x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Texas
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74-1492779
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(State of incorporation)
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(I.R.S. Employer Identification No.)
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12377 Merit Drive
Suite 1700
Dallas, Texas
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75251
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Emerging growth company
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o
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Item 1.
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Financial Statements
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(in thousands)
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|
September 30, 2017
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December 31, 2016
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||||
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(Unaudited)
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||||
Assets
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||||
Current assets:
|
|
|
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||||
Cash and cash equivalents
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$
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82,459
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$
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9,068
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Restricted cash
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23,379
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|
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11,150
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Accounts receivable, net:
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||||
Oil and natural gas
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39,457
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52,674
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||
Joint interest
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25,555
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25,905
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Other
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2,104
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3,813
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Derivative financial instruments - commodity derivatives
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1,512
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—
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Inventory and other
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15,915
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8,007
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Total current assets
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190,381
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110,617
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Equity investments
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25,373
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24,365
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Oil and natural gas properties (full cost accounting method):
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||||
Unproved oil and natural gas properties and development costs not being amortized
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112,935
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97,080
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Proved developed and undeveloped oil and natural gas properties
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3,055,258
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2,939,923
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Accumulated depletion
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(2,738,103
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)
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(2,702,245
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)
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Oil and natural gas properties, net
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430,090
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334,758
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Other property and equipment, net
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21,078
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23,661
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Deferred financing costs, net
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—
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4,376
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Derivative financial instruments - commodity derivatives
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97
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482
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Goodwill
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163,155
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163,155
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Total assets
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$
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830,174
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$
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661,414
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Liabilities and shareholders’ equity
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||||
Current liabilities:
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||||
Accounts payable and accrued liabilities
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$
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60,731
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$
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54,762
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Revenues and royalties payable
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132,917
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120,845
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||
Accrued interest payable
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6,097
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4,701
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Current portion of asset retirement obligations
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344
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344
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Income taxes payable
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—
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—
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Derivative financial instruments - commodity derivatives
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1,401
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27,711
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Current maturities of long-term debt
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1,333,989
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50,000
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Total current liabilities
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1,535,479
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258,363
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Long-term debt
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21,388
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1,258,538
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Deferred income taxes
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5,885
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2,802
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Derivative financial instruments - commodity derivatives
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—
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464
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|
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Derivative financial instruments - common share warrants
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14,555
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|
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—
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Asset retirement obligations and other long-term liabilities
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13,233
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13,153
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Shareholders’ equity:
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||||
Common shares, $0.001 par value; 260,000,000 authorized shares; 21,670,959 shares issued and 21,631,314 shares outstanding at September 30, 2017; 18,915,952 shares issued and 18,876,307 shares outstanding at December 31, 2016
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22
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19
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Additional paid-in capital
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3,539,498
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3,538,080
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Accumulated deficit
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(4,292,254
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)
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(4,402,373
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)
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Treasury shares, at cost; 39,645 shares at September 30, 2017 and December 31, 2016
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(7,632
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)
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(7,632
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)
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Total shareholders’ equity
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(760,366
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)
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(871,906
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)
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Total liabilities and shareholders’ equity
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$
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830,174
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$
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661,414
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
(in thousands, except per share data)
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2017
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2016
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2017
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2016
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||||||||
Revenues:
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||||||||
Oil
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$
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12,906
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$
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16,215
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$
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43,403
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$
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49,688
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Natural gas
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48,323
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54,647
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151,669
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127,044
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||||
Purchased natural gas and marketing
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5,507
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6,324
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19,208
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15,335
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||||
Total revenues
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66,736
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77,186
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214,280
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192,067
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|
||||
Costs and expenses:
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||||||||
Oil and natural gas operating costs
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9,215
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8,797
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25,928
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25,835
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|
||||
Production and ad valorem taxes
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3,044
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3,811
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9,894
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13,308
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||||
Gathering and transportation
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28,743
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27,979
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83,183
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79,828
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||||
Purchased natural gas
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5,388
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6,586
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18,193
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17,273
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|
||||
Depletion, depreciation and amortization
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13,518
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15,910
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36,648
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63,995
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|
||||
Impairment of oil and natural gas properties
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—
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—
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—
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160,813
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|
||||
Accretion of discount on asset retirement obligations
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221
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325
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|
648
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|
|
2,006
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|
||||
General and administrative
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10,035
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10,746
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13,056
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|
|
38,626
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|
||||
Other operating items
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|
1,714
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(1,110
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)
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3,069
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|
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23,936
|
|
||||
Total costs and expenses
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|
71,878
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73,044
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|
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190,619
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|
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425,620
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|
||||
Operating income (loss)
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|
(5,142
|
)
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4,142
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23,661
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|
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(233,553
|
)
|
||||
Other income (expense):
|
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|
|
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||||||||
Interest expense, net
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(32,888
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)
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(16,997
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)
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(75,320
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)
