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Harbinger Group Inc. Establishes Energy Operating Business through $725 Million Joint Venture with EXCO Resources

  Harbinger Group Inc. Establishes Energy Operating Business through $725
  Million Joint Venture with EXCO Resources

  *Transaction further diversifies HGI by establishing new Energy operating
    business to complement existing, highly-successful Consumer Products and
    Insurance & Financial Services businesses
  *HGI to have approximately 75% equity interest in partnership holding
    long-life, low geological-risk conventional oil and gas assets that
    generate steady production and reliable cash flows
  *With transaction completion, HGI expects dividends from all subsidiaries
    to comfortably exceed $100 million annually and to surpass HGI’s existing
    interest and dividend payments
  *Transaction also offers additional value accretion potential as natural
    gas prices continue to recover over the long term
  *Experienced EXCO team will continue to manage and grow the assets for
    increased shareholder value

Business Wire

NEW YORK -- November 05, 2012

Harbinger Group Inc. ("HGI" or the "Company"; NYSE: HRG) today announced a
joint venture with EXCO Resources, Inc. (“EXCO”; NYSE: XCO) to create a
private oil and gas limited partnership (the “Partnership”) that will purchase
and operate EXCO’s producing U.S. conventional oil and gas assets, for a total
consideration of $725 million.

Under the terms of the agreement, the Partnership will own EXCO’s conventional
oil and natural gas assets in West Texas including and above the Canyon Sand
formation as well as in the Danville, Waskom, Holly and Vernon fields in East
Texas and North Louisiana. The more than 520 billion cubic feet equivalent
(Bcfe) of estimated proved reserves are approximately 82% proved developed
producing, with long-lived and predictable production profiles. Approximately
84% of the reserves are natural gas (55% of current revenues), 8% are oil (35%
of current revenues), and 8% are natural gas liquids (10% of current
revenues). The assets include about 1,400 producing wells and approximately
124,000 net leasehold acres, of which 91% are held by production.
Additionally, EXCO and HGI intend to opportunistically add incremental cash
flow to the Partnership through the acquisition of other mature, conventional
assets over time.

"This is an exciting transaction for HGI that adds a long-life, proven
conventional oil and gas business with strong cash flows to our group of
diversified businesses,” said HGI's President, Omar Asali. “We believe this
deal will create long-term value by anchoring our new energy operating
business with a long-duration gas asset at a time when natural gas is trading
near historically-low levels. Our permanent capital structure enables us to
take a long-term view on the value of natural gas, while we benefit from
reliable cash streams from conservatively-hedged producing wells. The cash
flow from the Partnership, together with dividends from our other operating
subsidiaries, is expected to comfortably exceed $100 million and more than
cover HGI’s existing annual interest and dividend payments. At the same time,
we expect the Partnership will retain ample cash flow to reinvest in the
business, maintain production and position it for further growth.”

“We are excited to be entering this partnership with HGI,” said Douglas
Miller, EXCO’s Chief Executive Officer. “They are long-term investors who
share our vision for generating value and upside potential from these assets
while exploring further opportunities for both EXCO and HGI.”

Mr. Asali added, “This venture fits perfectly with our strategy of buying
valuable businesses and supporting their growth and success by giving them
access to long-term capital and partnering with high-quality, proven
management teams. Our relationship with EXCO goes back several years, and they
are excellent operators with the right industry expertise to drive value
creation for both HGI and EXCO.”

As natural gas prices begin to rise from near historical lows, this joint
venture is expected to allow HGI to create significant value through its
long-term exposure to a potential cyclical upturn in the natural gas market.
The Partnership also intends to conservatively hedge its production,
generating reliable cash flows and protecting against unexpected, prolonged
softness in natural gas prices.

The addition of an Energy business line to its business portfolio allows HGI
to further diversify its sources of revenues and cash flows. The oil and gas
business has traditionally exhibited low correlations to consumer products and
insurance and financial services, which are HGI’s other primary businesses.

