FORT WORTH, Texas, May 5 /PRNewswire-FirstCall/ -- XTO Energy Inc.
(NYSE: XTO) today reported first quarter 2010 production of 2.90
billion cubic feet equivalent (Bcfe) per day, up 6% from the first
quarter 2009 level of 2.73 Bcfe per day, and up 1% sequentially
from 2.88 Bcfe per day in fourth quarter 2009. Total revenues for
the first quarter were $2.00 billion,
a 7% decrease from $2.16 billion the
prior year. Earnings for the quarter were $330 million, or $0.56 per share ($0.56 diluted), compared with first quarter 2009
earnings of $486 million, or
$0.84 per share ($0.83 diluted). After adjusting for a
$13 million ($8 million after tax) non-cash derivative fair
value gain, adjusted earnings for first quarter 2010 were
$322 million, or $0.55 per share ($0.55 diluted), compared to first quarter 2009
adjusted earnings of $531 million, or
$0.92 per share ($0.91 diluted).(1)
Operating income for the quarter was $656
million, a 26% decrease from first quarter 2009 operating
income of $881 million. Operating
cash flow was $1.25 billion, down 16%
from 2009 first quarter comparable operating cash flow of
$1.49 billion.(1)
First quarter daily gas production averaged 2.40 billion cubic
feet (Bcf), up 8% from first quarter 2009 daily production of 2.23
Bcf. Daily oil production for the first quarter was 64.3
thousand barrels, a 2% decrease from the first quarter 2009 level
of 65.6 thousand barrels. During the quarter, natural gas
liquids production was 20.0 thousand barrels per day, a 9% increase
from the prior year quarter rate of 18.3 thousand barrels per
day.
The average gas price for the first quarter decreased 12% to
$6.35 per thousand cubic feet (Mcf)
from $7.24 per Mcf in first quarter
2009. The first quarter average oil price was $92.49 per barrel, a 12% decrease from last
year's first quarter average price of $104.59. Natural gas liquids prices
averaged $43.18 per barrel for the
quarter, 81% higher than the 2009 quarter average price of
$23.84.
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.
Statements made in this news release may include
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. The Company
undertakes no obligation to publicly update or revise any
forward-looking statements. 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
|
|
|
2010
|
2009
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
Gas and natural gas
liquids
|
$1,448
|
$1,491
|
|
|
Oil and condensate
|
535
|
618
|
|
|
Gas gathering, processing and
marketing
|
20
|
54
|
|
|
Other
|
(2)
|
(2)
|
|
|
Total Revenues
|
2,001
|
2,161
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
Production
|
255
|
256
|
|
|
Taxes, transportation and
other
|
186
|
161
|
|
|
Exploration
(a)
|
13
|
34
|
|
|
Depreciation, depletion and
amortization
|
753
|
699
|
|
|
Accretion of discount in asset
retirement obligation
|
10
|
10
|
|
|
Gas gathering and
processing
|
36
|
29
|
|
|
General and
administrative (b)
|
98
|
97
|
|
|
Derivative fair value (gain)
loss (c)
|
(6)
|
(6)
|
|
|
Total Expenses
|
1,345
|
1,280
|
|
|
|
|
|
|
OPERATING INCOME
|
656
|
881
|
|
|
|
|
|
|
OTHER EXPENSE
|
|
|
|
|
Interest expense, net
(d)
|
139
|
126
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAX
|
517
|
755
|
|
|
|
|
|
|
INCOME TAX EXPENSE
|
|
|
|
|
Current (e)
|
77
|
118
|
|
|
Deferred
|
110
|
151
|
|
|
Total Income Tax
Expense
|
187
|
269
|
|
|
|
|
|
|
NET INCOME
|
$330
|
$486
|
|
|
|
|
|
|
EARNINGS PER COMMON SHARE
(f)
|
|
|
|
|
Basic
|
$0.56
|
$0.84
|
|
|
Diluted
|
$0.56
|
$0.83
|
|
|
|
|
|
|
|
|
|
|
Average Daily Production
|
|
|
|
|
|
|
|
|
Gas (Mcf)
|
2,397,918
|
2,227,799
|
|
|
Natural Gas Liquids
(Bbls)
|
19,980
|
18,303
|
|
|
Oil (Bbls)
|
64,327
|
65,629
|
|
|
Natural Gas
Equivalents (Mcfe)
|
2,903,761
|
2,731,392
|
|
|
|
|
|
|
|
|
|
|
Average Sales Prices (g)
|
|
|
|
|
|
|
|
|
Gas (per Mcf)
|
$6.35
|
$7.24
|
|
|
Natural Gas Liquids
(per
Bbl)
|
$43.18
|
$23.84
|
|
|
Oil (per Bbl)
|
$92.49
|
$104.59
|
|
|
Natural Gas
Equivalents (per Mcfe)
|
$7.59
|
$8.58
|
|
|
|
|
|
|
XTO ENERGY INC.
