EXCO Resources Inc. agreed to sell its oil and natural gas assets in South Texas to a subsidiary of Venado Oil and Gas LLC for $300 million.
The assets comprise oil and natural gas properties and surface acreage in Zavala, Frio and Dimmit counties. The properties produced about 4,100 barrels of oil equivalent per day, 90% of which was oil, in December 2016.
The divestiture is part of an EXCO initiative aimed at improving its financial flexibility, according to an April 10 news release. Proceeds would be used to fund drilling and development of EXCO's Haynesville and Bossier shale assets in northern Louisiana and East Texas and for general corporate purposes.
The borrowing base under EXCO's revolving credit agreement will be $100 million after deal closing, expected in June, with the next borrowing base redetermination scheduled for November.
BMO Capital Markets served as EXCO's financial adviser. Venado Oil and Gas is an affiliate of KKR & Co. LP.