<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ________
Commission File Number: 0-9204
EXCO RESOURCES, INC.
(formerly MINERAL DEVELOPMENT, INC.)
(Exact name of registrant as specified in its charter)
Texas 74-1492779
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9400 North Central Suite 1209, L.B. 196
Dallas, Texas 75231
(Address of principal executive offices) (Zip Code)
(214)368-2084
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
YES X NO ___
Indicate the number of shares outstanding of each of
the issuer's classes of common stock, as of October 31, 1996.
Class: Common stock, par value $0.01 per share
Outstanding at October 31, 1996: 795,300 shares
<PAGE> 2
EXCO RESOURCES, INC.
(Formerly MINERAL DEVELOPMENT, INC.)
INDEX
<TABLE>
<CAPTION>
Page
Number
------
Part I. Financial Information:
- ------------------------------
<S> <C> <C>
Item 1. Financial Statements 2
Condensed Balance Sheets - September 30, 1996
and December 31, 1995 (Unaudited) 2
Condensed Statements of Operations
Three-Month Periods Ended September 30, 1996 and
1995 and Nine-Month Periods Ended September 30,
1996 and 1995 (Unaudited) 3
Condensed Statements of Cash Flows - Nine-
Month Periods Ended September 30, 1996 and 1995
(Unaudited) 4
Notes to Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II. Other Information:
- ----------------------------------
Item 4. Submission of Matters to a Vote of Security
Holders 13
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
</TABLE>
-1-
<PAGE> 3
Part I. Financial Information
Item 1. Financial Statements
EXCO RESOURCES, INC.
(formerly MINERAL DEVELOPMENT, INC.)
CONDENSED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
ASSETS
------
CURRENT ASSETS:
Cash $ 16,000 $ 221,000
Accounts receivable 401,000 360,000
Other 1,000 1,000
---------- ----------
TOTAL CURRENT ASSETS 418,000 582,000
PROPERTY AND EQUIPMENT, AT COST:
Undeveloped oil and gas properties 70,000 69,000
Proved developed oil and gas properties,
based on successful efforts method 5,414,000 5,488,000
Office and field equipment 375,000 372,000
---------- ----------
5,859,000 5,929,000
Allowance for depreciation,
depletion and amortization (4,972,000) (4,980,000)
---------- ----------
887,000 949,000
DEFERRED FINANCING AND ACQUISITION COSTS
(Note 5) 273,000 0
---------- ----------
$1,578,000 $1,531,000
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<C> <C>
CURRENT LIABILITIES:
Accounts payable $ 373,000 $ 476,000
Joint interest prepayments 26,000 69,000
Revenues and royalties payable 86,000 88,000
Current portion of long-term debt 32,000 28,000
Note payable 150,000 200,000
---------- ----------
TOTAL CURRENT LIABILITIES 667,000 861,000
LONG TERM DEBT, LESS CURRENT PORTION 28,000 40,000
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value; 25,000,000
shares authorized, 795,300 shares and
675,300 shares issued and outstanding,
respectively (Note 3) 8,000 7,000
Capital in excess of par value 9,095,000 8,871,000
Deficit (8,220,000) (8,248,000)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 883,000 630,000
---------- ----------
$1,578,000 $1,531,000
========== ==========
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE> 4
EXCO RESOURCES, INC.
(formerly MINERAL DEVELOPMENT, INC.)
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- ----------------------
1996 1995 1996 1995
-------- -------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES:
Oil and gas $ 210,000 $180,000 $652,000 $ 502,000
Management fees and other 43,000 68,000 139,000 190,000
Gain (loss) on disposition
of properties 0 0 2,000 (4,000)
--------- -------- -------- ---------
253,000 248,000 793,000 688,000
COSTS AND EXPENSES
Oil and gas production costs 109,000 117,000 313,000 319,000
Dry hole and abandonment
costs 0 22,000 1,000 31,000
Depreciation, depletion and
amortization 29,000 31,000 88,000 100,000
General and administrative 125,000 162,000 350,000 461,000
Interest 5,000 1,000 13,000 4,000
--------- -------- -------- ---------
268,000 333,000 765,000 915,000
--------- -------- -------- ---------
NET INCOME (LOSS) $ (15,000) $(85,000) $ 28,000 $(227,000)
========= ======== ======== =========
INCOME (LOSS) PER COMMON SHARE $ (.02) $ (.13) $ .04 $ (.34)
========= ======== ======== =========
Weighted average shares
outstanding (Note 2) 795,300 675,300 756,322 675,300
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE> 5
EXCO RESOURCES, INC.
