XCO - EXCO

[phil_Buffett]

big Crash in stock Price. bought more today

[fareastwarriors]

Any buyers at sub-$5 in price?

[phil_Buffett]

i bought some at higher Prices. already reach my Portfolio Level. down big time, but hold i for a few years :)

[muscleman]

Any buyers at sub-$5 in price?

 

I still have the same question that no one has answered yet:

If we compare XCO with CHK, for each dollar used to purchase their stock, we get the same gas reserve and production, but CHK has this oil operation that we get for free, so why buy XCO at current levels? Is there anything that I am missing? ::)

 

[BargainValueHunter]

http://www.marketwatch.com/story/exco-resources-inc-announces-changes-to-senior-management-and-board-of-directors-2014-capital-budget-and-declares-quarterly-cash-dividend-2013-11-21?reflink=MW_news_stmp

 

Douglas H. Miller has resigned from his positions as Chairman of the Board and Chief Executive Officer as well as from EXCO's Board of Directors effective as of November 20, 2013. The Board of Directors has appointed Jeffrey D. Benjamin, a long-time investor in EXCO and an independent member of EXCO's Board of Directors, to serve as Non-Executive Chairman of the Board of Directors. Mr. Benjamin has extensive knowledge of EXCO and its business, having served on the Board since October 2005 and prior to that from 1998 through 2003.

[phil_Buffett]

http://www.marketwatch.com/story/exco-resources-inc-announces-changes-to-senior-management-and-board-of-directors-2014-capital-budget-and-declares-quarterly-cash-dividend-2013-11-21?reflink=MW_news_stmp

 

Douglas H. Miller has resigned from his positions as Chairman of the Board and Chief Executive Officer as well as from EXCO's Board of Directors effective as of November 20, 2013. The Board of Directors has appointed Jeffrey D. Benjamin, a long-time investor in EXCO and an independent member of EXCO's Board of Directors, to serve as Non-Executive Chairman of the Board of Directors. Mr. Benjamin has extensive knowledge of EXCO and its business, having served on the Board since October 2005 and prior to that from 1998 through 2003.

 

thank you bargainvaluehunter for the link :).  interesting to see what will happen now. Will Ross and Marks take it over?

I hope they make the right steps now

[txlaw]

I still own XCO, though it is dwarfed by my positions in CHK and SD.

 

This is very interesting news.  It's hard to tell if Miller resigned because he was pushed out for failures or because he intends to try to buyout the company again.

 

There's no doubt that the market is increasingly skeptical of XCO. 

 

As I was telling another board member, the TGGT sale was a debacle.  It took forever to occur, it went for much less than was promised, and was the result of having to give in and sell those midstream assets at a very attractive price in order to fund their property acquisitions. 

 

And XCO continues to become more and more of a "financial" company, similar to the old SD.  Investors don't like all of the complex deals that are being struck with people like CHK, KKR, Harbinger, etc.  XCO is giving these guys the opportunities to de-risk.  That is, they are taking a lot of the upside but also taking on more of the risk involved with these properties.  So the market is reacting that way, without probably assessing what the downside NAV is in relation to market price.

 

So investors are probably skeptical now of the company's (and Doug Miller's) promises, especially in light of the EBITDA disappointment last quarter, cheaper oil, and continued cheap nat gas.  On the other hand, some of the most sophisticated financial/energy investors on the planet (Wilbur Ross, Howard Marks, Prem Watsa, KKR, Harbinger, Boone Pickens, etc.) have endorsed Doug Miller. 

 

So perhaps we see a catalyst soon?

[phil_Buffett]

http://finance.yahoo.com/news/exco-resources-inc-announces-intent-120000229.html

 

rights offering

[txlaw]

It keeps getting more and more interesting . . .

