8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K/A

Amendment No. 1

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):

January 17, 2005

EXCO RESOURCES, INC.

(Exact name of registrant as specified in its charter)

Texas	0-9204		74-1492779
(State of incorporation)	(Commission File No.)		(IRS Employer Identification No.)
12377 Merit Drive Suite 1700, LB 82 Dallas, Texas		75251
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code:  (214) 368-2084

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

On January 21, 2005, EXCO Resources, Inc., a Texas corporation (“EXCO”), filed a Form 8-K (the “Prior Form 8-K”) under Item 1.01 thereto to announce that EXCO’s Board had approved the Share and Debt Purchase Agreement (the “Agreement”), dated effective January 12, 2005, among 1143928 Alberta Ltd., a corporation organized under the laws of the Province of Alberta (“Purchaser”) and a wholly-owned subsidiary of NAL Oil & Gas Trust, an Alberta trust, EXCO and Taurus Acquisition, Inc., a Texas corporation and a wholly-owned subsidiary of EXCO (“Taurus”).  This Amendment No. 1 to the Prior Form 8-K amends and supplements the Prior Form 8-K as follows:

Item 1.01  Entry into a Material Definitive Agreement.

See Item 2.01 below for a discussion of the consummation of the Purchase Agreement on February 10, 2005.  At that closing the Agreement was amended pursuant to that certain First Amending Agreement to the Purchase Agreement (the “First Amending Agreement,” and together with the Agreement, the “Purchase Agreement”), among EXCO, Purchaser and Taurus. The First Amending Agreement amended the Agreement to, among other things, increase the amount of one of the promissory notes Taurus agreed to sell to Purchaser from Cdn. $97,874,177.10 to Cdn. $108,325,788.83 to reflect the principal amount then-outstanding on the note.  A copy of the First Amending Agreement is filed as Exhibit 10.2 hereto and incorporated herein by reference.

Item 2.01  Completion of Acquisition or Disposition of Assets.

On February 10, 2005, EXCO completed the sale to Purchaser of all of the issued and outstanding shares of common stock (the “Subsidiary Stock”) of its Calgary-based Canadian operating subsidiary, Addison Energy Inc., a corporation organized under the laws of the Province of Alberta and a wholly-owned subsidiary of EXCO (“Addison”) pursuant to the Purchase Agreement.  In addition, Taurus sold to Purchaser a promissory note in the amount of U.S. $98,800,167.66 and a promissory note in the amount of Cdn. $108,325,788.83(collectively, the “Notes”), each of which were issued by Addison in favor of Taurus.  The closing on February 10, 2005 of the transactions contemplated by the Purchase Agreement are referred to herein collectively as the “Addison Disposition”.

The aggregate purchase price for the Subsidiary Stock and the Notes paid at closing was approximately Cdn. $553.3 million.  EXCO deposited into escrow approximately Cdn. $56.9 million for Canadian tax withholding.

Prior to the closing of the Purchase Agreement, Addison paid an earnings and profits dividend (as calculated under U.S. tax law) to EXCO in an amount equal to Cdn. $74.5 million, subject to Canadian tax withholding, or net proceeds of U.S. $56.6 million.

In accordance with the terms of the Indenture, dated as of January 20, 2004, as subsequently amended (as amended, the “Indenture”), among EXCO, as issuer, Wilmington Trust Company, as trustee, and various subsidiaries of EXCO, as guarantors, governing EXCO’s 7¼% Senior Notes due 2011, the security interest of the noteholders in two-thirds of the common stock of Addison was released and a second lien security interest (behind the first lien security interest of EXCO’s U. S. revolving credit facility lenders) was effected in U.S. $120.6 million which represents two-thirds of the net cash proceeds of the sale of the Addison stock.  An additional U.S. $75.9 million of Addison Disposition proceeds were applied to pay down temporarily EXCO’s U.S. credit facility to a nominal amount.  The remaining Addison Disposition proceeds of U.S. $130.3 have been invested in permitted short-term investments.

On February 10, 2005, EXCO also issued a press release announcing that the Addison Disposition was complete.  The press release is filed as Exhibit 99.2 hereto and incorporated herein by reference.

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Item 9.01  Financial Statements and Exhibits.

(a)Financial Statements of Businesses Acquired. None.

(b)Pro Forma Financial Information.

Included in this Current Report (see Unaudited Pro Forma Financial Data on page F-1 below) are the following unaudited pro forma condensed consolidated financial statements, together with the notes thereto:

(i)Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2003;

(ii)Unaudited Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2004; and

(iii)Unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 2004.

The Unaudited Pro Forma Condensed Balance Sheet presents the financial position of EXCO at September 30, 2004, giving effect to the Addison Disposition as if it had occurred on such date. The Unaudited Pro Forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 2004 and for the year ended December 31, 2003 give effect to the Addison Disposition as if it had occurred at the beginning of each such period. The pro forma data does not purport to be indicative of the results which would actually have been reported if the Addison Disposition had occurred on such dates or which may be reported in the future. The Unaudited Pro Forma Condensed Consolidated Financial Statements should be read in conjunction with the historical consolidated financial statements of EXCO and the related notes thereto.

(c)Exhibits.

The following exhibits filed herewith supplement the exhibits filed in the Prior Form 8-K.

Number	Description
10.2	First Amending Agreement to the Share and Debt Purchase Agreement, dated effective February 8, 2005, among 1143928 Alberta Ltd., EXCO Resources, Inc. and Taurus Acquisition, Inc.
10.3	Securities Account Control Agreement, dated as of February 10, 2005, among EXCO Resources, Inc., JPMorgan Chase Bank, N.A., Wilmington Trust Company and J.P. Morgan Securities Inc.
10.4	Securities Account Control Agreement, dated as of February 10, 2005, among EXCO Resources, Inc., Wilmington Trust Company and J.P. Morgan Securities Inc.
99.2	Press Release dated February 10, 2005 issued by EXCO Resources, Inc.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		EXCO RESOURCES, INC.
Dated:	February 16, 2005	By:	/s/ J. DOUGLAS RAMSEY
		Name:	J. Douglas Ramsey, Ph.D.
		Title:	Vice President and Chief Financial Officer

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EXHIBIT INDEX

The following exhibits filed herewith supplement the exhibits filed in the Prior Form 8-K.

Number	Description
10.2	First Amending Agreement to the Share and Debt Purchase Agreement, dated effective February 8, 2005, among 1143928 Alberta Ltd., EXCO Resources, Inc. and Taurus Acquisition, Inc.
10.3	Securities Account Control Agreement, dated as of February 10, 2005, among EXCO Resources, Inc., JPMorgan Chase Bank, N.A., Wilmington Trust Company and J.P. Morgan Securities Inc.
10.4	Securities Account Control Agreement, dated as of February 10, 2005, among EXCO Resources, Inc., Wilmington Trust Company and J.P. Morgan Securities Inc.
99.2	Press Release dated February 10, 2005 issued by EXCO Resources, Inc.

5

UNAUDITED PRO FORMA FINANCIAL DATA

                The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2004 is based upon the historical balance sheet of EXCO Resources, Inc. (EXCO) as of September 30, 2004 and gives effect to the sale of all of the issued and outstanding shares of Addison Energy Inc. (our wholly-owned Canadian subsidiary)(Addison) and certain promissory notes between Addison and another of our wholly-owned subsidiaries to 1143928 Alberta Ltd., a wholly-owned subsidiary of NAL Oil & Gas Trust (the Addison Transaction) as if the transaction had occurred on September 30, 2004.

                EXCO has currently used the proceeds from the sale of the Addison shares and the promissory notes as follows (in thousands of U.S. dollars using the exchange rate in effect on February 10, 2005):

Repayment of all outstanding bank debt under the Canadian credit agreement	$	72,066
Repayment of substantially all outstanding bank debt under the U.S. credit agreement	75,911
Canadian tax withholdings	48,528
Estimated transaction costs	3,000
General working capital purposes	243,159
Total proceeds	$	442,664

The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2003 has been derived from our audited consolidated statement of operations for the 209 day period ended July 28, 2003 (predecessor basis), our audited consolidated statement of operations for the 156 day period ended December 31, 2003 (successor basis) and North Coast’s audited statement of operations for the year ended December 31, 2003. The pro forma statement of operations gives effect to the following events as if each occurred on January 1, 2003:

•Our going private transaction, which occurred on July 29, 2003, and pursuant to which a change in control of EXCO was effected through the purchase of each outstanding common share, other than common shares held by EXCO Holdings Inc. (EXCO Holdings) and its affiliates. As a result of the going private transaction, we became a wholly-owned subsidiary of EXCO Holdings, our parent. As a result of the change in control, Generally Accepted Accounting Principles (GAAP) requires the acquisition by EXCO Holdings to be accounted for as a purchase transaction in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations.” GAAP requires the application of “push down accounting” in situations where the ownership of an entity has changed, meaning that the post-transaction financial statements of the acquired entity reflect a new basis of accounting in accordance with Staff Accounting Bulletin No. 54. We have recognized increased depreciation, depletion and amortization expense reflecting the stepped up book basis resulting from the allocation of the purchase price.

•Our acquisition of North Coast Energy, Inc. (North Coast) on January 27, 2004 for a purchase price of approximately $225.6 million. The North Coast acquisition has been accounted for using the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations.” Accordingly, the pro forma results of operations reflects an increase in depreciation, depletion and amortization expense due to the increase in the basis of the oil and gas properties resulting from the allocation of the purchase price.

F-1

•Adjustments to conform North Coast’s historical accounting policies related to oil and natural gas properties from successful efforts to full cost accounting.

•The issuance of the 7 ¼% senior notes on January 20, 2004 and April 13, 2004.  The proceeds from the issuance of these notes were used to acquire all of the outstanding shares of North Coast, to repay substantially all of EXCO’s, Addison’s and North Coast’s outstanding bank debt and to repay in full our senior term loan (collectively, the North Coast Transactions).

•The elimination of Addison’s results of operations for the year.

•The sale of the Addison shares and the promissory notes for a net sales price of approximately $423.6 million (Cdn. $549.4 million).  The sales price has been determined based upon actual amounts received in Canadian dollars for the sale of the shares less estimated transaction costs and have been converted to U.S. dollars using the exchange rate in effect at December 31, 2003.

The unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2004 has been derived from our unaudited consolidated statement of operations for the nine months ended September 30, 2004 and the unaudited historical consolidated statement of operations for North Coast for the 27 day period from January 1 to January 27, 2004. The pro forma statement of operations gives effect to the following transactions as if each had occurred on January 1, 2003:

•Our acquisition of North Coast on January 27, 2004 for a purchase price of approximately $225.6 million. The North Coast acquisition was accounted for using the purchase method of accounting in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations.” Accordingly, the pro forma statement of operations reflects an increase in depreciation, depletion and amortization expense due to the increase in the basis of the oil and gas properties resulting from the allocation of the purchase price.