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(54,186
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)
|
||||
Gain (loss) on derivative financial instruments - commodity derivatives
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|
860
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8,209
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22,934
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(11,632
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)
|
||||
Gain on derivative financial instruments - common share warrants
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18,286
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|
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—
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146,585
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|
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—
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|
||||
Gain (loss) on restructuring and extinguishment of debt
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—
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57,421
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(6,380
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)
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119,374
|
|
||||
Other income
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|
25
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12
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4
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37
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|
||||
Equity income (loss)
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354
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(823
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)
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1,009
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|
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(8,824
|
)
|
||||
Total other income (expense)
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(13,363
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)
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|
47,822
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|
|
88,832
|
|
|
44,769
|
|
||||
Income (loss) before income taxes
|
|
(18,505
|
)
|
|
51,964
|
|
|
112,493
|
|
|
(188,784
|
)
|
||||
Income tax expense
|
|
319
|
|
|
1,028
|
|
|
2,374
|
|
|
1,775
|
|
||||
Net income (loss)
|
|
$
|
(18,824
|
)
|
|
$
|
50,936
|
|
|
$
|
110,119
|
|
|
$
|
(190,559
|
)
|
Earnings (loss) per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
(0.81
|
)
|
|
$
|
2.73
|
|
|
$
|
5.35
|
|
|
$
|
(10.24
|
)
|
Weighted average common shares outstanding
|
|
23,319
|
|
|
18,670
|
|
|
20,599
|
|
|
18,612
|
|
||||
Diluted:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
(0.81
|
)
|
|
$
|
2.72
|
|
|
$
|
5.35
|
|
|
$
|
(10.24
|
)
|
Weighted average common shares and common share equivalents outstanding
|
|
23,319
|
|
|
18,749
|
|
|
20,599
|
|
|
18,612
|
|
|
|
Nine Months Ended September 30,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Operating Activities:
|
|
|
|
|
||||
Net income (loss)
|
|
$
|
110,119
|
|
|
$
|
(190,559
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
||||
Deferred income tax expense
|
|
3,083
|
|
|
1,775
|
|
||
Depletion, depreciation and amortization
|
|
36,648
|
|
|
63,995
|
|
||
Equity-based compensation
|
|
(11,207
|
)
|
|
14,558
|
|
||
Accretion of discount on asset retirement obligations
|
|
648
|
|
|
2,006
|
|
||
Impairment of oil and natural gas properties
|
|
—
|
|
|
160,813
|
|
||
(Gain) loss from equity investments
|
|
(1,009
|
)
|
|
8,824
|
|
||
(Gain) loss on derivative financial instruments - commodity derivatives
|
|
(22,934
|
)
|
|
11,632
|
|
||
Cash receipts (payments) of commodity derivative financial instruments
|
|
(4,967
|
)
|
|
38,097
|
|
||
Gain on derivative financial instruments - common share warrants
|
|
(146,585
|
)
|
|
—
|
|
||
Amortization of deferred financing costs and discount on debt issuance
|
|
18,744
|
|
|
7,250
|
|
||
Other non-operating items
|
|
2,019
|
|
|
24,068
|
|
||
(Gain) loss on restructuring and extinguishment of debt
|
|
6,380
|
|
|
(119,374
|
)
|
||
Paid in-kind interest expense
|
|
38,386
|
|
|
—
|
|
||
Effect of changes in:
|
|
|
|
|
||||
Restricted cash with related party
|
|
—
|
|
|
2,100
|
|
||
Accounts receivable
|
|
13,183
|
|
|
(12,752
|
)
|
||
Other current assets
|
|
(6,210
|
)
|
|
(1,207
|
)
|
||
Accounts payable and other liabilities
|
|
14,809
|
|
|
(14,966
|
)
|
||
Net cash provided by (used in) operating activities
|
|
51,107
|
|
|
(3,740
|
)
|
||
Investing Activities:
|
|
|
|
|
||||
Additions to oil and natural gas properties, gathering assets and equipment
|
|
(91,009
|
)
|
|
(70,455
|
)
|
||
Property acquisitions
|
|
(24,665
|
)
|
|
—
|
|
||
Proceeds from disposition of property and equipment
|
|
25
|
|
|
11,242
|
|
||
Restricted cash
|
|
(12,229
|
)
|
|
686
|
|
||
Net changes in amounts due to joint ventures
|
|
(9,498
|
)
|
|
2,377
|
|
||
Net cash used in investing activities
|
|
(137,376
|
)
|
|
(56,150
|
)
|
||
Financing Activities:
|
|
|
|
|
||||
Borrowings under EXCO Resources Credit Agreement
|
|
163,401
|
|
|
390,897
|
|
||
Repayments under EXCO Resources Credit Agreement
|
|
(265,592
|
)
|
|
(243,797
|
)
|
||
Proceeds received from issuance of 1.5 Lien Notes, net
|
|
295,530
|
|
|
—
|
|
||
Payments on Exchange Term Loan
|
|
(11,602
|
)
|
|
(38,056
|
)
|
||
Repurchases of senior unsecured notes
|
|
—
|
|
|
(53,298
|
)
|
||
Debt financing costs and other
|
|
(22,077
|
)
|
|
(4,569
|
)
|
||
Net cash provided by financing activities
|
|
159,660
|
|
|
51,177
|
|
||
Net increase (decrease) in cash
|
|
73,391
|
|
|
(8,713
|
)
|
||
Cash at beginning of period
|
|
9,068
|
|
|
12,247
|
|
||
Cash at end of period
|
|
$
|
82,459
|
|
|
$
|
3,534
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
||||
Cash interest payments
|
|
$
|
23,072
|
|
|
$
|
51,975
|
|
Income tax payments
|
|
—
|
|
|
—
|
|
||
Supplemental non-cash investing and financing activities:
|
|
|
|
|
||||
Capitalized equity-based compensation
|
|
$
|
852
|
|
|
$
|
432
|
|
Capitalized interest
|
|
4,627
|
|
|
3,939
|
|
|
|
Common shares
|
|
Treasury shares
|
|
Additional paid-in capital
|
|
Accumulated deficit
|
|
Total shareholders’ equity
|
||||||||||||||||
(in thousands)
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|||||||||||||||
Balance at December 31, 2015
|
|
18,920
|
|
|
$
|
19
|
|
|
(40
|
)
|
|
$
|
(7,632
|
)
|
|
$
|
3,522,410
|
|
|
$
|
(4,177,120
|
)
|
|
$
|
(662,323
|
)
|
Issuance of common shares
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,240
|
|
|
—
|
|
|
15,240
|
|
|||||
Restricted shares issued, net of cancellations
|
|
(56
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common share dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|
45
|
|
|||||
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(190,559
|
)
|
|
(190,559
|
)
|
|||||
Balance at September 30, 2016
|
|
18,880
|
|
|
$
|
19
|
|
|
(40
|
)
|
|
$
|
(7,632
|
)
|
|
$
|
3,537,650
|
|
|
$
|
(4,367,634
|
)
|
|
$
|
(837,597
|
)
|
Balance at December 31, 2016
|
|
18,916
|
|
|
$
|
19
|
|
|
(40
|
)
|
|
$
|
(7,632
|
)
|
|
$
|
3,538,080
|
|
|
$
|
(4,402,373
|
)
|
|
$
|
(871,906
|
)
|
Issuance of common shares
|
|
2,746
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
11,395
|
|
|
—
|
|
|
11,398
|
|
|||||
Equity-based compensation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,977
|
)
|
|
—
|
|
|
(9,977
|
)
|
|||||
Restricted shares issued, net of cancellations
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
110,119
|
|
|
110,119
|
|
|||||
Balance at September 30, 2017
|
|
21,671
|
|
|
$
|
22
|
|
|
(40
|
)
|
|
$
|
(7,632
|
)
|
|
$
|
3,539,498
|
|
|
$
|
(4,292,254
|
)
|
|
$
|
(760,366
|
)
|
|
|
Average spot prices
|
||||||
|
|
Oil (per Bbl)
|
|
Natural gas (per Mmbtu)
|
||||
September 30, 2017
|
|
$
|
49.81
|
|
|
$
|
3.00
|
|
June 30, 2017
|
|
48.95
|
|
|
3.01
|
|
||
March 31, 2017
|
|
47.61
|
|
|
2.73
|
|
||
December 31, 2016
|
|
42.75
|
|
|
2.48
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands, except per share data)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Basic net income (loss) per common share:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
(18,824
|
)
|
|
$
|
50,936
|
|
|
$
|
110,119
|
|
|
$
|
(190,559
|
)
|
Weighted average common shares outstanding
|
|
23,319
|
|
|
18,670
|
|
|
20,599
|
|
|
18,612
|
|
||||
Net income (loss) per basic common share
|
|
$
|
(0.81
|
)
|
|
$
|
2.73
|
|
|
$
|
5.35
|
|
|
$
|
(10.24
|
)
|
Diluted net income (loss) per common share:
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
|
$
|
(18,824
|
)
|
|
$
|
50,936
|
|
|
$
|
110,119
|
|
|
$
|
(190,559
|
)
|
Weighted average common shares outstanding
|
|
23,319
|
|
|
18,670
|
|
|
20,599
|
|
|
18,612
|
|
||||
Dilutive effect of:
|
|
|
|
|
|
|
|
|
||||||||
Stock options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Restricted shares and restricted share units
|
|
—
|
|
|
79
|
|
|
—
|
|
|
—
|
|
||||
Warrants
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average common shares and common share equivalents outstanding
|
|
23,319
|
|
|
18,749
|
|
|
20,599
|
|
|
18,612
|
|
||||
Net income (loss) per diluted common share
|
|
$
|
(0.81
|
)
|
|
$
|
2.72
|
|
|
$
|
5.35
|
|
|
$
|
(10.24
|
)
|
(in thousands)
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Current assets
|
|
Derivative financial instruments - commodity derivatives
|
|
$
|
1,512
|
|
|
$
|
—
|
|
Long-term assets
|
|
Derivative financial instruments - commodity derivatives
|
|
97
|
|
|
482
|
|
||
Current liabilities
|
|
Derivative financial instruments - commodity derivatives
|
|
(1,401
|
)
|
|
(27,711
|
)
|
||
Long-term liabilities
|
|
Derivative financial instruments - commodity derivatives
|
|
—
|
|
|
(464
|
)
|
||
|
|
Net commodity derivative financial instruments
|
|
$
|
208
|
|
|
$
|
(27,693
|
)
|
|
|
|
|
|
|
|
||||
Long-term liabilities
|
|
Derivative financial instruments - common share warrants
|
|
$
|
(14,555
|
)
|
|
$
|
—
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Gain (loss) on derivative financial instruments - commodity derivatives
|
|
$
|
860
|
|
|
$
|
8,209
|
|
|
$
|
22,934
|
|
|
$
|
(11,632
|
)
|
Gain on derivative financial instruments - common share warrants
|
|
18,286
|
|
|
—
|
|
|
146,585
|
|
|
—
|
|
(dollars in thousands, except prices)
|
|
Volume Bbtu/Mbbl
|
|
Weighted average strike price per Mmbtu/Bbl
|
|
Fair value at September 30, 2017
|
|||||
Natural gas:
|
|
|
|
|
|
|
|||||
Swaps:
|
|
|
|
|
|
|
|||||
Remainder of 2017
|
|
9,200
|
|
|
$
|
3.05
|
|
|
$
|
(3
|
)
|
2018
|
|
3,650
|
|
|
3.15
|
|
|
351
|
|
||
Collars:
|
|
|
|
|
|
|
|||||
Remainder of 2017
|
|
2,760
|
|
|
|
|
(59
|
)
|
|||
Sold call
|
|
|
|
3.28
|
|
|
|
||||
Purchased put
|
|
|
|
2.87
|
|
|
|
||||
Total natural gas
|
|
|
|
|
|
$
|
289
|
|
|||
Oil:
|
|
|
|
|
|
|
|||||
Swaps:
|
|
|
|
|
|
|
|||||
Remainder of 2017
|
|
46
|
|
|
$
|
50.00
|
|
|
$
|
(81
|
)
|
Total oil
|
|
|
|
|
|
$
|
(81
|
)
|
|||
Total commodity derivative financial instruments
|
|
|
|
|
|
$
|
208
|
|
(in thousands)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
EXCO Resources Credit Agreement
|
|
$
|
126,401
|
|
|
$
|
228,592
|
|
1.5 Lien Notes
|
|
316,958
|
|
|
—
|
|
||
Unamortized discount on 1.5 Lien Notes
|
|
(144,928
|
)
|
|
—
|
|
||
1.75 Lien Term Loans
|
|
863,097
|
|
|
—
|
|
||
Unamortized discount on 1.75 Lien Term Loans
|
|
(18,610
|
)
|
|
—
|
|
||
Exchange Term Loan
|
|
23,543
|
|
|
590,477
|
|
||
Fairfax Term Loan
|
|
—
|
|
|
300,000
|
|
||
2018 Notes
|
|
131,576
|
|
|
131,576
|
|
||
Unamortized discount on 2018 Notes
|
|
(305
|
)
|
|
(520
|
)
|
||
2022 Notes
|
|
70,169
|
|
|
70,169
|
|
||
Deferred financing costs, net
|
|
(12,524
|
)
|
|
(11,756
|
)
|
||
Total debt
|
|
1,355,377
|
|
|
1,308,538
|
|
||
Current maturities of long-term debt
|
|
1,333,989
|
|
|
50,000
|
|
||
Long-term debt
|
|
$
|
21,388
|
|
|
$
|
1,258,538
|
|
|
|
September 30, 2017
|
||||||||||||||
(in thousands)
|
|
Carrying value
|
|
Deferred reduction in carrying value
|
|
Unamortized discount/deferred financing costs
|
|
Principal balance
|
||||||||
EXCO Resources Credit Agreement
|
|
$
|
126,401
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
126,401
|
|
1.5 Lien Notes
|
|
172,030
|
|
|
—
|
|
|
144,928
|
|
|
316,958
|
|
||||
1.75 Lien Term Loans
|
|
844,487
|
|
|
(154,171
|
)
|
|
18,610
|
|
|
708,926
|
|
||||
Exchange Term Loan
|
|
23,543
|
|
|
(6,297
|
)
|
|
—
|
|
|
17,246
|
|
||||
2018 Notes
|
|
131,271
|
|
|
—
|
|
|
305
|
|
|
131,576
|
|
||||
2022 Notes
|
|
70,169
|
|
|
—
|
|
|
—
|
|
|
70,169
|
|
||||
Deferred financing costs, net
|
|
(12,524
|
)
|
|
—
|
|
|
12,524
|
|
|
—
|
|
||||
Total debt
|
|
$
|
1,355,377
|
|
|
$
|
(160,468
|
)
|
|
$
|
176,367
|
|
|
$
|
1,371,276
|
|
•
|
our cash (as defined in the EXCO Resources Credit Agreement) plus unused commitments under the EXCO Resources Credit Agreement cannot be less than (i)
$50.0 million
as of the end of a fiscal month and (ii)
$70.0 million
as of the end of a fiscal quarter;
|
•
|
our Aggregate Revolving Credit Exposure Ratio cannot exceed
1.2
to 1.0 as of the end of any fiscal quarter. Aggregate revolving credit exposure utilized in the Aggregate Revolving Credit Exposure Ratio includes borrowings and letters of credit under the EXCO Resources Credit Agreement; and
|
•
|
our Interest Coverage Ratio cannot be less than
1.75
to 1.0 for the fiscal quarter ending September 30, 2017 and
2.0
to 1.0 for fiscal quarters thereafter. The consolidated EBITDAX and consolidated interest expense utilized in this ratio are based on the most recent fiscal quarter ended multiplied by
4.0
as of September 30, 2017, the most recent two fiscal quarters ended multiplied by
2.0
as of December 31, 2017, the most recent three fiscal quarters ended multiplied by
4/3
as of March 31, 2018, and the trailing twelve month period for fiscal quarters ending thereafter. The definition of consolidated interest expense includes cash interest payments that are accounted for as reductions in the carrying amount of indebtedness in accordance with FASB ASC 470-60,
Troubled Debt Restructuring by Debtors
. Consolidated interest expense is limited to payments in cash, and excludes PIK Payments on the 1.5 Lien Notes and 1.75 Lien Term Loans.
|
•
|
pay dividends or make other distributions or redeem or repurchase our common shares;
|
•
|
prepay, redeem or repurchase certain debt;
|
•
|
enter into agreements restricting the subsidiary guarantors’ ability to pay dividends to us or another subsidiary guarantor, make loans or advances to us or transfer assets to us;
|
•
|
engage in asset sales or substantially alter the business that we conduct;
|
•
|
enter into transactions with affiliates;
|
•
|
consolidate, merge or dispose of assets;
|
•
|
incur liens; and
|
•
|
enter into sale/leaseback transactions.
|
|
|
September 30, 2017
|
||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative financial instruments - commodity derivatives
|
|
$
|
—
|
|
|
$
|
208
|
|
|
$
|
—
|
|
|
$
|
208
|
|
Derivative financial instruments - common share warrants
|
|
—
|
|
|
(14,555
|
)
|
|
—
|
|
|
(14,555
|
)
|
||||
|
|
December 31, 2016
|
||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Derivative financial instruments - commodity derivatives
|
|
$
|
—
|
|
|
$
|
(27,693
|
)
|
|
$
|
—
|
|
|
$
|
(27,693
|
)
|
|
|
September 30, 2017
|
||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
1.5 Lien Notes
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
232,276
|
|
|
$
|
232,276
|
|
1.75 Lien Term Loans
|
|
—
|
|
|
—
|
|
|
474,980
|
|
|
474,980
|
|
||||
Exchange Term Loan
|
|
—
|
|
|
—
|
|
|
11,555
|
|
|
11,555
|
|
||||
2018 Notes
|
|
33,210
|
|
|
—
|
|
|
—
|
|
|
33,210
|
|
||||
2022 Notes
|
|
14,341
|
|
|
—
|
|
|
—
|
|
|
14,341
|
|
||||
|
|
December 31, 2016
|
||||||||||||||
(in thousands)
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Exchange Term Loan
|
|
$
|
—
|
|
|
$
|
294,000
|
|
|
$
|
—
|
|
|
$
|
294,000
|
|
Fairfax Term Loan
|
|
—
|
|
|
222,000
|
|
|
—
|
|
|
222,000
|
|
||||
2018 Notes
|
|
79,028
|
|
|
—
|
|
|
—
|
|
|
79,028
|
|
||||
2022 Notes
|
|
35,260
|
|
|
—
|
|
|
—
|
|
|
35,260
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Amounts received from OPCO
|
|
$
|
1,562
|
|
|
$
|
3,824
|
|
|
$
|
4,940
|
|
|
$
|
12,586
|
|
(in thousands)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Amounts due to EXCO (1)
|
|
$
|
492
|
|
|
$
|
618
|
|
Amounts due from EXCO (1)
|
|
3,389
|
|
|
13,624
|
|
(1)
|
Advances to OPCO are recorded in "Inventory and other" in our Condensed Consolidated Balance Sheets. Any amounts we owe to OPCO are netted against the advance until the advances are utilized. If the advances are fully utilized, we record amounts owed in "Accounts payable and accrued liabilities" in our Condensed Consolidated Balance Sheets.