(Formerly MINERAL DEVELOPMENT, INC.)
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
-------------------------------
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 28,000 $(227,000)
Adjustments to reconcile net income
(loss) to net cash provided (used)
by operating activities:
Depreciation, depletion and amortization 88,000 100,000
Loss (gain) on disposition of
property and equipment (2,000) 4,000
Net (increase) decrease in:
Accounts receivable (41,000) (224,000)
Other current assets -- 3,000
Net increase (decrease) in accounts
payable and other current liabilities (148,000) 443,000
-------- ---------
Net cash provided (used) by operating
activities (75,000) 99,000
Cash flows from investing activities:
Additions to property and equipment (29,000) (104,000)
Proceeds from disposition of property and
equipment 6,000 43,000
-------- ---------
Net cash used by investing activities (23,000) (61,000)
Cash flows from financing activities:
Proceeds from long-term debt 12,000 9,000
Deferred financing and acquisition costs (273,000) --
Payments on long-term debt (21,000) (19,000)
Payment on note payable (200,000) --
Proceeds from issuance of common stock 225,000 --
Proceeds from short-term note 150,000 --
-------- ---------
Net cash used by financing activities (107,000) (10,000)
-------- ---------
Net increase (decrease) in cash (205,000) 28,000
Cash at beginning of year 221,000 40,000
-------- ---------
Cash at end of period $ 16,000 $ 68,000
======== =========
Supplemental information:
Interest paid $ 13,000 $ 4,000
======== =========
Federal income tax paid $ -- $ --
======== =========
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE> 6
EXCO RESOURCES, INC.
(Formerly MINERAL DEVELOPMENT, INC.)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
1 - Statement by Management Concerning Interim Financial Information
The financial information included herein is unaudited and does not
include all information and footnotes required by generally accepted accounting
principles for complete financial statements; however, such information
reflects all adjustments (consisting solely of normal recurring adjustments),
which are, in the opinion of management, necessary for a fair presentation of
the results of operation for the interim period. It is recommended that these
interim financial statements be read in conjunction with the financial
statements and the notes thereto included in the Company's Annual Report on
Form 10-K for the nine-month transition period ended December 31, 1995.
2 - Income Per Common Share
Income per common share was computed by dividing the net income for
each period by the weighted average number of common shares outstanding during
the period. Common stock options are not considered to be common stock
equivalents as their effect would be anti-dilutive. The weighted average
number of common shares outstanding during the periods were retroactively
restated to give effect to the one-for-five reverse stock split effective July
19, 1996.
3 - Changes in Stockholders' Equity
Balances in common stock and in Capital in excess of par value at
September 30, 1996 reflect the issuance of 125,000 shares of common stock to a
director of the Company upon the exercise of a stock option during the first
quarter of 1996. The proceeds were used in the second quarter to repay the
$200,000 note payable to a bank.
On July 11, 1996, the Company's shareholders approved a one-for-five
reverse stock split of the Company's common stock. The reverse stock split was
effective July 19, 1996. The par value of common stock and the number of
authorized shares of common stock remained unchanged. All references in the
financial statements to number of shares, per share amounts and market prices
of the Company's common stock have been retroactively restated to reflect the
decreased number of common shares outstanding.
-5-
<PAGE> 7
4 - Employment Agreement
In April 1996, the Company entered into an employment agreement with
an individual for the position of President and Chief Executive Officer of the
Company. The agreement provides for an annual salary of $140,000, adjusted for
incentives, as determined by the Board of Directors for the period June 1, 1996
through June 1, 1999. Pursuant to the employment agreement, options to
purchase 100,000 shares of the Company's common stock are to be granted at a
purchase price per share of $3.00. The options are to have a ten-year term.