•Adjustments to conform North Coast’s historical accounting policies related to oil and natural gas properties from successful efforts to full cost accounting for the 27 day period ended January 27, 2004.

•The issuance of the 7 ¼% senior notes on January 20, 2004 and April 13, 2004.  The proceeds from the issuance of these notes were used to acquire all of the outstanding shares of North Coast, to repay substantially all of EXCO's, Addison's and North Coast’s outstanding bank debt and to repay in full our senior term loan.

•The repayment of the Canadian credit facility and the repayment of substantially all of the U.S. credit facility.

•The elimination of Addison’s results of operations for the year.

The unaudited pro forma financial statements should be read in conjunction with the accompanying notes to unaudited pro forma financial statements, our historical consolidated financial statements and related notes and the historical consolidated financial statements and related notes of North Coast, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information contained in the Prospectus for our senior notes exchange offer dated April 22, 2004 and our quarterly report on Form 10-Q for the quarterly period ended September 30, 2004 . The pro

F-2

forma information presented herein does not purport to be indicative of the financial position or results of operations that would have actually occurred had the North Coast Transaction, the Addison Transaction and the going private transaction occurred on the dates indicated or which may occur in the future.

Unaudited Pro Forma Condensed Consolidated

Balance Sheet as of September 30, 2004

	EXCO Historical		Adjustments for the Addison Transaction				Pro Forma
	(Dollars in thousands)
Assets:
Current assets:
Cash and cash equivalents	$	25,704	$	(8,323	)	(a)	$	423,789
			423,408			(b)
			(17,000		)	(d)
Other current assets	35,937		(17,275		)	(a)	18,662
Total current assets	61,641		380,810				442,451
Oil and natural gas properties and other equipment, net	732,130		(296,561		)	(a)	435,569
Goodwill	51,510		(29,952		)	(a)	21,558
Other assets, net	11,532		(164		)	(a)	11,368
Total assets	$	856,813	$	54,133			$	910,946
Liabilities and Stockholder’s Equity:
Current liabilities	$	109,013	$	(35,827	)	(a)	$	126,415
			53,229			(c)
			(17,000		)	(d)
Long-term debt	482,340		(12,289		)	(a)	453,051
Deferred income taxes	35,506		(35,506		)	(a)	—
Other liabilities	57,992		(16,441		)	(a)	41,551
Total liabilities	684,851		(63,834		)		621,017
Commitments and contingencies	—		—				—
Stockholder’s equity	171,962		117,967			(c)	289,929
Total liabilities and stockholder’s equity	$	856,813	$	54,133			$	910,946

F-3

Notes to Unaudited Pro Forma Condensed

Consolidated Balance Sheet as of September 30, 2004

(a)Represents the elimination of all assets and liabilities of Addison that were included in the EXCO Historical Consolidated Balance Sheet as of September 30, 2004.

(b)Represents the net cash proceeds from the sale of the Addison shares and promissory notes of U.S. $438.7 million plus the proceeds of a dividend paid by Addison to EXCO after September 30, 2004 of U.S. $59.1 million less the repayment of borrowings under the Canadian credit agreement (U.S. $71.4 million) and estimated transaction costs (U.S. $3.0 million).

(c)Represents the liability for income taxes incurred and the net after-tax gain from the sale of the Addison shares and the promissory notes determined as follows:

Net sales price	$	438,697
Less repayment of the Canadian credit facility	(71,355		)
Less estimated transaction costs	(3,000		)
Less investment in Addison as of September 30, 2004 (1)	(193,146		)
Pre-tax gain on sale	171,196
Less income taxes on sale	(53,229		)
After-tax gain on sale	$	117,967

(1)Reduced by the receipt of a dividend paid by Addison to EXCO after September 30, 2004 in the amount of U.S. $59.1 million.

(d)Represents the repayment of substantially all amounts outstanding under the U.S. credit agreement as of September 30, 2004

Unaudited Pro Forma Condensed Consolidated Statement

of Operations for the Year Ended December 31, 2003

	EXCO
	Historical						Pro Forma
	209 Day Period from January 1 to July 28, 2003 (a)			156 Day Period from July 29 to December 31, 2003 (a)			Adjustments for the Going Private Transactions				Year Ended December 31, 2003
	(Dollars in thousands)
Revenues:
Oil and natural gas sales	$	61,416		$	46,133		$	—				$	107,549
Commodity price risk management activities (c)	—			(11,160		)	—					(11,160		)
Well operating, gathering and other	—			—			—					—
Other income (expense)	(1,033		)	239			—					(794		)
Total revenues and other income	60,383			35,212			—					95,595
Costs and expenses:
Oil and natural gas production	19,793			14,524			—					34,317
Well operating, gathering and other	—			—			—					—
Exploration expense	—			—			—					—
Depreciation, depletion and amortization	12,022			12,012			4,331			(f)		28,365
Accretion of discount on asset retirement obligations	737			528			—					1,265
General and administrative	19,272			5,847			(10,050		)	(i)		15,069
Interest	2,981			3,971			1,215			(k)		8,167
Total costs and expenses	54,805			36,882			(4,504		)			87,183
Income (loss) from continuing operations before income taxes	5,578			(1,670		)	4,504					8,412
Income tax expense (benefit)	4,801			(5,847		)	(711		)	(m)		(1,757		)
Income (loss) from continuing operations	$	777		$	4,177		$	5,215				$	10,169

	North Coast Historical (b)		Adjustments for the North Coast Transactions			Pro Forma			Adjustments for the Addison Transaction				Pro-Forma
	(Dollars in thousands)
Revenues:
Oil and natural gas sales	$	58,415	$	—		$	165,964		$	(63,379	)	(n)	$	102,585
Commodity price risk management activities (c)	—		—			(11,160		)	360			(n)	(10,800		)
Well operating, gathering and other	6,881		(3,637		)(d)	3,244			—				3,244
Other income (expense)	478		737		(d)	421			(516		)	(n)	(95		)
Total revenues and other income	65,774		(2,900		)	158,469			(63,535		)		94,934
Costs and expenses:
Oil and natural gas production	10,220		(641		)(d)	43,896			(15,606		)	(n)	28,290
Well operating, gathering and other	5,211		(2,259		)(d)	2,952			—				2,952
Exploration expense	3,271		(3,271		)(e)	—			—				—
Depreciation, depletion and amortization	9,215		4,889		(g)	42,469			(13,038		)	(n)	29,431
Accretion of discount on asset retirement obligations	—		339		(h)	1,604			(740		)	(n)	864
General and administrative	7,302		(1,501		)(j)	20,870			(5,379		)	(n)	15,491
Interest	2,757		23,309		(l)	34,233			—				34,233
Total costs and expenses	37,976		20,865			146,024			(34,763		)		111,261
Income (loss) from continuing operations before income taxes	27,798		(23,765		)	12,445			(28,772		)		(16,327		)
Income tax expense (benefit)	9,791		(8,557		)(m)	(523		)	(1,960		)	(n)	(2,483		)
Income (loss) from continuing operations	$	18,007	$	(15,208	)	$	12,968		$	(26,812	)		$	(13,844	)

F-4

Notes to Unaudited Pro Forma Condensed

Consolidated Statement of Operations

(a)A change in control of EXCO occurred on July 29, 2003 as a result of the going private transaction. Subsequent to this change in control, the financial statements reflect a new basis of accounting. See “Note 1—The Merger” of the notes to EXCO’s December 31, 2003 consolidated financial statements contained in the Prospectus for our senior notes exchange offer dated April 22, 2004.

(b)Represents historical information for North Coast as of December 31, 2003, as reported in or derived from its audited consolidated financial statements at December 31, 2003.

(c)Following the going private transaction, EXCO (successor basis) adopted the same accounting policies as EXCO (predecessor basis). Effective July 29, 2003, we no longer account for derivative financial instruments using hedge accounting. Instead, any change in fair value is recognized directly through the statement of operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—Accounting for Derivatives” contained in the Prospectus for our senior notes exchange offer dated April 22, 2004.  The pro forma statements of operations reflect the historical accounting treatment in effect for all periods presented.

(d)Represents reclassifications to conform to EXCO’s presentation.

(e)Represents the adjustment to capitalize exploration expense as required under the full-cost method of accounting employed by EXCO.

(f)Represents increased depreciation, depletion and amortization primarily relating to the step up in basis of oil and natural gas properties associated with the purchase price allocation for the going private transaction as if it occurred on January 1, 2003.

(g)Represents increased depreciation, depletion and amortization primarily relating to the step up in basis of oil and natural gas properties associated with the purchase price allocation for the North Coast transaction as if it occurred on January 1, 2003 and utilizing the report on Proved Reserves prepared by Lee Keeling and Associates, Inc. as of December 31, 2003.

(h)Represents additional accretion charges resulting from the revaluation of fair value based upon EXCO management’s assessment of certain factors as they relate to North Coast’s asset retirement obligation.

(i)General and administrative pro forma expense adjustments include the following:

	Year Ended December 31, 2003
	(Dollars in thousands)
Accelerated stock compensation(1)	$	(8,157	)
Management retention bonuses(2)	1,080
Going private costs(3)	(2,973		)
Total G&A pro forma adjustment	$	(10,050	)

(1)Represents stock compensation expense attributable to the acceleration of stock option vesting in connection with the going private transaction.

(2)Represents additional contractual management compensation resulting from the going private transaction.

(3)Represents third party costs incurred by EXCO directly related to the going private transaction.

(j)Represents transaction costs incurred by North Coast and expensed during the year ended December 31, 2003 primarily related to employee retention payments and investment banking fees in connection with the acquisition of North Coast by EXCO.

(k)EXCO borrowed an additional $53.6 million under its former credit facilities to fund a portion of the going private transaction. This adjustment reflects the additional interest expense resulting from this borrowing in prior periods as if the borrowing was outstanding at January 1, 2003:

	Year Ended December 31, 2003
	(Dollars in thousands)
Interest expense from the $53.6 million increase in former credit facilities borrowings in the going private transaction at 3.85% at July 29, 2003	$	1,215

(l)Represents the adjustment to historical interest expense on debt to be retired and interest expense on debt assumed and issued in connection with the North Coast acquisition, at rates assumed to be in effect at the time of the Transactions, as presented in the following table. Total pro forma interest expense includes the additional interest expense resulting from the going private acquisition discussed in (i) above.

