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Simplifying the Most Complex Energy Deal of the Year

When Exco Resources (NYSE: XCO  ) made its bid for Chesapeake Energy's (NYSE: CHK  ) assets in the Eagle Ford and Haynesville shales, it appeared to be just another $1 billion asset deal that has been the modus operandi of Chesapeake over the past two years. In reality, though, the structure that Exco needed to implement to make this deal happen makes it one of the most complex asset deals of the year. 

Between expiring buy-in options from British company BG Group and farming out exploration of the Eagle Ford to private equity firms, this deal has lots of moving parts that will affect Exco's investment decisions for the next five years. Check out the video below where contributor Tyler Crowe will walk you through the details of this deal and help make sense of it for investors.

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  • Report this Comment On August 08, 2013, at 1:00 PM, justy727 wrote:

    Tyler Crowe,

    80% of my portfolio is in Exco at an average price of $7.25 so I pay close attention to any big catalysts affecting Exco's future. This deal is so confusing as far as whether they must purchase the assets from KKR or not in 1 year. Douglas Miller didn't offer much color on this and actually made it more confusing in their 2Q conference call.

    Thank you very much for this video! I really appreciate it! That was a great summary of what Exco just did!


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