|
•
|
Resources;
|
•
|
the Guarantor Subsidiaries;
|
•
|
the Non-Guarantor Subsidiaries;
|
•
|
elimination entries necessary to consolidate Resources, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries; and
|
•
|
EXCO on a consolidated basis.
|
(in thousands)
|
|
Resources
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
94,216
|
|
|
$
|
(11,757
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
82,459
|
|
Restricted cash
|
|
—
|
|
|
23,379
|
|
|
—
|
|
|
—
|
|
|
23,379
|
|
|||||
Other current assets
|
|
16,082
|
|
|
68,461
|
|
|
—
|
|
|
—
|
|
|
84,543
|
|
|||||
Total current assets
|
|
110,298
|
|
|
80,083
|
|
|
—
|
|
|
—
|
|
|
190,381
|
|
|||||
Equity investments
|
|
—
|
|
|
—
|
|
|
25,373
|
|
|
—
|
|
|
25,373
|
|
|||||
Oil and natural gas properties (full cost accounting method):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Unproved oil and natural gas properties and development costs not being amortized
|
|
—
|
|
|
112,935
|
|
|
—
|
|
|
—
|
|
|
112,935
|
|
|||||
Proved developed and undeveloped oil and natural gas properties
|
|
333,253
|
|
|
2,722,005
|
|
|
—
|
|
|
—
|
|
|
3,055,258
|
|
|||||
Accumulated depletion
|
|
(330,776
|
)
|
|
(2,407,327
|
)
|
|
—
|
|
|
—
|
|
|
(2,738,103
|
)
|
|||||
Oil and natural gas properties, net
|
|
2,477
|
|
|
427,613
|
|
|
—
|
|
|
—
|
|
|
430,090
|
|
|||||
Other property and equipment, net
|
|
585
|
|
|
20,493
|
|
|
—
|
|
|
—
|
|
|
21,078
|
|
|||||
Investments in and advances to affiliates, net
|
|
502,864
|
|
|
—
|
|
|
—
|
|
|
(502,864
|
)
|
|
—
|
|
|||||
Derivative financial instruments - commodity derivatives
|
|
97
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
97
|
|
|||||
Goodwill
|
|
13,293
|
|
|
149,862
|
|
|
—
|
|
|
—
|
|
|
163,155
|
|
|||||
Total assets
|
|
$
|
629,614
|
|
|
$
|
678,051
|
|
|
$
|
25,373
|
|
|
$
|
(502,864
|
)
|
|
$
|
830,174
|
|
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
|
$
|
1,333,989
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,333,989
|
|
Other current liabilities
|
|
14,163
|
|
|
187,327
|
|
|
—
|
|
|
—
|
|
|
201,490
|
|
|||||
Long-term debt
|
|
21,388
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,388
|
|
|||||
Derivative financial instruments - common share warrants
|
|
14,555
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,555
|
|
|||||
Other long-term liabilities
|
|
5,885
|
|
|
13,233
|
|
|
—
|
|
|
—
|
|
|
19,118
|
|
|||||
Payable to parent
|
|
—
|
|
|
2,416,991
|
|
|
—
|
|
|
(2,416,991
|
)
|
|
—
|
|
|||||
Total shareholders' equity
|
|
(760,366
|
)
|
|
(1,939,500
|
)
|
|
25,373
|
|
|
1,914,127
|
|
|
(760,366
|
)
|
|||||
Total liabilities and shareholders' equity
|
|
$
|
629,614
|
|
|
$
|
678,051
|
|
|
$
|
25,373
|
|
|
$
|
(502,864
|
)
|
|
$
|
830,174
|
|
(in thousands)
|
|
Resources
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
24,610
|
|
|
$
|
(15,542
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,068
|
|
Restricted cash
|
|
—
|
|
|
11,150
|
|
|
—
|
|
|
—
|
|
|
11,150
|
|
|||||
Other current assets
|
|
6,463
|
|
|
83,936
|
|
|
—
|
|
|
—
|
|
|
90,399
|
|
|||||
Total current assets
|
|
31,073
|
|
|
79,544
|
|
|
—
|
|
|
—
|
|
|
110,617
|
|
|||||
Equity investments
|
|
—
|
|
|
—
|
|
|
24,365
|
|
|
—
|
|
|
24,365
|
|
|||||
Oil and natural gas properties (full cost accounting method):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Unproved oil and natural gas properties and development costs not being amortized
|
|
—
|
|
|
97,080
|
|
|
—
|
|
|
—
|
|
|
97,080
|
|
|||||
Proved developed and undeveloped oil and natural gas properties
|
|
331,823
|
|
|
2,608,100
|
|
|
—
|
|
|
—
|
|
|
2,939,923
|
|
|||||
Accumulated depletion
|
|
(330,776
|
)
|
|
(2,371,469
|
)
|
|
—
|
|
|
—
|
|
|
(2,702,245
|
)
|
|||||
Oil and natural gas properties, net
|
|
1,047
|
|
|
333,711
|
|
|
—
|
|
|
—
|
|
|
334,758
|
|
|||||
Other property and equipment, net
|
|
568
|
|
|
23,093
|
|
|
—
|
|
|
—
|
|
|
23,661
|
|
|||||
Investments in and advances to affiliates, net
|
|
430,168
|
|
|
—
|
|
|
—
|
|
|
(430,168
|
)
|
|
—
|
|
|||||
Deferred financing costs, net
|
|
4,376
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,376
|
|
|||||
Derivative financial instruments - commodity derivatives
|
|
482
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
482
|
|
|||||
Goodwill
|
|
13,293
|
|
|
149,862
|
|
|
—
|
|
|
—
|
|
|
163,155
|
|
|||||
Total assets
|
|
$
|
481,007
|
|
|
$
|
586,210
|
|
|
$
|
24,365
|
|
|
$
|
(430,168
|
)
|
|
$
|
661,414
|
|
Liabilities and shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current maturities of long-term debt
|
|
$
|
50,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
50,000
|
|
Other current liabilities
|
|
40,671
|
|
|
167,692
|
|
|
—
|
|
|
—
|
|
|
208,363
|
|
|||||
Long-term debt
|
|
1,258,538
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,258,538
|
|
|||||
Other long-term liabilities
|
|
3,704
|
|
|
12,715
|
|
|
—
|
|
|
—
|
|
|
16,419
|
|
|||||
Payable to parent
|
|
—
|
|
|
2,337,585
|
|
|
—
|
|
|
(2,337,585
|
)
|
|
—
|
|
|||||
Total shareholders' equity
|
|
(871,906
|
)
|
|
(1,931,782
|
)
|
|
24,365
|
|
|
1,907,417
|
|
|
(871,906
|
)
|
|||||
Total liabilities and shareholders' equity
|
|
$
|
481,007
|
|
|
$
|
586,210
|
|
|
$
|
24,365
|
|
|
$
|
(430,168
|
)
|
|
$
|
661,414
|
|
(in thousands)
|
|
Resources
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas
|
|
$
|
—
|
|
|
$
|
61,229
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
61,229
|
|
Purchased natural gas and marketing
|
|
—
|
|
|
5,507
|
|
|
—
|
|
|
—
|
|
|
5,507
|
|
|||||
Total revenues
|
|
—
|
|
|
66,736
|
|
|
—
|
|
|
—
|
|
|
66,736
|
|
|||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas production
|
|
—
|
|
|
12,259
|
|
|
—
|
|
|
—
|
|
|
12,259
|
|
|||||
Gathering and transportation
|
|
—
|
|
|
28,743
|
|
|
—
|
|
|
—
|
|
|
28,743
|
|
|||||
Purchased natural gas
|
|
—
|
|
|
5,388
|
|
|
—
|
|
|
—
|
|
|
5,388
|
|
|||||
Depletion, depreciation and amortization
|
|
88
|
|
|
13,430
|
|
|
—
|
|
|
—
|
|
|
13,518
|
|
|||||
Impairment of oil and natural gas properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Accretion of discount on asset retirement obligations
|
|
—
|
|
|
221
|
|
|
—
|
|
|
—
|
|
|
221
|
|
|||||
General and administrative
|
|
(5,042
|
)
|
|
15,077
|
|
|
—
|
|
|
—
|
|
|
10,035
|
|
|||||
Other operating items
|
|
—
|
|
|
1,714
|
|
|
—
|
|
|
—
|
|
|
1,714
|
|
|||||
Total costs and expenses
|
|
(4,954
|
)
|
|
76,832
|
|
|
—
|
|
|
—
|
|
|
71,878
|
|
|||||
Operating income (loss)
|
|
4,954
|
|
|
(10,096
|
)
|
|
—
|
|
|
—
|
|
|
(5,142
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
|
(32,888
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32,888
|
)
|
|||||
Gain on derivative financial instruments - commodity derivatives
|
|
860
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
860
|
|
|||||
Gain on derivative financial instruments - common share warrants
|
|
18,286
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,286
|
|
|||||
Other income
|
|
13
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Equity income
|
|
—
|
|
|
—
|
|
|
354
|
|
|
—
|
|
|
354
|
|
|||||
Net loss from consolidated subsidiaries
|
|
(9,730
|
)
|
|
—
|
|
|
—
|
|
|
9,730
|
|
|
—
|
|
|||||
Total other income (expense)
|
|
(23,459
|
)
|
|
12
|
|
|
354
|
|
|
9,730
|
|
|
(13,363
|
)
|
|||||
Income (loss) before income taxes
|
|
(18,505
|
)
|
|
(10,084
|
)
|
|
354
|
|
|
9,730
|
|
|
(18,505
|
)
|
|||||
Income tax expense
|
|
319
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
319
|
|
|||||
Net income (loss)
|
|
$
|
(18,824
|
)
|
|
$
|
(10,084
|
)
|
|
$
|
354
|
|
|
$
|
9,730
|
|
|
$
|
(18,824
|
)
|
(in thousands)
|
|
Resources
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas
|
|
$
|
—
|
|
|
$
|
70,862
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,862
|
|
Purchased natural gas and marketing
|
|
—
|
|
|
6,324
|
|
|
—
|
|
|
—
|
|
|
6,324
|
|
|||||
Total revenues
|
|
—
|
|
|
77,186
|
|
|
—
|
|
|
—
|
|
|
77,186
|
|
|||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas production
|
|
—
|
|
|
12,608
|
|
|
—
|
|
|
—
|
|
|
12,608
|
|
|||||
Gathering and transportation
|
|
—
|
|
|
27,979
|
|
|
—
|
|
|
—
|
|
|
27,979
|
|
|||||
Purchased natural gas
|
|
—
|
|
|
6,586
|
|
|
—
|
|
|
—
|
|
|
6,586
|
|
|||||
Depletion, depreciation and amortization
|
|
89
|
|
|
15,821
|
|
|
—
|
|
|
—
|
|
|
15,910
|
|
|||||
Impairment of oil and natural gas properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Accretion of discount on asset retirement obligations
|
|
—
|
|
|
325
|
|
|
—
|
|
|
—
|
|
|
325
|
|
|||||
General and administrative
|
|
(4,395
|
)
|
|
15,141
|
|
|
—
|
|
|
—
|
|
|
10,746
|
|
|||||
Other operating items
|
|
—
|
|
|
(1,110
|
)
|
|
—
|
|
|
—
|
|
|
(1,110
|
)
|
|||||
Total costs and expenses
|
|
(4,306
|
)
|
|
77,350
|
|
|
—
|
|
|
—
|
|
|
73,044
|
|
|||||
Operating income (loss)
|
|
4,306
|
|
|
(164
|
)
|
|
—
|
|
|
—
|
|
|
4,142
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
|
(16,997
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16,997
|
)
|
|||||
Gain on derivative financial instruments - commodity derivatives
|
|
8,209
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,209
|
|
|||||
Gain on extinguishment of debt
|
|
57,421
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57,421
|
|
|||||
Other income
|
|
4
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
Equity loss
|
|
—
|
|
|
—
|
|
|
(823
|
)
|
|
—
|
|
|
(823
|
)
|
|||||
Net loss from consolidated subsidiaries
|
|
(979
|
)
|
|
—
|
|
|
—
|
|
|
979
|
|
|
—
|
|
|||||
Total other income (expense)
|
|
47,658
|
|
|
8
|
|
|
(823
|
)
|
|
