Shares of XTO Energy Inc. (NYSE: XTO) are trading higher after announcing a rather large acquisition. The company is acquiring privately held Hunt Petroleum Corp. for some $4.2 Billion in cash and stock.
The actual break-down of the merger is some $2.6 Billion consideration in cash and 23.5 million shares of XTO’s stock. As far as what it gets for the $4.2 Billion, the estimated reserves total about 1.052 trillion cubic feet of natural gas. As far as the daily additions, it could add 197 million cubic feet of natural gas, 2,300 barrels of natural gas liquids, and 8,500 barrels of oil. The company also expects to generate more than $1.2 Billion in cash flow next year at expected oil and gas prices.
The bulk of the properties are concentrated in East Texas as well as in in central and northern Louisiana with the rest being in or around the gulf of Mexico. It also has a small exposure for operations in the North Sea. This will take its production goal gains even higher based upon the additional properties. It had previously expected a 23% production growth target, and now it sees 28% to 30% growth. This is its second deal over the last 30-days.
XTO Energy shares are trading up about 1% at $68.39 on the day, and its 52-week trading range is $40.40 to $70.00. As far as its size, the market cap is now roughly $35 Billion.
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Jon C. Ogg
June 10, 2008
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