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EXCO Resources, Inc., Company Intelligence Report © GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form.

REFERENCE CODE GDGE0675V | PUBLICATION DATE JUNE 2014

EXCO RESOURCES, INC. COMPANY INTELLIGENCE REPORT


EXCO RESOURCES INC., COMPANY INTELLIGENCE REPORT

Executive Summary

EXCO Resources Inc., Key Valuation Metrics, 2014

Stock exchange NYSE

Stock symbol XCO

Current price for class A share (US$ per share) as of June 30, 2014

5.9

Target price for class A share (US$ per share) xx

2013 revenue (US$ mil) 634.3

Market capitalization of class A (US$ bil) as of June 30, 2014

1.6

Estimated EV (US$ bil) xx

52-week high/low (US$ per share) 7.9/4.3

Source: GlobalData; Google Finance, 2014 EV: Enterprise Value

EXCO Resources, Inc. vs. Peer Group, Operational Performance, 2013

Parameters Total Peer average*

Proved reserves (mmboe) xxx xxx

Oil/gas (%) in total proved reserves xxx xxx

Total production (mmboe) xxx xxx

Lifting cost (US$ per boe), three-year avg. xxx xxx

Net-back (US$ per boe), three-year avg. xxx xxx

Recycle ratio, three-year avg. xxx xxx

Oil and gas F&D cost per boe, three-year avg.

xxx xxx

Proved acquisition cost (US$ mil) xxx xxx

Reserve replacement cost (US$ per boe) xxx xxx

Reserve life index xxx xxx

Development costs (US$ bil) xxx xxx

Acquisition costs (US$ bil) xxx xxx

Total net developed and undeveloped acreage (mil)

xxx xxx

Source: GlobalData, Oil and Gas eTrack, Advanced Company Operational and Financial Benchmarking database [Accessed on June 26, 2014] boe: barrels of oil equivalent; F&D: Finding and Development; mmboe: million barrels of oil equivalent *Peers include Comstock, EV Energy, EXCO, Forest Oil, Quicksilver, Rex Energy and Swift Energy

Strong Exploration and Development Focus on Shale Resources and Managing Liquidity to Drive EXCO Resource’s Growth in the Future

Strengthening Upstream Operations by Exploiting Shale Resources

The acquisition history of EXCO Resources Inc. (EXCO) over the last five years has been focused on the development of shale resource plays with an emphasis on the acquisition of undeveloped acreage. EXCO has focused in accumulating acreage in the Haynesville-Bossier Shale, Eagle Ford Shale and Marcellus Shale over the past few years. Almost xx of its total capital budget for 2014, which is US$xxx million, is allocated to development and completion activities in shale plays. EXCO has allocated US$xxx million to drilling and completion activities in the East Texas/North Louisiana, which has the Haynesville-Bossier Shale, and US$xxx million to the drilling and completion of assets in the South Texas, which consists primarily of the Eagle Ford Shale. EXCO holds significant acreage positions in three prominent shale plays in the US, which are the Haynesville-Bossier Shale (approximately xx,xxx net acres) in East Texas and North Louisiana, the Eagle Ford Shale (approximately xx,xxx net acres) in South Texas, and the Marcellus Shale (approximately xx,xxx net acres), in the Appalachia Basin.

Managing Liquidity through Joint Ventures

EXCO conducts a substantial part of its operations through joint ventures (JV) with third parties, principally BG Group, Harbinger Group Inc. (HGI) and Kohlberg Kravis Roberts & Co. LP (KKR). EXCO formed a partnership with HGI in exchange for its conventional non-shale assets in East Texas and North Louisiana. EXCO also offered its shallow Canyon Sand and certain other assets in the Permian Basin of West Texas to the EXCO-HGI partnership in exchange for net proceeds of approximately US$xxx million and a xxx economic interest in the EXCO-HGI partnership. EXCO also

EXCO Resources, Inc., Company Intelligence Report 3 GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form.


Executive Summary

sold an undivided xx% interest in the undeveloped Eagle Ford Shale acreage to KKR for approximately US$xxx million in exchange for a participation agreement with KKR to jointly develop this undeveloped acreage. EXCO has a JV with BG Group, covering xx% interest in certain Haynesville-Bossier Shale assets in East Texas and North Louisiana. This region contains the company’s Haynesville-Bossier Shale assets. EXCO’s increased reliance on external funding indicates that its liquidity has been shrinking over the past few years. In order to manage this, EXCO has decided to maintain its capital expenditure (capex) and other cash flows from JVs and partnerships.



Table of Contents

EXCO Resources Inc., Key Production Data, 2010–2013

Parameter Unit 2010 2011 2012 2013

Crude oil and liquids

mmbbl xx xx xx xx

Natural gas bcf xx xx xx xx

Total production mmboe

xx xx xx xx

Gas as % share of total production

% xx xx xx xx

Production growth % xx xx xx xx

Source: GlobalData, Oil and Gas eTrack, Advanced Company Operational and Financial Benchmarking [Accessed on June 26, 2014] bcf: billion cubic feet; mmbbl: million barrels of oil

EXCO Resources Inc., Key Cost, 2010–2013

Parameter Unit 2010 2011 2012 2013

F&D cost per boe, three-year avg.

US$/ boe

xx xx xx xx

Reserve replacement cost per boe, three-year avg.

US$/ boe

xx xx xx xx

Oil and gas finding cost per boe, three-year avg.

US$/ boe

xx xx xx xx

Source: GlobalData, Oil and Gas eTrack, Advanced Company Operational and Financial Benchmarking [Accessed on June 26, 2014]

EXCO Resources Inc., Key Valuation Metrics, 2010–2013

-

5.0

10.0

15.0

20.0

25.0

-6-4-202468

10121416

2010 2011 2012 2013

Value

(US$

/boe)

Multip

le (X)

EV/DACF EV/EBITDA EV/1P reserves


EXCO Resources Inc., Key Valuation Metrics, 2010–2013

Parameter Unit 2010 2011 2012 2013

EV/Reserves US$/boe xx xx xx xx

EV/Production US$/boe xx xx xx xx

EV/DACF X xx xx xx xx

EV/EBITDA X xx xx xx xx

Source: GlobalData, Oil and Gas eTrack, Advanced Company Operational and Financial Benchmarking [Accessed on June 26, 2014] DACF: Debt-Adjusted Cash Flow; EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization

EXCO Resources Inc., Key Production Data, 2010–2013

020406080100120140160180200

05

1015

20253035

2010 2011 2012 2013

Pro

duct

ion

(bcf

)

Pro

duct

ion

(mm

boe)

Crude oil and liquids Total production Natural gas (RHS)

Source: GlobalData, Oil and Gas eTrack, Advanced Company Operational and Financial Benchmarking [Accessed on June 26, 2014] RHS: Right-Hand Side

EXCO Resources Inc., Key Cost, 2010–2013

0

50

100

150

200

250

2010 2011 2012 2013

Cos

t (U

S$/b

oe)

F&D cost per boe, three-year avg.Reserve replacement cost per boe, three-year avg.Oil and gas finding cost per boe, three-year avg.




