Exco Resources has executed a definitive agreement with a subsidiary of Venado Oil and Gas, an affiliate of KKR, to sell its oil and natural gas properties in South Texas.
In this transaction, Exco Resources will receive $300m as consideration, subject to customary closing conditions and adjustments based on an effective date of 1 January this year.
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The divested properties include Exco Resources’ interests in oil and natural gas assets in Zavala, Frio and Dimmit counties of Texas. These properties produced nearly 4,100boe daily last December.
The transaction is expected to close by June this year.
Exco Resources is selling the South Texas oil and natural gas properties to optimise its asset portfolio.
The divestment is also expected to improve the financial flexibility of the company.
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By GlobalDataExco Resources has planned to use part of the proceeds received from this transaction to conduct drilling campaign and develop its core Haynesville and Bossier shale assets situated in North Louisiana and East Texas.
The remaining part of the consideration will be used for other general corporate purposes.
Following the completion of this transaction, the borrowing base under Exco Resources’ revolving credit agreement will be $100m.
The next borrowing base redetermination under the credit agreement is scheduled in November this year.
Headquartered in Dallas, Exco Resources focuses on oil and natural gas exploration and development.
Most of its operations are located in Texas, Louisiana and Appalachia regions.