	Year Ended December 31, 2003
	(Dollars in thousands)
Historical interest expense	$	9,709
Interest expense resulting from the 7 ¼% senior notes issued on January 20, 2004	25,375
Interest expense resulting from the 7 ¼% senior notes issued on April 13, 2004	7,250
Increase in interest expense from the $53.6 million increase in credit facility borrowings in the going private transaction.	1,215
Reduction in interest expense from the $265.0 million pay down of our and North Coast’s credit facilities.	(10,924		)
Amortization of $3.2 million premium related to the 7 ¼% senior notes issued on April 13, 2004	(378		)
Amortization of $9.7 million deferred financing costs related to the old notes—7 years	1,388
Amortization of additional deferred financing costs of $1.7 million to amend and restate our existing credit facilities—3 years	598
Total pro forma interest expense	$	34,233

At December 31, 2003, on a pro forma basis, no indebtedness was outstanding under the U.S. or Canadian credit facilities. Interest on the credit facility is variable at Libor plus 1.25%-2.00% under our U.S. credit agreement and the Banker’s Acceptance rate plus 1.25%-2.00% under our Canadian credit agreement.

(m)Represents the income tax effect of the pro forma adjustments, the elimination of EXCO’s tax valuation increases or decreases recognized during the 209 day period from January 1, 2003 to July 28, 2003 (as EXCO is now in a net deferred tax liability position) and adjustment of North Coast’s historical rate to approximate EXCO’s U.S. tax rate.

(n)Represents the revenues and expenses of Addison included in the EXCO pro forma information for the year ended December 31, 2003.

F-5

Unaudited Pro Forma Condensed Consolidated Statement

of Operations for the Nine Months Ended September 30, 2004

	EXCO Historical			North Coast Historical for the 27 Day Period Ended January 27, 2004 (a)			Adjustments for the North Coast Transactions			Pro Forma				Adjustments for the Addison Transaction			Pro Forma
	(Dollars in thousands)
Revenues:
Oil and natural gas sales	$	166,603		$	6,540		$	—		$	173,143			$	(66,483	)(i)	$	106,660
Commodity price risk management activities	(81,999		)	—			—			(81,999			)	12,804		(i)	(69,195		)
Well operating, gathering and other	—			490			(490		)(b)	—				—			—
Other income (expense)	7,498			150			20		(b)	7,668				(6,611		)(i)	1,057
Total revenues and other income	92,102			7,180			(470		)	98,812				(60,290		)	38,522
Costs and expenses:
Oil and natural gas production	35,327			878			(108		)(b)	36,097				(14,454		)(i)	21,643
Well operating, gathering and other	—			362			(362		)(b)	—				—			—
Exploration expense	—			200			(200		)(c)	—				—			—
Depreciation, depletion and amortization	35,518			851			473		(d)	36,842				(14,558		)(i)	22,284
Accretion of discount on asset retirement obligations	1,259			—			30		(e)	1,289				(652		)(i)	637
General and administrative	15,610			11,535			(11,021		)(f)	16,124				(4,087		)(i)	12,037
Interest	27,144			186			1,456		(g)	28,786				(3,664		)(i)	24,990
														(132		)(j)
Total costs and expenses	114,858			14,012			(9,732		)	119,138				(37,547		)	81,591
Loss from continuing operations before income taxes	(22,756		)	(6,832		)	9,262			(20,326			)	(22,743		)(i)	(43,069		)
Income tax expense (benefit)	(5,356		)	(2,448		)	3,473		(h)	(4,331			)	(5,994		)(i)	(10,274		)
														51		(j)
Income (loss) from continuing operations	$	(17,400	)	$	(4,384	)	$	5,789		$		(15,995	)	$	(16,800	)	$	(32,795	)

F-6

Notes to Unaudited Pro Forma Condensed

Consolidated Statement of Operations

(a)Represents historical information for North Coast for the 27 day period from January 1 to January 27, 2004.

(b)Represents reclassification to conform to EXCO’s presentation.

(c)Represents the adjustment to capitalize exploration expense as required under the full-cost method of accounting employed by EXCO.

(d)Represents increased depreciation, depletion and amortization primarily relating to the step-up in basis of oil and natural gas properties associated with the purchase price allocation for the North Coast transaction as if it has occurred as of January 1, 2003.

(e)Represents additional accretion charges resulting from the revaluation of fair value based upon EXCO management’s assessment of certain factors as they relate to North Coast’s asset retirement obligations.

(f)Represents transaction costs incurred by North Coast and expensed during the 27 day period from January 1 to January 27, 2004 primarily related to investment banking fees, employee bonus and severance payments and other costs incurred in connection with the acquisition of North Coast by EXCO.

(g)Represents the additional interest expense that would have resulted had the $450.0 million of 7 ¼% senior notes due 2011 been issued on January 1, 2003 net of the reduction in interest expense relating to the repayment of outstanding debt under the bank credit agreements and the senior term loan occurred on January 1, 2003.

(h)Represents the income tax effect of the pro forma adjustments and adjustment of North Coast’s historical rate to approximate EXCO’s U.S. tax rate.

(i)Represents the revenues and expenses of Addison included in the EXCO pro forma information for the nine months ended September 30, 2004.

(j)Represents interest expense and the related income tax effect of the repayment of substantially all of the outstanding debt as of September 30, 2004 under the U.S. bank credit agreement as if it had occurred on January 1, 2003.

F-7

EX-10.2

EXHIBIT 10.2

FIRST AMENDING AGREEMENT TO THE

SHARE AND DEBT PURCHASE AGREEMENT

THIS AGREEMENT (the “Agreement”) dated the 8^th day of February, 2005 is made

BETWEEN:

1143928 ALBERTA LTD., a corporation duly organized and existing under the laws of the Province of Alberta (“Purchaser”)

- and -

EXCO RESOURCES, INC., a corporation duly organized and existing under the laws of the State of Texas (“EXCO”)

- and -

TAURUS ACQUISITION, INC., a corporation duly organized and validly existing under the laws of the State of Texas (“Taurus”)

(EXCO and Taurus are herein collectively referred to as “Seller”)

WHEREAS:

A.Seller and Purchaser executed the Share and Debt Purchase Agreement dated the 12^th day of January, 2005 (the “Purchase Agreement”), pursuant to which Seller agreed to sell and Purchaser agreed to buy the Company Stock and the Taurus Notes, upon the terms and subject to the conditions set forth therein.

B.Seller and Purchaser now desire to amend the Purchase Agreement on the terms and conditions herein contained.

NOW THEREFORE, in consideration of the recitals and the mutual covenants and agreements set forth in this Agreement and for such other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1.Definitions.  Unless otherwise specified herein or the context otherwise requires, capitalized terms utilized herein, including the recitals hereof, will have the meanings given to them in Purchase Agreement.

2.Amendments to the Purchase Agreement.

(a)Taurus Notes:  Effective as of the date hereof, Section 2.3(a)(i)(A) of the Purchase Agreement is amended by deleting the reference to “$97,874,177.10” therein and substituting “$108,325,788.83” therefor.

(b)Title to Shares:  Effective as of the 12^th day of January, 2005, Section 3.1(d) of the Purchase Agreement is amended by deleting the reference to “2.9(a)(xviii)” therein and substituting “2.9(a)(xvii)” therefor.

3.Headings.  The headings used in this Agreement are inserted for convenience of reference only and shall not affect the construction or interpretation of this Agreement.

4.Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any Applicable Law, such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability and all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby, taken as a whole, is not affected thereby in a materially adverse manner with respect to either party hereto.

5.Amendment or Waiver.  This Agreement may be amended, modified, supplemented, restated or discharged (and the provisions hereof may be waived) only by one or more instruments in writing signed by the party hereto against whom enforcement of the amendment, modification, supplement, restatement, discharge or waiver is sought.

6.Further Assurances.  The parties hereto shall take such further reasonable actions and shall execute, acknowledge and deliver all such further documents that are reasonably necessary or appropriate to consummate the transactions contemplated hereby.

7.Governing Law.  This Agreement shall in all respect be subject to and be interpreted, construed and enforced in accordance with the laws in effect in the Province of Alberta and the federal laws of Canada applicable therein.

8.Amendments and Supplements.  Any reference herein to this Agreement shall be deemed to include reference to the same as it may be amended, modified and supplemented from time to time.

9.Enurement.  This Agreement shall be binding upon and enure to the benefit of the parties hereto and their respective successors and permitted assigns.

10.Continuing Effect.  Each of the parties hereto acknowledges and agrees that the Purchase Agreement, as amended by this Agreement, shall be and continue in full force and effect and is hereby confirmed and the rights and obligations of all parties thereunder shall not be affected or prejudiced in any manner except as specifically provided for herein.

11.Counterpart Execution.  This Agreement may be executed and delivered in separate counterparts and delivered by one party hereto to the other by facsimile, each of which when so executed and delivered shall be deemed an original and all such counterparts shall together constitute one and the same agreement.

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THIS AGREEMENT has been executed effective the date first above written.

1143928 ALBERTA LTD.
By:	/s/ JONATHAN LEXIER
Name: Jonathan Lexier
Title: Chief Operating Officer
By:	/s/ PAUL E. BELLIVEAU
Name: Paul E. Belliveau
Title: Vice President, Finance and CFO
EXCO RESOURCES, INC.		TAURUS ACQUISITION, INC.
By:	/s/ J. DOUGLAS RAMSEY	By:	/s/ J. DOUGLAS RAMSEY
Name: J. Douglas Ramsey		Name: J. Douglas Ramsey
Title: Vice President & CFO		Title: Vice President

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EX-10.3

EXHIBIT 10.3

SECURITIES ACCOUNT CONTROL AGREEMENT

[JPMorgan Chase Bank]

This Securities Account Control Agreement dated as of February 10, 2005 (this “Agreement”) among EXCO RESOURCES, INC., a Texas corporation (the “Debtor”), JPMORGAN CHASE BANK, N.A. (successor by merger to Bank One, N.A. (Illinois)), in its capacity as administrative agent (in such capacity, the “Secured Party”) pursuant to that certain Third Amended and Restated Credit Agreement dated January 27, 2004 among  Debtor, EXCO Operating, LP, a Delaware limited partnership, North Coast Energy, Inc., a Delaware corporation and North Coast Energy Eastern, Inc., a Delaware corporation, the lenders from time to time a party thereto, Secured Party, BNP Paribas, as Syndication Agent, The Bank of Nova Scotia, as Co-Documentation Agent and Toronto-Dominion (Texas), as Co-Documentation Agent (as amended and in effect from time to time, the “Credit Agreement”), WILMINGTON TRUST COMPANY, in its capacity as Collateral Agent (in such capacity, “Other Secured Party”)  pursuant to that certain Indenture, dated January 20, 2004, among Debtor, certain subsidiaries of Debtor and Collateral Agent, and J.P. MORGAN SECURITIES INC., in its capacity as a “securities intermediary” as defined in Section 8-102 of the UCC (in such capacity, the “Securities Intermediary”). All references herein to the “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York.