Table of Contents

EXCO Resources Inc., Key Reserves and Reserves Metrics, 2010–2013

Parameter Unit 2010 2011 2012 2013

Proved crude oil reserves

mmbbl xx xx xx xx

Proved natural gas reserves

bcf xx xx xx xx

Proved total oil and gas reserves

mmboe xx xx xx xx


EXCO Resources Inc., Result of Oil and Gas Operations, 2010–2013

Parameter Unit 2010 2011 2012 2013

Oil and gas revenue

US$/boe

xx xx xx xx

Lifting cost, three-year avg.

US$/boe

xx xx xx xx

Net-back, three-year avg.

US$/boe

xx xx xx xx

Recycle ratio, three-year avg.

% xx xx xx xx

Source: GlobalData, Oil and Gas eTrack, Companies Operational and Financial Database [Accessed on June 26, 2014]

EXCO Resources Inc., Key Reserves and Reserves Metrics, 2010–2013

0

200

400

600

800

1,000

1,200

1,400

1,600

0

50

100

150

200

250

300

2010 2011 2012 2013

Gas

rese

rves

(bcf

)

Oil

rese

rves

(mm

bbl)

Proved crude oil reserves Proved total oil and gas reserves

Proved natural gas reserves Source: GlobalData, Oil and Gas eTrack, Advanced Company Operational and Financial Benchmarking [Accessed on June 26, 2014]

EXCO Resources Inc., Result of Oil and Gas Operations, 2010–2013

-8-7-6-5-4-3-2-101

05

101520253035

2010 2011 2012 2013

Rec

ycle

ratio

(X)

Oil

and

gas

oper

atio

ns

(US$

/boe

)

Oil and gas revenue per boeLifting cost per boe, three-year avg.Net-back per boe, three-year avg.Recycle ratio, three-year avg.




Table of Contents

Table of Contents Table of Contents ............................................................................................................................... 6

1.1 List of Tables ...................................................................................................................... 10

1.2 List of Figures ..................................................................................................................... 13

2 EXCO Resources Inc., Company Overview............................................................................. 16

3 EXCO Resources Inc., Key Highlights ..................................................................................... 21

3.1 Growth Driven by Stream of Major Shale Projects in Principal Operating Areas.................. 21

Haynesville-Bossier Shale................................................................................................................ 21

Eagle Ford Shale ............................................................................................................................. 22

Marcellus Shale ............................................................................................................................... 23

3.2 Natural Gas Exploration and Production Company with Growing Oil Exposure ................... 23

3.3 Long-lived Production Coupled with Extensive Shale Reserves Profile ............................... 24

4 EXCO Resources Inc., SWOT Analysis ................................................................................... 26

4.1 Strengths ............................................................................................................................ 26

High-Quality Shale Asset Base in Attractive Regions ....................................................................... 26

Highly Skilled Workforce Coupled with Expertise from its Joint Venture Partners ............................. 26

Operational Control .......................................................................................................................... 27

4.2 Weaknesses ....................................................................................................................... 28

Substantial Part of EXCO’s Operations through Joint Ventures ....................................................... 28

Company’s Dependence on Third Parties to Market Crude Oil and Natural Gas .............................. 28

Relatively Low Oil and Gas Reserve Life Index ................................................................................ 28

4.3 Opportunities ...................................................................................................................... 29

Substantial Exploration, Acquisition and Development Potential to Expand its Reserve Base .......... 29

4.4 Threats................................................................................................................................ 30

Severe Weather or Drilling Restrictions ............................................................................................ 30

Highly Volatile Commodity Prices may Affect Company’s Performance ........................................... 30

5 EXCO Resources Inc., Goals and Strategies .......................................................................... 31



Table of Contents

5.1 Flourishing Upstream Operations and Focus on Development Program ............................. 31

5.2 Improve Balance Sheet Liquidity and Reduce Debt ............................................................ 32

6 EXCO Resources Inc., Production Overview ........................................................................... 34

6.1 Production Profile ................................................................................................................ 34

6.2 Assets Portfolio ................................................................................................................... 37

East Texas/North Louisiana ....................................................................................................... 37

South Texas ............................................................................................................................... 38

Appalachia Basin ....................................................................................................................... 39

Permian Basin ............................................................................................................................ 40

EXCO-HGI Partnership .............................................................................................................. 40

7 Capital Expenditure ................................................................................................................. 41

7.1 Costs Incurred..................................................................................................................... 42

8 Acreage ................................................................................................................................... 44

9 EXCO Resources Inc., Exploration and Development Overview ............................................. 49

9.1 East Texas and North Louisiana ......................................................................................... 51

9.2 South Texas ........................................................................................................................ 52

9.3 Appalachian Basin .............................................................................................................. 53

9.4 Permian .............................................................................................................................. 53

10 EXCO Resources Inc., Forecast Production and Financial Statements ................................... 55

10.1 Income Statement, 2011–2018 ........................................................................................... 56

10.2 Balance Sheet, 2011–2018 ................................................................................................. 58

10.3 Cash Flow Statement, 2011–2018 ...................................................................................... 60

11 EXCO Resources Inc., Valuation ............................................................................................. 61

11.1 Net Asset Value Methodology ............................................................................................. 61

12 EXCO Resources Inc., Peer Comparison ................................................................................ 63

12.1 Share Price Performance .................................................................................................... 63

12.2 Operational and Financial Performance .............................................................................. 64



Table of Contents

12.3 Key Financial and Operational Ratio ................................................................................... 70

13 Exco Resources, Inc., Production and Reserves Trends ......................................................... 74

13.1 Total Oil and Gas, Reserves and Production ...................................................................... 74

13.1.1 Total Crude Oil and Natural Gas Production and Reserves Trend, 2009-2013 ............... 74

13.1.2 Total Crude Oil & Natural Gas Production and Reserves By Country/Region, 2009-2013 ....................................................................................................................................... 75

13.1.3 Total Crude Oil and Natural Gas Reserve Changes, 2009-2013 ..................................... 76

13.2 Crude Oil/Liquids Production and Reserve .......................................................................... 77

13.2.1 Crude Oil/Liquids Production and Reserve Trend, 2009-2013 ........................................ 77

13.2.2 Crude Oil Production and Reserves By Country/Region, 2009-2013 .............................. 78

13.2.3 Crude Oil/Liquids Reserve Changes, 2009-2013 ............................................................ 79

13.3 Natural Gas Production and Reserve .................................................................................. 80

13.3.1 Natural Gas Production and Reserve Trend, 2009-2013................................................. 80

13.3.2 Natural Gas Production and Reserves, By Country/Region, 2009-2013 ......................... 81

13.3.3 Natural Gas Reserve Changes, 2009-2013 .................................................................... 81

13.4 Total Crude Oil and Natural Gas Reserves Life Index ......................................................... 83

13.4.1 Total Crude Oil and Natural Gas Reserves Life Index, 2009-2013 .................................. 83

13.4.2 Total Crude Oil and Natural Gas Reserves Life Index, By Country/Region, 2009-2013 .. 84

14 Exco Resources, Inc., E&P Costs Trends................................................................................ 85

