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XCO > SEC Filings for XCO > Form 8-K on 5-Nov-2012All Recent SEC Filings

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Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement.

On October 30, 2012, EXCO Resources, Inc. ("EXCO") entered into that certain Seventh Amendment to Credit Agreement by and among EXCO, as borrower, certain of its subsidiaries, as guarantors, JPMorgan Chase Bank, N.A. ("JPMorgan"), as administrative agent, and the lenders named therein (the "Seventh Amendment"). The Seventh Amendment reduced the borrowing base under EXCO's existing credit agreement (the "Credit Agreement") from $1.4 billion to $1.3 billion. In addition, if EXCO or any of its restricted subsidiaries dispose of any oil and natural gas properties or any other material assets, the mandatory asset sale procedures contained in the sixth amendment to the Credit Agreement that required EXCO to reduce indebtedness by up to $200 million no longer apply.

The Seventh Amendment also amended the Credit Agreement to permit EXCO or its subsidiaries to form a new master limited partnership (the "MLP") and to contribute certain working interests in its conventional, onshore oil and natural gas exploration and production operations in the Canyon Sand formation in the Permian Basin and in the Cotton Valley sand formation in the East Texas/North Louisiana area to a wholly owned subsidiary of the MLP (the "MLP Transaction"). Under the Seventh Amendment, the MLP and a wholly owned subsidiary are permitted to be formed, subject to (i) EXCO's receipt of 25.5% of the outstanding limited partnership interests in the MLP, (ii) EXCO's receipt of 50% of the outstanding general partnership interests in the MLP, (iii) EXCO's receipt of not less than $500.0 million in net cash proceeds upon consummation of the MLP Transaction, (iv) the contribution by the joint venture partner of at least $305.0 million in cash in exchange for (A) 74.5% of the outstanding limited partnership interests in the MLP and (B) 50% of the outstanding general partnership interests in the MLP, (v) the consummation of the MLP Transaction on or before April 1, 2013 and (vi) EXCO's equity interests in the MLP being pledged as collateral under the Credit Agreement.

The net cash proceeds from the MLP Transaction will be used to prepay outstanding loans under the Credit Agreement. The borrowing base under the Credit Agreement will be reduced from $1.3 billion to $900 million following the consummation of the MLP Transaction until the earlier of the next redetermination date or the date the borrowing base is otherwise reduced pursuant to the terms of the Credit Agreement.

The foregoing description of the Seventh Amendment is not complete and is qualified in its entirety by the Seventh Amendment, which is filed herewith and incorporated by reference herein.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.       Description

   10.1           Seventh Amendment to Credit Agreement, dated as of October 30,
                  2012, by and among EXCO Resources, Inc., as Borrower, certain
                  subsidiaries of Borrower, as Guarantors, the lenders party
                  thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.

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