EXCO Resources Announces a Series of Transactions That Enhance Liquidity, Reduce Debt and Provide Credit Agreement Covenant Flexibility

EXCO Resources, Inc. (NYSE:XCO) (“EXCO” or the “Company”) today
announced that it has entered into agreements for a series of
transactions that are expected to significantly enhance its balance
sheet and substantially increase its financial flexibility as part of
its ongoing strategic improvement plan (“Strategic Plan”).

EXCO has executed an agreement with subsidiaries of Fairfax Financial
Holdings Limited (“Fairfax”) to provide a $300 million Senior Secured
Second Lien Term Loan (the “Fairfax Term Loan”). The Fairfax Term Loan
will be issued at par, bears interest at a rate of 12.50% per annum and
has a five-year maturity. The Company will use the net proceeds of the
Fairfax Term Loan to repay a portion of the borrowings under the
Company’s Amended and Restated Credit Agreement (the “Credit Agreement”).

EXCO has also entered into agreements with certain unsecured noteholders
(the “Noteholders”) pursuant to which the Noteholders have agreed to
become lenders under a new $291 million Senior Secured Second Lien Term
Loan (the “Exchange Term Loan”) in exchange for the Company repurchasing
$577 million of the Noteholders’ senior unsecured notes at an average
price of 51% of principal amount. The Exchange Term Loan will be issued
at par, bears interest at a rate of 12.50% per annum and has a five-year
maturity. EXCO will repurchase approximately $376 million of its 7.50%
Senior Unsecured Notes due 2018 (50% of the $750 million outstanding)
and approximately $201 million of its 8.50% Senior Unsecured Notes due
2022 (40% of the $500 million outstanding). EXCO has granted Fairfax and
the Exchange Term Loan lenders a pari-passu second lien security
interest in the same assets.

In connection with the foregoing transactions, EXCO entered into an
amendment (the “Amendment”) to its Credit Agreement which reduced the
borrowing base to $375 million and provided further covenant
flexibility. Among other things, the interest coverage ratio has been
reduced to 1.25 times from 2.0 times previously, and the total leverage
ratio has been removed entirely. The next borrowing base redetermination
is currently scheduled for March 2016.

The transactions are expected to close on October 26, 2015, subject to
the satisfaction or waiver of customary closing conditions.

EXCO anticipates that these transactions will strengthen the Company’s
financial position and will significantly increase its financial
flexibility to implement its Strategic Plan by:

• Reducing total net debt by $270 million, or 18%;
• Maintaining $234 million of secured debt capacity for future exchanges
  or issuance of new secured debt;
• Reducing the principal amount of outstanding senior unsecured notes by
  $577 million, or 46%;
• Reducing the nearest unsecured debt maturity, due in 2018, by $376
  million, or 50%;
• Extending weighted average debt maturity from 3.6 to 4.7 years,
  representing a 30% improvement;
• Improving pro forma liquidity by $60 million, or 18%; and
• Improving forward cash flow by $146 million.

Tables 1, 2, 3 and 4 illustrate the pro forma impact if such
transactions were completed on September 30, 2015.

Harold L. Hickey, EXCO’s Chief Executive Officer and President,
commented, “EXCO appreciates Fairfax’s confidence in the Company’s
ability to execute its Strategic Plan. In addition to being one of
EXCO’s largest shareholders, Fairfax is now investing $300 million in
the Company through a Senior Secured Second Lien Term Loan, while
allowing a $291 million Senior Secured Second Lien Term Loan to be
issued pari-passu with Fairfax. We believe this financing provides EXCO
the opportunity to strengthen the Company by investing this capital in
hard assets, while still maintaining $234 million of secured debt
capacity for future exchanges or issuance of new secured debt. We also
believe these transactions represent an important step as the Company
delivers on its long-term, disciplined performance improvement plan.”

Credit Suisse Securities (USA) LLC acted as exclusive restructuring
advisor to the Company.

Additional information about the transactions will be available in a
Form 8-K to be filed by the Company in connection with the transactions
described above.

About EXCO

EXCO Resources, Inc. is an oil and natural gas exploration,
exploitation, acquisition, development and production company
headquartered in Dallas, Texas with principal operations in Texas, North
Louisiana and Appalachia.

Additional information about EXCO Resources, Inc. may be obtained by
contacting Chris Peracchi, EXCO’s Vice President of Finance and Investor
Relations, and Treasurer, at EXCO’s headquarters, 12377 Merit Drive,
Suite 1700, Dallas, TX 75251, telephone number (214) 368-2084, or by
visiting EXCO’s website at www.excoresources.com.
EXCO’s SEC filings and press releases can be found under the Investor
Relations tab.

Forward-Looking Statements

This release may contain forward-looking statements relating to future
financial results, business expectations and business transactions.
Actual results may differ materially from those predicted as a result of
factors over which EXCO has no control. Such factors include, but are
not limited to: the closing of the transactions described herein,
continued volatility in the oil and gas markets, the estimates of
reserves, commodity price changes, regulatory changes and general
economic conditions. These risk factors are included in EXCO’s reports
on file with the SEC. Except as required by applicable law, EXCO
undertakes no obligation to publicly update or revise any
forward-looking statements.

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