Crimson Exploration Inc. has acquired a package of producing gas fields and undeveloped acreage in South Texas and South Louisiana from EXCO Resources, Inc. ("EXCO") for $285 million in cash and 750,000 shares of Crimson common stock.

Based on the $6.10 closing price of Crimson's common stock on May 7, the total purchase price was approximately $289.5 million. The effective date of the acquisition was January 1, 2007, and after adjustment for interim activity subsequent to the effective date and other customary purchase price adjustments, the cash consideration paid at closing was approximately $245 million. EXCO acquired these properties as part of a larger property package on May 4, 2007.

The acquired assets are located primarily in Liberty and Lavaca counties of the Upper Texas Gulf Coast, Brooks County of south Texas and Calcasieu Parish of south Louisiana. Crimson acquired over 80,000 gross acres in prolific producing areas. Daily production from the acquired assets averaged an estimated 50 million cubic feet of natural gas equivalents (MMcfe) per day in January 2007, implying a purchase cost of $5,790 per Mcfe of daily production, prior to allocation of a portion of the purchase price to unproved reserves and undeveloped acreage.

Both Crimson and its third party engineer for this transaction estimate total proven reserves being acquired at 96 Bcfe on the effective date. By category this would include 59 Bcfe of proved developed producing, 13 Bcfe of proved developed non-producing and 24 Bcfe of proved undeveloped reserves. In addition to the proved reserves acquired, the Company estimates that the properties contain an additional 140 Bcfe of unrisked probable and possible reserves. Based on the $289 million purchase price, the implied total purchase cost was $3.01 per Mcfe for proved reserves and $1.22 per Mcfe for proved, plus unrisked probable and possible reserves.

Future development costs, related primarily to the anticipated cost of drilling the 30 proved undeveloped locations, are forecast to be $56 million. Crimson will allocate approximately $30 million of the purchase price to probable and possible reserves and undeveloped acreage. The properties acquired include approximately 250 producing wells in over 30 fields, are 90% natural gas and are approximately 80% PDP by value. Crimson will have an average 65% working interest in the properties and will operate more than 80% of the value being acquired.

Allan D. Keel, President & Chief Executive Officer of the Company, commented, "We are extremely excited about this transforming acquisition and the benefits that it presents to the Company. The critical mass, strong cash flow and upside potential that come with this package of assets, and the financing we put in place to complete this acquisition will provide us the financial strength and flexibility to pursue additional growth through further acquisitions as well as complement that effort with drilling of lower risk exploitation and exploration projects in our growing inventory of prospects."