FORT WORTH, Texas, May 6 /PRNewswire-FirstCall/ -- XTO Energy Inc.
(NYSE: XTO) today reported record first quarter 2009 production of
2.73 billion cubic feet equivalent (Bcfe) per day, up 29% from the
first quarter 2008 level of 2.11 Bcfe per day, and up 3%
sequentially from 2.64 Bcfe per day in the fourth quarter 2008.
Total revenues for the first quarter were $2.16 billion, a 29%
increase from $1.67 billion the prior year. Earnings for the
quarter were $486 million, or $0.84 per share ($0.83 diluted),
compared with first quarter 2008 earnings of $465 million, or $0.93
per share ($0.92 diluted). After adjusting for a $79 million ($51
million after tax) non-cash derivative fair value loss and a $9
million ($6 million after tax) gain on extinguishment of debt,
adjusted earnings for first quarter 2009 were $531 million, or
$0.92 per share ($0.91 diluted), compared to first quarter 2008
adjusted earnings of $456 million, or $0.91 per share ($0.90
diluted).(1) Operating income for the quarter was $881 million, a
7% increase from first quarter 2008 operating income of $824
million. Operating cash flow, defined as cash provided by
operations, before changes in operating assets and liabilities,
exploration expense and significant cash flow effects of earnings
adjustments, was $1.49 billion, up 40% from 2008 first quarter
comparable operating cash flow of $1.06 billion.(1) First quarter
daily gas production averaged 2.23 billion cubic feet (Bcf), up 30%
from first quarter 2008 daily production of 1.71 Bcf. Daily oil
production for the first quarter was 65.6 thousand barrels, a 27%
increase from the first quarter 2008 level of 51.5 thousand
barrels. During the quarter, natural gas liquids production was
18.3 thousand barrels per day, a 15% increase from the prior year
quarter rate of 16.0 thousand barrels per day. "Our quarterly
results reflect strong old-fashioned performance for XTO Energy,"
stated Bob R. Simpson, Chairman and Founder. "Our production
volumes exceeded expectations, with sequential growth of 3%. The
Company's cash flow margins expanded above $6 per Mcfe, as cash
costs decreased. We strengthened the balance sheet with debt
reduction of about $1.9 billion. All told, our team is determined
to fulfill on the promises of a leading growth company: deliver
drill-bit growth, manage returns with commodity price hedging and
cost control, and prepare to accelerate growth into rebounding
economic conditions as the year plays out." "Our operations team
provided another outstanding quarter of production results, even as
we began to reduce activity across the board," continued Keith A.
Hutton, Chief Executive Officer. "The Eastern Region, our leading
producing area at a net rate of over 900 MMcfe per day, grew 5%
sequentially during the period, with the Freestone Trend leading
the way. In the Barnett Shale, net production reached 594 MMcfe per
day, up 7% from the previous quarter and 40% over the prior year.
Our intense drilling in the Woodford and Fayetteville shales has
now built gross daily operated production of 65 MMcf and 60 MMcf,
respectively, quadruple year ago levels. With hedging positions and
infrastructure in place, we expect those levels to reach 120 MMcf
in the Fayetteville and 80 MMcf in the Woodford by year end. In the
Haynesville Shale, XTO now has two wells producing with another
four wells awaiting completion and a fourth drilling rig on its
way. Finally, we completed XTO's best well to date in the Bakken
Shale, the Boucher 41, at a producing rate of 2,125 barrels of oil
per day from the Three Forks Sanish reservoir. Given the success of
these prolific regions and our strategic outlook for the year, we
are increasing the Company's growth target to 16%, while holding
the capital budget at previously announced levels." The average gas
price for the first quarter decreased 6% to $7.24 per thousand
cubic feet (Mcf) from $7.70 per Mcf in first quarter 2008. The
first quarter average oil price was $104.59 per barrel, a 30%
increase from last year's first quarter average price of $80.74.
Natural gas liquids prices averaged $23.84 per barrel for the
quarter, 55% lower than the 2008 quarter average price of $52.98.
XTO Energy Inc. is a domestic energy producer engaged in the
acquisition, development and discovery of quality, long-lived oil
and natural gas properties in the United States. (1) Adjusted
earnings and operating cash flow are non-GAAP financial measures.