979
|
|
|
47,822
|
|
|||||
Income (loss) before income taxes
|
|
51,964
|
|
|
(156
|
)
|
|
(823
|
)
|
|
979
|
|
|
51,964
|
|
|||||
Income tax expense
|
|
1,028
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,028
|
|
|||||
Net income (loss)
|
|
$
|
50,936
|
|
|
$
|
(156
|
)
|
|
$
|
(823
|
)
|
|
$
|
979
|
|
|
$
|
50,936
|
|
(in thousands)
|
|
Resources
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas
|
|
$
|
—
|
|
|
$
|
195,072
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
195,072
|
|
Purchased natural gas and marketing
|
|
—
|
|
|
19,208
|
|
|
—
|
|
|
—
|
|
|
19,208
|
|
|||||
Total revenues
|
|
—
|
|
|
214,280
|
|
|
—
|
|
|
—
|
|
|
214,280
|
|
|||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas production
|
|
—
|
|
|
35,822
|
|
|
—
|
|
|
—
|
|
|
35,822
|
|
|||||
Gathering and transportation
|
|
—
|
|
|
83,183
|
|
|
—
|
|
|
—
|
|
|
83,183
|
|
|||||
Purchased natural gas
|
|
—
|
|
|
18,193
|
|
|
—
|
|
|
—
|
|
|
18,193
|
|
|||||
Depletion, depreciation and amortization
|
|
224
|
|
|
36,424
|
|
|
—
|
|
|
—
|
|
|
36,648
|
|
|||||
Impairment of oil and natural gas properties
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Accretion of discount on asset retirement obligations
|
|
—
|
|
|
648
|
|
|
—
|
|
|
—
|
|
|
648
|
|
|||||
General and administrative
|
|
(32,169
|
)
|
|
45,225
|
|
|
—
|
|
|
—
|
|
|
13,056
|
|
|||||
Other operating items
|
|
577
|
|
|
2,492
|
|
|
—
|
|
|
—
|
|
|
3,069
|
|
|||||
Total costs and expenses
|
|
(31,368
|
)
|
|
221,987
|
|
|
—
|
|
|
—
|
|
|
190,619
|
|
|||||
Operating income (loss)
|
|
31,368
|
|
|
(7,707
|
)
|
|
—
|
|
|
—
|
|
|
23,661
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
|
(75,318
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(75,320
|
)
|
|||||
Gain on derivative financial instruments - commodity derivatives
|
|
22,934
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,934
|
|
|||||
Gain on derivative financial instruments - common share warrants
|
|
146,585
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146,585
|
|
|||||
Loss on restructuring of debt
|
|
(6,380
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,380
|
)
|
|||||
Other income (loss)
|
|
14
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
4
|
|
|||||
Equity income
|
|
—
|
|
|
—
|
|
|
1,009
|
|
|
—
|
|
|
1,009
|
|
|||||
Net loss from consolidated subsidiaries
|
|
(6,710
|
)
|
|
—
|
|
|
—
|
|
|
6,710
|
|
|
—
|
|
|||||
Total other income (expense)
|
|
81,125
|
|
|
(12
|
)
|
|
1,009
|
|
|
6,710
|
|
|
88,832
|
|
|||||
Income (loss) before income taxes
|
|
112,493
|
|
|
(7,719
|
)
|
|
1,009
|
|
|
6,710
|
|
|
112,493
|
|
|||||
Income tax expense
|
|
2,374
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,374
|
|
|||||
Net income (loss)
|
|
$
|
110,119
|
|
|
$
|
(7,719
|
)
|
|
$
|
1,009
|
|
|
$
|
6,710
|
|
|
$
|
110,119
|
|
(in thousands)
|
|
Resources
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas
|
|
$
|
—
|
|
|
$
|
176,732
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
176,732
|
|
Purchased natural gas and marketing
|
|
—
|
|
|
15,335
|
|
|
—
|
|
|
—
|
|
|
15,335
|
|
|||||
Total revenues
|
|
—
|
|
|
192,067
|
|
|
—
|
|
|
—
|
|
|
192,067
|
|
|||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Oil and natural gas production
|
|
4
|
|
|
39,139
|
|
|
—
|
|
|
—
|
|
|
39,143
|
|
|||||
Gathering and transportation
|
|
—
|
|
|
79,828
|
|
|
—
|
|
|
—
|
|
|
79,828
|
|
|||||
Purchased natural gas
|
|
—
|
|
|
17,273
|
|
|
—
|
|
|
—
|
|
|
17,273
|
|
|||||
Depletion, depreciation and amortization
|
|
298
|
|
|
63,697
|
|
|
—
|
|
|
—
|
|
|
63,995
|
|
|||||
Impairment of oil and natural gas properties
|
|
838
|
|
|
159,975
|
|
|
—
|
|
|
—
|
|
|
160,813
|
|
|||||
Accretion of discount on asset retirement obligations
|
|
—
|
|
|
2,006
|
|
|
—
|
|
|
—
|
|
|
2,006
|
|
|||||
General and administrative
|
|
(6,062
|
)
|
|
44,688
|
|
|
—
|
|
|
—
|
|
|
38,626
|
|
|||||
Other operating items
|
|
(406
|
)
|
|
24,342
|
|
|
—
|
|
|
—
|
|
|
23,936
|
|
|||||
Total costs and expenses
|
|
(5,328
|
)
|
|
430,948
|
|
|
—
|
|
|
—
|
|
|
425,620
|
|
|||||
Operating income (loss)
|
|
5,328
|
|
|
(238,881
|
)
|
|
—
|
|
|
—
|
|
|
(233,553
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
|
(54,186
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54,186
|
)
|
|||||
Loss on derivative financial instruments - commodity derivatives
|
|
(11,632
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,632
|
)
|
|||||
Gain on extinguishment of debt
|
|
119,374
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
119,374
|
|
|||||
Other income
|
|
9
|
|
|
28
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|||||
Equity loss
|
|
—
|
|
|
—
|
|
|
(8,824
|
)
|
|
—
|
|
|
(8,824
|
)
|
|||||
Net loss from consolidated subsidiaries
|
|
(247,677
|
)
|
|
—
|
|
|
—
|
|
|
247,677
|
|
|
—
|
|
|||||
Total other income (expense)
|
|
(194,112
|
)
|
|
28
|
|
|
(8,824
|
)
|
|
247,677
|
|
|
44,769
|
|
|||||
Loss before income taxes
|
|
(188,784
|
)
|
|
(238,853
|
)
|
|
(8,824
|
)
|
|
247,677
|
|
|
(188,784
|
)
|
|||||
Income tax expense
|
|
1,775
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,775
|
|
|||||
Net loss
|
|
$
|
(190,559
|
)
|
|
$
|
(238,853
|
)
|
|
$
|
(8,824
|
)
|
|
$
|
247,677
|
|
|
$
|
(190,559
|
)
|
(in thousands)
|
|
Resources
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
(9,637
|
)
|
|
$
|
60,744
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,107
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to oil and natural gas properties, gathering assets and equipment and property acquisitions
|
|
(1,011
|
)
|
|
(114,663
|
)
|
|
—
|
|
|
—
|
|
|
(115,674
|
)
|
|||||
Proceeds from disposition of property and equipment
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
25
|
|
|||||
Restricted cash
|
|
—
|
|
|
(12,229
|
)
|
|
—
|
|
|
—
|
|
|
(12,229
|
)
|
|||||
Net changes in amounts due to joint ventures
|
|
—
|
|
|
(9,498
|
)
|
|
—
|
|
|
—
|
|
|
(9,498
|
)
|
|||||
Advances/investments with affiliates
|
|
(79,406
|
)
|
|
79,406
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net cash used in investing activities
|
|
(80,417
|
)
|
|
(56,959
|
)
|
|
—
|
|
|
—
|
|
|
(137,376
|
)
|
|||||
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under EXCO Resources Credit Agreement
|
|
163,401
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
163,401
|
|
|||||
Repayments under EXCO Resources Credit Agreement
|
|
(265,592
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(265,592
|
)
|
|||||
Proceeds received from issuance of 1.5 Lien Notes, net
|
|
295,530
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
295,530
|
|
|||||
Payments on Exchange Term Loan
|
|
(11,602
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,602
|
)
|
|||||
Debt financing costs and other
|
|
(22,077
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,077
|
)
|
|||||
Net cash provided by financing activities
|
|
159,660
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
159,660
|
|
|||||
Net increase in cash
|
|
69,606
|
|
|
3,785
|
|
|
—
|
|
|
—
|
|
|
73,391
|
|
|||||
Cash at beginning of period
|
|
24,610
|
|
|
(15,542
|
)
|
|
—
|
|
|
—
|
|
|
9,068
|
|
|||||
Cash at end of period
|
|
$
|
94,216
|
|
|
$
|
(11,757
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
82,459
|
|
(in thousands)
|
|
Resources
|
|
Guarantor Subsidiaries
|
|
Non-Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
|
$
|
9,152
|
|
|
$
|
(12,892
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(3,740
|
)
|
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Additions to oil and natural gas properties, gathering assets and equipment and property acquisitions
|
|
(1,250
|
)
|
|
(69,205
|
)
|
|
—
|
|
|
—
|
|
|
(70,455
|
)
|
|||||
Proceeds from disposition of property and equipment
|
|
10
|
|
|
11,232
|
|
|
—
|
|
|
—
|
|
|
11,242
|
|
|||||
Restricted cash
|
|
—
|
|
|
686
|
|
|
—
|
|
|
—
|
|
|
686
|
|
|||||
Net changes in amounts due to joint ventures
|
|
—
|
|
|
2,377
|
|
|
—
|
|
|
—
|
|
|
2,377
|
|
|||||
Advances/investments with affiliates
|
|
(83,631
|
)
|
|
83,631
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) investing activities
|
|
(84,871
|
)
|
|
28,721
|
|
|
—
|
|
|
—
|
|
|
(56,150
|
)
|
|||||
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Borrowings under EXCO Resources Credit Agreement
|
|
390,897
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
390,897
|
|
|||||
Repayments under EXCO Resources Credit Agreement
|
|
(243,797
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(243,797
|
)
|
|||||
Payments on Exchange Term Loan
|
|
(38,056
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(38,056
|
)
|
|||||
Repurchases of senior unsecured notes
|
|
(53,298
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,298
|
)
|
|||||
Debt financing costs and other
|
|
(4,569
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,569
|
)
|
|||||
Net cash provided by financing activities
|
|
51,177
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
51,177
|
|
|||||
Net increase (decrease) in cash
|
|
(24,542
|
)
|
|
15,829
|
|
|
—
|
|
|
—
|
|
|
(8,713
|
)
|
|||||
Cash at beginning of period
|
|
34,296
|
|
|
(22,049
|
)
|
|
—
|
|
|
—
|
|
|
12,247
|
|
|||||
Cash at end of period
|
|
$
|
9,754
|
|
|
$
|
(6,220
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,534
|
|
•
|
our future financial and operating performance and results;
|
•
|
our business strategy;
|
•
|
market prices;
|
•
|
our future use of commodity derivative financial instruments;
|
•
|
our liquidity and capital resources; and
|
•
|
our plans and forecasts.