 

EXCO Resources, Inc. (the “Company”) entered into an Exercise Commitment Letter, dated November 22, 2013 (the “WLR Commitment Letter”), with WLR Recovery Fund IV XCO AIV I, L.P., WLR Recovery Fund IV XCO AIV II, L.P., WLR Recovery Fund IV XCO AIV III, L.P., WLR Select Co-Investment XCO AIV, L.P., WLR/GS Master Co-Investment XCO AIV, L.P. and WLR IV Parallel ESC, L.P. (collectively, “WL Ross”) and, separately, an Exercise Commitment Letter, dated November 22, 2013 (the “Hamblin Watsa Commitment Letter” and together with the WLR Commitment Letter, the “Commitment Letters”), with Hamblin Watsa Investment Counsel Ltd. (“Hamblin Watsa”), pursuant to which, subject to the terms and conditions therein, each of WL Ross and Hamblin Watsa have separately agreed to exercise all of the rights issued to it under the basic subscription right and, pursuant to the over-subscription privilege, to subscribe for all of the shares of common stock that are not subscribed for by the Company’s shareholders in a rights offering proposed by the Company. Pursuant to the terms and conditions of each of the Commitment Letters, each of WL Ross and Hamblin Watsa shall not be required to acquire an amount of shares pursuant to the over-subscription privilege exceeding the lesser of: (i) 100% of the shares that were not purchased by other shareholders pursuant to the exercise of their basic subscription right and (ii) an amount of shares which were not purchased by other shareholders pursuant to the exercise of their basic subscription right which, taken together with the shares acquired by WL Ross or Hamblin Watsa, as applicable, pursuant to the basic subscription right, is equal to 50% of the total amount of shares offered. The Company intends to distribute rights to subscribe for and purchase new shares of common stock at a subscription price of $5.00 per share for an aggregate offering amount of approximately $272.9 million if all of the rights are exercised.

[phil_Buffett]

It keeps getting more and more interesting . . .

 

EXCO Resources, Inc. (the Company) entered into an Exercise Commitment Letter, dated November 22, 2013 (the WLR Commitment Letter), with WLR Recovery Fund IV XCO AIV I, L.P., WLR Recovery Fund IV XCO AIV II, L.P., WLR Recovery Fund IV XCO AIV III, L.P., WLR Select Co-Investment XCO AIV, L.P., WLR/GS Master Co-Investment XCO AIV, L.P. and WLR IV Parallel ESC, L.P. (collectively, WL Ross) and, separately, an Exercise Commitment Letter, dated November 22, 2013 (the Hamblin Watsa Commitment Letter and together with the WLR Commitment Letter, the Commitment Letters), with Hamblin Watsa Investment Counsel Ltd. (Hamblin Watsa), pursuant to which, subject to the terms and conditions therein, each of WL Ross and Hamblin Watsa have separately agreed to exercise all of the rights issued to it under the basic subscription right and, pursuant to the over-subscription privilege, to subscribe for all of the shares of common stock that are not subscribed for by the Companys shareholders in a rights offering proposed by the Company. Pursuant to the terms and conditions of each of the Commitment Letters, each of WL Ross and Hamblin Watsa shall not be required to acquire an amount of shares pursuant to the over-subscription privilege exceeding the lesser of: (i) 100% of the shares that were not purchased by other shareholders pursuant to the exercise of their basic subscription right and (ii) an amount of shares which were not purchased by other shareholders pursuant to the exercise of their basic subscription right which, taken together with the shares acquired by WL Ross or Hamblin Watsa, as applicable, pursuant to the basic subscription right, is equal to 50% of the total amount of shares offered. The Company intends to distribute rights to subscribe for and purchase new shares of common stock at a subscription price of $5.00 per share for an aggregate offering amount of approximately $272.9 million if all of the rights are exercised.

 

good sign that they Keep adding Shares or want to add more. i hold my Shares until they will give a nice gain in a few years  :)

[muscleman]

It keeps getting more and more interesting . . .

