Exco Resources Inc. (NYSE: XCO) is buying undeveloped oil and gas assets for $1 billion.
The assets are in the Eagle Ford and Haynesville shale formations, and are being sold by subsidiaries of Chesapeake Energy Corp.
Exco is picking up about 55,000 acres in the Eagle Ford shale play for about $680 million and about 9,600 acres in the Haynesville formation for about $320 million.
The company will finance the Haynesville acquisition under its existing credit agreement. Exco has also secured a financing commitment from JPMorgan Chase & Co. (NYSE: JPM). Under that deal, its existing credit agreement will be replaced with a loan with a $1.6 billion borrowing base, and a $400 million bridge loan tranche. The loan will be used to finance the Eagle Ford purchase.
Exco expects the Eagle Ford assets to be drilled and developed through a partnership with companies advised by or affiliated with private equity firm Kohlberg Kravis Roberts & Co. LP (NYSE: KKR), including KKR Financial Holdings LLC (NYSE: KFN). KKR is funding about $133 million of the Eagle Ford deal.
Dallas-based Exco is an oil and natural gas exploration, exploitation, development and production company that operates in east and west Texas, north Louisiana and Appalachia.
Chesapeake Energy, headquartered in Oklahoma City, produces oil and natural gas.
Other recent energy deals include Wapiti Energy Holdings LLC’s purchase of oil properties in Texas for $375 million, NorthWestern Energy’s (NYSE: NWE) acquisition of natural gas interests in Montana’s Bear Paw Basin, and Contango Oil & Gas Co. and Crimson Exploration Inc.’s merger.