WHEREAS, Debtor is a party to an Amended and Restated Pledge Agreement For Stock, dated January 27, 2004, (as amended and in effect from time to time, the “First Lien Pledge Agreement”) between Debtor and Secured Party by which Debtor has granted to the Secured Party a first priority security interest in the Securities Account (as defined below).  Subject to the terms of this Agreement, Securities Intermediary recognizes the security interest in the Securities Account in favor of the Secured Party granted under the First Lien Pledge Agreement.

WHEREAS, Debtor is also a party to a Pledge Agreement For Stock, dated January 20, 2004, (as amended and in effect from time to time, the “Second Lien Pledge Agreement”) between Debtor and Other Secured Party by which Debtor has granted to the Other Secured Party a second priority security interest in the Securities Account (as defined below).  The Other Secured Party, Debtor and Securities Intermediary are contemporaneously entering into a Securities Account Control Agreement (the “Other Control Agreement”), pursuant to which Securities Intermediary recognizes the Security Interest in the Securities Account in favor of the Other Secured Party granted under the Second Lien Pledge Agreement.

SECTION 1.  Establishment of Securities Account.  The Securities Intermediary hereby confirms and agrees that:

(a)The Securities Intermediary has established account number  36057412 to be restyled in the name “JPMorgan Chase Bank, N.A., collateral account for  EXCO Resources, Inc.” or any abbreviations made by Securities Intermediary for operational purposes (such account and any successor accounts, the “Securities Account”); Debtor irrevocably directs Securities Intermediary to make all notations in Security Intermediary’s records pertaining to the Securities Account that are necessary or appropriate to reflect this Agreement and to move collateral from the existing Securities Account to establish a new Securities Account, with a new account number, for the purpose of holding the collateral.

(b)All securities or other property underlying any financial assets credited to the Securities Account shall be registered in the name of the Securities Intermediary, indorsed to the Securities Intermediary or in blank or credited to another securities account maintained in the name of the Securities Intermediary and in no case will any financial asset credited to the Securities Account be registered in the name of the Debtor, payable to the order of the Debtor or specially indorsed to the Debtor except to the extent the foregoing have been specially indorsed to the Securities Intermediary or in blank;

(c)All property delivered to the Securities Intermediary pursuant to the Security Agreement will be promptly credited to the Securities Account; and

(d)The Securities Account is a “securities account” within the meaning of Section 8-501 of the UCC.

SECTION 2.  “Financial Assets” Election.  The Securities Intermediary hereby agrees that each item of property (including, without limitation, any investment property, financial asset, security, instrument, general intangible or cash) credited to the Securities Account shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC.

SECTION 3.  Control of the Securities Account.  After the Notice of Sole Control (as defined in Section 8(a)) is received by the Securities Intermediary, and until the date that Securities Intermediary receives either: (i) a termination notice in the form of Exhibit B hereto from both of Secured Party and Other Secured Party (“Termination Notice”); or (ii) a subordination termination notice from Secured Party in the form of Exhibit C hereto (a “Subordination Termination Notice”)), then if the Securities Intermediary shall receive any order from the Secured Party directing withdrawal, transfer or redemption of any financial asset relating to the Securities Account, the Securities Intermediary shall comply with such entitlement order without further consent by the Debtor, the Other Secured Party or any other person.  Securities Intermediary shall not comply with any order it receives from the Other Secured Party directing the withdrawal, transfer or redemption of any financial asset, until and unless Securities Intermediary receives a Termination Notice or a Subordination Termination Notice of this Agreement pursuant to Section 13.  Any Termination Notice is not effective as to the Securities

1

Intermediary unless it is signed by both Secured Party and Other Secured Party.  Before the Notice of Sole Control is received by the Securities Intermediary, if the Securities Intermediary shall receive any order from the Debtor directing substitution or redemption of any financial asset relating to the Securities Account, the Securities Intermediary shall comply with such entitlement order.  Before the Notice of Sole Control is received by the Securities Intermediary, if a withdrawal notice in the form of Exhibit D hereto from both the Secured Party and the Other Secured Party (the “Withdrawal Notice”) is received by the Securities Intermediary, then the Securities Intermediary shall follow such orders to allow withdrawals by the Debtor.  If the Debtor is otherwise entitled to issue entitlement orders and such orders conflict with any entitlement order issued by the Secured Party, the Securities Intermediary shall follow the orders issued by the Secured Party.

SECTION 4.  Subordination of Lien; Waiver of Set-Off.  In the event that the Securities Intermediary has or subsequently obtains by agreement, by operation of law or otherwise a security interest in the Securities Account or any security entitlement credited thereto, the Securities Intermediary hereby agrees that such security interest shall be subordinate to the security interest of the Secured Party.  The financial assets and other items deposited to the Securities Account will not be subject to deduction, set-off, banker’s lien, or any other right in favor of any person other than the Secured Party and the Other Secured Party (except that the Securities Intermediary may set off (i) all amounts due to the Securities Intermediary arising out of this Agreement, (ii) the face amount of any checks which have been credited to such Securities Account but are subsequently returned unpaid because of uncollected or insufficient funds and (iii) any unsettled trades).

SECTION 5.  Choice of Law.  This Agreement and the Securities Account shall each be governed by the laws of the State of New York.  Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Securities Intermediary’s jurisdiction (within the meaning of Section 8-110 of the UCC) and the Securities Account (as well as the securities entitlements related thereto) shall be governed by the laws of the State of New York.

SECTION 6.  Conflict with Other Agreements.

(a) In the event of any conflict between this Agreement (or any portion thereof) and any other agreement now existing or hereafter entered into between the Debtor and Securities Intermediary, the terms of this Agreement shall prevail;

(b)No amendment or modification of this Agreement or waiver of any right hereunder shall be binding on any party hereto unless it is in writing and is signed by all of the parties hereto;

(c)The Securities Intermediary hereby confirms and agrees that:

2

(i)  There are no other agreements entered into between the Securities Intermediary and the Debtor or between Securities Intermediary and any other party with respect to the Securities Account other than the Other Control Agreement, that certain Securities Account Application and Customer Agreement between Debtor and Securities Intermediary, which shall, subject to Sections 4 and 6(a) hereof, prevail in the event of a dispute with the Securities Intermediary;

(ii)  It has not entered into, and until the termination of this Agreement, will not enter into, any agreement with any other person relating to the Securities Account and/or any financial assets credited thereto pursuant to which it has agreed to comply with entitlement orders (as defined in Section 8-102(a)(8) of the UCC) of such other person, other than the Other Control Agreement; and

(iii) It has not entered into, and until the termination of this Agreement, will not enter into, any agreement with the Debtor or Secured Party purporting to limit or condition the obligation of the Securities Intermediary to comply with entitlement orders as set forth in Section 3 hereof.

SECTION 7.  Adverse Claims.  Except for the claims and interest of the Secured Party, the Other Secured Party and of the Debtor in the Securities Account, the Securities Intermediary does not have actual knowledge of any claim to, or other interest in, the Securities Account or in any “financial asset” (as defined in Section 8-102(a) of the UCC) credited thereto.  If any person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Securities Account or in any financial asset carried therein, the Securities Intermediary will promptly notify the Secured Party and the Debtor thereof as provided in Section 12.

SECTION 8.  Maintenance of Securities Account.  In addition to, and not in lieu of, the obligation of the Securities Intermediary to honor entitlement orders as agreed in Section 3 hereof, the Securities Intermediary agrees to maintain the Securities Account as follows:

(a)Notice of Sole Control.  If the Secured Party delivers to the Securities Intermediary a Notice of Sole Control in substantially the form set forth in Exhibit A hereto, the Securities Intermediary agrees that after receipt of such notice, and until the date the Securities Intermediary receives a Termination Notice or a Subordination Termination Notice, it will take all instruction with respect to the Securities Account solely from the Secured Party.  Notwithstanding anything to the contrary set forth herein, unless and until a notice from the Secured Party (set out in Exhibit A hereto and, such other persons as may be nominated as an authorized officer by the Secured Party by written notice to the Securities Intermediary, from time to time) that the Secured Party will exercise exclusive control over the Securities Account

3

pursuant to the Notice of Sole Control (i) is accompanied by a telephone call that is actually received by employees of the Securities Intermediary, at the telephone numbers set out in the signatory section informing the Securities Intermediary to expect the Notice of Sole Control, (ii) is actually received by the individual employee(s) of the Securities Intermediary to whom the notice is required hereunder to be addressed (“Receive”) or (“Received”) and (iii) becomes Effective (as set forth below), the Debtor may:  (i) exercise any voting rights that it may have with respect to any financial asset relating to the Securities Account, (ii) give instructions to the Securities Intermediary to enter into purchase or sale transactions in the Securities Account and (iii) before the Notice of Sole Control is received by the Securities Intermediary, if a Withdrawal Notice from both the Secured Party and the Other Secured Party is received by the Securities Intermediary then the Securities Intermediary shall follow such orders to allow withdrawals by the Debtor.  Any Notice of Sole Control Received by the Securities Intermediary shall not be deemed effective until two hours after it is Received by the Securities Intermediary; provided, however, that any Notice of Sole Control Received by the Securities Intermediary after 4:00 p.m. New York City time on any Business Day shall not be deemed effective until 10:00 a.m. New York City time on the next succeeding Business Day.  A Notice of Sole Control deemed effective as set forth in the prior sentence is referred to herein as “Effective.”  Notwithstanding the foregoing, (1) all transactions relating to any financial asset relating to the Securities Account consummated or processed by the Securities Intermediary prior to a Notice of Sole Control becoming Effective (or commenced by the Securities Intermediary prior to a Notice of Sole Control becoming Effective and consummated or processed thereafter) shall be deemed not to constitute a violation of this Agreement, provided that, if practicable, the Securities Intermediary shall use reasonable efforts to reverse such transactions, but the Securities Intermediary shall have no obligation nor any liability for any failure to reverse such transactions and (2) the Securities Intermediary may (at its discretion and without any obligation to do so) commence honoring solely the Secured Party’s entitlement orders concerning the financial assets relating to the Securities Account at any time or from time to time after it becomes aware that the Secured Party has sent to it a Notice of Sole Control (including without limitation reversing or redirecting any transaction referred to in clause (1) above), whether or not the Notice of Sole Control has become Effective, with no liability whatsoever to the Debtor or any other party for doing so.  “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks and registered broker-dealers in New York City, New York and in Newark, Delaware are authorized or required to be closed. If the Securities Intermediary receives from the Secured Party a Notice of Sole Control, the Securities Intermediary will cease distributing to the Debtor all interest and dividends on any financial assetsrelating to the SecuritiesAccount upon the Notice of Sole Control becoming Effective.

