EXCO Resources Closes $500M Notes Offer (revised) - Analyst Blog


Upstream energy company EXCO Resources Inc. ( XCO ) announced the closure of its $500 million notes offering. The notes, due to mature in 2022, were issued at 100% of the principal value and carried an interest of 8.500%.

EXCO Resources stated that after deducting underwriter discounts and other offer-related expenses, the company received $490.0 million from the offering. Part of the net proceeds was utilized for repaying the entire outstanding term loan. The remaining proceeds were spent toward lowering the revolving commitment under the Amended and Restated Credit Agreement of the company.

Dallas, TX-based EXCO Resources is primarily involved in the exploration, development and production of oil and gas resources as well as the acquisition of these properties. As of Dec 31, 2013, the total estimated proved reserves came in at 1.1 trillion cubic feet equivalent.

The company's disciplined cost control measure which is reflected in the significant year-over-year reduction in total development and exploration expenses is commendable. However, substantial reduction in production volumes in 2013 from the previous year is a matter of concern.

EXCO Resources is expected to release first-quarter 2014 results on Apr 29, after the closing bell. The Zacks Consensus Estimate for the company's first-quarter earnings is currently pegged at 4 cents per share, down 2 cents in the past two months, amid negative estimate revisions.

In keeping with these views, EXCO Resources currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can consider better-ranked players in the exploration and production industry like Miller Energy Resources, Inc. ( MILL ), Abraxas Petroleum Corp. ( AXAS ) and Clayton Williams Energy, Inc. ( CWEI ). While Miller Energy sports a Zacks Rank #1 (Strong Buy), Abraxas and Clayton Williams hold a Zacks Rank #2 (Buy).

(We are reissuing this article to correct a mistake. The original article, issued April 17, 2014, should no longer be relied upon.)

ABRAXAS PETE/NV (AXAS): Free Stock Analysis Report

WILLIAMS(C)ENGY (CWEI): Free Stock Analysis Report

MILLER ENERGY (MILL): Free Stock Analysis Report

EXCO RESOURCES (XCO): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AXAS , C , CWEI , MILL , XCO



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