See the end of this release for further explanation and
reconciliation of these measures. The Company's first quarter 2009
earnings and operational review conference call will be broadcast
live via Internet webcast at 12:00 P.M. EDT (11:00 A.M. CDT) on
Wednesday, May 6, 2009. The webcast can be accessed on the
Company's website at http://www.xtoenergy.com/. Statements made in
this news release, including those relating to drill-bit growth,
cost control, growth acceleration, economic recovery, daily gross
production levels in Fayetteville and Woodford shales by year end
and production growth target are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. These
statements are based on assumptions and estimates that management
believes are reasonable based on currently available information;
however, management's assumptions and the Company's future
performance are both subject to a wide range of business risks and
uncertainties and there is no assurance that these goals and
projections can or will be met. Any number of factors could cause
actual results to differ materially from those in the
forward-looking statements, including, but not limited to, the
timing and extent of changes in oil and gas prices, changes in
underlying demand for oil and gas, the timing and results of
drilling activity, delays in completing production, treatment and
transportation facilities, higher than expected production costs
and other expenses, pipeline curtailments by thirdparties and
general market conditions. Further information on risks and
uncertainties is available in the Company's filings with the
Securities and Exchange Commission, which are incorporated by this
reference as though fully set forth herein. XTO ENERGY INC.
Consolidated Income Statements (Unaudited)
------------------------------------------ (in millions, except
production, per share and per unit data) Three Months Ended March
31 ------------------ 2009 2008 ------ ------ REVENUES Gas and
natural gas liquids $ 1,491 $ 1,274 Oil and condensate 618 379 Gas
gathering, processing and marketing 54 20 Other (2) - ----- -----
Total Revenues 2,161 1,673 ----- ----- EXPENSES Production 256 193
Taxes, transportation and other 161 154 Exploration (a) 34 18
Depreciation, depletion and amortization 699 383 Accretion of
discount in asset retirement obligation 10 7 Gas gathering and
processing 29 21 General and administrative (b) 97 89 Derivative
fair value (gain) loss (c) (6) (16) ----- ----- Total Expenses
1,280 849 ----- ----- OPERATING INCOME 881 824 ----- ----- OTHER
EXPENSE Interest expense, net (d) 126 91 ----- ----- INCOME BEFORE
INCOME TAX 755 733 ----- ----- INCOME TAX EXPENSE Current (e) 118
115 Deferred 151 153 ----- ----- Total Income Tax Expense 269 268
----- ----- NET INCOME $ 486 $ 465 ===== ===== EARNINGS PER COMMON
SHARE (f) Basic $ 0.84 $ 0.93 ===== ===== Diluted $ 0.83 $ 0.92
===== ===== Average Daily Production Gas (Mcf) 2,227,799 1,707,607
Natural Gas Liquids (Bbls) 18,303 15,974 Oil (Bbls) 65,629 51,540
Natural Gas Equivalents (Mcfe) 2,731,392 2,112,686 Average Sales
Prices (g) Gas (per Mcf) $ 7.24 $ 7.70 Natural Gas Liquids (per
Bbl) $ 23.84 $ 52.98 Oil (per Bbl) $104.59 $ 80.74 Natural Gas
Equivalents (per Mcfe) $ 8.58 $ 8.60 XTO ENERGY INC. Consolidated
Statements of Cash Flows (Unaudited)
------------------------------------------------- (in millions)
Three Months Ended March 31 ------------------ 2009 2008 ------
------ OPERATING ACTIVITIES Net income $ 486 $ 465 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization 699 383 Accretion of
discount in asset retirement obligation 10 7 Non-cash incentive
compensation 40 41 Dry hole expense 20 1 Deferred income tax 151
153 Non-cash derivative fair value (gain) loss 79 (14) Gain on
extinguishment of debt (9) - Other non-cash items (5) 4 Changes in
operating assets and liabilities (1) 1,971 (83) ----- ----- Cash
Provided by Operating Activities 3,442 957 ----- ----- INVESTING
ACTIVITIES Proceeds from sale of property and equipment 2 -
Property acquisitions (94) (1,260) Development costs, capitalized
exploration costs and dry hole expense (1,076) (767) Other property
and asset additions (209) (151) ----- ----- Cash Used by Investing
Activities (1,377) (2,178) ----- ----- FINANCING ACTIVITIES
Proceeds from long-term debt 2,115 2,762 Payments on long-term debt
(3,979) (2,610) Net proceeds from common stock offering - 1,224
Dividends (69) (58) Debt costs - (1) Proceeds from exercise of
stock options and warrants 1 13 Payments upon exercise of stock
options - (62) Excess tax benefit on exercise of stock options or
vesting of stock awards - 57 Other, primarily (decrease) increase
in cash overdrafts (149) 38 ----- ----- Cash (Used) Provided by
Financing Activities (2,081) 1,363 ----- ----- (DECREASE) INCREASE
IN CASH AND CASH EQUIVALENTS (16) 142 Cash and Cash Equivalents,
Beginning of Period 25 - ----- ----- Cash and Cash Equivalents, End
