BG to acquire a 50% stake in EXCO's Appalachian Basin assets
BG has announced the acquisition of a 50% stake in EXCO Resources' Marcellus Shale acreage. The consideration is US$950 million: US$800 million is to be paid as cash at closing with the balance to be paid as 75% of EXCO's drilling costs through 2011. Our base case valuation of the acquired interests (excluding the cost carry) is US$771 million. This equates to an Implied Long-term Oil Price of US$85/bbl, or an implied long-term Henry Hub gas price of US$6.79/mcf (both NPV10, in ...