|
•
|
our ability to continue as a going concern;
|
•
|
the outcome of our review of strategic alternatives, which may include, but not be limited to, seeking a comprehensive out-of-court restructuring or reorganization under Chapter 11 of the U.S. Bankruptcy Code;
|
•
|
our cash flow and Liquidity;
|
•
|
our ability and decisions to pay interest on the 1.5 Lien Notes and 1.75 Lien Term Loans in cash, common shares or additional indebtedness;
|
•
|
future capital requirements and availability of financing, including limitations on our ability to incur certain types of indebtedness under our debt agreements and to refinance or replace existing debt obligations as they mature;
|
•
|
our ability to meet our current and future debt service obligations, including our upcoming 2018 debt maturities;
|
•
|
our ability to maintain compliance with our debt covenants;
|
•
|
fluctuations in the prices of oil and natural gas;
|
•
|
the availability of oil and natural gas;
|
•
|
disruption of credit and capital markets and the ability of financial institutions to honor their commitments;
|
•
|
estimates of reserves and economic assumptions, including estimates related to acquisitions and dispositions of oil and natural gas properties;
|
•
|
geological concentration of our reserves;
|
•
|
risks associated with drilling and operating wells;
|
•
|
exploratory risks, including those related to our activities in shale formations;
|
•
|
discovery, acquisition, development and replacement of oil and natural gas reserves;
|
•
|
outcome of divestitures of non-core assets;
|
•
|
our ability to enter into transactions as a result of our credit rating, including commodity derivatives with financial institutions and services with vendors;
|
•
|
timing and amount of future production of oil and natural gas;
|
•
|
availability of drilling and production equipment;
|
•
|
availability of water, sand and other materials for drilling and completion activities;
|
•
|
marketing of oil and natural gas;
|
•
|
political and economic conditions and events in oil-producing and natural gas-producing countries;
|
•
|
title to our properties;
|
•
|
litigation;
|
•
|
competition;
|
•
|
our ability to attract and retain key personnel;
|
•
|
general economic conditions, including costs associated with drilling and operations of our properties;
|
•
|
our ability to regain compliance with the listing requirements of, and maintain the listing of our common shares on, the New York Stock Exchange ("NYSE");
|
•
|
environmental or other governmental regulations, including legislation to reduce emissions of greenhouse gases, legislation of derivative financial instruments, regulation of hydraulic fracture stimulation and elimination of income tax incentives available to our industry;
|
•
|
receipt and collectability of amounts owed to us by purchasers of our production and counterparties to our commodity derivative financial instruments;
|
•
|
our ability and decisions whether or not to enter into commodity derivative financial instruments;
|
•
|
potential acts of terrorism;
|
•
|
our ability to manage joint ventures with third parties, including the resolution of any material disagreements and our partners’ ability to satisfy obligations under these arrangements;
|
•
|
actions of third party co-owners of interests in properties in which we also own an interest;
|
•
|
fluctuations in interest rates;
|
•
|
our ability to effectively integrate companies and properties that we acquire; and
|
•
|
our ability to execute our business strategies and other corporate actions.
|
(1)
|
Mmcfe is calculated by converting one barrel of oil into six Mcf of natural gas.
|
(2)
|
Equity-based compensation included in general and administrative expense was income of
$0.9 million
and expense of
$1.4 million
for the three months ended
September 30, 2017
and
2016
, respectively, and income of
$11.2 million
and expense of
$14.6 million
for the nine months ended
September 30, 2017
and
2016
, respectively.
|
(3)
|
Net income
for the three and nine months ended
September 30, 2017
included
$18.3 million
and
$146.6 million
of gains related to the revaluation of the 2017 Warrants, respectively. See "Note 7. Derivative financial instruments" in the Notes to our Condensed Consolidated Financial Statements for further discussion. Net loss for the nine months ended
September 30, 2016
included
$160.8 million
of impairments of oil and natural gas properties. See "Note 5. Oil and natural gas properties" in the Notes to our Condensed Consolidated Financial Statements for further discussion. Net losses
for the three and nine months ended
September 30, 2016
were partially offset by net gains on extinguishment of debt of
$57.4 million
and
$119.4 million
, respectively.
|
•
|
fluctuations in oil and natural gas prices, which impact our oil and natural gas reserves, revenues, cash flows and net income or loss;
|
•
|
impairments of our oil and natural gas properties during 2016;
|
•
|
asset impairments and other non-recurring costs;
|
•
|
mark-to-market gains and losses from our derivative financial instruments, including significant gains on the 2017 Warrants due to a decrease in EXCO's share price;
|
•
|
changes in proved reserves and production volumes and their impact on depletion;
|
•
|
the sale of our shallow conventional assets in Appalachia and the settlement of the litigation with our Eagle Ford shale joint venture partner during 2016;
|
•
|
the impact of declining natural gas production volumes from our reduced drilling activities;
|
•
|
significant changes in our capital structure as a result of transactions in 2017 and 2016, including the issuance of the 1.5 Lien Notes and 1.75 Lien Term Loans on March 15, 2017 and repurchases of our 7.5% senior unsecured notes due September 15, 2018 ("2018 Notes") and our 8.5% senior unsecured notes due April 15, 2022 ("2022 Notes") during 2016;
|
•
|
changes in general and administrative expenses as a result of legal and advisory fees incurred in connection with the restructuring of our balance sheet; and
|
•
|
the reductions in our workforce that occurred during 2016.
|
•
|
supply and demand for oil and natural gas and expectations regarding supply and demand;
|
•
|
the level of domestic and international production;
|
•
|
the availability of imported oil and natural gas;
|
•
|
federal regulations applicable to the export of, and construction of export facilities for natural gas;
|
•
|
political and economic conditions and events in foreign oil and natural gas producing nations, including embargoes, continued hostilities in the Middle East and other sustained military campaigns, and acts of terrorism or sabotage;
|
•
|
the ability of members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls;
|
•
|
the cost and availability of transportation and pipeline systems with adequate capacity;
|
•
|
the cost and availability of other competitive fuels;
|
•
|
fluctuating and seasonal demand for oil, natural gas and refined products;
|
•
|
concerns about global warming or other conservation initiatives and the extent of governmental price controls and regulation of production;
|
•
|
regional price differentials and quality differentials of oil and natural gas;
|
•
|
the availability of refining capacity;
|
•
|
technological advances affecting oil and natural gas production and consumption;
|
•
|
weather conditions and natural disasters;
|
•
|
foreign and domestic government relations; and
|
•
|
overall domestic and global economic conditions.
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Quarter to quarter change
|
|||||||||||||||||||||||||||
(dollars in thousands, except per unit rate)
|
|
Production (Mmcfe)
|
|
Revenue
|
|
$/Mcfe
|
|
Production (Mmcfe)
|
|
Revenue
|
|
$/Mcfe
|
|
Production (Mmcfe)
|
|
Revenue
|
|
$/Mcfe
|
|||||||||||||||
Producing region:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
North Louisiana
|
|
13,768
|
|
|
$
|
35,544
|
|
|
$
|
2.58
|
|
|
14,633
|
|
|
$
|
34,856
|
|
|
$
|
2.38
|
|
|
(865
|
)
|
|
$
|
688
|
|
|
$
|
0.20
|
|
East Texas
|
|
3,736
|
|
|
9,716
|
|
|
2.60
|
|
|
6,312
|
|
|
16,424
|
|
|
2.60
|
|
|
(2,576
|
)
|
|
(6,708
|
)
|
|
—
|
|
||||||
South Texas
|
|
1,865
|
|
|
11,574
|
|
|
6.21
|
|
|
2,517
|
|
|
14,953
|
|
|
5.94
|
|
|
(652
|
)
|
|
(3,379
|
)
|
|
0.27
|
|
||||||
Appalachia and other
|
|
2,465
|
|
|
4,395
|
|
|
1.78
|
|
|
2,991
|
|
|
4,629
|
|
|
1.55
|
|
|
(526
|
)
|
|
(234
|
)
|
|
0.23
|
|
||||||
Total
|
|
21,834
|
|
|
$
|
61,229
|
|
|
$
|
2.80
|
|
|
26,453
|
|
|
$
|
70,862
|
|
|
$
|
2.68
|
|
|
(4,619
|
)
|
|
$
|
(9,633
|
)
|
|
$
|
0.12
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
|||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Period to period change
|
|||||||||||||||||||||||||||
(dollars in thousands, except per unit rate)
|
|
Production (Mmcfe)
|
|
Revenue
|
|
$/Mcfe
|
|
Production (Mmcfe)
|
|
Revenue
|
|
$/Mcfe
|
|
Production (Mmcfe)
|
|
Revenue
|
|
$/Mcfe
|
|||||||||||||||
Producing region:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
North Louisiana
|
|
37,764
|
|
|
$
|
100,351
|
|
|
$
|
2.66
|
|
|
41,639
|
|
|
$
|
76,044
|
|
|
$
|
1.83
|
|
|
(3,875
|
)
|
|
$
|
24,307
|
|
|
$
|
0.83
|
|
East Texas
|
|
12,752
|
|
|
36,078
|
|
|
2.83
|
|
|
18,933
|
|
|
39,607
|
|
|
2.09
|
|
|
(6,181
|
)
|
|
(3,529
|
)
|
|
0.74
|
|
||||||
South Texas
|
|
6,053
|
|
|
41,098
|
|
|
6.79
|
|
|
9,003
|
|
|
45,542
|
|
|
5.06
|
|
|
(2,950
|
)
|
|
(4,444
|
)
|
|
1.73
|
|
||||||
Appalachia and other
|
|
7,855
|
|
|
17,545
|
|
|
2.23
|
|
|
10,679
|
|
|
15,539
|
|
|
1.46
|
|
|
(2,824
|
)
|
|
2,006
|
|
|
0.77
|
|
||||||
Total
|
|
64,424
|
|
|
$
|
195,072
|
|
|
$
|
3.03
|
|
|
80,254
|
|
|
$
|
176,732
|
|
|
$
|
2.20
|
|
|
(15,830
|
)
|
|
$
|
18,340
|
|
|
$
|
0.83
|
|
•
|
decrease
d production of
0.9
Bcfe and
3.9
Bcfe
for the three and nine months ended
September 30, 2017
, respectively, in the North Louisiana region, primarily due to production declines partially offset by additional volumes from the wells turned-to-sales in the second quarter of 2017. We expect the production in the North Louisiana region to increase due to additional wells to be turned-to-sales during the fourth quarter of 2017.
|
•
|
decrease
d production of
2.6
Bcfe and
6.2
Bcfe
for the three and nine months ended
September 30, 2017
, respectively, in the East Texas region, primarily due to production declines as we have not turned an operated well to sales in the region since the first quarter of 2016.
|
•
|
decrease
d production of
0.7
Bcfe and
3.0
Bcfe
for the three and nine months ended
September 30, 2017
, respectively, in the South Texas region, primarily due to production declines as we have not turned an operated well to sales in the region since late 2015.
|
•
|
decrease
d production of
0.5
Bcfe and
2.8
Bcfe
for the three and nine months ended
September 30, 2017
, respectively, in the Appalachia region, primarily due to the sale of our interests in shallow conventional assets in 2016 and production declines, partially offset by lower shut-in volumes. We have not had an active drilling program in this region since 2013. Production in the Appalachia region is expected to be impacted by significant shut-in volumes during the fourth quarter of 2017 due to low regional natural gas prices.
