Subsequent Event

3 Months Ended

Mar. 31, 2012

14.

Subsequent events

On April 27, 2012, we completed our semi-annual borrowing base redetermination with our banking group. The borrowing base was established at $1.4 billion, with an interest grid of LIBOR plus 175 bps to 275 bps (or ABR plus 75 bps to 175 bps). Our debt to EBITDA covenant was changed to 4.5 to 1.0 from 4.0 to 1.0, effective for the quarter ended March 31, 2012 and thereafter. The amendment also provides for asset sale procedures for sales of oil and natural gas properties or other material assets, including our interest in TGGT Holdings, LLC, whereby the proceeds from asset sales (over a minimum threshold) will be used to pay down the outstanding debt balance under the credit agreement and will also reduce the borrowing base. The borrowing base reduction will be equal to the borrowing base value assigned to the assets sold (if any) plus cash proceeds in excess of the borrowing base value aggregating up to $200 million.

In April 2012, we entered into commodity swap transactions for an additional 35,000 Mmbtu per day at an average price of $4.18 per Mmbtu for 2013, 2014 and 2015. The derivative contracts give the counterparty an option to cause EXCO to enter into derivative contracts at future dates. These options are exercisable monthly on the settlement date for each monthly contract. If the counterparty elects to exercise their option, the notional volume will increase by 35,000 Mmbtu per day at the average price of $4.18 per Mmbtu.

- Definition

Tabular disclosure of significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, losses resulting from fire or flood, losses on receivables, significant realized and unrealized gains and losses that result from changes in quoted market prices of securities, declines in market prices of inventory, changes in authorized or issued debt (SEC), significant foreign exchange rate changes, substantial loans to insiders or affiliates, significant long-term investments, and substantial dividends not in the ordinary course of business.

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