14.1 Allocation of the Upstream Capital Expenditure .................................................................. 85

14.1.1 Upstream Capital Expenditure, 2009-2013 ..................................................................... 85

14.1.2 Acquisition Costs By Country/Region, 2009-2013 ........................................................... 86

14.1.3 Exploration and Development Costs, By Country/Region, 2009-2013............................. 87

14.2 Oil and Gas Cost Per boe, US$/boe .................................................................................... 88

14.2.1 Oil and Gas Cost Per boe, US$/boe, 2009-2013 ............................................................ 88

14.2.2 Oil and Gas Cost Per boe, US$/boe, By Country/Region, 2009-2013 ............................. 90

15 Exco Resources, Inc., Reserve Replacement Ratio ................................................................ 91

15.1 Oil and Gas Production Replacement Ratio ........................................................................ 91



Table of Contents

15.1.1 Oil and Gas Production Replacement Ratio, 2009-2013 ................................................. 91

15.1.2 Oil and Gas Production Replacement Ratio, By Country/Region, 2009-2013 ................. 93

16 Exco Resources, Inc., Results of Oil & Gas Operations Trend ................................................ 95

16.1 Oil and Gas Revenue and Expenses .................................................................................. 95

16.1.1 Oil and Gas Revenue and Expenses, 2009-2013 ........................................................... 95

16.1.2 Oil and Gas Revenue and Expenses, By Country/Region, 2009-2013 ............................ 97

16.2 Oil and Gas Revenue and Expenses, Per boe .................................................................. 100

16.2.1 Oil and Gas Revenue and Expenses, By boe, 2009-2013 ............................................ 100

16.2.2 Oil and Gas Revenue and Expenses Per boe, By Country/Region, 2009-2013 ............ 101

16.2.3 Oil and Gas Performance Metrics ................................................................................. 104

17 Exco Resources, Inc., Land Holdings and Well Data ............................................................. 105

17.1 Developed and Undeveloped Acreage .............................................................................. 105

17.1.1 Gross and Net Developed and Undeveloped Acreage, 2009-2013 ............................... 105

17.1.2 Gross and Net Developed and Undeveloped Acreage, By Country/Region, 2009-2013 107

17.2 Well Statistics.................................................................................................................... 108

17.2.1 Producible Oil and Gas Well, 2009-2013 ...................................................................... 108

17.2.2 Producible Oil and Gas Well, By Country/Region, 2009-2013 ....................................... 109

17.2.3 Exploration and Development Wells Drilled, 2009-2013................................................ 110

17.2.4 Exploration and Development Wells Drilled, By Country/Region, 2009-2013 ................ 111

18 Appendix ............................................................................................................................... 113

18.1 Abbreviations .................................................................................................................... 113

18.2 Sources............................................................................................................................. 115

18.3 Methodology ..................................................................................................................... 116

Coverage ....................................................................................................................................... 116

Secondary Research...................................................................................................................... 116

Primary Research .......................................................................................................................... 117

18.4 Disclaimer ......................................................................................................................... 117


1.1 List of Tables Table 1: EXCO Resources, Inc. Haynesville-Bossier Shale, Key Operational Parameters, 2013* ................... 22

Table 2: EXCO Resources, Inc. Eagle Ford Shale, Key Operational Parameters, 2013* ................................. 22

Table 3: EXCO Resources, Inc. Marcellus Shale, Key Operational Parameters, 2013* ................................... 23

Table 4: EXCO Resources Inc., Proved Reserves, 2011–2013 ...................................................................... 24

Table 5: EXCO Resources Inc., Capital Budget (US$ mil), 2014 .................................................................... 32

Table 6: EXCO Resources Inc., Total Oil and Gas Production Forecast, 2010–2018 ...................................... 36

Table 7: EXCO Resources Inc., Costs Incurred (US$ mil), 2010–2013 ........................................................... 43

Table 8: EXCO Resources Inc. vs. Peers, Total Net Acreage (‘000), 2013 ..................................................... 45

Table 9: EXCO Resources Inc., Historical and Forecast Production, 2011–2018 ............................................ 55

Table 10: GlobalData, Price Forecasts, 2014–2018 ....................................................................................... 55

Table 11: EXCO Resources Inc., Income Statement (US$ mil), 2011–2018 ................................................... 56

Table 12: EXCO Resources Inc., Balance Sheet (US$ mil), 2011–2018 ......................................................... 58

Table 13: EXCO Resources Inc., Cash Flow Statement (US$ mil), 2011–2018 .............................................. 60

Table 14: EXCO Resources Inc., Net Asset Value, 2013 ................................................................................ 62

Table 15: EXCO Resources Inc., Peer Group Comparison, Operational and Financial Performance, 2014 ..... 64

Table 16: EXCO Resources Inc., Peer Group Comparison, Total Reserves and Production (mmboe), 2013 .. 69

Table 17: EXCO Resources Inc., Peer Group Comparison, Financial and Operational Ratios, 2013 ............... 71

Table 18: Exco Resources, Inc., Total Crude Oil and Natural Gas, Production and Reserves, mmboe, 2009-2013 ........................................................................................................................................... 74

Table 19: Exco Resources, Inc., Total Crude Oil & Natural Gas Production and Reserves, By Country/Region, mmboe, 2009-2013 ........................................................................................... 75

Table 20: Exco Resources, Inc., Total Crude Oil and Natural Gas Reserve Changes, mmboe, 2009-2013 ..... 76

Table 21: Exco Resources, Inc., Crude Oil Production and Reserves Metrics, mmbbl, 2009-2013 .................. 77

Table 22: Exco Resources, Inc., Crude Oil Production and Reserves, By Country/Region, mmbbl, 2009-2013 ........................................................................................................................................... 78



Executive Summary

Table 23: Exco Resources, Inc., Crude Oil Reserve Changes, mmbbl, 2009-2013 ........................................ 79

Table 24: Exco Resources, Inc., Natural Gas Production and Reserves Metrics, bcf, 2009-2013 .................... 80

Table 25: Exco Resources, Inc., Natural Gas Production and Reserves, By Country/Region, bcf, 2009-2013 . 81

Table 26: Exco Resources, Inc., Natural Gas Reserve Changes, bcf, 2009-2013 ........................................... 82

Table 27: Exco Resources, Inc., Oil and Gas Reserves Life Index, Years, 2009-2013 .................................... 83

Table 28: Exco Resources, Inc., Oil and Gas Reserves Life Index, By Country/Region, Years, 2009-2013 ..... 84

Table 29: Exco Resources, Inc., Upstream Capital Expenditure, US$ mil, 2009-2013 .................................... 85

Table 30: Exco Resources, Inc., Proved and Unproved Acquisition Costs, By Country/Region, US$ mil, 2009-2013 .................................................................................................................................. 86

Table 31: Exco Resources, Inc., Exploration and Development Costs, By Country/Region, US$ mil, 2009-2013 ........................................................................................................................................... 87