 

EXCO Resources, Inc. (the “Company”) entered into an Exercise Commitment Letter, dated November 22, 2013 (the “WLR Commitment Letter”), with WLR Recovery Fund IV XCO AIV I, L.P., WLR Recovery Fund IV XCO AIV II, L.P., WLR Recovery Fund IV XCO AIV III, L.P., WLR Select Co-Investment XCO AIV, L.P., WLR/GS Master Co-Investment XCO AIV, L.P. and WLR IV Parallel ESC, L.P. (collectively, “WL Ross”) and, separately, an Exercise Commitment Letter, dated November 22, 2013 (the “Hamblin Watsa Commitment Letter” and together with the WLR Commitment Letter, the “Commitment Letters”), with Hamblin Watsa Investment Counsel Ltd. (“Hamblin Watsa”), pursuant to which, subject to the terms and conditions therein, each of WL Ross and Hamblin Watsa have separately agreed to exercise all of the rights issued to it under the basic subscription right and, pursuant to the over-subscription privilege, to subscribe for all of the shares of common stock that are not subscribed for by the Company’s shareholders in a rights offering proposed by the Company. Pursuant to the terms and conditions of each of the Commitment Letters, each of WL Ross and Hamblin Watsa shall not be required to acquire an amount of shares pursuant to the over-subscription privilege exceeding the lesser of: (i) 100% of the shares that were not purchased by other shareholders pursuant to the exercise of their basic subscription right and (ii) an amount of shares which were not purchased by other shareholders pursuant to the exercise of their basic subscription right which, taken together with the shares acquired by WL Ross or Hamblin Watsa, as applicable, pursuant to the basic subscription right, is equal to 50% of the total amount of shares offered. The Company intends to distribute rights to subscribe for and purchase new shares of common stock at a subscription price of $5.00 per share for an aggregate offering amount of approximately $272.9 million if all of the rights are exercised.

 

This is certainly more interesting and proped me to take another look at XCO.

I still haven't understood the story for XCO and its valuation yet. If nat gas price stays low for the next 5 years, what will happen to XCO?

Are these guru investors recapitalizing it for the transition to oil?

[phil_Buffett]

http://finance.yahoo.com/news/ross-watsa-backstop-273-million-224715989.html

 

Wilbur Ross speaks about exco

[BargainValueHunter]

{Same article as above but the Ross quotes are quite interesting}

 

http://www.reuters.com/article/2013/11/25/exco-offering-idUSL2N0JA1UI20131125

 

Ross, who owns 14 percent of Exco's shares, said in an interview he would not be committing more capital to Exco unless he believed in its prospects.

 

"I think it speaks for itself," he said.

 

-and-

 

He said the company's pressing issues are to find a new chief executive, complete the rights offering and prove the assets they own are viable.

 

"They have a lot of prospects," Ross said. "They have a lot of reserves. They have amassed, I believe, a large capital budget for drilling. A lot of what's needed is simply to prove up the reserves that they have."

 

 

[phil_Buffett]

{Same article as above but the Ross quotes are quite interesting}

 

http://www.reuters.com/article/2013/11/25/exco-offering-idUSL2N0JA1UI20131125

 

Ross, who owns 14 percent of Exco's shares, said in an interview he would not be committing more capital to Exco unless he believed in its prospects.

 

"I think it speaks for itself," he said.

 

-and-

 

He said the company's pressing issues are to find a new chief executive, complete the rights offering and prove the assets they own are viable.

 

"They have a lot of prospects," Ross said. "They have a lot of reserves. They have amassed, I believe, a large capital budget for drilling. A lot of what's needed is simply to prove up the reserves that they have."

 

 

 

very nice. i have a high respect for Mr. Ross and like him very much. Iam very confident that over a few years period this Company will Play out very well. they have good assets and a lot of reserves, that are almost completly written down. in few years if natural gas Prices are back at 5-6$ exco the low cost Producer will be a good investment

[muscleman]

{Same article as above but the Ross quotes are quite interesting}

 

http://www.reuters.com/article/2013/11/25/exco-offering-idUSL2N0JA1UI20131125

 

Ross, who owns 14 percent of Exco's shares, said in an interview he would not be committing more capital to Exco unless he believed in its prospects.

