Contribution Agreement

On August 5, 2009, EXCO Operating Company, LP ("EOC"), Vaughan Holding Company, LLC ("Vaughan" and, together with EOC, "Contributor"), each wholly-owned indirect subsidiaries of EXCO Resources, Inc. ("EXCO"), entered into a Contribution Agreement (the "Contribution Agreement") with BG US Gathering Company, LLC, a wholly-owned subsidiary of BG Group plc ("BG Gathering"). The Contribution Agreement was executed in furtherance of EOC's obligations under that certain Purchase and Sale Agreement, dated June 29, 2009 (the "Purchase Agreement"), among EOC, EXCO Production Company, LP ("EPC") and BG US Production Company, LP ("BG Production").

Contributions and Special Distribution

Under the terms of the Contribution Agreement, (i) EOC has agreed to contribute to a newly formed Delaware limited liability company named TGGT Holdings, LLC ("TGGT") all of its directly and indirectly held general and limited partnership interests in TGG Pipeline, Ltd. ("TGG") and Talco Midstream Assets, Ltd. ("Talco" and, together with TGG, the "Midstream Companies") in exchange for a 50% member interest in TGGT, (ii) BG Gathering has agreed to contribute to TGGT $249 million in cash, subject to customary closing adjustments (as adjusted, the "Cash Contribution Amount") in exchange for a 50% member interest in TGGT, and
(iii) TGGT will make a special distribution to EOC in an amount equal to the Cash Contribution Amount. As a result of the contributions and special distribution, EOC and BG Gathering will each own a 50% member interest in TGGT, and TGGT will in turn directly and indirectly hold all of the partnership interests in the Midstream Companies.

Midstream Assets

The Midstream Companies currently hold all of EXCO's pipeline and gathering systems, including related personal property, rights-of-way, contracts, imbalances and records, in the counties of Cherokee, Gregg, Harrison, Marion, Nacogdoches, Panola, Rusk and Shelby in the State of Texas and the parishes of Bienville, Bossier, Caddo, DeSoto, Red River and Webster in the State of Louisiana (the "AMI") (collectively, the "Midstream Assets"). The Midstream Assets do not include any of EXCO's pipeline or gathering systems in the Vernon field.

Cash Contribution Amount

Under the terms of the Contribution Agreement, the Cash Contribution Amount is subject to customary closing and post-closing adjustments. The Cash Contribution Amount will be adjusted upwards for:

• an amount equal to 50% of the ordinary operating and other costs paid by any Midstream Company during the period of time between January 1, 2009 and the closing date (the "Interim Period"),

• an amount equal to 50% of ordinary operating and other costs paid by any Midstream Company that relate to Talco's Haynesville-header system being constructed in the AMI and certain horizontal well connections related to such construction that are attributable to periods of time prior to January 1, 2009,

• an amount attributable to taxes on certain assets prorated to TGGT but payable by Contributor, and

• a complete and final settlement of all imbalances (if a liability).

• an amount equal to (a) 50% of the proceeds attributable to the Midstream Assets received by any Midstream Company during the Interim Period (net of certain expenses) and (b) 50% of the proceeds received by any Midstream Company from any sale of equipment, materials or other real or personal property attributable to the Midstream Assets during the Interim Period,

• an amount attributable to certain environmental defects (after taking into account certain deductibles),

• an amount attributable to any Midstream Assets excluded from the transaction,

• an amount attributable to taxes on certain assets prorated to Contributor but payable by TGGT, and

• a complete and final settlement of all Imbalances (if an asset).

BG Energy Holdings Limited, the indirect parent of BG Gathering, has provided a payment guaranty to Contributor of BG Gathering's payment obligations under the Contribution Agreement for a limited period after closing.

The Contribution Agreement requires a deposit from BG Gathering of $12.45 million. The deposit is to be applied against the Cash Contribution Amount at closing or, if Contributor terminates the Contribution Agreement because BG Gathering has willfully breached its covenants under the Contribution Agreement in any material respect, Contributor may elect to retain the deposit as liquidated damages or return the deposit and seek any remedies available to Contributor at law or in equity (including specific performance). If the Contribution Agreement is terminated for any reason other than as stated in the preceding sentence, the deposit is required to be returned to BG Gathering. If Contributor willfully breaches its covenants under the Contribution Agreement in any material respect, BG Gathering may seek any remedies available to it at law or in equity (including specific performance).