Table 32: Exco Resources, Inc., Reserves Replacement, Finding and Development Costs, Finding Cost and Proved Acquisition Costs Per boe, US$/boe, 2009-2013 ...................................................... 88

Table 33: Exco Resources, Inc., Reserves Replacement, Finding and Development Costs, Finding Cost and Proved Acquisition Costs Per boe, US$/boe, By Country/Region, 2009-2013....................... 90

Table 34: Exco Resources, Inc., Oil and Gas Production Replacement Ratio, %, 2009-2013 ......................... 91

Table 35: Exco Resources, Inc., 3-Year Wt.Avg. Oil and Gas Production Replacement Ratio, By Country/Region, %, 2009-2013 ................................................................................................... 93

Table 36: Exco Resources, Inc., Revenue and Expenses, US$ mil, 2009-2013 .............................................. 95

Table 37: Exco Resources, Inc., Revenue and Expenses, By Country/Region, US$ mil, 2009-2013 ............... 98

Table 38: Exco Resources, Inc., Oil and Gas Revenue and Expenses, US$/boe, 2009-2013 ....................... 100

Table 39: Exco Resources, Inc., Oil and Gas Revenue and Expenses, US$/boe, By Country/Region, 2009-2013 ......................................................................................................................................... 102

Table 40: Exco Resources, Inc., Oil and Gas Performance Metrics, 2009-2013............................................ 104

Table 41: Exco Resources, Inc., Land Holdings (Developed and Undeveloped Acreage), Acres, 2009-2013 105

Table 42: Exco Resources, Inc., Land Holdings (Developed and Undeveloped Acreage), By Country/Region, Acres, 2009-2013 ............................................................................................ 107

Table 43: Exco Resources, Inc., Producible Oil and Gas Wells, 2009-2013 .................................................. 108



Executive Summary

Table 44: Exco Resources, Inc., Producible Oil and Gas Wells, By Country/Region, 2009-2013 ................... 109

Table 45: Exco Resources, Inc., Exploratory and Developed Wells, 2009-2013............................................ 110

Table 46: Exco Resources, Inc., Exploratory and Developed Wells, By Country/Region, 2009-2013 ............ 111


1.2 List of Figures Figure 1: EXCO Resources Inc., Operational Map, 2014 ................................................................................ 16

Figure 2: EXCO Resources Inc., Financial and Operational Overview, 2010–2013 ......................................... 18

Figure 3: EXCO Resources Inc., Share Price Movement, July 2013 to June 2014 .......................................... 19

Figure 4: EXCO Resources Inc. and Peer Group, Low Oil and Gas Reserve Life Index, 2009–2013 .............. 29

Figure 5: EXCO Resources Inc., Historical and Estimated Production, 2010–2018 ......................................... 35

Figure 6: EXCO Resources Inc., Production Mix (%), 2010–2018 .................................................................. 36

Figure 7: EXCO Resources Inc., Operational Map, East Texas/North Louisiana Division, 2014 ...................... 38

Figure 8: EXCO Resources Inc., Operational Map, Appalachia Basin, 2014 ................................................... 39

Figure 9: EXCO Resources Inc., Capital Expenditure Classification (US$ mil), 2010–2014* ........................... 41

Figure 10: EXCO Resources Inc., Costs Incurred (US$ mil), 2010–2013 ........................................................ 43

Figure 11: EXCO Resources Inc., Developed and Undeveloped Acreage (‘000), 2009–2013 ......................... 44

Figure 12: EXCO Resources Inc. vs. Peers, Total Net Acreage (‘000), 2013 .................................................. 45

Figure 13: EXCO Resources Inc. vs. Peers, Acreage Comparison (‘000), 2010–2013 .................................... 47

Figure 14: EXCO Resources Inc., Net Developed and Undeveloped Acreage (‘000), 2013............................. 48

Figure 15: EXCO Resources Inc., Operational Map, 2014 .............................................................................. 49

Figure 16: EXCO Resources Inc., Net Productive and Dry Exploratory and Development Wells, 2010–2013 .. 50

Figure 17: EXCO Resources Inc., Net Total Dry and Productive Exploratory Wells, 2010–2013 ..................... 51

Figure 18: EXCO Resources Inc., and Peers, Relative Share Price Performance Index (%), April 2013 to March 2014 ................................................................................................................................. 63

Figure 19: EXCO Resources Inc., Financial Parameters, 2009–2013 ............................................................. 65

Figure 20: EXCO Resources Inc., Financial Parameters, 2009–2013 ............................................................. 66

Figure 21: EXCO Resources Inc. and Peer Group, Financial Parameters, 2012 ............................................. 67

Figure 22: EXCO Resources Inc. and Peer Group, Finding and Development Cost and Reserve Replacement Comparison, 2013 ................................................................................................. 68



Executive Summary

Figure 23: EXCO Resources Inc., Peer Group Comparison, Total Reserves and Production (mmboe), 2013 . 69

Figure 24: EXCO Resources Inc. and Peer Group, Reserve Life Index (Years), 2013 .................................... 70

Figure 25: EXCO Resources Inc., Peer Group Comparison, Valuation Ratios (US$/boe), 2012 ...................... 73

Figure 26: Exco Resources, Inc., Total Crude Oil and Natural Gas, Production and Reserves, mmboe, 2009-2013 .................................................................................................................................. 74

Figure 27: Exco Resources, Inc., Total Crude Oil and Natural Gas Reserve Changes, mmboe, 2013 ............. 76

Figure 28: Exco Resources, Inc., Crude Oil Production and Reserves Metrics, mmbbl, 2009-2013 ................. 77

Figure 29: Exco Resources, Inc., Crude Oil Reserve Changes, mmbbl, 2013 ................................................ 79

Figure 30: Exco Resources, Inc., Natural Gas Production and Reserves Metrics, bcf, 2009-2013 .................. 80

Figure 31: Exco Resources, Inc., Natural Gas Reserve Changes, bcf, 2013 ................................................... 81

Figure 32: Exco Resources, Inc., Oil and Gas Reserves Life Index, Years, 2009-2013 ................................... 83

Figure 33: Exco Resources, Inc., Upstream Capital Expenditure, US$ mil, 2009-2013 ................................... 85

Figure 34: Exco Resources, Inc., Unproved Acquisition Costs, By Country/Region, US$ mil, 2009-2013 ........ 86

Figure 35: Exco Resources, Inc., 3-Year Wt.Avg., Reserves Replacement, Finding and Development Costs, Finding Cost and Proved Acquisition Costs Per boe, US$/boe, 2009-2013 ................................. 88

Figure 36: Exco Resources, Inc., 3-Year Wt.Avg., Oil and Gas Production Replacement Ratio, %, 2009-2013 ........................................................................................................................................... 91

Figure 37: Exco Resources, Inc., Revenue and Expenses, US$ mil, 2009-2013 ............................................. 95

Figure 38: Exco Resources, Inc., Income Tax Provision (Benefit) From Upstream Oil & Gas Operations, By Country/Region, US$ mil, 2009-2013 .......................................................................................... 97