 

"I think it speaks for itself," he said.

 

-and-

 

He said the company's pressing issues are to find a new chief executive, complete the rights offering and prove the assets they own are viable.

 

"They have a lot of prospects," Ross said. "They have a lot of reserves. They have amassed, I believe, a large capital budget for drilling. A lot of what's needed is simply to prove up the reserves that they have."

 

 

 

very nice. i have a high respect for Mr. Ross and like him very much. Iam very confident that over a few years period this Company will Play out very well. they have good assets and a lot of reserves, that are almost completly written down. in few years if natural gas Prices are back at 5-6$ exco the low cost Producer will be a good investment

 

But what if the gas price remains low for another 5 years?

I think they are ramping up oil production significantly in order to have a backup plan. But is that oil acquisition from CHK sufficient?

[phil_Buffett]

{Same article as above but the Ross quotes are quite interesting}

 

http://www.reuters.com/article/2013/11/25/exco-offering-idUSL2N0JA1UI20131125

 

Ross, who owns 14 percent of Exco's shares, said in an interview he would not be committing more capital to Exco unless he believed in its prospects.

 

"I think it speaks for itself," he said.

 

-and-

 

He said the company's pressing issues are to find a new chief executive, complete the rights offering and prove the assets they own are viable.

 

"They have a lot of prospects," Ross said. "They have a lot of reserves. They have amassed, I believe, a large capital budget for drilling. A lot of what's needed is simply to prove up the reserves that they have."

 

 

 

very nice. i have a high respect for Mr. Ross and like him very much. Iam very confident that over a few years period this Company will Play out very well. they have good assets and a lot of reserves, that are almost completly written down. in few years if natural gas Prices are back at 5-6$ exco the low cost Producer will be a good investment

 

But what if the gas price remains low for another 5 years?

I think they are ramping up oil production significantly in order to have a backup plan. But is that oil acquisition from CHK sufficient?

 

that is the only Problem which remains. if nat gas stay low for the next 5 year, than exco has a Problem. but that will not happen.

[muscleman]

{Same article as above but the Ross quotes are quite interesting}

 

http://www.reuters.com/article/2013/11/25/exco-offering-idUSL2N0JA1UI20131125

 

Ross, who owns 14 percent of Exco's shares, said in an interview he would not be committing more capital to Exco unless he believed in its prospects.

 

"I think it speaks for itself," he said.

 

-and-

 

He said the company's pressing issues are to find a new chief executive, complete the rights offering and prove the assets they own are viable.

 

"They have a lot of prospects," Ross said. "They have a lot of reserves. They have amassed, I believe, a large capital budget for drilling. A lot of what's needed is simply to prove up the reserves that they have."

 

 

 

very nice. i have a high respect for Mr. Ross and like him very much. Iam very confident that over a few years period this Company will Play out very well. they have good assets and a lot of reserves, that are almost completly written down. in few years if natural gas Prices are back at 5-6$ exco the low cost Producer will be a good investment

 

But what if the gas price remains low for another 5 years?

I think they are ramping up oil production significantly in order to have a backup plan. But is that oil acquisition from CHK sufficient?

 

that is the only Problem which remains. if nat gas stay low for the next 5 year, than exco has a Problem. but that will not happen.

 

Could you please share some insights on the nat gas price 5 year projection?

[phil_Buffett]

i cant say exactly what will happen. i have no cyrstal ball  ;D

 

the only i know, is that i think the coming years demand will rise big. a Switch from coal to nat gas. rising energy demand for natural gas. exports maybe in 2015.

the fact alone that in Germany for example the Price of nat gas is 3-4X the us Price. this is very seductive.

