XTO Cuts 2009 Capital Spending and Resets Hedges (XTO)
XTO Energy Inc. (NYSE:XTO) has cut its 2009 capital spending budget from $3.8 billion to $3.2 billion. Development and exploration expenses are now expected at $2.75 billion and pipeline construction is set at $450 million. The company also plans to…
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XTO Energy Inc. (NYSE:XTO) has cut its 2009 capital spending budget from $3.8 billion to $3.2 billion. Development and exploration expenses are now expected at $2.75 billion and pipeline construction is set at $450 million.
The company also plans to increase production by 14% over last year,lower than the 18% production growth it forecast just last November.XTO’s chairman noted, "Increasing production too rapidly into thecurrently over-supplied natural gas markets is not a prudent use of ourshareholders’ resources." At least XTO understands that producing moreand selling it for less is never in shareholders’ best interests.
The company also executed an early monetization of a third of its 2009commodity volume hedges, realizing $800 million after taxes. XTO usedthe money to reduce debt.
The company’s shares fell in early trading, but have recovered somewhatnow to $36.15. The 52-week trading range is $23.80-$73.74.
Paul Ausick
February 3, 2009
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