Last Thursday, EXCO Resources (XCO) issued a press release announcing the resignation of the company's CEO Douglas H. Miller. The market reacted with an 8% stock price run-up during the following trading session. However, the news does not provide much reason for optimism. The unexpected announcement likely reflects strategy challenges at the company and highlights controversy around EXCO's aggressive use of leverage and numerous complex JV structures.
The CEO's departure will inevitably lead to extended organizational uncertainty at the company, at the time when focus on execution and operational efficiencies is particularly important. Key problems EXCO is currently facing - the weak drilling returns in the company's core natural gas business and excessive leverage - will remain...
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