 

wilbur ross argues, that with the rising energy demand for nat gas and the maybe Export into other countries for example asia (where for example the energy Prices are also 3-4xtimes the us costs) the assets from exco are worth a lot.

 

so i dont say exactly what will happen. i think a nat gas Price between 5-6$ would be very good in the near term.

[muscleman]

i cant say exactly what will happen. i have no cyrstal ball  ;D

 

the only i know, is that i think the coming years demand will rise big. a Switch from coal to nat gas. rising energy demand for natural gas. exports maybe in 2015.

the fact alone that in Germany for example the Price of nat gas is 3-4X the us Price. this is very seductive.

 

wilbur ross argues, that with the rising energy demand for nat gas and the maybe Export into other countries for example asia (where for example the energy Prices are also 3-4xtimes the us costs) the assets from exco are worth a lot.

 

so i dont say exactly what will happen. i think a nat gas Price between 5-6$ would be very good in the near term.

 

But still, why is XCO at current price better than other nat gas stocks like CHK? I stilll can't wrap my head around it.

I also bet that gas price will recover in a few years, but for CHK, if it doesn't recover, its oil production can put in a floor for me. That was my thesis for CHK.

[phil_Buffett]

i cant say exactly what will happen. i have no cyrstal ball  ;D

 

the only i know, is that i think the coming years demand will rise big. a Switch from coal to nat gas. rising energy demand for natural gas. exports maybe in 2015.

the fact alone that in Germany for example the Price of nat gas is 3-4X the us Price. this is very seductive.

 

wilbur ross argues, that with the rising energy demand for nat gas and the maybe Export into other countries for example asia (where for example the energy Prices are also 3-4xtimes the us costs) the assets from exco are worth a lot.

 

so i dont say exactly what will happen. i think a nat gas Price between 5-6$ would be very good in the near term.

 

But still, why is XCO at current price better than other nat gas stocks like CHK? I stilll can't wrap my head around it.

I also bet that gas price will recover in a few years, but for CHK, if it doesn't recover, its oil production can put in a floor for me. That was my thesis for CHK.

 

i would not say it is better than other stocks. it is a good stock to own if you think that nat gas will a lot higher in a few years. i have three stocks in this sector. CHK is the stock with best assets. as you said muscleman oil and gas. then i have SD and Exco. Exco is a pure Play for me on natural gas. nothing more. i have this strong Feeling and confidence that nat gas will be a lot higher in few years

[fareastwarriors]

rights offering

 

http://www.excoresources.com/single-news-release.htm?regid=1885204

 

 

 

Under the terms of the rights offering, EXCO is distributing to its common shareholders, at no charge, one transferable subscription right for every share of common stock held of record as of 5:00 p.m., New York City time, on December 19, 2013, the previously announced record date. Each subscription right entitles the holder thereof to purchase 0.25 of a share of common stock for each share of common stock owned as of the record date at a purchase price of $5.00 per share. In addition to being able to purchase their pro rata portion of the shares offered based on their ownership as of the record date for the rights offering, shareholders may oversubscribe for additional shares of common stock as described in the registration statement.

[phil_Buffett]

http://www.insidermonkey.com/blog/oaktree-capital-management-boosts-stake-in-exco-resources-inc-xco-to-16-6-313793/

[muscleman]

http://www.insidermonkey.com/blog/oaktree-capital-management-boosts-stake-in-exco-resources-inc-xco-to-16-6-313793/

 

That's just the rights offering, nothing more.

In terms of upside/downside analysis, I am wondering what is your thoughts on this vs CHK.

[phil_Buffett]

exco is small Position for me. i have much more faith in CHK  than Exco. Chesapeake has a good new CEO and they making the right steps. the assets are undervalued. i like Chesapeake much more.

[alertmeipp]

the only reason i would like xco over chk is its smaller size so m&a will be easier to come along