EXCO Resources: Insider Selling Not A Certainty

In a report yesterday, I indicated that EXCO Resources filed an S-1 registration statement with the SEC. I would like to clarify that the registration of these shares does not insure that any shares will immediately be sold. These shares are now simply fully registered and can be sold in the open market (or through private placement) at anytime. The registration also allows insiders to sell outside of the restrictions of SEC Rule 144 regarding volume and “sale windows”. Insiders will still be required to file a Form-4 “Change of Ownership” subsequent to any sales.

All restricted shares were provided with “registration rights” through the IPO. There was a 180-day “lock-up” on all shares. After 180 days shareholders had the right to have 1/3 of their shares registered by the Company. Another 1/3 of their holdings have registration rights after 365 days.

The timing of the filing in front of the Anadarko announcement is a little disturbing. So is the fact that none of the newswires picked it up. In fairness to the Company, they are always doing deals so there may not have been a better time to file. It may also have been a function of some shareholders exercising their registration rights before yearend. And it may have been that attorneys have had their hands full all year.

It would be naïve to assume that none of these shares will be sold. But I want to retract any statement that may have indicated that anyone is definitely selling shares at this time.

The author currently has no position in XCO.