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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FEBRUARY 11, 1998
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
EXCO RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
STATE OF TEXAS 0-9204 74-1492779
(STATE OF INCORPORATION) (COMMISSION FILE NO.) (IRS EMPLOYER
IDENTIFICATION NO.)
5735 PINELAND DRIVE
SUITE 235
DALLAS, TEXAS 75231
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (214) 368-2084
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The purpose of this filing is to correct certain data in Item 2 as
previously filed and to update Item 7 information for the acquisition which was
originally reported in a Current Report on Form 8-K filed on February 25, 1998.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 11, 1998, EXCO Resources, Inc., a Texas corporation
("EXCO"), acquired from Osborne Oil Company, Homer C. Osborne, Gypsy Production
Company, Haynes & Associates, Howard W. Haynes, Maverick Partners, Ltd.,
Genoveva Hooper, Richard E. Miller, Lawrence S. Robinson, Jaro Investments,
Inc., Charles Yeager, Leon A. Greenblatt, Richard A. Lindberg, Donald W. Hanley,
Michael Buchanan, David H. Segrest, Marie Capparelli, Executor of the Estate of
Wallace Page, and W.R. Thompson (collectively, the "Sellers") certain oil and
natural gas working interests in the Chittim/Barclay Ranch Properties located in
Maverick County, Texas (collectively, the "Maverick County Properties"). Mr.
Miller is EXCO's Secretary and General Counsel. The Maverick County Properties
include 9 gross productive wells (7.0 net productive wells) and 2 gross (1.87
net) non-producing wells which may require recompletions, workovers or
abandonment. EXCO has identified at least two potential development well
locations, one of which was drilled in March and is awaiting completion. The
Maverick County Properties include 360 gross (280 net) developed acres and 3,384
gross (2,843 net) undeveloped acres. Based on independent engineer estimates as
of January 1, 1998, the Maverick County Properties are estimated to contain
8,011 Bbls of oil and 2,447,785 Mcf of natural gas of proved reserves.
Approximately 66% of the estimated proved reserves of the Maverick County
Properties are classified as developed. The acquisition also includes an 86.9%
interest in a natural gas gathering system and an 88% interest in a natural gas
treating facility, both of which were operated by Osborne Oil Company.
The aggregate purchase price paid for the Maverick County Properties
was $760,200. The amount of consideration was determined through arm's length
negotiations taking into account estimates of recoverable reserves, further
development of proved undeveloped reserves and current oil and natural gas
prices, and was calculated by multiplying each Seller's interest in the acquired
properties by the allocated value for the property. EXCO obtained a portion of
the cash for the purchase price from its credit facility with NationsBank of
Texas, N.A. and the balance came from working capital. The Maverick County
Properties have been mortgaged under the credit facility.
ITEM 5. OTHER EVENTS
On February 11, 1998, EXCO entered into a credit agreement with
NationsBank of Texas, N.A. as agent and lender (the "Credit Facility"). The
Credit Facility provides for borrowings up to $50 million, subject to borrowing
base limitations.
The Credit Facility consists of a regular revolver which at February
13, 1998, had a borrowing base of $2.2 million. At February 13, 1998,
approximately $1.6 million was available to be borrowed under the Credit
Facility. A portion of the borrowing base is available for the issuance of
letters of credit. All borrowings under the Credit Facility are secured by a
first lien deed of trust providing a security interest in tangible and
intangible
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assets representing at least 90% of the assessed present value of EXCO's oil and
gas properties.
The Credit Facility provides that if EXCO's aggregate outstanding
indebtedness is less than $5,000,000, advances will bear interest at 1.5% over
the appropriate LIBOR rate. If the aggregate outstanding indebtedness is greater
than $5,000,000, then advances will bear interest at 1.0% over LIBOR if the
borrowing base usage is less than 50%, 1.25% over LIBOR if the borrowing base
usage is between 50-70%, 1.5% over LIBOR if the borrowing base usage is between
70-90%, and 1.75% over LIBOR if the borrowing base usage exceeds 90%. The Credit
Facility also permits EXCO to repay and reborrow amounts under the Credit
Facility without any penalty, thereby allowing EXCO the flexibility to utilize
any available cash to reduce its outstanding indebtedness and thus, its costs of
borrowed funds.