(b)Permitted Investments.  Until such time as the Securities Intermediary receives a Notice of Sole Control signed by the Secured Party, the Debtor shall direct the Securities Intermediary with respect to the selection of investments to be made for the Securities Account. Before the Notice of Sole Control is received by the Securities Intermediary, if the Securities Intermediary shall receive any order from the Debtor directing substitution or

4

redemption of any financial asset relating to the Securities Account, the Securities Intermediary shall comply with such entitlement order.  Before the Notice of Sole Control is received by the Securities Intermediary, if a Withdrawal Notice from both of Secured Party and Other Secured Party is received by Securities Intermediary, then the Securities Intermediary shall follow such orders to allow withdrawals by Debtor.  If the Debtor is otherwise entitled to issue entitlement orders and such orders conflict with any entitlement order issued by the Secured Party, the Securities Intermediary shall follow the orders issued by the Secured Party.

(c)Statements and Confirmations.  The Securities Intermediary will promptly send copies of all statements, confirmations and will use best efforts for other correspondence concerning the Securities Account and/or any financial assets credited thereto simultaneously to each of the Debtor, the Secured Party and the Other Secured Party at the address for each set forth in Section 12 of this Agreement.

(d)Tax Reporting.  All items of income, gain, expense and loss recognized in the Securities Account shall be reported to the Internal Revenue Service and all state and local taxing authorities under the name and taxpayer identification number of the Debtor.

Section 9.  Representations, Warranties and Covenants of the Securities Intermediary.  The Securities Intermediary hereby makes the following representations, warranties and covenants:

(a)The Securities Account has been established as set forth in Section 1 above and such Securities Account will be maintained in the manner set forth herein until termination of this Agreement; and

(b)This Agreement is the valid and legally binding obligation of the Securities Intermediary.

Section 10.   Indemnification of Securities Intermediary.  The Debtor and the Secured Party hereby agree that (a) the Securities Intermediary is released from any and all liabilities to the Debtor and the Secured Party arising from the terms of this Agreement and the compliance of the Securities Intermediary with the terms hereof, except to the extent that such liabilities arise from the Securities Intermediary’s negligence and (b) the Debtor, and its successors and assigns shall at all times indemnify and save harmless the Securities Intermediary from and against any and all claims, actions and suits of others arising out of the terms of this Agreement or the compliance of the Securities Intermediary with the terms hereof, except to the extent that such arises from the Securities Intermediary’s gross negligence, and from and against any and all liabilities, losses, damages, costs, charges, counsel fees and other expenses of every nature and character arising by reason of the same, except to the extent such arises from the Securities Intermediary’s gross negligence, until the termination of this Agreement.

5

Section 11.  Successors; Assignment.  The terms of this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective corporate successors or heirs and personal representatives who obtain such rights solely by operation of law.

Section 12.  Notices.   Any notice, request or other communication required or permitted to be given under this Agreement shall be in writing and deemed to have been properly given when delivered in person, or when sent by telecopy or other electronic means and electronic confirmation of error free receipt is received or two (2) days after being sent by certified or registered United States mail, return receipt requested, postage prepaid, addressed to the party at the address set forth below.

Debtor:	EXCO Resources, Inc.
	12377 Merit Drive
	Suite 1700, LB 82
	Dallas, Texas 75251
	Attention:	Chief Financial Officer
	Telephone:	(214) 368-2084
	Facsimile:	(214) 368-2087
Secured Party:	JPMorgan Chase Bank, N.A.
	1717 Main Street, TX1-2448
	Dallas, Texas 75201
	Attention:	Wm. Mark Cranmer
	Telephone:	(214) 240-2212
	Facsimile:	(214) 290-2332
	JPMorgan Chase Bank, N.A.
	Mail Code IL1-0634
	1 Bank One Plaza
	Chicago, Illinois 60670-0634
	Attention:	Jim Moore
	Telephone:	(312) 385-7057
	Facsimile:	(312) 732-4840

6

Other Secured Party:	Wilmington Trust Company
	Rodney Square North
	1100 North Market Street
	Wilmington, DE 19890
	Attention:	Corporate Trust Department
	Telephone:	(302) 651-8671
	Facsimile:	(302) 651-8882
Securities Intermediary:	J.P. Morgan Securities Inc.
	601 Travis, 18th Floor
	Houston, Texas 77002
	All notices and Notice of Sole Control must be Received by:
	Attention:	Pledged Collateral Desk
	Securities Division
	Telecopier:	713-216-2396
	Telephone:	713-216-1827
	AND
	Attention:	Client Services
	Telecopier:	713-216-1445
	Telephone:	713-216-5410

Any party may change its address for notices in the manner set forth above.

Section 13.  Termination.  (1) The obligations of the Securities Intermediary to the Secured Party pursuant to this Agreement shall continue in effect until the security interest of the Secured Party in the Securities Account has been terminated pursuant to the terms of the First Lien Pledge Agreement and the Securities Intermediary has been notified of such termination in writing, as follows:  (a) Termination Notice. The Secured Party and the Other Secured Party agree to provide Termination Notice in substantially the form of Exhibit B hereto to the Securities Intermediary upon the request of the Debtor on or after the termination of the Secured Party’s security interest in the Securities Account pursuant to the terms of the First Lien Pledge  Agreement.  Any Termination Notice is not effective as to the Securities Intermediary unless it is signed by both Secured Party and Other Secured Party.  (b) Subordination Termination Notice.  The Secured Party agrees to provide a Subordination Termination Notice in substantially the form of Exhibit C hereto to the Securities Intermediary after the termination of the Secured Party’s security interest in the Securities Account pursuant to the terms of the First Lien Pledge Agreement.  Upon receipt of a Subordination Termination Notice, Securities Intermediary agrees that it will comply with the terms and conditions of the Other Control Agreement.  (2)  The termination of this Agreement shall not terminate the Securities Account or alter the obligations of the Securities Intermediary to the Debtor pursuant to any other agreement with respect to the

7

Securities Account.  Securities Intermediary may at any time, with 30 business days prior notice, terminate the Securities Account.  The Securities Intermediary will mail notice of termination to the Secured Party, the Other Secured Party and the Debtor thereof as provided in Section 12. If the Securities Intermediary terminates the Securities Account after the Notice of Sole Control is received by the Securities Intermediary, then the Securities Intermediary shall comply with any order from the Secured Party directing withdrawal, transfer or redemption of any financial asset relating to the Securities Account and the Securities Intermediary shall comply with such entitlement order from the Secured Party without further consent by the Debtor or any other person. If the Securities Intermediary terminates the Securities Account before the Notice of Sole Control is received by the Securities Intermediary, then the Securities Intermediary shall comply with any order from the Debtor directing substitution or redemption of any financial asset relating to the Securities Account.  If the Debtor is otherwise entitled to issue entitlement orders and such orders conflict with any entitlement order issued by the Secured Party, the Securities Intermediary shall follow the orders issued by the Secured Party.

Section 14.  Force Majeure.  Securities Intermediary shall not be liable for and performance is excused during the period of delay, interruption or failure for any action taken, or any delay or failure to take any action, to the extent that the taking of such action, or such delay, interruption or failure, arises out of causes beyond the reasonable control of Securities Intermediary or any of its third party providers, including without limitation, any delay or failure to perform, execute or comply with instructions that (a) are never received by Securities Intermediary, (b) are not received by Securities Intermediary in a timely manner or within normal business hours, (c) are received by Securities Intermediary but Securities Intermediary or any of its third party providers is unable to perform, execute or comply with such instructions for causes beyond the reasonable control of Securities Intermediary or any of its third party providers, such as computer or systems failures, damage caused by severe weather, earthquakes, wars, insurrection, acts of terrorism, riots, acts of God, accident, fire, water damage, explosions, mechanical breakdowns or national disasters, power or utility failures, strikes or other stoppage of labor, governmental or other intervention or any other cause (whether similar or dissimilar to any of the foregoing) whatsoever beyond the control of Securities Intermediary or any of its third party providers.

Section 15.  Counterparts.  This Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Agreement by signing and delivering one or more counterparts.

8

IN WITNESS WHEREOF, the parties hereto have caused this Securities Account Control Agreement to be executed as of the date first above written by their respective officers thereunto duly authorized.

EXCO RESOURCES, INC.
as Debtor
By:		/s/ J. Douglas Ramsey
	Name:	J. Douglas Ramsey
	Title:	Vice President and Chief Financial Officer

9

JPMORGAN CHASE BANK, N.A.
(successor by merger to Bank One, N.A. (Illinois)
as Secured Party
By:		/s/ Stephen Lescher
	Name:	Stephen Lescher
	Title:	Director, Capital Markets

10

WILMINGTON TRUST COMPANY
as Collateral Agent
as Other Secured Party
By:		/s/ W.T. Morris II
	Name:	W. Thomas Morris, II
	Title:	Senior Financial Services Officer

11

J.P. MORGAN SECURITIES, INC.
as Securities Intermediary
By:		/s/ Terry L. Knell
	Name:	Terry Knell
	Title:	Vice President

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EXHIBIT A

NOTICE OF SOLE CONTROL

TO SECURITIES ACCOUNT CONTROL AGREEMENT

[Letterhead of Secured Party]

[Date]

J.P. Morgan Securities Inc.
601 Travis, 18th Floor
Houston, Texas 77002
All notices and Notice of Sole Control must be Received by:
Attention:	Pledged Collateral Desk
Securities Division
Telecopier:	713-216-2396
Telephone:	713-216-1827
AND
Attention:	Client Services
Telecopier:	713-216-1445
Telephone:	713-216-5410

Re:  Notice of Sole Control

Ladies and Gentlemen:

As referenced in the Securities Account Control Agreement dated as of February    , 2005 among EXCO Resources, Inc., a Texas corporation (the “Debtor”), you and the undersigned, JPMorgan Chase Bank, N.A. (as successor by merger to Bank One, N.A. (Illinois)) (a copy of which is attached), we hereby give you notice of our sole control over securities account number                     (the “Securities Account”) and all financial assets credited thereto.  You are hereby instructed not to accept any direction, instructions or entitlement orders with respect to the Securities Account or the financial assets credited thereto from any person other than the undersigned, unless otherwise ordered by a court of competent jurisdiction.