The employment agreement will not become effective unless the Company is
successful in raising a minimum of $9,000,000 in a public offering.
5 - Deferred Financing and Acquisition Costs
The $273,000 balance in deferred financing and acquisition costs at
September 30, 1996, represents legal, accounting and other costs attributable
to the Company's financing and acquisition activities. See Note 7. Deferred
financing costs will be charged against the gross proceeds of the contemplated
public offering when and if received. Deferred acquisition costs will be
capitalized in the cost of the acquisition when and if completed. If the
financing and acquisition are abandoned, such costs will be expensed.
6 - Results of Annual Meeting of Shareholders
On July 11, 1996, at the Company's Annual Meeting of Shareholders (the
"Annual Meeting") the shareholders of the Company approved, a one-for-five
reverse stock split of the Company's common stock. The reverse stock split
became effective July 19, 1996, upon filing of an amendment to the Company's
Articles of Incorporation with the Secretary of State of the State of Texas.
The shareholders of the Company also approved another amendment to the
Company's Articles of Incorporation that authorizes the issuance of up to
10,000,000 shares of preferred stock that the Board of Directors may issue from
time to time in one or more series. With respect to each series of preferred
stock, the amendment authorizes the Board to fix and determine by resolution
the number of shares of each series, the designation thereof and all rights and
preferences including voting, dividend, conversion, redemption and liquidation
rights.
At the Annual Meeting, the shareholders also approved the Company's
stock option plan. The stock option plan provides for the grant of incentive
stock options under Section 422 of the Internal Revenue Code of 1986, as
amended, and stock options that do not qualify under Section 422 to employees
to purchase up to an aggregate of 400,000 shares of the Company's common stock.
At the date hereof, options to purchase 280,000 shares remain available for
grant, excluding an option to purchase 100,000 shares at $3.00 per share that
may be granted under an employment agreement. See Note 4.
-6-
<PAGE> 8
At the Annual Meeting, the shareholders also approved a Director Stock
Option Plan, previously adopted by the Board of Directors, whereby up to
1,000,000 post-reverse stock split shares of common stock may be issued to
Directors in consideration of the common stock component of their respective
Annual Director Fee or upon exercise of their respective Director Options. The
Annual Director Fee is $12,000, payable on the first business day following the
end of each quarter beginning with the quarter ending September 30, 1996, 50%
in cash and 50% in Company common stock. Each Director will be automatically
granted a Director Option, at the then current fair market value, to purchase
100,000 shares of common stock on the date the Director is initially elected or
appointed as a director, or in the case of directors at the time of approval of
the Plan, upon their election or re-election at the Annual Meeting. Each
Director Option vests in four equal amounts of 25,000 shares per year over four
years, provided that no shares subject to a Director Option will vest in any
year in which the Director attends less than 75% of the Board meetings held for
that fiscal year. The Board has postponed implementation of the 1996 Director
Plan, and, to date, no Director Options have been granted under the 1996
Director Plan.
7 - Finance and Acquisition Activities
On August 13, 1996, the Company entered into a Letter of Intent with
Coda Energy, Inc. ("Coda") to purchase all of the stock of Taurus Energy Corp.,
a wholly owned subsidiary of Coda ("Taurus"). Taurus is actively engaged in the
gathering, processing and marketing of natural gas and natural gas liquids. At
the time of closing, Taurus would own the Hamlin and Shackelford gas gathering
systems located in West Texas, as well as other assets. Total revenues for
these systems were approximately $35 million and $32 million for the year ended
December 31, 1995 and the nine-month period ended September 30, 1996,
respectively.
The consideration for the Taurus shares would be $35,000,000 in cash
and that number of shares of unregistered Company common stock equal to the
quotient resulting from dividing $10,000,000 by the offering price per share in
the Company's contemplated underwritten offering. Certain shares would be
subject to forfeiture upon certain conditions. The transaction is subject to
certain conditions, including, among other things, the negotiation, execution
and delivery of a definitive purchase agreement, satisfactory due diligence
investigations by both parties, the receipt by the Company of $25,000,000 in
net proceeds from the sale of Company stock in an underwritten public offering,
the establishment by the Company of a credit facility with at least $10,000,000
of borrowing capacity, receipt by the Company's Board of Directors of a
satisfactory fairness opinion, the receipt by Coda of any required waivers or
approvals under an indenture, the receipt of all necessary governmental
approvals and approvals of the Boards of Directors of both the Company and
Coda. Any offering of the Company's securities will be made only by means of a
prospectus.