Under the terms of the Credit Facility, EXCO must not permit its
Current Ratio (as defined) of Consolidated Current Assets (as defined) to its
Consolidated Current Liabilities (as defined) to be less than 1.0 to 1.0 at any
time. Furthermore, EXCO must not permit its Consolidated Net Worth (as defined)
to be less than $500,000 at any time between February 11, 1998 and March 31,
1998. In addition, by March 31, 1998, EXCO's Consolidated Net Worth must
increase by 50% of EXCO's Consolidated Net Income (as defined) for the fiscal
quarter then ended and thereafter must increase by 50% of EXCO's Consolidated
Net Income for the fiscal quarter then ended for every fiscal quarter.
No principal amortization shall be required during the Credit Facility
period as long as the aggregate principal balance does not exceed the borrowing
base then in effect. However, if a borrowing base deficiency exists after giving
effect to the redetermination, then EXCO must either (a) eliminate such
borrowing base deficiency by making a single mandatory prepayment of principal
on the revolving loan in an amount equal to the entire amount of such borrowing
base deficiency on the first monthly date following the date on which such
borrowing base deficiency is determined to exist, (b) eliminate such deficiency
by making six (6) consecutive mandatory prepayments of principal on the
revolving loan each of which shall be in the amount of one sixth (1/6th) of the
amount of such borrowing base deficiency commencing on the first monthly date
following the date on which such borrowing base deficiency is determined to
exist and continuing on each monthly date thereafter, or (c) eliminate such
borrowing base deficiency by submitting additional mineral interests to banks on
the first monthly date following the date on which such borrowing base
deficiency is determined to exist for evaluation as borrowing base properties
which banks, in their sole discretion, determine have a value sufficient to
increase the borrowing base by at least the amount of the borrowing base
deficiency. If by the first scheduled borrowing base redetermination EXCO has
not raised a minimum of $1.0 million in additional cash equity, then, beginning
July 31, 1998 and on the last day of each month thereafter, EXCO will be
required to amortize the then outstanding debt balance by applying 75% of the
previous month's net revenues to the Credit Facility. The Credit Facility
matures on February 11, 2000.
EXCO's next borrowing base redetermination is scheduled for no later
than July 1, 1998, and semi-annually thereafter. EXCO may seek additional
borrowing capacity at that time for its development drilling program. However,
there is no assurance that the current development program will result in
increased collateral values or that such values will enable EXCO to borrow the
funds needed to continue the program.
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The Credit Facility contains a number of covenants affecting EXCO's
liquidity and capital resources, including restrictions on EXCO's ability to
incur indebtedness at any time in an amount exceeding $100,000 or to pledge
assets outside of the Credit Facility, EXCO's maintenance of a minimum net worth
and restrictions on the payment of dividends on EXCO's capital stock.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business required.
The required historical financial statements in respect of the
Maverick County Properties were filed in EXCO's Annual Report on
Form 10-K for fiscal year ended December 31, 1997, filed on
March 17, 1998.
(b) Pro forma financial information.
The required pro forma financial data in respect of the Maverick
County Properties was filed in EXCO's Annual Report on Form 10-K
for fiscal year ended December 31, 1997, filed on March 17, 1998.
(c) Exhibits
4.1* Purchase and Sale Agreement between EXCO Resources, Inc.
and Osborne Oil Company, et al., dated January 27, 1998.
10.1* Credit Agreement among EXCO Resources, Inc., as borrower,
NationsBank of Texas, N.A., as agent, and financial
institutions listed on Schedule I, dated February 11, 1998.
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* Previously filed in Current Report on Form 8-K filed on
February 25, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
EXCO RESOURCES, INC.
By: /s/ J. DOUGLAS RAMSEY
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Name: J. Douglas Ramsey
Title: Chief Financial Officer and
Vice President
Dated: April 7, 1998
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