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EXCO reaches $22.5 million settlement over development agreement
By Caroline Salls
Pittsburgh, Sept. 18 – EXCO Resources, Inc. requested court approval of a development agreement revenue dispute settlement reached with BG US Production Co., LLC, according to a motion filed Monday with the U.S. Bankruptcy Court for the Southern District of Texas.
The company said the EXCO debtors and BG jointly develop oil and gas interests in North Louisiana and East Texas under several development agreements. EXCO is the operator and BG owns non-operating working interests in hydrocarbons, minerals and related rights.
Before the EXCO bankruptcy filing, EXCO and BG affiliate Shell Energy North America (US), LP (SENA) were in a dispute regarding SENA’s withholding of $33 million from EXCO debtor Raider Marketing, LP. As a result, EXCO said it withheld $28.5 million it owed to BG under one of the development agreements.
On April 13, BG filed $34.5 million in pre-bankruptcy revenue claims and $5.5 million in post-petition revenue claims.
Under the proposed settlement, EXCO will pay BG $22.5 million in three installments, including $9 million on the earlier of 15 days following entry of the settlement order or the effective date of EXCO’s Chapter 11 plan, an additional $9 million on the earlier of 45 days following entry of the plan effective date and $4.5 million on or before the plan effective date.
In addition, the settlement calls for the EXCO debtors to resume operations to complete its Donner wells no later than Nov. 15 and three additional wells in the development area following completion of those wells.
The development agreements will also be deemed assumed under the settlement.
Exco is a Dallas-based oil and gas exploration and production company operating in Texas, North Louisiana and Appalachia. The company filed for bankruptcy on Jan. 15, 2018 under Chapter 11 case number 18-30155.
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