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RRJ

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What happens if the Saudis decide to take oil to sub $60 per barrel for a year or two?  Yikes!

 

Exco is primarily a nat gas company, though they also have more oil exposure now because of their deal in the Eagle Ford.  So they're going to live and die primarily by nat gas.

 

They hedge in order to protect themselves from disaster, and they disclosed existing hedges several days ago, which caused a weird market reaction (apparently, traders thought this was negative because nat gas could go to $6 and they believe Exco doesn't make money on nat gas unless it's at $5).  I wouldn't be surprised if they just go ahead and hedge the rest of their oil production now in order to make sure that their oil ops remain nicely profitable in the face of further collapse in oil prices.

 

If nat gas collapses again, then that would be a different story.

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if they are really approached by buyers would be interesting to see what they want to pay. ross, watsa and marks all have way higher entry Prices and are also as we big in the red. maybe with 10$ the see green lights. but 10$ with a 2$ share actuall is very unrealistic. hope we are getting not screwed big time. but i cant think about a sale at a low Price. makes no sense because the Gurus are big in the red. maybe take this Thing private for 4$ but this also something i dont believe wilbur ross will do.

 

what are your thoughts?

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http://www.excoresources.com/single-news-release.htm?regid=1976165

 

DALLAS--(BUSINESS WIRE)--Oct. 10, 2014-- EXCO Resources, Inc. (NYSE:XCO) (“EXCO”) today announced that it is continuing its search for a new Chief Executive Officer. EXCO is currently in various stages of discussions with candidates. In connection with such search, EXCO may consider acquiring oil and gas entities or properties owned by or affiliated with the candidate who is ultimately selected

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http://www.businessweek.com/news/2014-10-10/exco-resources-may-buy-properties-from-its-next-ceo

 

Pickens says “Somebody suggested that Exco is a candidate for bankruptcy,” he said. “They have $750 million of liquidity. They’re not a prospect for bankruptcy. But when it gets down like $2.50 a share, that starts the talk that they’re a prospect.”

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http://www.excoresources.com/single-news-release.htm?regid=1976165

 

DALLAS--(BUSINESS WIRE)--Oct. 10, 2014-- EXCO Resources, Inc. (NYSE:XCO) (“EXCO”) today announced that it is continuing its search for a new Chief Executive Officer. EXCO is currently in various stages of discussions with candidates. In connection with such search, EXCO may consider acquiring oil and gas entities or properties owned by or affiliated with the candidate who is ultimately selected

 

What a bizarre press release.  It sounds like they're trying to tell potential acquirers . . . hey, if you don't act soon, we're going to hire a CEO and buy properties from him too.  What a threat!

 

Without a doubt, Exco has had some of the strangest stuff go on with management. 

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to the buyout Point. what Price is possible?  i cleary dont get it that the Company who is owned by marks, ross and watsa and pickens will sell for 3-4 bucks and they are making big big loses. can the Company make a buyout over the heads from ross, watsa and marks?

 

i would think that they control the Company and what Management do, because of their high ownership

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My two cents for what it's worth after filing them pretty closely. The deal will have to be an equity deal or allow some sort of roll-over for the Big Three.  They believe the story of natural gas and no way they are going to get out now. They would need to get a good portion of the equity of the combined entity however in order for it to work for them.

 

At this point consolidation within the industry might start to make sense if everyone is getting ready to bear down and survive until it turns so mergers start to make sense especially equity mergers where they can keep the upside once things turned.

 

I don't think there's any chance they allow a full buy-out in cash.

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http://www.excoresources.com/single-news-release.htm?regid=1976165

 

DALLAS--(BUSINESS WIRE)--Oct. 10, 2014-- EXCO Resources, Inc. (NYSE:XCO) (“EXCO”) today announced that it is continuing its search for a new Chief Executive Officer. EXCO is currently in various stages of discussions with candidates. In connection with such search, EXCO may consider acquiring oil and gas entities or properties owned by or affiliated with the candidate who is ultimately selected

 

What a bizarre press release.  It sounds like they're trying to tell potential acquirers . . . hey, if you don't act soon, we're going to hire a CEO and buy properties from him too.  What a threat!

 

Without a doubt, Exco has had some of the strangest stuff go on with management.

 

I agree it's a bizarre release. I'd put my money on FFH pushing for Tom Ward and buying his assets as part of appointing him to the role.

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