Figure 39: Exco Resources, Inc., Net Income/ Loss From Upstream Oil & Gas Operations, By Country/Region, US$ mil, 2009-2013 .......................................................................................... 98

Figure 40: Exco Resources, Inc., Oil and Gas Revenue and Expenses, US$/boe, 2009-2013 ...................... 100

Figure 41: Exco Resources, Inc., Income Tax/(Benefit) per boe, By Country/Region, US$/boe, 2009-2013 .. 101

Figure 42: Exco Resources, Inc., Annual Net Income per boe, By Country/Region, US$/boe, 2009-2013 ..... 102

Figure 43: Exco Resources, Inc., Oil and Gas Performance Metrics, 2009-2013 .......................................... 104

Figure 44: Exco Resources, Inc., Land Holdings (Developed and Undeveloped Acreage), Acres, 2009-2013105

Figure 45: Exco Resources, Inc., Producible Oil and Gas Wells, 2009-2013................................................. 108



Executive Summary

Figure 46: Exco Resources, Inc., Exploratory and Developed Wells, 2009-2013 .......................................... 110



EXCO Resources, Inc., Company Overview

2 EXCO Resources Inc., Company Overview EXCO Resources Inc. (EXCO) is an independent oil and gas company involved in the exploration, exploitation, development and production of onshore oil and natural gas properties. EXCO is headquartered in Dallas, Texas. Its operations mainly include upstream operations, along with some exposure to midstream operations. It upstream assets are located mainly in the US especially in East Texas, North Louisiana, Appalachia, and the Permian Basin in West Texas. EXCO’s operations in the Appalachian Basin are mainly located in the Marcellus Shale. In Pennsylvania, its operations encompass xx counties and target the Marcellus Shale as well as the Upper Devonian, Venanago, Bradford and Elk Sandstone formation. In West Virginia, its operations encompass xx counties and target Marcellus Shale as well as multiple reservoirs of the Mississippian and Devonian formations. EXCO’s operations in East Texas and North Louisiana are mainly located in the Haynesville-Bossier Shales. Its development drilling program in the Haynesville Shale play is concentrated in the Holly area in DeSoto Parish, Louisiana, and the Shelby area, in East Texas. EXCO’s operations in West Texas are located in Zavala, Dimmit and Frio counties and target the Eagle Ford Shale as well as the Austin Chalk, Buda and Pearsall formations. EXCO and Harbinger Group Inc. (HGI) formed a partnership in 2013, which owns conventional oil and gas assets. These assets are mainly concentrated in the Permian Basin of West Texas and Cotton Valley area of East Texas and North Louisiana. The following figure shows EXCO’s operations in the US in 2014.

Figure 1: EXCO Resources Inc., Operational Map, 2014

Source: EXCO, 2014



EXCO Resources, Inc., Company Overview

EXCO has midstream Joint Ventures (JV) in East Texas/North Louisiana and Appalachia in which it owns xx interest in each. The midstream JV in East Texas/North Louisiana is TGGT Holdings (TGGT). TGGT was a xx:xx JV company between BG and EXCO. It is a natural gas midstream company that is engaged in natural gas gathering, compression, treating, transportation, marketing, and related services, primarily in the East Texas/North Louisiana area. It operates production from the Haynesville, Bossier and Cotton Valley shale gas formations in East Texas/North Louisiana. On November 15, 2013, EXCO sold its equity interest in the midstream asset TGGT to Azure in exchange for cash proceeds and an equity interest in Azure. EXCO and BG will collectively own 8% of Azure. EXCO also owns a xx interest in the Appalachia Midstream JV, which holds interests in midstream assets in the Marcellus Shale. Its upstream segment held total proved oil and gas reserves of nearly xx million barrels of oil equivalent (mmboe) at the end of 2013. The segment reported a total oil and gas production of xx mmboe in 2013. EXCO produced xxx billion cubic feet equivalent (bcfe) of oil and gas in 2013. The majority of its oil and gas production was derived from the East Texas/North Louisiana region, which accounted for nearly xx of total production in the year, followed by production from Appalachia Basin with xx, the EXCO-HGI partnership with x.x%, the South Texas region with x.x% and the Permian Basin and ‘‘other’’ region with x.x%.



Exco Resources Inc., Key Highlights

3 EXCO Resources Inc., Key Highlights 3.1 Growth Driven by Stream of Major Shale Projects in Principal Operating

Areas EXCO has focused on the exploitation and development of shale resource plays over the past few years, accumulating acreage in the Haynesville-Bossier, Eagle Ford Shale and Marcellus Shale. During 2013, EXCO acquired additional assets in its core area of the Haynesville Shale for a purchase price of US$xxx million, which includes an additional working interest in its operated wells and operated interests in producing wells. During 2013, EXCO also acquired producing wells and non-producing leasehold interests in the Eagle Ford Shale for a purchase price of US$xxx million. The acquisition includes the undeveloped acreage in Eagle Ford Shale. In addition, EXCO entered into a participation agreement with Kohlberg Kravis Roberts & Co. LP (KKR) to jointly develop the Eagle Ford Shale assets. The agreement is called the KKR Participation Agreement. Currently, EXCO’s major operating areas are East Texas, North Louisiana, Appalachia and South Texas, which are primarily rich in shale resources. Its major shale plays are the Haynesville-Bossier, Eagle Ford Shale and the Marcellus Shale plays. The development and exploitation of these shale plays is one of EXCO’s key strategies. The majority of EXCO’s capital investments are therefore allocated towards this shale. EXCO has planned a total capital budget of US$xxxmillion for 2014, of which about US$xxx million will be allocated to the drilling and completion activities in East Texas/North Louisiana and US$xxx million on the drilling and completion of the assets in South Texas.

Haynesville-Bossier Shale

The Haynesville-Bossier Shale play covers a substantial geographic area in East Texas and Northwest Louisiana. The East Texas and North Louisiana division is one of the most important divisions and the largest producing region for EXCO. EXCO’s major operations are focused on the Haynesville-Bossier Shale play. EXCO owns 70,000 net acres in the Haynesville-Bossier Shales, as of December 2013. EXCO’s Haynesville Shale acreage is mainly located in the DeSoto and Caddo parishes, in Louisiana, and in the Harrison, Panola, Shelby, San Augustine and Nacogdoches counties, in Texas. EXCO holds xx,xxx net acres in the Holly area of DeSoto. In the Holly area, xx% of net acreage is held-by-production. It also holds xx,xxx net acres in the Shelby area in San Augustine, Nacogdoches and Shelby counties. As of December 31, 2013, EXCO’s average daily net production from the East Texas/North Louisiana region was about xxx million cubic feet of equivalent (mmcfe) per day. Its net production from the shale stood at xxx.x mmcfe per day at the end of 2013. Its net production (including non-operated volumes) from the Haynesville-Bossier shale was xxx mmcfe per day at the end of 2013. The following table provides an overview of EXCO’s key operational parameters in the Haynesville-Bossier Shale.