We have also delivered a copy of this notice by facsimile transmission to the Debtor and the Other Secured Party (as defined in the above referenced agreement).

Very truly yours,
JPMORGAN CHASE BANK, N.A.
as Secured Party
By:
	Name:
	Title:

cc: EXCO Resources, Inc.

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EXHIBIT B

TERMINATION NOTICE

TO SECURITIES ACCOUNT CONTROL AGREEMENT

[Letterhead of Secured Party]

[Date]

J.P. Morgan Securities Inc.
601 Travis, 18th Floor
Houston, Texas 77002
All notices and Notice of Sole Control must be Received by:
Attention:	Pledged Collateral Desk
Securities Division
Telecopier:	713-216-2396
Telephone:	713-216-1827
AND
Attention:	Client Services
Telecopier:	713-216-1445
Telephone:	713-216-5410

Re:  Termination of Securities Account Control Agreement

You are hereby notified that the Securities Account Control Agreement, dated as of February     , 2005, among EXCO Resources, Inc., a Texas corporation (“Debtor”), you and the undersigned, JPMorgan Chase Bank, N.A. and Wilmington Trust Company (a copy of which is attached), is terminated with respect to the undersigned only and you have no further obligations to the undersigned pursuant to such Agreement.  Notwithstanding any previous instructions to you, you are hereby instructed to accept all future directions with respect to account number                           from Wilmington Trust Company.  This notice terminates any obligations you may have to the undersigned with respect to such account, however nothing contained in this notice shall alter any obligations which you may otherwise owe to Wilmington Trust Company, pursuant to any other agreement.

We have also delivered a copy of this notice by facsimile transmission to EXCO Resources, Inc.

Very truly yours,
JPMORGAN CHASE BANK, N.A.
(as successor by merger to Bank One, N.A. (Illinois))
as Secured Party
By:
	Name:
	Title:
ACCEPTED AND AGREED TO BY:
WILMINGTON TRUST COMPANY,
as Collateral Agent
as Other Secured Party
By:
	Name:
	Title:

cc: EXCO Resources, Inc.

14

EXHIBIT C

SUBORDINATION TERMINATION NOTICE

TO SECURITIES ACCOUNT CONTROL AGREEMENT

[Letterhead of Secured Party]

[Date]

J.P. Morgan Securities Inc.
601 Travis, 18th Floor
Houston, Texas 77002
All notices and Notice of Sole Control must be Received by:
Attention:	Pledged Collateral Desk
Securities Division
Telecopier:	713-216-2396
Telephone:	713-216-1827
AND
Attention:	Client Services
Telecopier:	713-216-1445
Telephone:	713-216-5410

Re:  Subordination Termination Notice

You are hereby notified, pursuant to the Securities Account Control Agreement dated as of February     , 2005 among EXCO Resources, Inc., a Texas corporation, you and the undersigned, JPMorgan Chase Bank, N.A. and Wilmington Trust Company (a copy of which is attached), that as of the date hereof, Secured Party authorizes and directs you to comply with any order directing  the withdrawal, transfer or redemption of any financial asset related to the Securities Account that you receive from Wilmington Trust Company as Other Secured Party and to comply with the terms and conditions of the Other Control Agreement (notwithstanding any Notice of Sole Control you may have heretofore received from Secured Party).  Capitalized terms used herein but not defined herein shall have the meanings assigned to them in said Securities Account Control Agreement.

We have also delivered a copy of this notice by facsimile transmission to EXCO Resources, Inc. and Wilmington Trust Company.

Very truly yours,
JPMORGAN CHASE BANK, N.A.
as Secured Party
By:
	Name:
	Title:

cc: EXCO Resources, Inc.

15

EXHIBIT D

WITHDRAWAL NOTICE

TO SECURITIES ACCOUNT CONTROL AGREEMENT

[Letterhead of Secured Party]

[Date]

J.P. Morgan Securities Inc.
601 Travis, 18th Floor
Houston, Texas 77002
All notices and Notice of Sole Control must be Received by:
Attention:	Pledged Collateral Desk
Securities Division
Telecopier:	713-216-2396
Telephone:	713-216-1827
AND
Attention:	Client Services
Telecopier:	713-216-1445
Telephone:	713-216-5410

Re:  Withdrawal by Debtor from Securities Account

You are hereby notified that as to the Securities Account Control Agreement, dated as of February      , 2005, among EXCO Resources, Inc., a Texas corporation (“Debtor”), you and the undersigned, JPMorgan Chase Bank, N.A. and Wilmington Trust Company (a copy of which is attached), the undersigned direct you to allow the Debtor to withdraw $                                      that you are to follow the Debtor’s directions in that regard as to methods of distribution to the Debtor.

We have also delivered a copy of this notice by facsimile transmission to EXCO Resources, Inc.

Very truly yours,
JPMORGAN CHASE BANK, N.A.
(as successor by merger to Bank One, N.A. (Illinois))
as Secured Party
By:
	Name:
	Title:
ACCEPTED AND AGREED TO BY:
WILMINGTON TRUST COMPANY,
as Collateral Agent
as Other Secured Party
By:
	Name:
	Title:

cc: EXCO Resources, Inc.

16

EX-10.4

EXHIBIT 10.4

SECURITIES ACCOUNT CONTROL AGREEMENT

[Collateral Agent]

This Securities Account Control Agreement dated as of February 10, 2005 (this “Agreement”) among EXCO RESOURCES, INC., a Texas corporation (the “Debtor”), WILMINGTON TRUST COMPANY, in its capacity as Collateral Agent (the “Secured Party”) pursuant to that certain Indenture dated January 20, 2004, among Debtor, certain subsidiaries of Debtor and Collateral Agent (as amended and in effect from time to time, the “Indenture”) and J.P. MORGAN SECURITIES INC., in its capacity as a “securities intermediary” as defined in Section 8-102 of the UCC (in such capacity, the “Securities Intermediary”). All references herein to the “UCC” shall mean the Uniform Commercial Code as in effect in the State of New York.

WHEREAS, Debtor is a party to a Pledge Agreement For Stock, dated January 20, 2004, (as amended and in effect from time to time, the “Pledge Agreement”) between Debtor and Secured Party by which Debtor has granted to the Secured Party a perfected security interest in the Securities Account, subject to the terms and conditions of the Prior Control Agreement (as defined below).  Subject to the terms of this Agreement, Securities Intermediary recognizes the security interest in the Securities Account in favor of the Secured Party, granted pursuant to the Pledge Agreement.

WHEREAS, Debtor is also a party to an Amended and Restated Pledge Agreement For Stock, dated January 27, 2004, among Debtor, JPMorgan Chase Bank, N.A. (as successor by merger to Bank One, N.A. (Illinois)) (the “Prior Secured Party”), by which the Debtor has granted to the Prior Secured Party a first priority security interest in the Securities Account (as defined below).  The Prior Secured Party, Debtor, Secured Party and Securities Intermediary are contemporaneously entering into a Securities Account Control Agreement (the “Prior Control Agreement”), pursuant to which Securities Intermediary recognizes the Security Interest in the Securities Account in favor of the Prior Secured Party.  Any defined terms used but not defined herein shall have the meanings assigned to such terms in the Prior Control Agreement.

SECTION 1.  Establishment of Securities Account.  The Securities Intermediary hereby confirms and agrees that:

(a)Upon receipt of a Subordination Termination Notice from the Prior Secured Party, the Securities Intermediary will restyle account number 36057412 styled as “JPMorgan Chase Bank, N.A., collateral account for  EXCO Resources, Inc.” to be restyled in the name “Wilmington Trust Company, as Collateral Agent, collateral account for  EXCO Resources, Inc.” or any abbreviations made by Securities Intermediary for operational purposes (such account and any successor accounts, the “Securities Account”); Debtor irrevocably directs Securities Intermediary to make all notations in Security Intermediary’s records pertaining to the

Securities Account that are necessary or appropriate to reflect this Agreement and to move collateral from the existing Securities Account to establish a new Securities Account, with a new account number, for the purpose of holding the collateral.

(b)All securities or other property underlying any financial assets credited to the Securities Account shall be registered in the name of the Securities Intermediary, indorsed to the Securities Intermediary or in blank or credited to another securities account maintained in the name of the Securities Intermediary and in no case will any financial asset credited to the Securities Account be registered in the name of the Debtor, payable to the order of the Debtor or specially indorsed to the Debtor except to the extent the foregoing have been specially indorsed to the Securities Intermediary or in blank;

(c)All property delivered to the Securities Intermediary pursuant to the Security Agreement will be promptly credited to the Securities Account; and

(d)The Securities Account is a “securities account” within the meaning of Section 8-501 of the UCC.

SECTION 2.  “Financial Assets” Election.  The Securities Intermediary hereby agrees that each item of property (including, without limitation, any investment property, financial asset, security, instrument, general intangible or cash) credited to the Securities Account shall be treated as a “financial asset” within the meaning of Section 8-102(a)(9) of the UCC.

SECTION 3.  Control of the Securities Account.  After the Secured Party receives a Subordination Termination Notice (a “Control Triggering Event”), then Secured Party hereunder shall be entitled to issue a Notice of Sole Control hereunder in substantially the form set forth in Exhibit A hereto. After the Notice of Sole Control (as defined in Section 8(a)) is received by the Securities Intermediary at any time following the occurrence of a Control Triggering Event, then if the Securities Intermediary shall receive any order from the Secured Party directing withdrawal, transfer or redemption of any financial asset relating to the Securities Account, the Securities Intermediary shall comply with such entitlement order without further consent by the Debtor or any other person.  Before the Notice of Sole Control is received by the Securities Intermediary, if the Securities Intermediary shall receive any order from the Debtor directing substitution or redemption of any financial asset relating to the Securities Account, the Securities Intermediary shall comply with such entitlement order.  After a Control Triggering Event and before the Notice of Sole Control is received by the Securities Intermediary, if a withdrawal notice in the form of Exhibit C hereto from the Secured Party (the “Withdrawal Notice”) is received by the Securities Intermediary, then the Securities Intermediary shall follow such orders to allow withdrawals by the Debtor..  If the Debtor is otherwise entitled to issue entitlement orders and such orders conflict with any entitlement order issued by the Secured Party, the Securities Intermediary shall follow the orders issued by the Secured Party.

