Wednesday, September 30, 2009

Exco: More Non-Core Sales

This week, Exco Resources announced that it has sold all of its Oklahoma operating properties to Sheridan Holding Company I, LLC for $540 million and certain Ohio and Pennsylvania properties to EV Energy Partners, LP for $145 million. Selling more of its "non-core" portfolio allows Exco to concentrate on its big investments in shale plays. Moves like this generate upfront cash that can be used to retire debt or invest in drilling. It also allows for greater management and operational focus on shale.

Some might argue that Exco is surrendering good future cash flow and portfolio diversification to concentrate its risk in shale, but it clearly speaks to the company's belief in Big Kahuna plays like the Haynesville.

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