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Quarter to quarter change
|
||||||||||||||||||||||||||||||
(in thousands)
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
||||||||||||||||||
Producing region:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
North Louisiana
|
|
$
|
3,582
|
|
|
$
|
1,917
|
|
|
$
|
5,499
|
|
|
$
|
2,841
|
|
|
$
|
341
|
|
|
$
|
3,182
|
|
|
$
|
741
|
|
|
$
|
1,576
|
|
|
$
|
2,317
|
|
East Texas
|
|
1,049
|
|
|
17
|
|
|
1,066
|
|
|
1,482
|
|
|
23
|
|
|
1,505
|
|
|
(433
|
)
|
|
(6
|
)
|
|
(439
|
)
|
|||||||||
South Texas
|
|
2,303
|
|
|
2
|
|
|
2,305
|
|
|
2,937
|
|
|
—
|
|
|
2,937
|
|
|
(634
|
)
|
|
2
|
|
|
(632
|
)
|
|||||||||
Appalachia and other
|
|
345
|
|
|
—
|
|
|
345
|
|
|
1,131
|
|
|
42
|
|
|
1,173
|
|
|
(786
|
)
|
|
(42
|
)
|
|
(828
|
)
|
|||||||||
Total
|
|
$
|
7,279
|
|
|
$
|
1,936
|
|
|
$
|
9,215
|
|
|
$
|
8,391
|
|
|
$
|
406
|
|
|
$
|
8,797
|
|
|
$
|
(1,112
|
)
|
|
$
|
1,530
|
|
|
$
|
418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
Three Months Ended September 30,
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Quarter to quarter change
|
||||||||||||||||||||||||||||||
(per Mcfe)
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
||||||||||||||||||
Producing region:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
North Louisiana
|
|
$
|
0.26
|
|
|
$
|
0.14
|
|
|
$
|
0.40
|
|
|
$
|
0.19
|
|
|
$
|
0.02
|
|
|
$
|
0.21
|
|
|
$
|
0.07
|
|
|
$
|
0.12
|
|
|
$
|
0.19
|
|
East Texas
|
|
0.28
|
|
|
—
|
|
|
0.28
|
|
|
0.23
|
|
|
—
|
|
|
0.23
|
|
|
0.05
|
|
|
—
|
|
|
0.05
|
|
|||||||||
South Texas
|
|
1.23
|
|
|
—
|
|
|
1.23
|
|
|
1.17
|
|
|
—
|
|
|
1.17
|
|
|
0.06
|
|
|
—
|
|
|
0.06
|
|
|||||||||
Appalachia and other
|
|
0.14
|
|
|
—
|
|
|
0.14
|
|
|
0.38
|
|
|
0.01
|
|
|
0.39
|
|
|
(0.24
|
)
|
|
(0.01
|
)
|
|
(0.25
|
)
|
|||||||||
Total
|
|
$
|
0.33
|
|
|
$
|
0.09
|
|
|
$
|
0.42
|
|
|
$
|
0.32
|
|
|
$
|
0.01
|
|
|
$
|
0.33
|
|
|
$
|
0.01
|
|
|
$
|
0.08
|
|
|
$
|
0.09
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Period to period change
|
||||||||||||||||||||||||||||||
(in thousands)
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
||||||||||||||||||
Producing region:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
North Louisiana
|
|
$
|
10,000
|
|
|
$
|
2,333
|
|
|
$
|
12,333
|
|
|
$
|
8,421
|
|
|
$
|
493
|
|
|
$
|
8,914
|
|
|
$
|
1,579
|
|
|
$
|
1,840
|
|
|
$
|
3,419
|
|
East Texas
|
|
3,476
|
|
|
814
|
|
|
4,290
|
|
|
3,746
|
|
|
229
|
|
|
3,975
|
|
|
(270
|
)
|
|
585
|
|
|
315
|
|
|||||||||
South Texas
|
|
8,052
|
|
|
4
|
|
|
8,056
|
|
|
8,506
|
|
|
246
|
|
|
8,752
|
|
|
(454
|
)
|
|
(242
|
)
|
|
(696
|
)
|
|||||||||
Appalachia and other
|
|
1,241
|
|
|
8
|
|
|
1,249
|
|
|
4,152
|
|
|
42
|
|
|
4,194
|
|
|
(2,911
|
)
|
|
(34
|
)
|
|
(2,945
|
)
|
|||||||||
Total
|
|
$
|
22,769
|
|
|
$
|
3,159
|
|
|
$
|
25,928
|
|
|
$
|
24,825
|
|
|
$
|
1,010
|
|
|
$
|
25,835
|
|
|
$
|
(2,056
|
)
|
|
$
|
2,149
|
|
|
$
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
|
Nine Months Ended September 30,
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Period to period change
|
||||||||||||||||||||||||||||||
(per Mcfe)
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
|
Lease operating expenses
|
|
Workovers and other
|
|
Total
|
||||||||||||||||||
Producing region:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
North Louisiana
|
|
$
|
0.26
|
|
|
$
|
0.06
|
|
|
$
|
0.32
|
|
|
$
|
0.20
|
|
|
$
|
0.01
|
|
|
$
|
0.21
|
|
|
$
|
0.06
|
|
|
$
|
0.05
|
|
|
$
|
0.11
|
|
East Texas
|
|
0.27
|
|
|
0.06
|
|
|
0.33
|
|
|
0.20
|
|
|
0.01
|
|
|
0.21
|
|
|
0.07
|
|
|
0.05
|
|
|
0.12
|
|
|||||||||
South Texas
|
|
1.33
|
|
|
—
|
|
|
1.33
|
|
|
0.94
|
|
|
0.03
|
|
|
0.97
|
|
|
0.39
|
|
|
(0.03
|
)
|
|
0.36
|
|
|||||||||
Appalachia and other
|
|
0.16
|
|
|
—
|
|
|
0.16
|
|
|
0.39
|
|
|
—
|
|
|
0.39
|
|
|
(0.23
|
)
|
|
—
|
|
|
(0.23
|
)
|
|||||||||
Total
|
|
$
|
0.35
|
|
|
$
|
0.05
|
|
|
$
|
0.40
|
|
|
$
|
0.31
|
|
|
$
|
0.01
|
|
|
$
|
0.32
|
|
|
$
|
0.04
|
|
|
$
|
0.04
|
|
|
$
|
0.08
|
|
|
|
Three Months Ended September 30,
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||||||||
(in thousands, except per unit rate)
|
|
Production and ad valorem taxes
|
|
% of revenue
|
|
Taxes $/Mcfe
|
|
Production and ad valorem taxes
|
|
% of revenue
|
|
Taxes $/Mcfe
|
||||||||||
Producing region:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North Louisiana
|
|
$
|
1,916
|
|
|
5.4
|
%
|
|
$
|
0.14
|
|
|
$
|
1,627
|
|
|
4.7
|
%
|
|
$
|
0.11
|
|
East Texas
|
|
176
|
|
|
1.8
|
%
|
|
0.05
|
|
|
277
|
|
|
1.7
|
%
|
|
0.04
|
|
||||
South Texas
|
|
775
|
|
|
6.7
|
%
|
|
0.42
|
|
|
1,626
|
|
|
10.9
|
%
|
|
0.65
|
|
||||
Appalachia and other
|
|
177
|
|
|
4.0
|
%
|
|
0.07
|
|
|
281
|
|
|
6.1
|
%
|
|
0.09
|
|
||||
Total
|
|
$
|
3,044
|
|
|
5.0
|
%
|
|
$
|
0.14
|
|
|
$
|
3,811
|
|
|
5.4
|
%
|
|
$
|
0.14
|
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||||||||
(in thousands, except per unit rate)
|
|
Production and ad valorem taxes
|
|
% of revenue
|
|
Taxes $/Mcfe
|
|
Production and ad valorem taxes
|
|
% of revenue
|
|
Taxes $/Mcfe
|
||||||||||
Producing region:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
North Louisiana
|
|
$
|
5,174
|
|
|
5.2
|
%
|
|
$
|
0.14
|
|
|
$
|
5,909
|
|
|
7.8
|
%
|
|
$
|
0.14
|
|
East Texas
|
|
801
|
|
|
2.2
|
%
|
|
0.06
|
|
|
864
|
|
|
2.2
|
%
|
|
0.05
|
|
||||
South Texas
|
|
3,473
|
|
|
8.5
|
%
|
|
0.57
|
|
|
5,903
|
|
|
13.0
|
%
|
|
0.66
|
|
||||
Appalachia and other
|
|
446
|
|
|
2.5
|
%
|
|
0.06
|
|
|
632
|
|
|
4.1
|
%
|
|
0.06
|
|
||||
Total
|
|
$
|
9,894
|
|
|
5.1
|
%
|
|
$
|
0.15
|
|
|
$
|
13,308
|
|
|
7.5
|
%
|
|
$
|
0.17
|
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Quarter to quarter change
|
|
2017
|
|
2016
|
|
Period to period change
|
||||||||||||
General and administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross general and administrative expenses
|
|
$
|
17,040
|
|
|
$
|
14,863
|
|
|
$
|
2,177
|
|
|
$
|
41,826
|
|
|
$
|
42,635
|
|
|
$
|
(809
|
)
|
Technical services and service agreement charges
|
|
(1,675
|
)
|
|
(1,312
|
)
|
|
(363
|
)
|
|
(4,573
|
)
|
|
(5,705
|
)
|
|
1,132
|
|
||||||
Operator overhead reimbursements
|
|
(3,782
|
)
|
|
(3,463
|
)
|
|
(319
|
)
|
|
(10,860
|
)
|
|
(10,339
|
)
|
|
(521
|
)
|
||||||
Capitalized salaries
|
|
(682
|
)
|
|
(759
|
)
|
|
77
|
|
|
(2,130
|
)
|
|
(2,523
|
)
|
|
393
|
|
||||||
General and administrative expenses, excluding equity-based compensation
|
|
10,901
|
|
|
9,329
|
|
|
1,572
|
|
|
24,263
|
|
|
24,068
|
|
|
195
|
|
||||||
Gross equity-based compensation
|
|
(707
|
)
|
|
1,642
|
|
|
(2,349
|
)
|
|
(10,355
|
)
|
|
14,990
|
|
|
(25,345
|
)
|
||||||
Capitalized equity-based compensation
|
|
(159
|
)
|
|
(225
|
)
|
|
66
|
|
|
(852
|
)
|
|
(432
|
)
|
|
(420
|
)
|
||||||
General and administrative expenses
|
|
$
|
10,035
|
|
|
$
|
10,746
|
|
|
$
|
(711
|
)
|
|
$
|
13,056
|
|
|
$
|
38,626
|
|
|
$
|
(25,570
|
)
|
•
|
decreased equity-based compensation of
$2.3 million
and
$25.8 million
for the three and nine months ended
September 30, 2017
, respectively. The decrease was primarily due to a significant decline in the fair value of the warrants issued to ESAS in connection with the ESAS services and investment agreement ("ESAS Warrants") that resulted in income of
$1.3 million
and
$14.2 million
for the three and nine months ended
September 30, 2017
, respectively, as compared to expense of
$0.9 million
and
$11.8 million
for the three and nine months ended
September 30, 2016
, respectively. The fair value of the ESAS Warrants is dependent on factors such as our share price, historical volatility, risk-free rate and performance relative to our peer group. The decrease in EXCO's share price contributed to a significant decrease in the fair value of the ESAS Warrants and the related equity-based compensation expense at
September 30, 2017
. The expense related to ESAS Warrants is re-measured and adjusted each interim reporting period; therefore, our general and administrative expenses in future periods could be volatile based on the aforementioned factors.