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SECTION 4.  Subordination of Lien; Waiver of Set-Off.  In the event that the Securities Intermediary has or subsequently obtains by agreement, by operation of law or otherwise a security interest in the Securities Account or any security entitlement credited thereto, the Securities Intermediary hereby agrees that such security interest shall be subordinate to the security interest of the Secured Party.  The financial assets and other items deposited to the Securities Account will not be subject to deduction, set-off, banker’s lien, or any other right in favor of any person other than the Secured Party and the Prior Secured Party (except that the Securities Intermediary may set off (i) all amounts due to the Securities Intermediary arising out of this Agreement, (ii) the face amount of any checks which have been credited to such Securities Account but are subsequently returned unpaid because of uncollected or insufficient funds and (iii) any unsettled trades).

SECTION 5.  Choice of Law.  This Agreement and the Securities Account shall each be governed by the laws of the State of New York.  Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Securities Intermediary’s jurisdiction (within the meaning of Section 8-110 of the UCC) and the Securities Account (as well as the securities entitlements related thereto) shall be governed by the laws of the State of New York.

SECTION 6.  Conflict with Other Agreements.

(a)In the event of any conflict between this Agreement (or any portion thereof) and any other agreement now existing or hereafter entered into between the Debtor and Securities Intermediary, the terms of this Agreement shall prevail;

(b)No amendment or modification of this Agreement or waiver of any right hereunder shall be binding on any party hereto unless it is in writing and is signed by all of the parties hereto;

(c)The Securities Intermediary hereby confirms and agrees that:

(i)  There are no other agreements entered into between the Securities Intermediary and the Debtor or between Securities Intermediary and any other party with respect to the Securities Account other than the Prior Control Agreement, that certain Securities Account Account Application and Customer Agreement between Debtor and Securities Intermediary, which shall, subject to Sections 4 and 6(a) hereof, prevail in the event of a dispute with the Securities Intermediary;

(ii)  It has not entered into, and until the termination of this Agreement, will not enter into, any agreement with any other person relating to the Securities

3

Account and/or any financial assets credited thereto pursuant to which it has agreed to comply with entitlement orders (as defined in Section 8-102(a)(8) of the UCC) of such other person, other than the Prior Control Agreement; and

(iii) It has not entered into, and until the termination of this Agreement, will not enter into, any agreement with the Debtor or Secured Party purporting to limit or condition the obligation of the Securities Intermediary to comply with entitlement orders as set forth in Section 3 hereof, other than the Prior Control Agreement.

SECTION 7.  Adverse Claims.  Except for the claims and interest of the Secured Party, the Prior Secured Party and of the Debtor in the Securities Account, the Securities Intermediary does not have actual knowledge of any claim to, or other interest in, the Securities Account or in any “financial asset” (as defined in Section 8-102(a) of the UCC) credited thereto.  If any person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Securities Account or in any financial asset carried therein, the Securities Intermediary will promptly notify the Secured Party and the Debtor thereof as provided in Section 12.

SECTION 8.   Maintenance of Securities Account.  In addition to, and not in lieu of, the obligation of the Securities Intermediary to honor entitlement orders as agreed in Section 3 hereof, the Securities Intermediary agrees to maintain the Securities Account as follows:

(a)Notice of Sole Control after a Control Triggering Event.  Secured Party agrees that it will not issue a Notice of Sole Control to Securities Intermediary prior to the occurrence of a Control Triggering Event, as defined in Section 3, and any Notice of Sole Control issued by Secured Party hereunder to Securities Intermediary prior to the occurrence of a Control Triggering Event shall not be effective as to Securities Intermediary.  If the Secured Party delivers to the Securities Intermediary a Notice of Sole Control in substantially the form set forth in Exhibit A hereto at any time after a Control Triggering Event, the Securities Intermediary agrees that after receipt of such notice, it will take all instruction with respect to the Securities Account solely from the Secured Party.  Notwithstanding anything to the contrary set forth herein, unless and until a notice (set out in Exhibit A hereto after a Control Triggering Event from the Secured Party and, such other persons as may be nominated as an authorized officer by the Secured Party by written notice to the Securities Intermediary, from time to time) that the Secured Party will exercise exclusive control over the Securities Account pursuant to the Notice of Sole Control (i) is accompanied by a telephone call that is actually received by employees of the Securities Intermediary, at the telephone numbers set out in the signatory section informing the Securities Intermediary to expect the Notice of Sole Control, (ii) is actually received by the individual employee(s) of the Securities Intermediary to whom the notice is required hereunder to be addressed (“Receive”) or (“Received”) and (iii) becomes Effective (as

4

set forth below), the Debtor may:  (i) exercise any voting rights that it may have with respect to any financial asset relating to the Securities Account, (ii) give instructions to the Securities Intermediary to enter into purchase or sale transactions in the Securities Account and (iii) after a Control Triggering Event and before the Notice of Sole Control is received by the Securities Intermediary, if a Withdrawal Notice from the Secured Party is received by the Securities Intermediary then the Securities Intermediary shall follow such orders to allow withdrawals by the Debtor.  Any Notice of Sole Control Received by the Securities Intermediary shall not be deemed effective until two hours after it is Received by the Securities Intermediary; provided, however, that any Notice of Sole Control Received by the Securities Intermediary after 4:00 p.m. New York City time on any Business Day shall not be deemed effective until 10:00 a.m. New York City time on the next succeeding Business Day.  A Notice of Sole Control deemed effective as set forth in the prior sentence is referred to herein as “Effective.”  Notwithstanding the foregoing, (1) all transactions relating to any financial asset relating to the Securities Account consummated or processed by the Securities Intermediary prior to a Notice of Sole Control becoming Effective (or commenced by the Securities Intermediary prior to a Notice of Sole Control becoming Effective and consummated or processed thereafter) shall be deemed not to constitute a violation of this Agreement, provided that, if practicable, the Securities Intermediary shall use reasonable efforts to reverse such transactions, but the Securities Intermediary shall have no obligation nor any liability for any failure to reverse such transactions and (2) the Securities Intermediary may (at its discretion and without any obligation to do so) commence honoring solely the Secured Party’s entitlement orders concerning the financial assets relating to the Securities Account at any time or from time to time after it becomes aware that the Secured Party has sent to it a Notice of Sole Control (including without limitation reversing or redirecting any transaction referred to in clause (1) above), whether or not the Notice of Sole Control has become Effective, with no liability whatsoever to the Debtor or any other party for doing so.  “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks and registered broker-dealers in New York City, New York and in Newark, Delaware are authorized or required to be closed. If the Securities Intermediary receives from the Secured Party a Notice of Sole Control, the Securities Intermediary will cease distributing to the Debtor all interest and dividends on any financial assetsrelating to the SecuritiesAccount upon the Notice of Sole Control becoming Effective.

(b)Permitted Investments.  Until such time as the Securities Intermediary receives a Notice of Sole Control signed by the Secured Party, the Debtor shall direct the Securities Intermediary with respect to the selection of investments to be made for the Securities Account. Before the Notice of Sole Control is received by the Securities Intermediary, if the Securities Intermediary shall receive any order from the Debtor directing substitution or redemption of any financial asset relating to the Securities Account, the Securities Intermediary shall comply with such entitlement order.  After a Control Triggering Event and before the Notice of Sole Control is received by the Securities Intermediary, if a Withdrawal Notice from the Secured Party is received by Securities Intermediary, then the Securities Intermediary shall

5

follow such orders to allow withdrawals by Debtor.  If the Debtor is otherwise entitled to issue entitlement orders and such orders conflict with any entitlement order issued by the Secured Party, the Securities Intermediary shall follow the orders issued by the Secured Party.

(c)Statements and Confirmations.  The Securities Intermediary will promptly send copies of all statements, confirmations and will use best efforts for other correspondence concerning the Securities Account and/or any financial assets credited thereto simultaneously to each of the Debtor and the Secured Party at the address for each set forth in Section 12 of this Agreement.

(d)Tax Reporting.  All items of income, gain, expense and loss recognized in the Securities Account shall be reported to the Internal Revenue Service and all state and local taxing authorities under the name and taxpayer identification number of the Debtor.

Section 9.  Representations, Warranties and Covenants of the Securities Intermediary.  The Securities Intermediary hereby makes the following representations, warranties and covenants:

(a)The Securities Account has been established as set forth in Section 1 above and such Securities Account will be maintained in the manner set forth herein until termination of this Agreement; and

(b)This Agreement is the valid and legally binding obligation of the Securities Intermediary.

Section 10.   Indemnification of Securities Intermediary.  The Debtor and the Secured Party hereby agree that (a) the Securities Intermediary is released from any and all liabilities to the Debtor and the Secured Party arising from the terms of this Agreement and the compliance of the Securities Intermediary with the terms hereof, except to the extent that such liabilities arise from the Securities Intermediary’s negligence and (b) the Debtor, and its successors and assigns shall at all times indemnify and save harmless the Securities Intermediary from and against any and all claims, actions and suits of others arising out of the terms of this Agreement or the compliance of the Securities Intermediary with the terms hereof, except to the extent that such arises from the Securities Intermediary’s gross negligence, and from and against any and all liabilities, losses, damages, costs, charges, counsel fees and other expenses of every nature and character arising by reason of the same, except to the extent such arises from the Securities Intermediary’s gross negligence, until the termination of this Agreement.

Section 11.  Successors; Assignment.  The terms of this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective corporate successors or heirs and personal representatives who obtain such rights solely by operation of law.

6

Section 12.  Notices.   Any notice, request or other communication required or permitted to be given under this Agreement shall be in writing and deemed to have been properly given when delivered in person, or when sent by telecopy or other electronic means and electronic confirmation of error free receipt is received or two (2) days after being sent by certified or registered United States mail, return receipt requested, postage prepaid, addressed to the party at the address set forth below.

Debtor:	EXCO Resources, Inc.
	12377 Merit Drive
	Suite 1700, LB 82
	Dallas, Texas 75251
	Attention:		Chief Financial Officer
	Telephone:		(214) 368-2084
	Facsimile:		(214) 36802087
Secured Party:	Wilmington Trust Company
	Rodney Square North
	1100 North Market Street
	Wilmington, DE 19890
	Attention:		Corporate Trust Department
	Telephone:		(302) 651-8671
	Facsimile:		(302) 651-8882
Securities Intermediary:	J.P. Morgan Securities Inc.
	601 Travis, 18th Floor
	Houston, Texas 77002
	All notices and Notice of Sole Control must be Received by:
	Attention:	Pledged Collateral Desk
	Securities Division
	Telecopier:	713-216-2396
	Telephone:	713-216-1827
	AND
	Attention:	Client Services
	Telecopier:	713-216-1445
	Telephone:	713-216-5410

Any party may change its address for notices in the manner set forth above.