Exco Resources Inc., SWOT Analysis

4 EXCO Resources Inc., SWOT Analysis 4.1 Strengths High-Quality Shale Asset Base in Attractive Regions

EXCO has significant acreage positions in some of the most prominent shale plays in the US. It has xx,xxx net acres in three prominent shale plays: Eagle Ford Shale, Haynesville-Bossier Shale and Marcellus Shale. Its primary strategy is to focus on the exploitation and development of shale resource plays and evaluate complementary acquisitions that meet its strategic and financial objectives. Its goal is to develop the existing asset base and expand in the core areas while maintaining its liquidity position. It holds significant acreage positions in three prominent shale plays in the US:

1-Haynesville-Bossier Shale, located in East Texas and North Louisiana, where EXCO currently holds approximately xx,xxx net acres

2-Eagle Ford Shale, located in South Texas, where EXCO currently holds approximately xx,xxx net acres

3-Marcellus Shale, located in the Appalachia Basin, where EXCO currently holds approximately xxx,xxx net acres

All of these shale plays are connected by well-developed infrastructure that includes pipelines and refineries. Most of the acreage is primarily held-by-production, which allows EXCO to develop these properties within its optimum time frame. EXCO’s multi-year inventory of development drilling and exploitation projects, its high drilling success rates, its significant unproved reserves and resources, and its long reserve lives have proved to be extremely beneficial for EXCO.

Highly Skilled Workforce Coupled with Expertise from its Joint Venture Partners

EXCO has developed a workforce that has a significant number of highly skilled technical and operational personnel who have been successful in developing its shale resources. The technical expertise has helped EXCO exploit its asset base in an efficient and cost-effective manner and provided a competitive advantage in its key operating areas. EXCO has also entered into JV agreements with both public and private oil and natural gas companies that have extensive industry experience in acquiring, exploring, exploiting and developing oil and natural gas properties. These JV agreements have helped EXCO in executing a disciplined approach to accomplishing its business strategies. EXCO formed a JV agreement with HGI on February 14, 2013. The EXCO-HGI partnership was formed to exploit its current asset base as well as to acquire conventional producing oil and natural gas properties. As per this agreement, EXCO owns a xx.x% economic interest in conventional shallow Cotton Valley producing assets in East Texas and North Louisiana as well as shallow Canyon Sand and other assets in the Permian Basin. It is also in a JV with affiliates of KKR to develop Eagle Ford Shale assets in South Texas. Under this agreement, EXCO



Exco Resources Inc., SWOT Analysis

4.2 Weaknesses Substantial Part of EXCO’s Operations through Joint Ventures

EXCO conducts a substantial part of its operations through JVs with third parties, principally BG, HGI and KKR. Therefore, the continuation of such JVs is vital to its continued success. EXCO depends on these third parties for elements such as agreed payments of substantial development costs pertaining to the JV and their share of other costs of the JV. The performance of these third-party obligations or the ability of third parties to meet their obligations under these arrangements is outside its control. If these parties do not meet or satisfy their obligations under these arrangements, the performance and success of these arrangements, and their value to EXCO, may be adversely affected. Furthermore, EXCO may be forced to undertake the obligations itself and incur additional expenses in order to have some other party perform such obligations. In such cases, EXCO may be required to enforce its rights, which may cause disputes among its JV partners that in turn may adversely impact its financial performance and operations.

Company’s Dependence on Third Parties to Market Crude Oil and Natural Gas

EXCO is primarily dependent upon third parties to transport its oil and natural gas production. Its ability to market its oil and natural gas production depends upon the availability and capacity of gathering systems, pipelines and other transportation facilities. Transportation space on the gathering systems and pipelines that EXCO uses is occasionally limited or unavailable due to repairs, outages caused by accidents, or other events. Above all, these facilities are being utilized by other companies who have priority transportation agreements. EXCO has experienced production curtailments in East Texas and North Louisiana resulting from capacity restraints, offsetting fracturing stimulation operations and short-term shutdowns of certain pipelines for maintenance purposes. These factors can affect the company’s revenue, which in turn could adversely affect its ability to produce and market oil and natural gas.

Relatively Low Oil and Gas Reserve Life Index

EXCO’s oil and gas reserve life index is much lower than its peer group’s average. For 2013, EXCO’s reserve life index was x.x as compared with its peer group’s average of xx.x. The decrease is primarily due to the result of impairments of its oil and natural gas properties, which lowered its depletable reserves base. The following figure illustrates the oil and gas reserve life index of EXCO and its peer group from 2009 to 2013.



Exco Resources Inc., Goals and Strategies

5 EXCO Resources Inc., Goals and Strategies 5.1 Flourishing Upstream Operations and Focus on Development Program EXCO is an independent oil and natural gas company engaged in the acquisition, exploration, exploitation, development and production of onshore oil and natural gas properties in the US. Its principal operations are conducted in certain key US oil and natural gas areas, including Texas, Louisiana and the Appalachia region. EXCO’s goal is to develop the existing asset base and expand in the core areas while maintaining its liquidity position. The strategy is to intensify its hydrocarbon Exploration and Production (E&P) activities, thereby adding new reserves and production. Its primary strategy is to focus on the exploitation and development of shale resource plays and to evaluate complementary acquisitions that meet its strategic and financial objectives. It holds significant acreage positions in three prominent shale plays in the US: Haynesville-Bossier Shale, Eagle Ford Shale and Marcellus Shale.

EXCO’s total capital budget for 2014 is US$xxx million. Almost xx% of the total capital budget, US$xxx million, is allocated to development and completion activities. EXCO’s developmental activities in the East Texas/North Louisiana region are primarily focused on its core area in DeSoto Parish as well as a limited drilling program in the Shelby area. EXCO is developing the Holly area in DeSoto Parish by utilizing multi-well pad design as it minimizes surface impact and provides for a more capital efficient gathering and production system compared with single-well locations. On December 31, 2013, EXCO had three drilling rigs running in the area and a total of xxx gross operated horizontal wells flowing to sales. EXCO modified its development plan from eight wells per section to x wells per section in order to optimize its rate of return and value for each section. Its current manufacturing process typically involves using three drilling rigs per xxx-acre unit to simultaneously drill all wells in the unit. It is followed by one to two fracture stimulation fleets to efficiently complete all wells in the unit. As of December 31, 2013, EXCO had xx developed units and xx undeveloped units. Its plan for 2014 is to develop seven of these units, which include drilling xx gross (xx.x net) wells. Its developmental activities in the South Texas region will primarily be focused on the Eagle Ford Shale, through its participation agreement with KKR. The KKR Participation Agreement provides that EXCO and KKR will jointly fund future costs to develop the Eagle Ford assets. EXCO will assign half of its undivided xx% interest in each well drilled to KKR, and KKR will fund and own xx% of each well drilled. EXCO will fund and own xx% of each well drilled. EXCO and KKR will determine the development plan on a quarterly basis, covering the following xx months. EXCO will be required to offer to purchase KKR's xx% working interest in wells drilled that have been in production for one year. EXCO has designed its capital program to manage capex in relation to its operating cash flow. This capex excludes the EXCO-HGI partnership, which funds its capex through internally generated cash flow and its credit agreement. It also excludes any capex for its joint development of shale properties in the Permian Basin. The 2014 capital budget is currently allocated among the different budget categories as shown in the following table.



