Significant Activities

9 Months Ended

Sep. 30, 2011

Significant Activities [Abstract]

Significant Activities

2. Significant activities

Chief transaction

On December 21, 2010, we funded the acquisition of undeveloped acreage and oil and natural gas properties primarily in the Marcellus shale from Chief Oil & Gas LLC and related parties for approximately $459.4 million, subject to post-closing title adjustments and customary post-closing purchase price adjustments, or the Chief Transaction. The $459.4 million preliminary purchase price was funded into an escrow account pending receipt of a waiver from a third party, which was received on January 11, 2011 and all properties were released to us. BG Group participated in its 50% share of the Chief Transaction and funded $229.7 million to us on February 7, 2011. During the third quarter of 2011 we post closed on the Chief Transaction for a final purchase price of $454.4 million ($227.2 million net to us), including all post-closing title adjustments and other customary post-closing purchase price adjustments.

Appalachia transaction

On March 1, 2011, we jointly closed the purchase of additional Marcellus shale properties with BG Group, which also included certain shallow production primarily in Jefferson and Clarion counties in Pennsylvania for $82.0 million ($41.0 million net to us), or the Appalachia Transaction.

Haynesville shale acquisition

On April 5, 2011, we closed on a $225.2 million acquisition of land, mineral interests and other assets in DeSoto Parish, Louisiana, or the Haynesville Shale Acquisition. On May 12, 2011, BG Group elected to participate in this acquisition for its 50% share in accordance with contracts covering our East Texas/North Louisiana JV and funded us $112.6 million.

Amendment of the EXCO Resources Credit Agreement and increase in borrowing base

On April 1, 2011, we entered into the Third Amendment to our credit agreement, or the EXCO Resources Credit Agreement, resulting in an increase of the borrowing base from $1.0 billion to $1.5 billion. In addition, the interest rate under the EXCO Resources Credit Agreement was reduced by 50 basis points, or bps, and now ranges from the London Interbank Offered Rate, or LIBOR, plus 150 bps to LIBOR plus 250 bps, or from Alternate Base Rate, or ABR, plus 50 bps to ABR plus 150 bps, depending upon borrowing base usage. Our consolidated ratio of funded indebtedness to consolidated EBITDAX (as defined in the EXCO Resources Credit Agreement) increased by 0.5, so that the ratio can be no greater than 4.0 to 1.0 at the end of any fiscal quarter ending on or after December 31, 2010. The maturity date was extended from April 30, 2014 to April 1, 2016.

TGGT incident

In the second quarter of 2011 an incident occurred at a TGGT amine treating facility in northwest Red River Parish, Louisiana resulting in an immediate shut-down of the facility. As a precautionary measure, TGGT also shut down another amine treating facility located in DeSoto Parish with similar specifications, which was restarted in October 2011. TGGT has ordered temporary treating units and expects to be capable of treating all projected northwest Louisiana throughput volumes by early in the first quarter of 2012 once these temporary treating units are operational. TGGT received an initial insurance reimbursement associated with the incident of approximately $6.2 million ($3.1 million net to us) during the third quarter 2011. TGGT expects to have the damaged facility re-commissioned early in 2012.

Former acquisition Proposal

On October 29, 2010, our Chairman and Chief Executive Officer, Douglas H. Miller presented a letter to our board of directors indicating an interest in acquiring all of the outstanding shares of our stock not already owned by Mr. Miller for a cash purchase price of $20.50 per share. This proposal did not represent a definitive offer and there was no assurance that a definitive offer would be made or accepted, that any agreement would be executed or that any transaction would be consummated.

Our board of directors established a special committee on November 4, 2010 comprised of two of our independent directors to, among other things, evaluate and determine the Company's response to the October 29, 2010 proposal. On July 8, 2011, after consultation with its independent financial and legal advisors, the special committee released a statement that its review of strategic alternatives did not result in any firm proposal or any other proposal that was in the best interests of the Company and its shareholders and that they had terminated the review process. See "Note 17. Former acquisition proposal" for further information regarding the proposal.