Transaction Details

Under the terms of the agreement, the Partnership will acquire oil and gas
assets from EXCO for approximately $725 million of total consideration,
subject to customary closing adjustments. The purchase by the Partnership will
be funded with approximately $225 million of bank debt, $372.5 million in cash
contributed from HGI and $127.5 million in oil and gas properties and related
assets being contributed by EXCO. In exchange for its cash investment, HGI
will receive a 75% limited partnership interest in the Partnership and a 50%
member interest in the general partner of the Partnership (the “General
Partner”). The General Partner will own a 2% interest in the Partnership, thus
giving HGI directly and indirectly a net 74.5% total equity interest in the
Partnership. In exchange for its asset contribution, EXCO will receive
approximately $597.5 million in cash proceeds as well as a 25% limited partner
interest and a 50% member interest in the General Partner, for a net 25.5%
total equity interest in the Partnership. EXCO will continue to operate the
assets. The Partnership has been structured with incentive distribution rights
to the General Partner intended to give EXCO upside and incentives to maintain
efficient operations and grow cash flows for the benefit of all partners of
the Partnership. In addition, HGI and EXCO will each own a 50% member interest
in the General Partner and each will have equal representation on the General
Partner’s board of directors.

The transaction, which has been approved by the Boards of Directors of
Harbinger Group Inc. and EXCO Resources, Inc., is subject to customary closing
conditions, including title and environmental reviews, receipt of applicable
approvals and consents and receipt of bank debt at the Partnership in
accordance with the terms of the purchase agreement. The transaction is
expected to close in early 2013.

HGI’s financial advisor for this transaction is Citigroup and its legal
advisors were Andrews Kurth LLP and Paul, Weiss, Rifkind, Wharton & Garrison
LLP.

The foregoing summary does not purport to be a complete description of the
transaction and related agreements. Interested parties should read HGI’s other
announcements and public filings regarding this transaction and related
agreements by reviewing HGI’s filings with the Securities and Exchange
Commission (www.sec.gov).

About Harbinger Group Inc.

Harbinger Group Inc. ("HGI"; NYSE: HRG) is a diversified holding company.
HGI’s principal operations are conducted through subsidiaries that offer life
insurance and annuity products, and branded consumer products such as
batteries, personal care products, small household appliances, pet supplies,
and home and garden pest control products. HGI is principally focused on
acquiring controlling and other equity stakes in businesses across a
diversified range of industries and growing its existing businesses. In
addition to HGI’s intention to acquire controlling equity interests, HGI may
also from time to time make investments in debt instruments and acquire
minority equity interests in companies. Harbinger Group Inc. is headquartered
in New York and traded on the New York Stock Exchange under the symbol HRG.
For more information on HGI, visit: www.harbingergroupinc.com.

About EXCO Resources, Inc.

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

Forward Looking Statements

"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
1995: Some of the statements contained in the Press Release and certain oral
statements made by our representatives from time to time regarding the matters
discussed herein, including those statements related to the proposed
transaction and its effects on HGI, including future dividends expected to be
received by HGI, are or may be forward-looking statements. Such
forward-looking statements are based upon management's current expectations
that are subject to risks and uncertainties that could cause actual results,
events and developments to differ materially from those set forth in or
implied by such forward-looking statements. These statements and other
forward-looking statements made from time-to-time by HGI and its
representatives are based upon certain assumptions and describe future plans,
strategies and expectations of HGI, are generally identifiable by use of the
words "believes," "expects," "intends," "anticipates," "plans," "seeks,"
"estimates," "projects," "may" or similar expressions. Factors that could
cause actual results, events and developments to differ include, without
limitation, the risk that closing of the transaction will not occur, will be
delayed or will close on terms materially different than expected (including
as a result of title and environmental diligence of properties to be acquired,
commodity price risks, drilling and production risks), financing plans for the
Partnership and the transaction, reserve estimates and values, statements
about the Partnership properties and potential reserves and production levels,
the ability of HGI’s subsidiaries (including the Partnership) to generate
sufficient net income and cash flows to make upstream cash distributions,
capital market conditions, that HGI may not be successful in identifying any
suitable future acquisition opportunities, the risks that may affect the
performance of the operating subsidiaries of HGI and those factors listed
under the caption "Risk Factors" in HGI’s most recent Annual Report on Form
10-K and Quarterly Report on Form 10-Q, filed with the Securities and Exchange
Commission. All forward-looking statements described herein are qualified by
these cautionary statements and there can be no assurance that the actual
results, events or developments referenced herein will occur or be realized.
HGI does not undertake any obligation to update or revise forward-looking
statements to reflect changed assumptions, the occurrence of unanticipated
events or changes to future operation results.

Contact:

Investors:
Harbinger Group Inc.
Tara Glenn, 212-906-8560
Investor Relations
investorrelations@Harbingergroupinc.com
or
Media:
Sard Verbinnen & Co
Jamie Tully/Michael Henson, 212-687-8080