EXCO Resources Inc. (NYSE:XCO) found another crowbar to shift its heavy debt April 1, with the company saying Bluescape Resources Co. LLC will now have a part in running the show.

EXCO and similar E&Ps with heavy indebtedness have spent much of 2015 using creative financing, joint ventures (JV) and asset sales to keep afloat in tough times.

EXCO and Bluescape, both of Dallas, entered a services and investment agreement. Bluescape will purchase $10 million worth of EXCO common stock. The company will move chairs around in the board room. And the private company will be obligated to buy an additional $40 million in shares in the open market with a year of closing.

The initial deal gives Bluescape 2.2% of EXCO’s outstanding shares and some control in the company. John Wilder, Bluescape’s executive chairman, will become EXCO’s executive chairman. Harold L. Hickey, EXCO’s president and COO, has been appointed CEO, the company said.

“We believe EXCO has significant potential by uniting EXCO’s strong operating capabilities with Bluescape’s proven commercial and turnaround track record,” Wilder said. “By executing a disciplined performance improvement plan, EXCO can be repositioned to deliver significant value to its shareholders. We are enthusiastic about immediately beginning to help drive improved performance.”

EXCO was one of several companies that Baird Equity Research designated as “highest risk” for capital financing—meaning the company would need money based on its overleveraged balance sheet.

Baird calculated EXCO’s leverage using the company’s 2015 estimated net debt to EBITDA ratio. EXCO’s leverage was more than five times its EBITDA, according to a March 12 report by Daniel P. Katzenberg, analyst, Baird Energy.

EXCO Resources, EXCO debt, EXCO EBITDA, A-Dcenter, Hart Energy A-Dcenter’s calculations are based on net debt at the end of 2014 and company statements that EBITDA would be similar to the company’s capital budget.

In the deal, EXCO also gives Bluescape the ability to purchase up to 80 million more shares, based on its performance relative to the company’s peer group. EXCO operates in East Texas/North Louisiana, South Texas and the Appalachia Basin.

Services from Bluescape will begin immediately but the deal requires EXCO shareholder approval, including two-thirds to change aspects of the company’s articles of incorporation.

Cash Preservers

Large E&P financings have provided a lifeline to many companies. In February, the industry was eyeing which E&Ps would go out of business, Katzenberg said. A number of companies have filed for bankruptcy protection while they reorganize.

But “similar to past cycles, financial markets and partner banks have willingly bailed out E&Ps in a flurry of deal activity,” Katzenberg said. “The financing window, both equity and debt, remains wide open and we expect more deals from highly levered and opportunistic producers alike.”

E&Ps have gone to the equity market, as well as debt, at an unprecedented rate in an attempt to shore up liquidity and balance sheets ahead of a potentially prolonged retrenchment in hydrocarbon pricing,” Katzenberg said. “The bifurcation among issuers is high with distressed companies in the ‘need to have’ financing bucket and more opportunistic issuers in the ‘nice to have’ camp as they fortify liquidity positions.”

Katzenberg predicted that Rex Energy Corp. (NASDAQ: REXX) would be a candidate for financing with a debt/EBITDA ratio of more than 6x. On March 31, Rex entered into a JV in the Butler Operated Area of the Marcellus Shale. The $67 million JV gives Rex, based in State College, Pa., the flexibility to keep operating in 2015 and most of 2016.

On March 30, natural gas and coal producer Consol Energy Inc. (NYSE: CNX) closed a private placement of $500 million in senior notes to pay senior notes due in 2020-21.

E&P MLPs have also tapped the equity market, often for monumental amounts. On March 30, for instance, Breitburn Energy Partners LP (NASDAQ: BBEP) was able to free up liquidity in a private equity placement and other moves that generated $1 billion.

Linn Energy LLC (NASDAQ: LINE) and LinnCo LLC (NASDAQ: LNCO) said March 26 they have a non-binding commitment from private equity firm Quantum Energy Partners for up to $1 billion for acquisitions.

EXCO has been working to get out from under its debt since July 2013, reducing obligations through in about 18 months by $602 million.

The company had $202.5 million of outstanding indebtedness in December on a borrowing base of $900 million. In February, the borrowing base was dialed down to $725 million because of the decline in oil and gas prices. The company’s total leverage ratio is fixed until the fourth quarter of 2016.

Cutting, Keeping Staff

The company’s debt in December was $1.4 billion, down 22% from $1.9 billion in December 2013. However, cash flow yield as of March 17 was projected by Barclays to fall 31% compared to 2014.

In February, EXCO was able to remove a covenant on its borrowings, which capped net debt/EBITDAX covenant at 4.5x. The new covenant allows for 2.5x net senior secured debt/EBITDAX and 2x interest coverage until September 2016, Katzenberg said.

EXCO also added senior secured leverage ratio and interest coverage ratio and its amended credit agreement gives the company the ability to selectively develop its assets while deferring a significant amount of drilling inventory.

The company has also made moves to trim costs and stave off defections while preserving its $586 million in liquidity. In December, EXCO suspended dividends. The company said in March it had lowered general and administrative expenses and reduced total headcount by 15%. It has cut capex 35% to $275 million.

The company has also bumped up performance incentives as a retention tool for management and vice-president level employees, including the named executive officers. Depending on performance, those employees can receive a bonus of up to 140% of their base salary.

Also in March, noted oilman T. Boone Pickens resigned from EXCO’s board. In a letter to the company Pickens said, his “resignation is no reflection on the company, its management, its past or its future, but more a desire to devote my attention and my resources to the operations of my own firm, BP Capital.”