EXCO Resources Prices Senior Notes (Revised) - Analyst Blog

EXCO Resources Prices Senior Notes (Revised)

Upstream energy company EXCO Resources Inc. XCO declared the pricing of senior notes worth $500.0 million, due to mature in 2022. The company added that the notes are expected to carry an interest of 8.500% and will likely be priced at 100% of the principal value.   

EXCO Resources stated that out of the estimated total of $490.0 million proceeds from the offering, part of it will be utilized for repaying term loan. The remaining will be spent toward lowering revolving commitment under the Amended and Restated Credit Agreement of the company.

EXCO Resources is expected to release first-quarter 2014 results on Apr 29, 2014, after the closing bell. The Zacks Consensus Estimate for the company's first-quarter earnings is pegged at 4 cents per share.

Dallas, TX-based EXCO Resources is primarily involved in the exploration, development and production of oil and gas resources as well as the acquisition of those properties. As of Dec 31, 2013, the total estimated proved reserves came in at 1.1 trillion cubic feet equivalent.

We commend the company's disciplined cost control measure which is reflected in the significant year-over-year reduction in total development and exploration expenses in 2013. However, substantial reduction in production volumes in 2013 in comparison to the previous year is a matter of concern.

EXCO Resources currently carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the oil and gas exploration and production sector like Range Resources Corporation RRC, World Point Terminals LP WPT and Abraxas Petroleum Corp. AXAS. Range Resources and World Point sport a Zacks Rank #1 (Strong Buy), while Abraxas Petroleum carries a Zacks Rank #2 (Buy).

(We are reissuing this article to correct a mistake. The original article, issued Monday, Apr 14, 2014, and it should no longer be relied upon.)