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XTO Energy Sets 2009 Development Budget of $3.3 Billion; Plans Additional $500 Million for Midstream Infrastructure; Targets Production Growth of 18%

By Amarendra Bhushan for CEOWORLD Magazine Updated:November 21, 2008 Become a writer!

XTO Energy Inc. (NYSE: XTO) today announced that its Board of Directors has approved a 2009 capital budget for development and exploration expenditures of $3.3 billion. An additional $500 million has been budgeted for the construction of pipeline infrastructure and compression and processing facilities. With these expenditures, the Company plans to increase 2009 production volumes by 18% over 2008 levels.

“The budget approved today will provide for activity levels consistent with 2008 and positions us to take advantage of organizational efficiencies and falling costs. Moreover, combined with our expansive hedging program, XTO should have 18% production growth and record cash flow, with free cash flow approximating $2 billion. As a result, we will dedicate at least $1.25 billion to debt reduction,” stated Bob R. Simpson, Chairman of the Board.

“In these challenging times, the strength of our property base allows XTO to continue to create shareholder value through volume growth and strong economic margins,” stated Keith A. Hutton, President. “With this managed growth strategy, the Company expects to average utilizing 90 drilling rigs for 2009. Activities will include drilling 1,250 new wells and conducting 800 workover events.”

During the year, the Eastern Region will be allocated $1.0 billion. The Barnett Shale Region will utilize about $800 million. The Arkoma Basin and Mid-Continent properties will be allocated $500 million. The Bakken, Gulf Coast and Offshore areas will be allocated $350 million. Programs in the Permian District are expected to utilize another $300 million. The San Juan, Raton, Uinta and Piceance basins combined will be allocated $250 million. Finally, the Company will target $100 million for exploration events.

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, Montana, North Dakota, Pennsylvania, New York, West Virginia and Kentucky.