-7-
<PAGE> 9
As proposed, Coda would have certain termination rights, certain
rights to board representation and certain registration rights with respect to
shares of Company common stock received in the proposed transaction.
To date, the Company has not obtained the required bank or equity
financings. Discussions are ongoing with banks and underwriters concerning the
financing of the Taurus acquisition, and the Company continues to work towards
completion of the acquisition; however, there are no assurances that the
required capital will be obtained for the acquisition or that the other
conditions to the acquisition will be satisfied or that the acquisition will be
completed.
The Letter of Intent provides that if a definitive agreement has not
been executed by September 13, 1996, either Coda or the Company may terminate
the Letter of Intent. To date, a definitive agreement has not been executed
and there are no assurances that a definitive agreement will be executed. As
of the date of this report, neither Coda nor the Company has terminated the
Letter of Intent.
8 - Note Payable
In August, 1996, the Company obtained a $200,000 short-term credit
facility with a bank to finance costs related to the Company's finance and
acquisition activities. The outstanding principal amount of the loan bears
interest at the prime rate plus 2%, and interest is payable monthly. The loan
is secured by the pledge of certain of the Company's oil and natural gas
properties. The loan restricts the Company's ability to borrow additional funds
or guarantee other indebtedness and requires the maintenance of a positive
working capital, excluding the loan amount. Currently, as a result of expenses
incurred in connection with the Company's finance and acquisition activities,
the Company does not meet the loan requirement of maintaining a positive
working capital, as defined. (At September 30, 1996, the amount of this
deficiency was $99,000). The Company, as a part of its overall refocus,
intends to divest certain nonstrategic assets to bring the Company in
compliance with this requirement of the credit facility. At September 30,
1996, the Company had borrowed $150,000 on this credit facility.
-8-
<PAGE> 10
Item 2.
EXCO RESOURCES, INC.
(Formerly MINERAL DEVELOPMENT, INC.)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q of EXCO Resources, Inc. (the
"Company") contains "forwarding-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Specifically, all statements other than statements of
historical facts included in this report regarding the Company's financial
position, business strategy and plans and objectives of management of the
Company for future operations are forward-looking statements. These
forward-looking statements are based on the beliefs of the Company's management
as well as assumptions made by and information currently available to the
Company's management. When used in this report, the words "anticipate,"
"believe," "estimate," "expect" and "intend" and words or phrases of similar
import, as they relate to the Company or Company management, are intended to
identify forward-looking statements. Such statements reflect the current view
of the Company with respect to future events and are subject to certain risks,
uncertainties and assumptions related to certain factors including, without
limitation, price levels for oil and natural gas, concentration of oil and
natural gas reserves and production, drilling risks, uncertainty of oil and gas
reserves, risks associated with the development of additional revenues and with
the acquisition of oil and gas properties and other energy assets, operating
hazards and uninsured risks, general economic conditions, governmental
regulation, changes in industry practices, marketing risks, one time events and
other factors described herein ("cautionary statements"). Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to have
been correct. Based upon changing conditions, should any one or more of these
risks or uncertainties materialize, or should any underlying assumptions prove
incorrect, actual results may vary materially from those described herein as
anticipated, believed, estimated, expected or intended. The Company does not
intend to update these forward-looking statements. All subsequent written and
oral forward-looking statements attributable to the Company or persons acting
on its behalf are expressly qualified in their entirety by the applicable
cautionary statements. Reference is made to "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Forward-Looking
Information - Cautionary Statements" included in the Company's Annual Report on
Form 10-K for the Nine-Month Transition Period ended December 31, 1995, which
is incorporated herein by reference.
