Exco Resources Inc. (XCO:US), the Dallas- based natural-gas producer that rejected a buyout offer last year, fell to its lowest price in more than three years as fuel prices dropped and a negotiating period expired without a sale agreement for one of its pipelines.
Exco declined (XCO:US) 1.4 percent to $6.23 at the close in New York, the lowest since December 2008. Gas prices on the New York Mercantile Exchange rebounded from a 10-year low today, settling at $2.107 per million British thermal units.
Exco said Feb. 3 it was in a 45-day period of exclusive talks with an unidentified private infrastructure fund to sell a third of TGGT Holdings LLC, a pipeline partnership it owns with BG Group Plc. (BG/) Exco estimated the sale price at more than $400 million and will use the proceeds to pay down debt.
“That period expired a while back and they haven’t announced anything,” Michael Hall, an analyst with Robert W. Baird & Co. in Denver, said in an interview today. A delay in the sale may complicate Exco’s ability to finance capital spending this year, said Hall, who rates Exco neutral and doesn’t own the stock.
Exco, which lost $166.7 million, or 78 cents a share, in the fourth quarter, said Feb. 23 it will “significantly reduce” drilling this year because of gas prices. About 97 percent of the company’s reserves are gas.
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