XTO Energy (XTO) Increases Production Targets and Makes (Another) Acquisition

XTO Energy (XTO) is one of the more acquisitive companies in the natural gas space; they have announced another meaningful one this morning - while increasing future production targets (a very good thing) So we not only get higher prices in natural gas but we have the type of companies that can expand output; exactly what we want to see. (Note: I still think commodities are overdue for a pullback, but this is positive long term news)

• XTO Energy Inc. (XTO) announced today that the Company is increasing its 2008 production growth target to 28 - 30% based on recently announced agreements to acquire Hunt Petroleum Corporation and Bakken Shale producing properties from Headington Oil Company
• Based on volume projections for next year, the Company is also establishing an annual production growth target of 20% for 2009.
• In order to achieve this production growth, a preliminary 2009 development budget of $4.0 - $4.5 billion utilizing 110 to 120 operated drilling rigs is anticipated.
• "Given XTO's significant acquisitions and expanding shale basin presence, we have now assimilated the best property base for growth in the Company's history," stated Bob R. Simpson, Chairman and Chief Executive Officer.
• "With acquisitions and our planned development work, we are targeting a production volume increase in 2009 of about 450 million cubic feet equivalent above the average rate in 2008. This significant growth can be delivered with about 50% to 55% of the estimated cash flow at the current commodity price outlook."

Acquisition of Hunt Petroleum

• XTO Energy says it is acquiring privately held Hunt Petroleum Corp. for $4.19 billion in cash and stock.
• XTO Energy Inc. says the deal includes $2.6 billion in cash and 23.5 million shares of XTO stock. The stock portion of the deal is valued at about $1.6 billion, or $67.50 per share.
• Fort Worth, Texas-based XTO estimates Hunt's properties' proved reserves total about 1.052 trillion cubic feet of natural gas equivalent. About 70 percent of the properties are in East Texas, Central and Northern Louisiana.

XTO Energy Inc. is a domestic natural gas producer engaged in the acquisition, exploitation and development of quality, long-lived oil and natural gas properties in the United States. Its properties are concentrated in Texas, New Mexico, Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Alaska, Utah, Louisiana, Mississippi and Montana.

Long XTO Energy in fund; no personal position