The properties were acquired for a purchase price of $51.6 million ($52.3 million after contractual adjustments) and consist of approximately 2,000 net acres of leasehold, estimated proved reserves of 28.3 Bcfe (99% gas and 51% proved developed producing) and 10 Bcfe of estimated probable reserves.

Current average daily production from the wells acquired is approximately 4.3 Mmcfe per day. Also included in the purchase is approximately 10,500 net undeveloped acres in the general area of the production. EXCO will operate the properties and will own 100% of the working interest. EXCO plans to begin a one to two rig development drilling program on the properties beginning in the third quarter of 2006 to drill an estimated 20 additional wells.

This East Texas acquisition was financed with $49.9 million from EXCO's revolving line of credit with its bank group and $2.4 million from surplus cash.

In comments related to this acquisition, Douglas Miller, EXCO's Chairman and CEO, said, "This acquisition represents the third significant property acquisition by us since our initial public offering was completed in February 2006. These transactions are in accordance with our plan of growing our company through acquisitions, exploitation and development. In the aggregate, the acquisitions since February 2006, have added 223 Bcfe of estimated proved reserves, 1,533 estimated proved drilling locations and approximately 13 Mmcfe of daily production."