Boston, MA 10/22/2013 (wallstreetpr) – On Friday, EXCO Resources Inc (NYSE:XCO) finally sold its midstream assets. In spite of the fact that this transaction was long anticipated, it can be negatively perceived by the stock market as the price received from the deal was much less then the expected range.
Along with its JV partner, BG Group plc, EXCO Resources sold TGGT Holdings, a natural gas midstream business to Azure Midstream Holdings for $910 million. The deal consists of $875 million in cash and 8% equity interest in Azure Midstream, split equally between the two partners. The partners are planning to use the cash amount to pay off TGGT’s bank debt and cover other closing adjustments and transaction costs.
EXCO Resources and BG Group had the plans to sell TGGT for over 2 years and this transaction can finally give them some peace of mind. Initial plans were to sell one-third interest of TGGT but early in 2012, the plans were changed to sell it completely. Douglas Miller, CEO of EXCO, estimated a $1.0-$1.4 billion valuation range for this transaction but the two years wait and turmoil in the natural gas market in 2012 made him to satiate with only $910 million.
About EXCO Resources Inc (NYSE:XCO)
Incorporated in 1955, EXCO Resources, Inc is a leading natural gas and oil production company primarily engaged in investigation, management and development of oil and natural gas all across the United States with a major focus on shale resources. The chief areas of operation for the company include North Louisiana, East Texas, Permian Basin in West Texas and Appalachia. In addition to its major business of oil and natural gas production, EXCO Resources also owns 50% interest in two midstream business ventures located in Appalachia and East Texas.