|
•
|
increased personnel costs of
$2.0 million
for the three months ended
September 30, 2017
, primarily due to higher bonus expense during the current period, partially offset by the reductions in our workforce. The increase in bonus expense was due to the adoption of new cash-based retention and incentive plans during the three months ended September 30, 2017. The cash-based retention and incentive plans are intended to replace grants under equity-based incentive plans. As a result, we expect cash-based personnel costs to increase and equity-based compensation to decrease in future periods. Additional information on the new cash-based retention and incentive plans is included in the Form 8-K filed with the SEC on October 10, 2017.
|
•
|
decreased consulting and contract labor costs of
$0.7 million
and
$1.5 million
for the three and nine months ended
September 30, 2017
, primarily related to the changes in our accrual for the annual incentive payment to ESAS that is based on EXCO’s common share price achieving certain performance hurdles as compared to a peer group.
|
•
|
increased professional and legal fees of
$0.9 million
and
$3.1 million
for the three and nine months ended
September 30, 2017
, respectively, primarily related to various legal and advisory fees. As discussed in "Note 1. Organization and basis of presentation" in the Notes to our Condensed Consolidated Financial Statement, we hired financial and restructuring advisors to explore strategic alternatives to strengthen our balance sheet and maximize the value of the Company. Based on the terms of certain of our debt agreements, we are required to pay costs related to legal and financial advisors of debtholders in connection with the restructuring process. Furthermore, we have agreed to pay costs related to legal and financial advisors of certain other debtholders in order to facilitate our restructuring process. As a result, we expect professional and legal fees to increase in future periods.
|
•
|
decreased various other gross general and administrative expenses of
$2.4 million
for the nine months ended
September 30, 2017
. These decreases reflect our continued efforts to reduce our general and administrative costs throughout the organization.
|
•
|
decreased technical services and service agreement recoveries of
$1.1 million
for the nine months ended
September 30, 2017
, primarily a result of reduced headcount.
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Quarter to quarter change
|
|
2017
|
|
2016
|
|
Period to period change
|
||||||||||||
Interest expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EXCO Resources Credit Agreement
|
|
$
|
813
|
|
|
$
|
1,585
|
|
|
$
|
(772
|
)
|
|
$
|
3,008
|
|
|
$
|
3,890
|
|
|
$
|
(882
|
)
|
1.5 Lien Notes
|
|
12,117
|
|
|
—
|
|
|
12,117
|
|
|
26,039
|
|
|
—
|
|
|
26,039
|
|
||||||
1.75 Lien Term Loans
|
|
15,447
|
|
|
—
|
|
|
15,447
|
|
|
23,011
|
|
|
—
|
|
|
23,011
|
|
||||||
Fairfax Term Loan
|
|
—
|
|
|
9,375
|
|
|
(9,375
|
)
|
|
7,708
|
|
|
28,125
|
|
|
(20,417
|
)
|
||||||
2018 Notes
|
|
2,540
|
|
|
2,571
|
|
|
(31
|
)
|
|
7,616
|
|
|
8,076
|
|
|
(460
|
)
|
||||||
2022 Notes
|
|
1,491
|
|
|
2,512
|
|
|
(1,021
|
)
|
|
4,473
|
|
|
10,819
|
|
|
(6,346
|
)
|
||||||
Amortization of deferred financing costs
|
|
2,140
|
|
|
2,184
|
|
|
(44
|
)
|
|
7,864
|
|
|
7,052
|
|
|
812
|
|
||||||
Capitalized interest
|
|
(1,729
|
)
|
|
(1,297
|
)
|
|
(432
|
)
|
|
(4,627
|
)
|
|
(3,939
|
)
|
|
(688
|
)
|
||||||
Other
|
|
69
|
|
|
67
|
|
|
2
|
|
|
228
|
|
|
163
|
|
|
65
|
|
||||||
Total interest expense, net
|
|
$
|
32,888
|
|
|
$
|
16,997
|
|
|
$
|
15,891
|
|
|
$
|
75,320
|
|
|
$
|
54,186
|
|
|
$
|
21,134
|
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
Average realized pricing:
|
|
2017
|
|
2016
|
|
Quarter to quarter change
|
|
2017
|
|
2016
|
|
Period to period change
|
||||||||||||
Natural gas (per Mcf):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net price, excluding derivatives
|
|
$
|
2.39
|
|
|
$
|
2.27
|
|
|
$
|
0.12
|
|
|
$
|
2.57
|
|
|
$
|
1.77
|
|
|
$
|
0.80
|
|
Cash receipts (payments) on derivatives
|
|
0.03
|
|
|
0.04
|
|
|
(0.01
|
)
|
|
(0.09
|
)
|
|
0.34
|
|
|
(0.43
|
)
|
||||||
Net price, including derivatives
|
|
$
|
2.42
|
|
|
$
|
2.31
|
|
|
$
|
0.11
|
|
|
$
|
2.48
|
|
|
$
|
2.11
|
|
|
$
|
0.37
|
|
Oil (per Bbl):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net price, excluding derivatives
|
|
$
|
46.76
|
|
|
$
|
41.47
|
|
|
$
|
5.29
|
|
|
$
|
47.70
|
|
|
$
|
35.80
|
|
|
$
|
11.90
|
|
Cash receipts (payments) on derivatives
|
|
0.30
|
|
|
9.65
|
|
|
(9.35
|
)
|
|
0.08
|
|
|
9.93
|
|
|
(9.85
|
)
|
||||||
Net price, including derivatives
|
|
$
|
47.06
|
|
|
$
|
51.12
|
|
|
$
|
(4.06
|
)
|
|
$
|
47.78
|
|
|
$
|
45.73
|
|
|
$
|
2.05
|
|
Natural gas equivalent (per Mcfe):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net price, excluding derivatives
|
|
$
|
2.80
|
|
|
$
|
2.68
|
|
|
$
|
0.12
|
|
|
$
|
3.03
|
|
|
$
|
2.20
|
|
|
$
|
0.83
|
|
Cash receipts (payments) on derivatives
|
|
0.03
|
|
|
0.18
|
|
|
(0.15
|
)
|
|
(0.08
|
)
|
|
0.47
|
|
|
(0.55
|
)
|
||||||
Net price, including derivatives
|
|
$
|
2.83
|
|
|
$
|
2.86
|
|
|
$
|
(0.03
|
)
|
|
$
|
2.95
|
|
|
$
|
2.67
|
|
|
$
|
0.28
|
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
Quarter to quarter change
|
|
2017
|
|
2016
|
|
Period to period change
|
||||||||||||
Income tax expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current income tax benefit
|
|
$
|
(709
|
)
|
|
$
|
—
|
|
|
$
|
(709
|
)
|
|
$
|
(709
|
)
|
|
$
|
—
|
|
|
$
|
(709
|
)
|
Deferred income tax expense
|
|
1,028
|
|
|
1,028
|
|
|
—
|
|
|
3,083
|
|
|
1,775
|
|
|
1,308
|
|
||||||
Total income tax expense
|
|
$
|
319
|
|
|
$
|
1,028
|
|
|
$
|
(709
|
)
|
|
$
|
2,374
|
|
|
$
|
1,775
|
|
|
$
|
599
|
|
•
|
potential acquisitions and/or dispositions of oil and natural gas properties or other assets;
|
•
|
the outcome of our review of strategic alternatives, which may include, but not be limited to, seeking a comprehensive out-of-court restructuring or reorganization under Chapter 11 of the U.S. Bankruptcy Code;
|
•
|
the level of planned drilling activities;
|
•
|
the results of our ongoing drilling programs;
|
•
|
our ability to fund, finance or repay indebtedness, including the EXCO Resources Credit Agreement and 2018 Notes that mature in July and September 2018, respectively;
|
•
|
the integration of acquisitions of oil and natural gas properties or other assets;
|
•
|
our ability to effectively manage operating, general and administrative expenses and capital expenditure programs, specifically related to recent pricing pressures from key vendors utilized in our drilling, completion and operating activities;
|
•
|
reduced oil and natural gas revenues resulting from, among other things, depressed oil and natural gas prices and lower production from reductions to our drilling and development activities;
|
•
|
our ability to mitigate commodity price volatility with commodity derivative financial instruments;
|
•
|
our ability to meet minimum volume commitments under firm transportation agreements and other fixed commitments, as well as our ability to restructure these contracts;
|
•
|
limitations on our ability to incur certain types of indebtedness in accordance with our debt agreements;
|
•
|
our ability to pay interest on our outstanding indebtedness, including decisions to pay interest on the 1.5 Lien Notes and 1.75 Lien Term Loans in cash, common shares or additional indebtedness;
|
•
|
reductions to our borrowing base;
|
•
|
requirements to provide certain vendors and other parties with letters of credit or cash deposits as a result of our credit quality, which reduce the amount of available borrowings under the EXCO Resources Credit Agreement;
|
•
|
additional debt restructuring activities, which may include seeking relief under the U.S. Bankruptcy Code;
|
•
|
our ability to maintain compliance with debt covenants; and
|
•
|
the potential outcome of litigation related to certain natural gas sales and firm transportation contracts.
|
(in thousands)
|
|
September 30, 2017
|
||
EXCO Resources Credit Agreement
|
|
$
|
126,401
|
|
1.5 Lien Notes
|
|
316,958
|
|
|
1.75 Lien Term Loans (1)
|
|
708,926
|
|
|
Exchange Term Loan (1)
|
|
17,246
|
|
|
2018 Notes
|
|
131,576
|
|
|
2022 Notes
|
|
70,169
|
|
|
Total debt (2)
|
|
$
|
1,371,276
|
|
Net debt
|
|
$
|
1,265,438
|
|
Borrowing base
|
|
$
|
150,000
|
|
Unused borrowing base (3)
|
|
$
|
—
|
|
Cash (4)
|
|
$
|
105,838
|
|
Unused borrowing base plus cash
|
|
$
|
105,838
|
|
(1)
|
Amounts presented are the outstanding principal balances and exclude
$154.2 million
and
$6.3 million
of deferred reductions to carrying value on the 1.75 Lien Term Loans and the Exchange Term Loan, respectively. See "Note 8. Debt" in the Notes to our Condensed Consolidated Financial Statements for additional information.
|
(2)
|
Excludes unamortized discounts and deferred financing costs.
|
(3)
|
Net of
$23.6 million
in letters of credit at
September 30, 2017
.
|
(4)
|
Includes restricted cash of
$23.4 million
at
September 30, 2017
.
|
(in thousands)
|
|
Principal amount outstanding
|
|
Maturity date
|
|
Frequency of payment
|
|
Annual cash interest rate
|
||
EXCO Resources Credit Agreement
|
|
$
|
126,401
|
|
|
July 31, 2018
|
|
Monthly
|
|
(1)
|
1.5 Lien Notes
|
|
316,958
|
|
|
March 20, 2022
|
|
Semi-annually
|
|
8.0%
|
|
1.75 Lien Term Loans
|
|
708,926
|
|
|
October 26, 2020
|
|
Quarterly
|
|
12.5%
|
|
Exchange Term Loan
|
|
17,246
|
|
|
October 26, 2020
|
|
Quarterly
|
|
12.5%
|
|
2018 Notes
|
|
131,576
|
|
|
September 15, 2018
|
|
Semi-annually
|
|
7.5%
|
|
2022 Notes
|
|
70,169
|
|
|
April 15, 2022
|
|
Semi-annually
|
|
8.5%
|
|
Total debt
|
|
$
|
1,371,276
|
|
|
|
|
|
|
|
(1)
|
The interest rate grid on the revolving credit facility of the EXCO Resources Credit Agreement, as amended on September 29, 2017, ranges from LIBOR plus 250 bps to 350 bps (or ABR plus 150 bps to 250 bps), depending on the percentages of drawn balances to the borrowing base.
