Harbinger Group Inc. Announces Acquisition Of Full Interest In Compass Production

Harbinger Group Inc. ("HGI" or the "Company"; NYSE: HRG), a diversified holding company seeking to acquire and grow attractive businesses that can, in the long term, generate sustainable free cash flow, announced today that its wholly-owned subsidiary, HGI Energy Holdings, LLC ("HGI Energy"), has executed an agreement to acquire the remaining approximately 25% interests it does not already hold in the Compass joint venture ("Compass") from EXCO Resources, Inc. ("EXCO") for $118.75 million in cash. "Since making our initial investment in Compass a year and a half ago, our enthusiasm for the oil & gas sector has only grown, and we have been actively looking for opportunities to increase our presence in this vertical," said Philip A. Falcone, HGI's Chairman and Chief Executive Officer. "Today's announcement more completely aligns Compass with HGI's investment thesis of building long-term value and sustainable free cash flow. With the remaining interest in, and full control of, Compass, we can more effectively execute on smart conventional asset acquisitions that will drive Compass' value and cash flow generation capability." "Under the leadership of Matt Grubb as its CEO, we have been pleased with both the operational performance and the strategic direction of Compass. We expect today's agreement will simplify and accelerate the decision-making at Compass, and streamline its ability to efficiently execute on its strategy of increasing scale through accretive acquisitions and organic growth opportunities," said Omar Asali, President of HGI. "The EXCO team has been an excellent partner, and we appreciate their commitment to helping us effect a smooth transition." Compass was formed in 2013 by HGI and EXCO. Compass owns predominantly producing, long-lived, low-decline rate and lower geologic-risk conventional oil and gas assets concentrated in the Permian Basin of western Texas and in the Cotton Valley area of eastern Texas and northern Louisiana. The economic effective date of the transaction is August 1, 2014, subject to certain exceptions, and is expected to close this fiscal quarter. Following the transaction, the Company will be the sole owner of any and all interests in Compass.