S&P: EXCO Resources on watch

Standard & Poor's said it placed EXCO Resources Inc.'s B+ corporate credit rating and B senior unsecured debt rating on CreditWatch negative.

S&P said the listing follows EXCO's announcement that its board approved an agreement to sell the company's Canadian subsidiary (Addison Energy Inc. (unrated)), which represents about 43% of the company's current production and about 34% of the company's total proved reserves to NAL Oil and Gas Trust (unrated) for $452 million.

Although EXCO's liquidity will be significantly bolstered in the near term as proceeds are realized from the transaction, S&P said the negative CreditWatch listing reflects uncertainty regarding the direction of proceeds, the low likelihood that funds will be used for debt reduction and the potential execution risks facing the company if it seeks to reinvest proceeds into additional domestic U.S. oil and gas properties.

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