-9-
<PAGE> 11
Results of Operations - Comparison of Three-Month Periods and Nine-Month
Periods Ended September 30, 1996 and 1995
Revenues. Revenues for the three-month period ended September 30,
1996 were $253,000 compared with $248,000 from the corresponding period in
1995, a 2% increase. Revenues increased 15% for the nine-month period ended
September 30, 1996 to $793,000 from $688,000 for the nine-month period ended
September 30, 1995. These improvements in revenues were primarily due to the
increases in oil and gas revenues, which resulted from higher oil and gas
prices during the relative periods. Also contributing to the increases in
revenues were oil and gas volumes produced from new wells that more than offset
normal production declines. Offsetting these increases, management fees and
other income were down for both the three- and nine-month periods in 1996
versus the same periods in 1995 due to decreased drilling and completion
activity.
Costs and Expenses. Costs and expenses for the three-month period
ended September 30, 1996, and the nine-month period ended September 30, 1996
decreased $65,000 and $150,000, respectively, versus the corresponding periods
of 1995. These decreases of 20% and 16% from $333,000 to $268,000 and from
$915,000 to $765,000 for the three- and nine-month comparative periods were due
primarily to reductions in general and administrative costs primarily related
to the elimination of certain executive costs for the first five months of the
current year.
Net Income (Loss). Net income for the quarter ended September 30,
1996 was a loss of $15,000 compared to a loss of $85,000 for the corresponding
quarter of 1995, representing $(.02) and $(.13) per share, respectively. Net
income for the nine-month period ended September 30, 1996 was $28,000 compared
to a loss of $227,000 for the corresponding nine-month period of 1995. These
amounts represented $.04 and $(.34) per share, respectively. All earnings per
share figures are based on restated weighted average shares outstanding after
the retroactive effect of the one-for-five reverse stock split approved at the
Company's shareholders' meeting held July 11, 1996.
Liquidity and Capital Resources
The Company's working capital at September 30, 1996 was a negative
$249,000 compared to a negative $279,000 at December 31, 1995. The exercise of
a stock option to purchase 120,000 shares of Common Stock by a director of the
Company during the first quarter of 1996 resulted in $225,000 in cash for the
Company. This addition to working capital was utilized primarily to pay off
the Company's short-term note payable in the second quarter of the current
year.
Subsequently, costs relative to the Company's finance and acquisition
activities (see Note 5, Deferred Financing and Acquisition Costs) necessitated
that the Company obtain a $200,000 short-term credit facility with a bank. The
facility is payable
-10-
<PAGE> 12
February 27, 1997, or sooner if demanded. The outstanding principal amount of
the loan bears interest at the prime rate plus 2%, and interest is payable
monthly. The loan is secured by the pledge of certain of the Company's oil and
natural gas properties. The loan restricts the Company's ability borrow
additional funds or guarantee other indebtedness and requires the maintenance
of a positive working capital, excluding the loan amount. Currently, as a
result of expenses incurred in connection with the Company's finance and
acquisition activities, the Company does not meet the loan requirement of
maintaining a positive working capital, as defined. (At September 30, 1996,
the amount of this deficiency was $99,000). The Company, as a part of its
overall consolidation and refocus, intends to divest certain nonstrategic
assets to bring the Company in compliance with this requirement of the credit
facility. At September 30, 1996, the Company had borrowed $150,000 on this
credit facility.
Also impacting the Company's working capital was positive earnings
before interest, taxes, depreciation, depletion and amortization ("EBITDA").
EBITDA for the three-month and nine-month periods ended September 30, 1996 was
$19,000, or $.02 per share, and $129,000, or $.17 per share, respectively, as
compared to a negative $53,000 and a negative $123,000 for the corresponding
periods of the prior year. This cash flow was used primarily for expenditures
attributable to the Company's finance and related acquisition activities (see
Note 7, Finance and Acquisition Activities). These costs through the third
quarter of the current year were $273,000 and are listed as Deferred financing
and acquisition costs on the Company's Condensed Balance Sheet dated September
30, 1996. There is no assurance that any financing or acquisition will be
completed. In the event the financing and acquisition are abandoned, the costs
will be expensed.