|
•
|
our cash (as defined in the EXCO Resources Credit Agreement) plus unused commitments under the EXCO Resources Credit Agreement of
$102.9 million
exceeded the required minimum of $70.0 million as of the end of a fiscal quarter ("Minimum Liquidity Test");
|
•
|
our ratio of consolidated EBITDAX to consolidated interest expense (“Interest Coverage Ratio”) of
2.2
to 1.0 exceeded the minimum of 1.75 to 1.0 for the fiscal quarter ending September 30, 2017. The Interest Coverage Ratio cannot be less than 2.0 to 1.0 for all future fiscal quarters. The consolidated EBITDAX and consolidated interest expense utilized in this ratio are based on the most recent fiscal quarter ended multiplied by 4.0 as of September 30, 2017, the most recent two fiscal quarters ended multiplied by 2.0 as of December 31, 2017, the most recent three fiscal quarters ended multiplied by 4/3 as of March 31, 2018, and the trailing twelve month period for fiscal quarters ending thereafter. The definition of consolidated interest expense includes cash interest payments that are accounted for as reductions in the carrying amount of indebtedness in accordance with FASB ASC 470-60. The consolidated interest expense utilized in the Interest Coverage Ratio is limited to payments in cash, and excludes PIK Payments on the 1.5 Lien Notes and 1.75 Lien Term Loans.
|
|
|
Nine Months Ended
|
|
October - December Forecast
|
|
Full Year Forecast
|
||||||
(in thousands)
|
|
September 30, 2017
|
|
2017
|
|
2017
|
||||||
Capital expenditures:
|
|
|
|
|
|
|
||||||
Development capital expenditures
|
|
$
|
91,133
|
|
|
$
|
57,867
|
|
|
$
|
149,000
|
|
Other (1)
|
|
16,176
|
|
|
1,824
|
|
|
18,000
|
|
|||
Total
|
|
$
|
107,309
|
|
|
$
|
59,691
|
|
|
$
|
167,000
|
|
|
|
Nine Months Ended September 30,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Net cash provided by (used in) operating activities
|
|
$
|
51,107
|
|
|
$
|
(3,740
|
)
|
Net cash used in investing activities
|
|
(137,376
|
)
|
|
(56,150
|
)
|
||
Net cash provided by financing activities
|
|
159,660
|
|
|
51,177
|
|
||
Net increase (decrease) in cash
|
|
$
|
73,391
|
|
|
$
|
(8,713
|
)
|
|
|
NYMEX gas volume - Bbtu
|
|
Weighted average contract price per Mmbtu
|
|
NYMEX oil volume - Mbbl
|
|
Weighted average contract price per Bbl
|
||||||
Swaps:
|
|
|
|
|
|
|
|
|
||||||
Remainder of 2017
|
|
9,200
|
|
|
$
|
3.05
|
|
|
46
|
|
|
$
|
50.00
|
|
2018
|
|
3,650
|
|
|
3.15
|
|
|
—
|
|
|
—
|
|
||
Collars:
|
|
|
|
|
|
|
|
|
||||||
Remainder of 2017
|
|
2,760
|
|
|
|
|
—
|
|
|
|
||||
Sold call
|
|
|
|
3.28
|
|
|
|
|
—
|
|
||||
Purchased put
|
|
|
|
2.87
|
|
|
|
|
—
|
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) (1)
|
||||||
July 1, 2017 - July 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
192.5
|
|
August 1, 2017 - August 31, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
192.5
|
|
||
September 1, 2017 - September 30, 2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
192.5
|
|
||
Total
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
(1)
|
On July 19, 2010, we announced a $200.0 million share repurchase program.
|
Item 6.
|
Exhibits
|
Exhibit
|
|
Number
|
Description of Exhibits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXCO RESOURCES, INC.
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
November 7, 2017
|
|
/s/ Harold L. Hickey
|
|
|
|
Harold L. Hickey
|
|
|
|
Chief Executive Officer and President
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Tyler S. Farquharson
|
|
|
|
Tyler S. Farquharson
|
|
|
|
Vice President, Chief Financial Officer and Treasurer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Brian N. Gaebe
|
|
|
|
Brian N. Gaebe
|
|
|
|
Chief Accounting Officer and Corporate Controller
|
|
|
|
(Principal Accounting Officer)
|
(i)
|
Second Quarter Catch-Up
: A Participant shall earn an amount equal to the positive difference, if any, between (i) the aggregate Quarterly Performance Incentive payable based on achievement, as applicable, of the Cumulative Goals as of the end of the Second Quarter, and (ii) the Quarterly Performance Incentive actually paid for the First Quarter, if any. The Second Quarter Catch-Up Payment, if any, shall be payable in addition to any Quarterly Performance Incentive payment earned for the Second Quarter pursuant to Section 6(a) above.
|
(ii)
|
Third Quarter Catch-Up
: A Participant shall earn an amount equal to the positive difference, if any, between (i) the aggregate Quarterly Performance Incentive payable based on achievement, as applicable, of the Cumulative Performance Goals as of the end of the Third Quarter, and (ii) the sum of the Quarterly Performance Incentives actually paid for the First and Second Quarters, if any. The Third Quarter Catch-Up Payment, if any, shall be payable in addition to any Quarterly Performance Incentive payment earned for the Third Quarter pursuant to Section 6(a) above.
|
(iii)
|
Fourth Quarter Catch-Up
: A Participant shall earn an amount equal to the positive difference, if any, between (i) the aggregate Quarterly Performance Incentive payable based on achievement, as applicable, of the Cumulative Performance Goals as of the end of the Fourth Quarter, and (ii) the sum of the Quarterly Performance Incentive payment actually paid for the First, Second and Third Quarters, if any. The Fourth Quarter Catch-Up Payment, if any, shall be payable in addition to any Quarterly Performance Incentive payment earned for the Fourth Quarter pursuant to
Section 6(a)
above.
|
Portion of Applicable Portion Payable if Quarterly and/or Cumulative Threshold Performance Goal Achieved:
|
75%
|
Portion of Applicable Portion Payable if Quarterly and/or Cumulative Target Performance Goal Achieved:
|
100%
|
Portion of Applicable Portion Payable if Cumulative Maximum Performance Goal Achieved:
|
125%
|
Portion of Applicable Portion Payable if Achievement is Between Quarterly and/or Cumulative Threshold and Maximum Performance Goals:
|
Linear interpolation between 75% and 125%]
|
Performance Measures:
|
|
Production (Mmcfe)
|
Applicable Portion:
|
|
30%
|
Quarter:
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Quarterly Threshold Performance Goal
|
19,500
|
|
|
|
Quarterly Target Performance Goal
|
21,000
|
|
|
|
Quarterly Maximum Performance Goal
|
22,500
|
|
|
|
Cumulative Threshold Performance Goal
|
N/A
|
|
|
|
Cumulative Target Performance Goal
|
N/A
|
|
|
|
Cumulative Maximum Performance Goal
|
N/A
|
|
|
|
Performance Measures:
|
|
General Administrative Costs ($ in millions)
|
Applicable Portion:
|
|
30%
|
Quarter:
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Quarterly Threshold Performance Goal
|
$11.5
|
|
|
|
Quarterly Target Performance Goal
|
$10.0
|
|
|
|
Quarterly Maximum Performance Goal
|
$8.5
|
|
|
|
Cumulative Threshold Performance Goal
|
N/A
|
|
|
|
Cumulative Target Performance Goal
|
N/A
|
|
|
|
Cumulative Maximum Performance Goal
|
N/A
|
|
|
|
Performance Measures:
|
|
Lease Operating Expenses ($ per Mcfe)
|
Applicable Portion:
|
|
30%
|
Quarter:
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Quarterly Threshold Performance Goal
|
$.38
|
|
|
|
Quarterly Target Performance Goal
|
$.35
|
|
|
|
Quarterly Maximum Performance Goal
|
$.32
|
|
|
|
Cumulative Threshold Performance Goal
|
N/A
|
|
|
|
Cumulative Target Performance Goal
|
N/A
|
|
|
|
Cumulative Maximum Performance Goal
|
N/A
|
|
|
|
Performance Measures:
|
|
EBITDA ($ in millions)
|
Applicable Portion:
|
|
10%
|
Quarter:
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Quarterly Threshold Performance Goal
|
$11.5
|
|
|
|
Quarterly Target Performance Goal
|
$13.5
|
|
|
|
Quarterly Maximum Performance Goal
|
$15.5
|
|
|
|
Cumulative Threshold Performance Goal
|
N/A
|
|
|
|
Cumulative Target Performance Goal
|
N/A
|
|
|
|
Cumulative Maximum Performance Goal
|
N/A
|
|
|
|
RE:
|
Participation Agreement under the EXCO Resources, Inc. 2017-2018 Key Employee Incentive Plan
|
1.
|
Performance Period
. This Participation Agreement relates to the Performance Period beginning with July 1, 2017 – September 30, 2017 and as continuing for successive quarters pursuant to the terms of the Plan.
|
2.
|
Target Quarterly Performance Incentive
. Your target Quarterly Performance Incentive amount is $___________.
|
3.
|
Payout Schedule
. Your Quarterly Performance Incentive payments are calculated based on the achievement of the Performance Measures and shall be subject to the following payout schedule (less all federal, state, and local taxes and other withholdings):
|
Overall Performance Level
|
Payout Schedule
|
|
|
Threshold
|
75%
|
Target
|
100%
|
Maximum
|
125%
|
|
|
|
|
4.
|
Payment Schedule
. Your Quarterly Performance Incentive payment, if any, will be paid to you as soon as practicable after the end of each Performance Period once quarterly financials are reasonable estimable, but in no event, shall payment be made later than as required by Section 409A.
|
___________________________
|
|
Dated:
|
Signature
|
|
|
|
|
|
___________________________
|
|
_______________________
|
Print Name
|
|
Print Title
|
|
|
Performance Goals
|
|
||
Performance Measure
|
Weight
|
Threshold
|
Target
|
Maximum
|
Actuals
|
Production (Mcfe)
|
26%
|
39,572
|
42,000
|
44,428
|
42,083
|
General and Administrative Costs (gross) (dollars in millions)
|
26%
|
$27.5
|
$25.0
|
$22.5
|
$21.8
|
Finding and Development Costs (dollars per Mcfe)
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
EBITDA (dollars in millions)
|
13%
|
$26.1
|
$30.5
|
$34.9
|
$35.3
|
Lease Operating Expenses (dollars per Mcfe)
|
26%
|
$0.39
|
$0.35
|
$0.32
|
$0.35
|
Discretion of the Committee
|
10%
|
|
|
|
|
Safety Modifier – TRIR
|
+/-5%
|
|
0.70
|
|
0.00
|
|
Very truly yours,
|
|
|
|
|
|
EXCO RESOURCES, INC.
|
|
|
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of EXCO Resources, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 7, 2017
|
/s/ Harold L. Hickey
|
|
|
Harold L. Hickey
|
|
|
Chief Executive Officer and President
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of EXCO Resources, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 7, 2017
|
/s/ Tyler S. Farquharson
|
|
|
Tyler S. Farquharson
|
|
|
Vice President, Chief Financial Officer and Treasurer
|
Date:
|
November 7, 2017
|
/s/ Harold L. Hickey
|
|
|
Harold L. Hickey
|
|
|
Chief Executive Officer and President
|
|
|
|
|
|
/s/ Tyler S. Farquharson
|
|
|
Tyler S. Farquharson
|
|
|
Vice President, Chief Financial Officer and Treasurer
|