Representations, warranties and covenants

The Contribution Agreement contains customary representations, warranties and covenants for a transaction of this nature by Contributor and BG Gathering.

Additionally, the Contribution Agreement contains a maintenance of value covenant ("Maintenance of Value Covenant") which requires EOC, until December 31, 2011, to maintain in EOC for EOC's use a minimum of $200 million of the Cash Contribution Amount (the "Minimum Consideration") and restricts EOC from distributing any part of such Minimum Consideration to, or satisfying any obligation of, any of EOC's affiliates (other than direct or indirect wholly-owned subsidiaries of EOC). EOC may satisfy the Maintenance of Value Covenant by using it to:

• pay expenses or costs in connection with EOC's general corporate purposes,

• keep such amounts as cash, as cash equivalents or in other short-term investments,

• acquire properties or other assets,

• make capital expenditures, including the payment of any costs of New Business or Acquired Business (each as defined below),

• make capital contributions to TGGT,

• make a payment under EOC's revolving credit facility to reduce the outstanding principal and interest to the extent such payment is made because of a mandatory reduction of the borrowing base under the credit facility in connection with the contribution of the Midstream Companies to TGGT, and

To the extent EOC uses the Minimum Consideration in the manner set forth above (other than with respect to keeping amounts as cash, as cash equivalents or in other short-term investments), the amount required to be maintained as Minimum Consideration shall be decreased by the amount of such usage. If such amount is reduced to zero, then the Maintenance of Value Covenant requirement will terminate. Additionally, in certain circumstances, if EOC's revolving credit facility or its other indebtedness is consolidated in any way with the indebtedness of any of its affiliates (other than its wholly-owned subsidiaries but including indebtedness of EXCO) prior to the termination of the Joint Development Agreement (as defined in the Purchase Agreement), the Maintenance of Value Covenant requires that EXCO (or its successor) must provide a payment guaranty of certain obligations of EOC under the Contribution Agreement.

Closing

The transactions under the Contribution Agreement are expected to close on or about August 14, 2009, subject to the satisfaction of customary closing conditions, including the closing of the transactions contemplated by the Purchase Agreement.

Indemnification

Subject to a de minimus threshold and, in certain situations, a $3.735 million deductible and $87.15 million cap, Contributor has agreed to indemnify BG and TGGT after the closing (generally subject to an 18-month time limit), against liabilities related to the following:

• any breach by Contributor of its representations, warranties, covenants and agreements contained in the Contribution Agreement,

• any act or omission by Contributor involving or relating to excluded assets or specified actions, suits or proceedings,

• any claim for personal injury or death relating to the Midstream Assets and occurring prior to the closing date to the extent attributable to the period of Contributor's ownership of the Midstream Assets prior to the closing date,

• the disposal or transportation of any hazardous substances from Midstream Assets operated by Contributor attributable to the period of Contributor's ownership of the Midstream Assets to off-site locations in violation of any environmental law,

• certain royalty payments held in suspense by the Midstream Companies at closing,

. . .

On August 5, 2009, EXCO issued a press release announcing, among other things, the signing of the Contribution Agreement, a copy of which is furnished as Exhibit 99.1.

On July 17, 2009, the Department of Justice and the Federal Trade Commission granted the parties early termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to the transactions contemplated by the Purchase Agreement and the Contribution Agreement.

In accordance with general instruction B.2 to Form 8-K, information contained in Exhibit 99.1 is being "furnished" and not "filed" with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, and such information shall not be deemed incorporated by reference in any filing under the Securities Act of 1933.

(d) Exhibits.

10.1    Contribution Agreement, dated August 5, 2009, among EXCO Operating
        Company, LP, Vaughan Holding Company, LLC and BG US Gathering Company,
        LLC.

10.2    Second Amendment to Purchase and Sale Agreement, among EXCO Operating
        Company, LP, EXCO Production Company, LP and BG US Production Company,
        LLC.

99.1    Press Release, dated August 5, 2009.