EXCO Lost $225M in ’16; Screwing Shareholders to Avoid Bankruptcy

EXCO Resources was once a sizable player in the Marcellus. They still have 145,000 net acres in the Marcellus, with 124 horizontal Marcellus wells drilled and in production. However, EXCO, as we pointed out a year ago, has abandoned the Marcellus at this point (see EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting). The company flirted with bankruptcy for some time. They were able to slow the bleeding in 2Q16 (see EXCO Still Hammering Midstreamers re Contracts, Bleeding Slowed). In 3Q16 EXCO finally turned a profit, going from losing $355 million in 3Q15 to making $51 million in 3Q16 (see EXCO 3Q16: Turns a Profit! Marcellus Production Continues to Fall). That was an astonishing turnaround for a company razor close to bankruptcy. EXCO has just released its fourth quarter and full year 2016 update, along with details on a plan to keep the company out of bankruptcy court. The update shows the company lost $35 million in 4Q16. EXCO lost $225 million for all of 2016, versus losing $1.2 billion in 2015. The bleeding has slowed. In a surprise move, they added 1 Marcellus well to production in 4Q16. EXCO’s master plan to stay out of bankruptcy includes selling $300 million in bonds to a group of investors–effectively turning over control of the company to its creditors and screwing existing shareholders. Believe it or not, there is a connection between EXCO and the Trump Administration…

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