Exco Resources Inc., Forecast Production and Financial Statements

10 EXCO Resources Inc., Forecast Production and Financial Statements

EXCO’s production and financial projections have been made using information that is publicly available. GlobalData has used a forecast period of five years for its analysis. The following table shows EXCO’s historical and estimated production during the 2011–2018 period.

Table 9: EXCO Resources Inc., Historical and Forecast Production, 2011–2018

Production spilt Actual Projected annual forecast

2011 2012 2013 2014 2015 2016 2017 2018

Crude oil and NGL production (mmbbl) xx xx xx xx xx xx xx xx

Natural gas production (bcf) xx xx xx xx xx xx xx xx

Overall production (mmboe) xx xx xx xx xx xx xx xx

Source: GlobalData; EXCO, 2012; EXCO, 2013

GlobalData’s price deck is divided into strong, base and weak cases to forecast a company’s performance. GlobalData has applied company-specific differentials to its projected crude oil and natural gas prices. The following table shows GlobalData’s price deck for the 2014–2018 period.

Table 10: GlobalData, Price Forecasts, 2014–2018

Crude oil price (US$ per bbl) 2014 2015 2016 2017 2018

Strong case xx xx xx xx xx

Base case xx xx xx xx xx

Weak case xx xx xx xx xx

Natural gas price (US$ per mcf) 2014 2015 2016 2017 2018

Strong case xx xx xx xx xx

Base case xx xx xx xx xx

Weak case xx xx xx xx xx

Source: GlobalData bbl: barrel of oil; mcf: thousand cubic feet Note: GlobalData has considered base case prices for crude oil and natural gas NYMEX prices are considered for crude oil and Henry Hub prices are considered for Natural Gas




10.1 Income Statement, 2011–2018 EXCO’s income statement is shown in Table 24. EXCO’s total E&P revenue is expected to increase by almost xx% from US$xxx million in 2013 to US$xxx million in 2014. However, GlobalData expects EXCO’s E&P revenue to decrease to US$xxx million in 2018. The production costs are expected to increase to US$xxx million in 2018. EXCO’s Earnings before Interest, Tax, Depreciation, Depletion, Amortization and Exploration (EBITDAX) expenses in 2014 is expected to be US$xxx million, which will be xx% of its total revenue. Similarly, EXCO’s Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA) is expected to decrease from US$xxx million in 2013 to US$xxx million in 2018. EXCO is expected to generate a net income of US$xxx million in 2014, which translates into basic Earnings per Share (EPS) of US$xx.

Table 11: EXCO Resources Inc., Income Statement (US$ mil), 2011–2018

2011 2012 2013 2014 2015 2016 2017 2018

E&P revenue xx xx xx xx xx xx xx xx

Total revenue xx xx xx xx xx xx xx xx

Production costs xx xx xx xx xx xx xx xx

G&A Expense xx xx xx xx xx xx xx xx

EBITDAX xx xx xx xx xx xx xx xx

(Gain) loss on divestitures xx xx xx xx xx xx xx xx

Asset retirement xx xx xx xx xx xx xx xx

Impairments/ceiling test impairments xx xx xx xx xx xx xx xx

EBITDA xx xx xx xx xx xx xx xx

DD&A expense xx xx xx xx xx xx xx xx

Operating income xx xx xx xx xx xx xx xx

Other non-operating incomes xx xx xx xx xx xx xx xx

Equity in income of affiliates, after tax xx xx xx xx xx xx xx xx

Net interest expense xx xx xx xx xx xx xx xx

EBT xx xx xx xx xx xx xx xx

Current tax xx xx xx xx xx xx xx xx

Deferred tax xx xx xx xx xx xx xx xx

Total income tax xx xx xx xx xx xx xx xx

PAT xx xx xx xx xx xx xx xx

Minority interest xx xx xx xx xx xx xx xx

Net income to common shareholders xx xx xx xx xx xx xx xx




Weighted avg. shares outstanding (million) xx xx xx xx xx xx xx xx

Fully diluted shares outstanding (million) xx xx xx xx xx xx xx xx

Basic EPS xx xx xx xx xx xx xx xx

Dilutive EPS xx xx xx xx xx xx xx xx

Source: GlobalData; EXCO, 2012; EXCO, 2013 DD&A: Depreciation, Depletion and Amortization; EBT: Earnings Before Tax; PAT: Profit After Tax




10.2 Balance Sheet, 2011–2018 EXCO’s balance sheet is depicted in the following table. GlobalData expects EXCO to maintain a healthy level of cash and cash equivalents during the 2014–2018 period.

Table 12: EXCO Resources Inc., Balance Sheet (US$ mil), 2011–2018

2011 2012 2013 2014 2015 2016 2017 2018

Cash and cash equivalents xx xx xx xx xx xx xx xx

Restricted cash xx xx xx xx xx xx xx xx

Accounts receivable xx xx xx xx xx xx xx xx

Inventories xx xx xx xx xx xx xx xx

Other current assets xx xx xx xx xx xx xx xx

Investments in unconsolidated entities xx xx xx xx xx xx xx xx

Prop. plant and equipment, net xx xx xx xx xx xx xx xx

Other non-current assets xx xx xx xx xx xx xx xx

Total assets xx xx xx xx xx xx xx xx

Accounts payable xx xx xx xx xx xx xx xx

Accrued expenses xx xx xx xx xx xx xx xx

Other current liabilities (non-debt) xx xx xx xx xx xx xx xx

Current part of long-term debt xx xx xx xx xx xx xx xx

Long-term debt xx xx xx xx xx xx xx xx

Asset retirement xx xx xx xx xx xx xx xx

Other non-current liabilities xx xx xx xx xx xx xx xx

Total liabilities xx xx xx xx xx xx xx xx

Common stock xx xx xx xx xx xx xx xx

Additional paid in-capital xx xx xx xx xx xx xx xx

Treasury stock (contra account) xx xx xx xx xx xx xx xx

Accumulated loss/ other xx xx xx xx xx xx xx xx

Total shareholders' equity xx xx xx xx xx xx xx xx




Total equity xx xx xx xx xx xx xx xx

Total liabilities plus shareholders' equity xx xx xx xx xx xx xx xx





10.3 Cash Flow Statement, 2011–2018 The following table shows EXCO’s cash flow statement for the 2011–2018 period. EXCO’s CFO is expected to increase to US$xxx million in 2014, from US$xxx million in 2013. EXCO will be able to fund most of its capex plans through internally generated operational cash flows during the 2014–2018 period.