of Period $ 9 $ 142 ===== ===== (1) Changes in Operating Assets and
Liabilities Accounts receivable $ 258 $ (213) Other current assets
138 39 Other operating assets and liabilities (20) 3 Current
liabilities (63) 88 Change in current assets from early settlement
of hedges, net of amortization 1,658 - ----- ----- $ 1,971 $ (83)
===== ===== XTO ENERGY INC. Consolidated Balance Sheets
--------------------------- (in millions, except shares) March 31,
December 31, 2009 2008 ------ ------ ASSETS (Unaudited) Current
Assets: Cash and cash equivalents $ 9 $ 25 Accounts receivable, net
950 1,217 Derivative fair value 1,406 2,735 Current income tax
receivable - 57 Other 206 224 ----- ----- Total Current Assets
2,571 4,258 ----- ----- Property and Equipment, at cost -
successful efforts method: Proved properties 32,053 30,994 Unproved
properties 3,878 3,907 Other 2,379 2,239 ----- ----- Total Property
and Equipment 38,310 37,140 Accumulated depreciation, depletion and
amortization (6,536) (5,859) ----- ----- Net Property and Equipment
31,774 31,281 ------ ------ Other Assets: Derivative fair value 991
1,023 Acquired gas gathering contracts, net of accumulated
amortization 103 105 Goodwill 1,462 1,447 Other 155 140 ----- -----
Total Other Assets 2,711 2,715 ----- ----- TOTAL ASSETS $ 37,056 $
38,254 ====== ====== LIABILITIES AND STOCKHOLDERS' EQUITY Current
Liabilities: Accounts payable and accrued liabilities $ 1,542 $
1,912 Payable to royalty trusts 15 13 Derivative fair value 65 35
Deferred income tax payable 1,063 940 Current income tax payable 62
- Other 35 30 ----- ----- Total Current Liabilities 2,782 2,930
----- ----- Long-term Debt 10,085 11,959 ------ ------ Other
Liabilities: Derivative fair value 1 - Deferred income taxes
payable 5,349 5,200 Asset retirement obligation 734 735 Other 91 83
----- ----- Total Other Liabilities 6,175 6,018 ----- -----
Commitments and Contingencies Stockholders' Equity: Common stock
($.01 par value, 1,000,000,000 shares authorized, 585,325,725 and
585,094,847 shares issued) 6 6 Additional paid-in capital 8,356
8,315 Treasury stock, at cost (5,630,453 and 5,563,247 shares)
(148) (147) Retained earnings 7,002 6,588 Accumulated other
comprehensive income (loss) 2,798 2,585 ----- ----- Total
Stockholders' Equity 18,014 17,347 ------ ------ TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY $ 37,056 $ 38,254 ====== ====== XTO ENERGY
INC. (continued) (a) Includes geological and geophysical costs, as
well as dry hole costs of $20 million in the three-month 2009
period and $1 million in the three-month 2008 period. (b) Includes
non-cash incentive award compensation of $40 million in the
three-month 2009 period and $41 million in the three-month 2008
period. (c) The derivative fair value (gain) loss comprises the
change in fair value of the following derivative financial
instruments not providing effective hedges (in millions): Three
Months Ended March 31 ------------------ 2009 2008 ---- ---- Other
non-hedge derivatives $ 2 $ (29) Ineffective portion of hedge
derivatives (8) 13 ---- ---- Total derivative fair value (gain)
loss $ (6) $ (16) ==== ==== (d) Net of capitalized interest of $13
million in the three-month 2009 period and $7 million in the
three-month 2008 period. The three-month 2009 period also includes
a $9 million gain on extinguishment of debt. (e) The current income
tax provision exceeds cash tax expense by the benefit realized upon
exercise of stock options or vesting of stock awards in excess of
amounts expensed in the financial statements. This benefit, which
is recorded in additional paid-in capital, was less than $1 million
for the three-month 2009 period and $62 million for the three-month
2008 period. (f) The following reconciles earnings and shares used
in the computation of basic and diluted earnings per common share
(in millions, except per share data): Three Months Ended March 31
--------------------------------------------------- 2009 2008
------------------------- ------------------------- Earnings
Earnings Earnings Shares per Share Earnings Shares per Share
-------- ------ --------- -------- ------ --------- Total $486
579.7 $465 498.5 Attributable to participating securities (4) (4.7)
(2) (2.2) ----- ----- ----- ----- Basic $482 575.0 $0.84 $463 496.3
$0.93 ===== ===== Effect of dilutive securities: Stock options -
1.8 - 5.5 Warrants - 1.0 - 1.6 ----- ----- ----- ----- ----- -----
Diluted $482 577.8 $0.83 $463 503.4 $0.92 ====== ====== ======
====== ====== ====== Effective January 1, 2009, we adopted the
provisions of FASB Staff Position EITF 03-6-1, Determining Whether
Instruments Granted in Share-Based Payment Transactions are
Participating Securities. As a result, we retrospectively adjusted
the calculation of our 2008 earnings per share. The previously
reported earnings per share for first quarter 2008 were $0.94 basic
and $0.92 diluted. XTO ENERGY INC. (continued) (g) Average sales
