Exco Resources Inc.

Exco Resources Inc., Dallas, (NYSE: XCO) has retained Goldman, Sachs & Co. to explore a possible joint venture to enhance exploitation and development of its East Texas, northern Louisiana and Appalachia operating areas. Exco's reserves in East Texas and northern Louisiana include more than 2.7 trillion cubic feet equivalent of proved, probable and possible (3P) reserves, of which 1.1 trillion is proved. These interests also include 292,000 net acres, 255 million cubic feet equivalent per day net production, and more than 3,000 undrilled Cotton Valley, Hosston and other conventional locations. Exco acreage includes some 115,000 net acres prospective for the Bossier/ Haynesville shale. Based on 80-acre spacing, this shale acreage could contain more than 1,400 drilling locations. Exco also has substantial midstream assets in East Texas and northern Louisiana which currently gather and transport 500 million cubic feet per day. Exco's 3P reserves in Appalachia exceed 1.1 trillion cubic feet equivalent of which 600 billion is proved. The Appalachia assets include 1.1 million net acres, 60 million cubic feet equivalent per day of shallow production, more than 8,100 shallow drilling locations and some 400,000 net acres of Marcellus shale potential, of which 117,000 net acres are also prospective for the Huron shale. Based on 80-acre spacing, the company estimates shale acreage could contain 6,400 drilling locations. The possible joint venture could include a sale of up to 50% of Exco's reserves, production, acreage and other interests in either or both areas, with a joint development program to be conducted with potential partners. The company is considering a separate joint venture for the East Texas and northern Louisiana midstream assets. Exco will use proceeds to reduce debt, help fund shale development and for corporate purposes. Contact Douglas H. Miller, 214-368- 2084.