Harbinger Group Inc. Closes Joint Venture with EXCO Resources; Establishes New Energy Operating Partnership; New Partnership

  Harbinger Group Inc. Closes Joint Venture with EXCO Resources; Establishes
  New Energy Operating Partnership; New Partnership Signs Agreement to Acquire
  Conventional Oil and Natural Gas Assets from Affiliate of BG Group plc for
  $132.5 Million

Business Wire

NEW YORK -- February 15, 2013

Harbinger Group Inc. (NYSE: HRG) (“HGI” or the “Company”) announced today that
its wholly-owned subsidiary, HGI Energy Holdings, LLC, successfully closed,
effective February 14, 2013, on its previously announced joint venture with
EXCO Resources, Inc. (“EXCO”; NYSE: XCO) to create a private oil and gas
partnership (the “Partnership”).

Pursuant to the transaction, the Partnership purchased and will operate 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. A definitive agreement to enter into
the Partnership was announced on November 5, 2012.

“This joint venture with EXCO fits well within our strategy of identifying and
acquiring businesses with untapped value that we can support and grow by
providing access to long-term capital and partnering with high-quality, proven
management teams,” said Philip A. Falcone, HGI Chairman and Chief Executive
Officer. “With this transaction, we are further diversifying HGI by
establishing a new Energy operating business that will complement our
existing, highly-successful Consumer Products and Insurance & Financial
Services businesses. We will continue to look for strategic opportunities to
increase our footprint in the important Energy sector by acquiring companies
with long-term growth potential.”

“The Partnership is expected to provide stable dividends to HGI from
long-life, low geological-risk conventional oil and gas assets that generate
steady production and reliable cash flows, while at the same time retaining
ample cash flow to invest in its reserve base, maintain production and
position itself for further growth,” said HGI President Omar Asali.
“Additionally, as a result of the July 1, 2012 effective date of the
transaction, we have already received an economic benefit of approximately
$24.2 million. We appreciate the efforts of the EXCO team in facilitating an
orderly transaction and are excited about working with such an established and
well-known operator.”

Under the terms of the agreement announced on November 5, the Partnership
acquired the oil and gas assets from EXCO for approximately $725 million of
total consideration, which represents HGI’s effective equity interest of
$372.5 million, $127.5 million in oil and gas properties and related assets
contributed by EXCO, in each case before giving effect to preliminary closing
adjustments described below, and approximately $225 million of bank debt. The
net cash contributed from HGI was $348.3 million reflecting the effect of
preliminary closing adjustments and the economic benefits related to the July
1, 2012 effective date.

HGI has approximately a 75% equity interest in the Partnership. The
Partnership will be governed by a Board of Directors of the general partner
consisting of two EXCO directors and two HGI directors. EXCO will continue to
operate the assets as contract operator of the properties and provide services
pursuant to contract operating and administrative service agreements with the
Partnership.

HGI and EXCO intend to opportunistically add incremental cash flow to the
Partnership through the acquisition of other mature, conventional assets over
time. As the first step in executing this business strategy, effective as of
February 14, 2013, the Partnership entered into an agreement to acquire
certain conventional oil and natural gas assets in the Danville, Waskom and
Holly fields in East Texas and North Louisiana, including and above the Cotton
Valley formation, from an affiliate of BG Group plc for $132.5 million,
subject to customary closing adjustments. These properties represent an
incremental working interest in properties that EXCO contributed to the
Partnership. This transaction is expected to close in March 2013. The
Partnership intends to fund the acquisition using its revolving credit
agreement.

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; branded consumer products such as batteries,
personal care products, small household appliances, pet supplies, and home and
garden pest control products; and energy assets. 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 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 the Company and its
representatives, including the expected closing of the transaction with the BG
seller and the expected ability of the Partnership to make distributions, are
based upon certain assumptions and describe future plans, strategies and
expectations of the Company, 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 ability of the Company’s subsidiaries (including, the
Partnership) to generate sufficient net income and cash flows to make upstream
cash distributions, capital market conditions, that the Company may not be
successful in identifying any suitable future acquisition opportunities, the
risks that may affect the performance of the operating subsidiaries of the
Company and those factors listed under the caption “Risk Factors” in the
Company’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. The Company 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, Investor Relations
212-906-8560
investorrelations@harbingergroupinc.com
or
Media:
Sard Verbinnen& Co
Jamie Tully/Michael Henson
212-687-8080
 
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