prices include realized gains and losses upon cash settlement of
hedge derivatives. Realized gains and losses on non-hedge
derivatives and on the ineffective portion of hedge derivatives are
recorded as a component of derivative fair value (gain) loss (see
(c) above). These non-hedge and ineffective derivative gains and
losses are primarily related to certain of our crude oil swap
agreements that did not qualify for hedge accounting, and the
timing of entering basis swap agreements and designating them as
hedges associated with NYMEX swaps. Had realized non-hedge and
ineffective gains and losses attributable to first quarter
production been recorded as gas, natural gas liquids and oil
revenue, the average gas, natural gas liquids and oil prices would
have been: Three Months Ended March 31 ------------------ 2009 2008
---- ---- Gas (per Mcf) $ 7.32 $ 7.72 Natural gas liquids (per Bbl)
23.84 52.96 Oil (per Bbl) 116.40 80.73 Non-GAAP Financial Measures
Adjusted Earnings Adjusted earnings, a non-GAAP financial measure,
excludes certain items that management believes affect the
comparability of operating results. The Company discloses adjusted
earnings as a useful adjunct to GAAP net income because: --
Management uses adjusted earnings to evaluate the Company's
operational trends and performance relative to other oil and gas
producing companies. -- Adjusted earnings are more comparable to
earnings estimates provided by securities analysts. -- Items
excluded generally are items whose timing or amount cannot be
reasonably estimated. Accordingly, any guidance provided by the
Company generally excludes information regarding these types of
items. The following reconciles GAAP net income to adjusted
earnings: Three Months Ended March 31 (in millions, except per
share amounts) ------------------ (Unaudited) 2009 2008 ---- ----
Net income $ 486 $ 465 Adjustments, net of tax: Non-cash derivative
fair value (gain) loss 51 (9) Gain on extinguishment of debt (6) -
------ ------ Adjusted earnings $ 531 $ 456 ======== ========
Adjusted earnings per common share: Basic $ 0.92 $ 0.91 ========
======== Diluted $ 0.91 $ 0.90 ======== ======== XTO ENERGY INC.
(continued) Non-GAAP Financial Measures Operating Cash Flow
Operating cash flow, a non-GAAP financial measure, is defined as
cash provided by operating activities before changes in operating
assets and liabilities, exploration expense and significant cash
flow effects of earnings adjustments. Because of these adjustments,
this cash flow statistic is different from cash provided by
operating activities, as disclosed under GAAP. Management believes
operating cash flow is a better liquidity indicator for oil and gas
producers because of the adjustments made to cash provided by
operating activities, explained as follows: -- Adjustment for
changes in operating assets and liabilities eliminates fluctuations
primarily related to the timing of cash receipts and disbursements,
which can vary from period-to-period because of conditions the
Company cannot control (for example, the day of the week on which
the last day of the period falls), and results in attributing cash
flow to operations of the period that provided the cash flow. --
Adjustment for exploration expense is to provide an amount
comparable to operating cash flow for full cost companies and to
eliminate the effect of a discretionary expenditure that is part of
the Company's capital budget. -- Adjustment for the significant
cash flow effects of earnings adjustments (see "Adjusted Earnings"
above) so that operating cash flow is reported on a basis
comparable to adjusted earnings. Management uses operating cash
flow not only for measuring the Company's cash flow and liquidity,
but also in evaluating the Company against other oil and gas
producing companies and valuing potential producing property
acquisitions. The following reconciles cash provided by operating
activities, the GAAP cash flow measure, to operating cash flow:
Three Months Ended March 31 (in millions) ------------------
(Unaudited) 2009 2008 ---- ---- Cash Provided by Operating
Activities $ 3,442 $ 957 Changes in operating assets and
liabilities (1,971) 83 Exploration expense, excluding dry hole
expense 14 17 ----- ----- Operating Cash Flow $ 1,485 $ 1,057
====== ====== Cash Flow Margin Cash flow margin, a non-GAAP
financial measure, is defined as revenues less before-tax cash
expenses, on a per Mcfe basis. Management uses cash flow margin to
evaluate the Company's performance versus the performance of other
oil and gas producing companies and valuing potential producing
property acquisitions. DATASOURCE: XTO Energy Inc. CONTACT: Louis
G. Baldwin, Executive Vice President & Chief Financial Officer,
or Gary D. Simpson, Senior Vice President, Investor Relations &
Finance, +1-817-870-2800, both of XTO Energy Inc Web Site:
http://www.xtoenergy.com/
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