XTO announces $1 billion in acquisitions; funding to include cash, bank debt, commercial paper program

By Jennifer Lanning Drey

Portland, Ore., Feb. 12 - XTO Energy, Inc. entered into definitive agreements totaling $1 billion during the first quarter to acquire producing property and acreage positions, the company reported Tuesday during its fourth-quarter earnings conference call.

Funding for the acquisitions is expected to come from a combination of cash flow, bank debt and capital markets transactions, including the company's commercial paper program, Louis Baldwin, chief financial officer of XTO, said during the call.

In anticipation of the acquisitions, XTO increased its availability, including commercial paper and bank credit facilities, by $800 million, Baldwin said.

The acquisitions involve more than 25 transactions, all of which have closed or will be closed during the first quarter.

The producing properties are located in XTO's Eastern and San Juan regions, and the acreage positions are in the Woodford, Fayetteville and Barnett shales, where the company has established an expansive growth platform.

"If you watch what we're doing, we're expanding our expertise and we're squarely up on three shales now pretty solidly, and we're reviewing others so it won't be our last one," Bob Simpson, XTO's chief executive officer, said during the call.

XTO is currently looking at a number of other possible future acquisitions, which the company expects would be bolt-ons, as opposed to expansions into new areas, Simpson said.

"Going forward we see more consolidation opportunities in 2008. XTO is well positioned to continue to purchase bolt-on properties and by doing so, accreting long-term value," Simpson said in a news release.

Given its positioning toward additional acquisitions and the evolution of the financial markets, XTO also announced it will not establish a master limited partnership at this time.

For the fourth quarter, XTO reported earnings of $464 million, demonstrating an 8% increase over fourth-quarter 2006 earnings of $429 million.

XTO ended 2007 with $6.3 billion of debt.

Based in Fort Worth, Texas, XTO is a domestic natural gas producer.

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