Summary of EXCO RESOURCES INC

Entry into a Material Definitive Agreement, Regulation FD Disclosure, Financia

Item 1.01 Entry Into a Material Definitive Agreement.

Purchase and Sale Agreement

On June 29, 2009, EXCO Operating Company, LP ("EOC"), and EXCO Production Company, LP ("EPC" and, together with EOC, "Seller"), each wholly-owned indirect subsidiaries of EXCO Resources, Inc., entered into a Purchase and Sale Agreement (the "Purchase Agreement") with BG US Production Company, LLC ("Buyer"), a wholly-owned indirect subsidiary of BG Group plc. Under the Purchase Agreement, Seller will sell to Buyer an undivided 50% interest in certain oil and gas assets and properties (the "Conveyed Interests") located in the counties of Cherokee, Gregg, Harrison, Marion, Nacogdoches, Panola, Rusk and Shelby in the State of Texas and the parishes of Bienville, Bossier, Caddo, DeSoto, Red River and Webster in the State of Louisiana (the "AMI"). The Conveyed Interests will not include any of Seller's assets or properties in its Gladewater, Overton, Vernon or Redlands fields. The sale of the Conveyed Interests will be effective as of January 1, 2009 (the "Effective Time").

Purchase price

Under the terms of the Purchase Agreement, Buyer will pay Seller a purchase price of approximately $655 million in cash for the Conveyed Interests, subject to certain customary closing and post-closing purchase price adjustments, including, adjustments for the following:

• revenues from the Conveyed Interests and certain operating expenses and other costs related to the Conveyed Interests received or paid between the Effective Time and closing,

• certain title and environmental matters,

• certain taxes relating to the Conveyed Interests, and

• properties that may be excluded from the Conveyed Interests pursuant to the terms of the Purchase Agreement, including those excluded for title or environmental defects, the exercise of preferential purchase rights or the failure to obtain required consents.

BG Energy Holdings Limited, an affiliate of Buyer, has provided a payment guaranty to Seller of Buyer's obligations under the Purchase Agreement and to pay the Carried Costs under the Joint Development Agreement (each as defined below).

Representations, warranties and covenants

The Purchase Agreement contains customary representations and warranties by Seller, including, among others, with respect to corporate power and authority, no conflicts, consents, bankruptcy, foreign person, written claims and litigation, material contracts, no violation of laws, preferential rights, royalties, payout status, imbalances, current commitments, environmental matters, taxes, broker's fees, obligations to drill to hold acreage, advance sales or prepayments, plugging and abandonment, partnerships, permits, the completeness of the Conveyed Interests and no material adverse change. The Purchase Agreement also contains customary representations and warranties by Buyer.

The Purchase Agreement contains certain covenants by Seller, including the following:

• restrictions on the conduct of Seller's business with respect to the Conveyed Interests between signing and closing,

• a requirement to make filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act"),

• a requirement to transfer a 50% interest in certain of Seller's downstream transportation contracts to an affiliate of Buyer at closing,

• a requirement to enforce, on behalf of Buyer and at Buyer's expense, rights of Seller under certain warranties, guarantees or indemnities,

• a requirement to negotiate in good faith with respect to the Midstream Transaction (defined below) subject to Seller's board approval of the documentation relating to such transaction, and

• a requirement to maintain for Seller's use certain proceeds from the transaction (the "Maintenance of Value Covenant").

The Maintenance of Value Covenant requires Seller, until December 31, 2011, to maintain in Seller for Seller's use a minimum of $500 million of the purchase price (the "Minimum Consideration") and restricts Seller from distributing any part of such Minimum Consideration to, or satisfying any obligation of, any of Seller's affiliates (other than direct or indirect wholly-owned subsidiaries of Seller). Seller may satisfy the requirement to maintain the Minimum Consideration by using it to:

• pay expenses or costs in connection with Seller's general corporate purpose,

• keep such amounts as cash, as cash equivalents or in other short-term investments,

• acquire properties or other assets,

• make capital expenditures, including paying development costs and operating expenses in accordance with the Joint Development Agreement,

• satisfy Seller's revolving credit facility by making payments to reduce the outstanding principal and interest to the extent such payment is made because of a mandatory reduction of the borrowing base under the credit facility in connection with the disposition of collateral to Buyer as part of the transactions contemplated by the Purchase Agreement, and

• satisfy Seller's senior term credit agreement by making payments to reduce the outstanding principal and interest.

To the extent Seller uses the Minimum Consideration in the manner set forth above (other than with respect to keeping amounts as cash, as cash equivalents or in other short-term investments), the amount required to be maintained as Minimum Collateral shall be decreased by the amount of such usage. If such amount is reduced to zero, then the Minimum Consideration requirement will terminate. Additionally, in certain circumstances, if EOC's revolving credit facility or its other indebtedness is consolidated in any way with the indebtedness of any of its affiliates (other than its wholly-owned subsidiaries but including indebtedness of EXCO Resources, Inc.) prior to the termination of the Joint Development Agreement, the Maintenance of Value Covenant requires that EXCO Resources, Inc. (or its successor) must provide a payment guaranty of certain obligations of Seller under the Purchase Agreement and the Joint Development Agreement.

The Purchase Agreement also contains certain covenants by Buyer, including the following:

• a requirement to post bonds and other security required for Buyer to own the Conveyed Interests,

• a requirement to make filings under the HSR Act,

• restrictions on Buyer's ability to solicit for hire certain employees of Seller for a period of one year after the closing,

• a requirement to cooperate with Seller with respect to the transfer of certain downstream transportation contracts to an affiliate of Buyer at closing, and

• a requirement to negotiate in good faith with respect to the Midstream Transaction subject to Buyer's board's or other governing body's approval of the documentation relating to such transaction.

Additionally, if Buyer enters into any agreement for borrowed money for the benefit of its affiliates (other than its wholly-owned subsidiaries) prior to the termination of the Joint Development Agreement, BG Energy Holdings Limited (or its successor) must provide a payment guaranty of certain obligations of Buyer under the Joint Development Agreement.

Closing

The transactions under the Purchase Agreement are expected to close on or about August 13, 2009, subject to the satisfaction of various closing conditions, including the following:

• the termination of any applicable waiting periods under the HSR Act,

• the sum of title defect amounts (net of title benefit amounts) and remediation amounts for environmental defects not exceeding $211 million, with any lesser amount becoming a potential proportional adjustment to the $655 million purchase price and the Carried Costs,

• the successful negotiation and execution of certain ancillary agreements between EOC and Buyer (which agreements will provide for the creation of a joint relationship between EOC and Buyer with respect to certain gathering systems (the "Midstream Assets") indirectly owned by EOC in the AMI (such transaction, as more specifically described below, the "Midstream Transaction")), and

• the receipt of certain agreed upon consents.

The Purchase Agreement requires a deposit from Buyer of $52.75 million. The deposit is to be applied against the purchase price at closing or, if Seller terminates the Purchase Agreement because Buyer has willfully breached Buyer's covenants under the Purchase Agreement in any material respect, Seller may elect to retain the deposit as liquidated damages or return the deposit and seek any remedies available to Seller at law or in equity (including specific performance). If the Purchase Agreement is terminated for any reason other than as stated in the preceding sentence, the deposit is required to be returned to Buyer. If Seller willfully breaches its covenants under the Purchase Agreement in any material respect, Buyer may seek any remedies available to Buyer at law or in equity (including specific performance).

Title and environmental matters

Except for its remedy for a breach of Seller's special warranty of title under . . .