Table 13: EXCO Resources Inc., Cash Flow Statement (US$ mil), 2011–2018

2011 2012 2013 2014 2015 2016 2017 2018

Net income xx xx xx xx xx xx xx xx

DD&A xx xx xx xx xx xx xx xx

Dry hole and impairment expense xx xx xx xx xx xx xx xx

Income from equity investments xx xx xx xx xx xx xx xx

Change in working capital xx xx xx xx xx xx xx xx

Other operating xx xx xx xx xx xx xx xx

Operating cash flows xx xx xx xx xx xx xx xx

capex xx xx xx xx xx xx xx xx

Asset acquisitions xx xx xx xx xx xx xx xx

Asset sales xx xx xx xx xx xx xx xx

Other investing xx xx xx xx xx xx xx xx

Investing cash flows xx xx xx xx xx xx xx xx

Additions to (reductions in) long-term debt xx xx xx xx xx xx xx xx

Common and preferred dividends xx xx xx xx xx xx xx xx

Other xx xx xx xx xx xx xx xx

Financing cash flows xx xx xx xx xx xx xx xx

Total increase/decrease of cash xx xx xx xx xx xx xx xx



SWIFT ENERGY COMPANY, COMPANY INTELLIGENCE REPORT

Forecast Production and Valuation

11 EXCO Resources Inc., Valuation 11.1 Net Asset Value Methodology EXCO’s operations have been valued using the Net Asset Value (NAV) methodology. EXCO’s operations yielded an equity value of US$xx billion, and an Enterprise Value (EV) of US$xx billion. GlobalData’s base case valuation is US$xx per share, implying that the stock is trading at a discount of xx%, based on the current share price of US$xx per share as of July 31, 2014.

GlobalData has valued EXCO using the sum-of-parts valuation methodology. GlobalData has valued EXCO’s proved reserve base using the Present Value discounted

at xx% (PV10) method. GlobalData has valued EXCO’s undeveloped acreages by using the recent US$-per-

acreage multiples evaluated in its database (www.oilandgasetrack.com). GlobalData’s price deck is divided into strong, base and weak cases, to evaluate EXCO’s

performance. GlobalData has taken the future development costs from EXCO’s standardized PV-10

values from US Securities and Exchange Commission filings. GlobalData assumes that the development cost will be spent over the coming eight years.

The operating cost for independent E&P companies consists of the lifting costs and the related G&A expenses.

GlobalData assumes a nominal discount rate of about xx%.


SWIFT ENERGY COMPANY, COMPANY INTELLIGENCE REPORT

Forecast Production and Valuation

The following table provides a detailed calculation of EXCO’s NAV.

Table 14: EXCO Resources Inc., Net Asset Value, 2013 Total value (US$ mil) US$/share

Net present value xx xx

Prospective acreage xx xx

Total E&P value xx xx

Total EV xx xx

Long-term debt xx xx

Net debt xx xx

Equity value xx xx

Source: GlobalData



Appendix

18 Appendix 18.1 Abbreviations

bbl: barrel of oil

bcf: billion cubic feet

bcfe: billion cubic feet equivalent

bd: barrels of oil per day

boe: barrels of oil equivalent

boed: barrels of oil equivalent per day

CAGR: Compound Annual Growth Rate

Capex: Capital expenditure

CFO: Cash Flow from Operations

DACF: Debt-Adjusted Cash Flow

DD&A: Depreciation, Depletion and Amortization

E&D: Exploration and Development

E&P: Exploration and Production

EBITDA: Earnings Before Interest, Tax, Depreciation, and Amortization

EBITDAX: Earnings Before Interest, Tax, Depreciation, Depletion, Amortization and Exploration

EBT: Earnings Before Tax

EPS: Earnings per Share

EV: Enterprise Value

F&D: Finding and Development

FCPA: Foreign Corrupt Practices Act

FPSO: Floating Production, Storage and Offloading

FPU: Floating Production Unit

ft: feet

G&A: General and Administrative



Appendix

HGI: Harbinger Group Inc.

JV: Joint Venture

KKR: Kohlberg Kravis Roberts

m: meter

mbbl: thousand barrels

mboe: thousand barrels of oil equivalent

mcf: thousand cubic feet

mcfd: thousand cubic feet per day

mcfe: thousand cubic feet of equivalent

mmbbl: million barrels of oil

mmboe: million barrels of oil equivalent

mmcfe: million cubic feet of equivalent

NAV: Net Asset Value

NGL: Natural Gas Liquids

PAT: Profit After Tax

RHS: Right-Hand Side

YoY: Year-On-Year

1 mmboe = 6 bcf



Appendix

18.2 Sources

EXCO (2012). Annual Report 2012. EXCO Resources, Inc. Available from: http://media.corporate-ir.net/media_files/IROL/19/195412/EXCO_Annual_Report_2012_4_24_13.pdf

EXCO (2013). Annual Report 2013. EXCO Resources, Inc. Available from: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NTQxMjMzfENoaWxkSUQ9MjMxMjYwfFR5cGU9MQ==&t=1

EXCO (2014). Investor Presentation June, 2014. EXCO Resources, Inc. Available from: http://media.corporate-ir.net/media_files/IROL/19/195412/EXCO_Annual_Report_2012_4_24_13.pdf

Yahoo Finance (2014). Historical Prices. Yahoo. Available from: http://in.finance.yahoo.com/q/hp?s=FP.PA&a=00&b=1&c=2013&d=11&e=31&f=2013&g=d [Accessed on June 13, 2014]



Appendix

18.3 Methodology GlobalData’s dedicated research and analysis teams consist of experienced professionals with advanced statistical expertise and marketing, market research and consulting backgrounds in the energy industry.

GlobalData adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and Strategic and Competitive Intelligence Professionals (www.scip.org).

All GlobalData databases are continuously updated and revised.

Coverage

The objective of updating GlobalData’s coverage is to ensure that it represents the most up-to-date vision of the industry possible.

Changes to the industry taxonomy are built on the basis of extensive research of company, association and competitor sources.

Company coverage is based on three key factors: market capitalization; revenues; and media attention and innovation and market potential.

An exhaustive search of 56 member exchanges is conducted and companies are prioritized on the basis of their market capitalization.

The estimated revenues of all major companies, including private and governmental, are gathered and used to prioritize coverage.

Companies that are making the news or that are of particular interest due to their innovative approach are prioritized.

GlobalData aims to cover all major news events and deals in the energy industry, updated on a daily basis.

Secondary Research

The research process begins with extensive secondary research using internal and external sources to gather qualitative and quantitative information relating to each market.

The secondary research sources that are typically referred to include, but are not limited to:

Company websites, annual reports, financial reports, broker reports, investor presentations and SEC filings

Industry trade journals and other technical literature

Internal proprietary and external databases

National government documents, statistical databases and market reports



Appendix

News articles, press releases and web-casts specific to the companies operating in the market

Primary Research

GlobalData conducts hundreds of primary interviews each year with industry participants and commentators in order to validate its data and analysis. A typical research interview fulfills the following functions:

Provides first-hand information on market size, market trends, growth trends, competitive landscape and future outlook

Helps to validate and strengthen secondary research findings

Further develops the analysis team’s expertise and market understanding

18.4 Disclaimer All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means; electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GlobalData.

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