Section 13.  Termination.  The obligations of the Securities Intermediary to the Secured Party pursuant to this Agreement shall continue in effect until the security interest of the

7

Secured Party in the Securities Account has been terminated pursuant to the terms of the Pledge Agreement and the Secured Party has notified the Securities Intermediary of such termination in writing.  The Secured Party agrees to provide Notice of Termination in substantially the form of Exhibit B hereto to the Securities Intermediary upon the request of the Debtor on or after the termination of the Secured Party’s security interest in the Securities Account pursuant to the terms of the Security Agreement.  The termination of this Agreement shall not terminate the Securities Account or alter the obligations of the Securities Intermediary to the Debtor pursuant to any other agreement with respect to the Securities Account.  Securities Intermediary may at any time, with 30 business days prior notice, terminate the Securities Account.  The Securities Intermediary will mail notice of termination to the Secured Party and the Debtor thereof as provided in Section 12. If the Securities Intermediary terminates the Securities Account after the Notice of Sole Control is received by the Securities Intermediary, then the Securities Intermediary shall comply with any order from the Secured Party directing withdrawal, transfer or redemption of any financial asset relating to the Securities Account and the Securities Intermediary shall comply with such entitlement order from the Secured Party without further consent by the Debtor or any other person. If the Securities Intermediary terminates the Securities Account before the Notice of Sole Control is received by the Securities Intermediary, then the Securities Intermediary shall comply with any order from the Debtor directing substitution or redemption of any financial asset relating to the Securities Account If the Debtor is otherwise entitled to issue entitlement orders and such orders conflict with any entitlement order issued by the Secured Party, the Securities Intermediary shall follow the orders issued by the Secured Party.

Section 14.  Force Majeure.  Securities Intermediary shall not be liable for and performance is excused during the period of delay, interruption or failure for any action taken, or any delay or failure to take any action, to the extent that the taking of such action, or such delay, interruption or failure, arises out of causes beyond the reasonable control of Securities Intermediary or any of its third party providers, including without limitation, any delay or failure to perform, execute or comply with instructions that (a) are never received by Securities Intermediary, (b) are not received by Securities Intermediary in a timely manner or within normal business hours, (c) are received by Securities Intermediary but Securities Intermediary or any of its third party providers is unable to perform, execute or comply with such instructions for causes beyond the reasonable control of Securities Intermediary or any of its third party providers, such as computer or systems failures, damage caused by severe weather, earthquakes, wars, insurrection, acts of terrorism, riots, acts of God, accident, fire, water damage, explosions, mechanical breakdowns or national disasters, power or utility failures, strikes or other stoppage of labor, governmental or other intervention or any other cause (whether similar or dissimilar to any of the foregoing) whatsoever beyond the control of Securities Intermediary or any of its third party providers.

8

Section 15.  Counterparts.  This Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Agreement by signing and delivering one or more counterparts.

Section 16.  Collateral Agent.  Any and all rights granted to the Secured Party under this Agreement are to be held and exercised by the Secured Party in its capacity as collateral agent for the benefit of the Senior Noteholders pursuant to the provisions of the Indenture.  Nothing in this Agreement expressed or implied is intended or shall be construed to give any person other than the Debtor, the Secured Party and Securities Intermediary any legal or equitable right, remedy or claim under or in respect of this Agreement or any covenant, condition or provision herein contained, and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Debtor, the Secured Party and Securities Intermediary.  Notwithstanding anything herein to the contrary, the Secured Party shall exercise its rights and powers subject to the direct and indemnity of the Senior Noteholders as provided in the Indenture.  Nothing in this Section 16 imposes any duty whatsoever upon the Securities Intermediary except as otherwise provided in this Agreement to Debtor, the Secured Party and the Prior Secured Party.

9

IN WITNESS WHEREOF, the parties hereto have caused this Securities Account Control Agreement to be executed as of the date first above written by their respective officers thereunto duly authorized.

EXCO RESOURCES, INC.
as Debtor
By:	/s/ J. Douglas Ramsey
	Name:	J. Douglas Ramsey
	Title:	Vice President and Chief Financial Officer

10

WILMINGTON TRUST COMPANY,
as Collateral Agent
as Secured Party
By:	/s/ W.T. Morris II
	Name:	W. Thomas Morris, II
	Title:	Senior Financial Services Officer

11

J.P. MORGAN SECURITIES, INC.
as Securities Intermediary
By:	/s/ Terry L. Knell
	Name:	Terry L. Knell
	Title:	Vice President

12

EXHIBIT A

NOTICE OF SOLE CONTROL

TO SECURITIES ACCOUNT CONTROL AGREEMENT

[Letterhead of Secured Party]

[Date]

J.P. Morgan Securities Inc.
601 Travis, 18th Floor
Houston, Texas 77002
All notices and Notice of Sole Control must be Received by:
Attention:	Pledged Collateral Desk
Securities Division
Telecopier:	713-216-2396
Telephone:	713-216-1827
AND
Attention:	Client Services
Telecopier:	713-216-1445
Telephone:	713-216-5410

Re:  Notice of Sole Control

Ladies and Gentlemen:

As referenced in the Securities Account Control Agreement dated as of February [   ], 2005 among EXCO Resources, Inc., you and the undersigned (a copy of which is attached), we hereby give you notice of our sole control over securities account number account number (the “Securities Account”) and all financial assets credited thereto.   The undersigned represents and warrants to the Securities Intermediary that a Control Triggering Event has occurred.  You are hereby instructed not to accept any direction, instructions or entitlement orders with respect to the Securities Account or the financial assets credited thereto from any person other than the undersigned, unless otherwise ordered by a court of competent jurisdiction.

We have also delivered a copy of this notice by facsimile transmission to EXCO Resources, Inc.

	Very truly yours,
	Wilmington Trust Company as Collateral Agent as Secured Party
	By:
		Name:
		Title:
cc:    EXCO Resources, Inc.

2

EXHIBIT B

TERMINATION NOTICE

TO SECURITIES ACCOUNT CONTROL AGREEMENT

[Letterhead of Secured Party]

[Date]

J.P. Morgan Securities Inc.
601 Travis, 18th Floor
Houston, Texas 77002
All notices and Notice of Sole Control must be Received by:
Attention:	Pledged Collateral Desk
Securities Division
Telecopier:	713-216-2396
Telephone:	713-216-1827
AND
Attention:	Client Services
Telecopier:	713-216-1445
Telephone:	713-216-5410

Re:  Termination of Securities Account Control Agreement

As referenced in the Securities Account Control Agreement dated as of February       , 2005,  among EXCO Resources, Inc., you and the undersigned, (a copy of which is attached), is terminated with respect to the undersigned only and you have no further obligations to the undersigned pursuant to such Agreement.  Notwithstanding any previous instructions to you, you are hereby instructed to accept all future directions with respect to account number from                                           . This notice terminates any obligations you may have to the undersigned with respect to such account, however nothing contained in this notice shall alter any obligations which you may otherwise owe to                                                                                                 ,pursuant to any other agreement.

We have also delivered a copy of this notice by facsimile transmission to EXCO Resources, Inc.

Very truly yours,
WILMINGTON TRUST COMPANY as Collateral Agent as Secured Party
By:
	Name:
	Title:

2

EXHIBIT C

WITHDRAWAL NOTICE

TO SECURITIES ACCOUNT CONTROL AGREEMENT

[Letterhead of Secured Party]

[Date]

J.P. Morgan Securities Inc.
601 Travis, 18th Floor
Houston, Texas 77002
All notices and Notice of Sole Control must be Received by:
Attention:	Pledged Collateral Desk
Securities Division
Telecopier:	713-216-2396
Telephone:	713-216-1827
AND
Attention:	Client Services
Telecopier:	713-216-1445
Telephone:	713-216-5410

Re:  Withdrawal by Debtor from Securities Account

You are hereby notified that as to the Securities Account Control Agreement, dated as of February       , 2005, among EXCO Resources, Inc., a Texas corporation (“Debtor”), you and the undersigned Wilmington Trust Company (a copy of which is attached), the undersigned direct you to allow the Debtor to withdraw $                                             that you are to follow the Debtor’s directions in that regard as to methods of distribution to the Debtor.

We have also delivered a copy of this notice by facsimile transmission to EXCO Resources, Inc.

	Very truly yours,
	WILMINGTON TRUST COMPANY, as Collateral Agent as Secured Party
	By:
		Name:
cc:    EXCO Resources, Inc.		Title:

2

EX-99.2

EXHIBIT 99.2

	EXCO Resources, Inc.
	12377 Merit Drive, Suite 1700, LB 82, Dallas, Texas 75251
	(214) 368-2084  FAX (214) 368-2087

EXCO RESOURCES ANNOUNCES THE COMPLETION OF

THE SALE OF ITS CANADIAN SUBSIDIARY

DALLAS, TEXAS, February 10, 2005…EXCO Resources, Inc. (EXCO) today announced the completion of the sale of Addison Energy Inc., EXCO’s Calgary-based operating subsidiary, to NAL Oil and Gas Trust for an aggregate pre-tax cash purchase price of Cdn $553.3 million (U.S. $443.4 million as of February 9, 2005), subject to adjustment for repayment of outstanding indebtedness and other adjustments. The consideration paid at closing is subject to certain post-closing adjustments.

According to Douglas H. Miller, EXCO’s Chairman and Chief Executive Officer, “The completion of the sale of Addison is a win-win situation for EXCO and NAL. We can now focus our resources and capital on our core U.S. properties as well as future acquisition and development opportunities and NAL is taking over the reigns of a thriving organization. We appreciate everyone’s efforts, especially those of Addison’s management team and employees, in making the completion of this sale such a success.”

EXCO Resources, Inc. is a privately-held oil and gas acquisition, exploitation, development and production company headquartered in Dallas, Texas with principal operations in Texas, Louisiana, Colorado, Ohio, Pennsylvania, and West Virginia.

Additional information about EXCO Resources, Inc. may be obtained by contacting the Company’s President, Ted Eubank, at EXCO’s headquarters, 12377 Merit Drive, Suite 1700, Dallas, TX 75251, telephone number (214) 368-2084.

This release may contain forward-looking statements relating to the sale of Addison Energy Inc. Business plans may change as circumstances warrant. Actual results may differ materially from those predicted as a result of factors over which EXCO has no control. Forward-looking statements include statements that are predictive in nature, which depend upon or refer to future events or conditions, which include words such as “expects”, “anticipates”, “intends”, “plans”, “could”, “might”, “believes”, “seeks”, “estimates” or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings or growth rates), ongoing business strategies or prospects, and possible future actions, which may be provided by EXCO’s management, are also forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are subject to various risks, uncertainties and assumptions about EXCO, economic and market factors and the industries in which EXCO does business, among other things. These statements are not guarantees of future performance and EXCO undertakes no specific obligation or intention to update these statements after the date of this release.

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