8.	Long-term debt

Our total debt is summarized as follows:


(in thousands)	March 31, 2012			December 31, 2011
EXCO Resources Credit Agreement	$	1,177,500		$	1,147,500
2018 Notes		750,000			750,000
Unamortized discount on 2018 Notes		(9,394	)		(9,672	)

Total debt	$	1,918,106		$	1,887,828

Terms and conditions of each of the debt obligations are discussed below.

EXCO Resources Credit Agreement

As of March 31, 2012, the EXCO Resources Credit Agreement had a borrowing base of $1.6 billion, with $1.2 billion of outstanding indebtedness and $414.5 million of available borrowing capacity. On March 31, 2012, the one month LIBOR was 0.2%, which would result in an interest rate of approximately 2.2%. The borrowing base is redetermined semi-annually, with us and the lenders having the right to request interim unscheduled redeterminations in certain circumstances. Please see "Note 14. Subsequent events" regarding the April 2012 redetermination of the borrowing base under the EXCO Resources Credit Agreement. Our next scheduled redetermination is in October 2012. The maturity date of the agreement is April 1, 2016.

The majority of our subsidiaries are guarantors under the EXCO Resources Credit Agreement. The EXCO Resources Credit Agreement permits investments, loans and advances to the unrestricted subsidiaries related to our joint ventures with certain limitations, and allows us to repurchase up to $200.0 million of our common stock, of which $7.5 million had been utilized as of March 31, 2012.

Borrowings under the EXCO Resources Credit Agreement are collateralized by first lien mortgages providing a security interest of not less than 80% of the Engineered Value (as defined in the EXCO Resources Credit Agreement) in our oil and natural gas properties covered by the borrowing base. We are permitted to have derivative financial instruments covering no more than 100% of forecasted production from total Proved Reserves (as defined in the EXCO Resources Credit Agreement) during the first two years of the forthcoming five-year period, 90% of the forecasted production for any month during the third year of the forthcoming five-year period and 85% of the forecasted production from total Proved Reserves during the fourth and fifth year of the forthcoming five-year period.

The EXCO Resources Credit Agreement sets forth the terms and conditions under which we are permitted to pay a cash dividend on our common stock and provides that we may declare and pay cash dividends on our common stock in an amount not to exceed $50.0 million in any four consecutive fiscal quarters, provided that, as of each payment date and after giving effect to the dividend payment date, (i) no default has occurred and is continuing, (ii) we have at least 10% of our borrowing base available under the EXCO Resources Credit Agreement, and (iii) payment of such dividend is permitted under the indenture governing the 2018 Notes.

As of March 31, 2012, we were in compliance with the financial covenants contained in the EXCO Resources Credit Agreement, which require that we:

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maintain a consolidated current ratio (as defined in the EXCO Resources Credit Agreement) of at least 1.0 to 1.0 as of the end of any fiscal quarter; and

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not permit our ratio of consolidated funded indebtedness to consolidated EBITDAX (as defined in the EXCO Resources Credit Agreement) to be greater than 4.5 to 1.0 at the end of any fiscal quarter ending on or after March 31, 2012.

While we believe our existing capital resources, including our cash flow from operations and borrowing capacity under the EXCO Resources Credit Agreement is sufficient to conduct our operations into 2013, there are certain risks arising from further declines in natural gas prices that could impact our ability to meet debt covenants in future periods. In particular, our consolidated funded indebtedness to consolidated EBITDAX, as defined in the EXCO Resources Credit Agreement, is computed using the trailing twelve month EBITDAX. As a result, our ability to maintain compliance with this covenant may be negatively impacted when oil and/or natural gas prices decline for an extended period of time. Our available borrowing base under the EXCO Resources Credit Agreement was reduced to $1.4 billion effective April 27, 2012. The possibility of further reductions to our borrowing base exists if natural gas prices remain at low levels.

In response to the declines in natural gas prices, we have reduced our drilling plans, which will likely reduce our production volumes late in 2012 and into 2013, and have taken measures to reduce operating and administrative expenses. In addition, the volumes of natural gas currently covered by derivative financial instruments declines significantly in 2013. We may enter into additional derivative financial instrument transactions as opportunities arise. The combination of a lower borrowing base, lower production volumes and reduced percentages of volumes covered by derivative financial instruments may result in our seeking alternative financing arrangements, further reducing costs or selling assets.

2018 Notes

The 2018 Notes are guaranteed on a senior unsecured basis by a majority of EXCO's subsidiaries, with the exception of certain non-guarantor subsidiaries and our jointly-held equity investments with BG Group. Our equity investments with BG Group, other than OPCO, have been designated as unrestricted subsidiaries under the indenture governing the 2018 Notes.

As of March 31, 2012, $750.0 million in principal was outstanding on the 2018 Notes. The unamortized discount on the 2018 Notes at March 31, 2012 was $9.4 million. The estimated fair value of the 2018 Notes, based on quoted market prices, was $673.1 million on March 31, 2012.

Interest accrues at 7.5% and is payable semi-annually in arrears on March 15 and September 15 of each year, beginning on March 15, 2011.

The indenture governing the 2018 Notes contains covenants, which may limit our ability and the ability of our restricted subsidiaries to:

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incur or guarantee additional debt and issue certain types of preferred stock;

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pay dividends on our capital stock (over $50.0 million per annum) or redeem, repurchase or retire our capital stock or subordinated debt;

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make certain investments;

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create liens on our assets;

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enter into sale/leaseback transactions;

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create restrictions on the ability of our restricted subsidiaries to pay dividends or make other payments to us;

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engage in transactions with our affiliates;

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transfer or issue shares of stock of subsidiaries;

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transfer or sell assets; and

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consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries.

The foregoing descriptions are not complete and are qualified in their entirety by the EXCO Resources Credit Agreement and the indenture governing the 2018 Notes.