Harbinger Group Enters Natural Gas Venture

Nov 5 2012 | 10:05am ET

Philip Falcone is betting on natural gas.

Harbinger Group, which is controlled by Falcone's hedge fund, has agreed to pay Exco Resources $373 million for a stake in U.S. natural gas fields.

“This deal will create long-term value by anchoring our new energy operating business with a long-duration gas asset at a time when natural gas is trading near historically low levels,” Harbinger Group President Omar Asali said in the statement.

Falcone, who put his wireless internet venture LightSquared into bankruptcy protection earlier this year, apparently likes the odds for a rebound in the natural gas industry.

Under the terms of the deal, Harbinger Group will get roughly 75% of a partnership with Exco. Bloomberg, citing a person with knowledge fo the deal, reports that because the partnership will take on debt, Exco will get also $597.5 million of cash.

The Exco assets in which Falcone is investing include conventional natural gas wells (as opposed to 'unconventional' wells, i.e. those employing techniques like hydraulic fracking) in West Texas, East Texas and Northern Lousiana. The fields involved comprise 520 billion cubic feet equivalent of estimated proved reserves and are about 84% gas, according to the Harbinger Group statement.


In Depth

JOBS Act Propels Real-Estate Crowdfunding Platform

Oct 21 2014 | 2:57am ET

If D.J. Paul were a real estate development, he would be described as “multi-use...

Lifestyle

Balyasny Pays Over $6M For Lakefront House

Oct 22 2014 | 10:29am ET

A venture headed by hedge fund manager Dmitry Balyasny just paid $6.2 million for...

Guest Contributor

Hedge Funds Weather A Data Management Perfect Storm

Oct 22 2014 | 12:28pm ET

From a regulatory standpoint, nearly every development since the crisis has placed...

 

Videos

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

October 2014 Cover

Deeply flawed risk benchmark

Most traders agree that proper risk management is the key to successful trading. However, many traders depend on the deeply flawed measure of standard deviation as a benchmark of risk. Here we put it ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.