Management is of the opinion that the Company's cash flow, available
borrowing capacity and ability to raise additional capital will be adequate to
meet its current obligations as well as fund currently anticipated property
acquisitions, new projects, and generation and/or participation in new drilling
and recompletion work. However, any significant acquisitions, projects or
drilling and/or recompletion work will require additional debt and/or equity
financing.
On August 13, 1996, the Company entered into a letter of intent with
Coda Energy, Inc. ("Coda") to acquire all of the stock of Taurus Energy Corp.,
a wholly owned subsidiary of Coda. See Note 7, Finance and Acquisition
Activities, to the Company's financial statements. The sale of common stock by
the Company to complete this proposed acquisition could result in dilution of
the percentage ownership of public shareholders. There is no assurance that
any acquisition will be consummated.
At the 1996 Annual Meeting of Shareholders, the shareholders of the
Company approved an amendment to the Company's Articles of Incorporation to
authorize the issuance of up to 10,000,000 shares
-11-
<PAGE> 13
of preferred stock that the Board of Directors may issue from time to time in
one or more series. With respect to each series of preferred stock, the
amendment authorizes the Board to fix and determine by resolution the number of
shares of each series, the designation thereof and all rights and preferences
including voting, dividend, conversion, redemption and liquidation rights. The
Board of Directors deemed it in the best interest of the Company to provide for
a class of series preferred stock in order to provide flexibility for corporate
planning and to have shares available for future equity financings through
issuance to the general public, future acquisitions, stock dividends or splits,
or for other corporate purposes for which the issuance of preferred shares may
be advisable.
-12-
<PAGE> 14
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of the Company's shareholders held July 11,
1996, the shareholders approved the following items with the number of
votes cast (prior to giving effect to the reverse stock split) for,
against or withheld, and abstentions:
(1) Directors. All nominees for director were elected.
(2) Name Change. The shareholders voted to amended the Company's
Articles of Incorporation to change the name of the Company
from Mineral Development, Inc. to EXCO Resources, Inc. The
votes were cast as follows:
For Against Abstain
--- ------- -------
3,021,400 3,740 66,293
(3) Reverse Stock Split. The shareholders voted to amend the
Company's Articles of Incorporation to effect a one-for-five
reverse stock split of the Company's common stock. The votes
were cast as follows:
For Against Abstain
--- ------- -------
3,006,771 23,808 70,154
(4) Preferred Stock. The shareholders voted to amend the
Company's Articles of Incorporation to provide for a class of
Preferred Stock of up to 10,000,000 shares issuable in series.
The votes were cast as follows:
For Against Abstain
--- ------- -------
2,783,611 42,455 73,116
(5) Directors' Liability. The shareholders voted to amend the
Company's Articles of Incorporation to eliminate directors'
liability for monetary damages in certain situations. The
votes were cast as follows:
For Against Abstain
--- ------- -------
2,865,277 49,131 72,985
-13-
<PAGE> 15
(6) Stock Option Plan. The shareholders voted to approve the
adoption of the Company's Stock Option Plan. The votes were
cast as follows:
For Against Abstain
--- ------- -------
2,871,564 35,513 91,770
(7) 1996 Director Plan. The shareholders voted to approve the
adoption of the Company's 1996 Director Plan. The votes were
cast as follows:
For Against Abstain
--- ------- -------
2,763,161 54,485 84,030
No other matters were considered at the Annual Meeting.
Item 5. Other Information
- --------------------------
For other information regarding the Company, please see Note 7,
Finance and Acquisition Activities, to the Company's financial
statements.
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
27.1 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K
None
-14-
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
EXCO RESOURCES, INC.
--------------------
(Registrant)
Date: November 14, 1996 /s/ Glenn L. Seitz
---------------------------------------
Glenn L. Seitz, Treasurer
-15-
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27.1 Financial Data Schedule (filed herewith)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS FOR EXCO RESOURCES, INC. FOR THE NINE-MONTH
PERIOD ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 16,000
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0
0
<COMMON> 8,000
<OTHER-SE> 875,000
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<SALES> 652,000
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<CGS> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,000
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