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
(in millions)
|
|
|
|
|
Three Months
Ended
|
|
|
March 31
|
|
|
2010
|
2009
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Net income
|
$330
|
$486
|
|
|
Adjustments to reconcile net
income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation, depletion and
amortization
|
753
|
699
|
|
|
Accretion of discount in asset
retirement obligation
|
10
|
10
|
|
|
Non-cash incentive
compensation
|
38
|
40
|
|
|
Dry hole expense
|
3
|
20
|
|
|
Deferred income tax
|
110
|
151
|
|
|
Non-cash derivative fair value
(gain) loss
|
(13)
|
79
|
|
|
Gain on extinguishment of
debt
|
-
|
(9)
|
|
|
Other non-cash
items
|
4
|
(5)
|
|
|
Changes in operating assets
and liabilities (1)
|
(7)
|
1,971
|
|
|
|
|
|
|
Cash Provided by Operating
Activities
|
1,228
|
3,442
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from sale of property
and equipment
|
-
|
2
|
|
|
Property
acquisitions
|
(44)
|
(94)
|
|
|
Development costs, capitalized
exploration costs and dry hole expense
|
(670)
|
(1,076)
|
|
|
Other property and asset
additions
|
(88)
|
(209)
|
|
|
|
|
|
|
Cash Used by Investing
Activities
|
(802)
|
(1,377)
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from long-term
debt
|
2,354
|
2,115
|
|
|
Payments on long-term
debt
|
(2,636)
|
(3,979)
|
|
|
Dividends
|
(73)
|
(69)
|
|
|
Proceeds from exercise of
stock options and warrants
|
9
|
1
|
|
|
Payments upon exercise of
stock options
|
(2)
|
-
|
|
|
Excess tax benefit on exercise
of stock options or vesting of stock awards
|
2
|
-
|
|
|
Other, primarily decrease in
cash overdrafts
|
(56)
|
(149)
|
|
|
|
|
|
|
Cash Used by Financing
Activities
|
(402)
|
(2,081)
|
|
|
|
|
|
|
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
|
24
|
(16)
|
|
|
|
|
|
|
Cash and Cash Equivalents, Beginning of
Period
|
9
|
25
|
|
|
|
|
|
|
Cash and Cash Equivalents, End of
Period
|
$33
|
$9
|
|
|
|
|
|
|
(1) Changes in Operating Assets and
Liabilities
|
|
|
|
|
Accounts receivable
|
$(84)
|
$258
|
|
|
Other current
assets
|
63
|
138
|
|
|
Other operating assets and
liabilities
|
(21)
|
(20)
|
|
|
Current liabilities
|
35
|
(63)
|
|
|
Change in current assets from
early settlement of hedges, net of
amortization
|
-
|
1,658
|
|
|
$(7)
|
$1,971
|
|
|
|
|
|
|
|
|
|
|
XTO ENERGY INC.
Consolidated Balance Sheets
|
|
|
(in millions, except shares)
|
|
|
|
|
|
|
|
|
March 31,
|
December 31,
|
|
|
2010
|
2009
|
|
|
ASSETS
|
(Unaudited)
|
|
|
|
Current Assets:
|
|
|
|
|
Cash and cash
equivalents
|
$33
|
$9
|
|
|
Accounts receivable,
net
|
1,050
|
965
|
|
|
Derivative fair
value
|
1,451
|
1,222
|
|
|
Current income tax
receivable
|
101
|
170
|
|
|
Other
|
185
|
182
|
|
|
Total Current
Assets
|
2,820
|
2,548
|
|
|
|
|
|
|
Property and Equipment, at cost – successful
efforts method:
|
|
|
|
|
Proved properties
|
35,002
|
34,180
|
|
|
Unproved properties
|
3,435
|
3,691
|
|
|
Other
|
2,878
|
2,810
|
|
|
Total Property and
Equipment
|
41,315
|
40,681
|
|
|
Accumulated depreciation,
depletion and amortization
|
(9,318)
|
(8,747)
|
|
|
Net Property and
Equipment
|
31,997
|
31,934
|
|
|
|
|
|
|
Other Assets:
|
|
|
|
|
Derivative fair
value
|
117
|
68
|
|
|
Acquired gas gathering
contracts, net of accumulated amortization
|
96
|
97
|
|
|
Goodwill
|
1,475
|
1,475
|
|
|
Other
|
137
|
133
|
|
|
Total Other Assets
|
1,825
|
1,773
|
|
|
|
|
|
|
TOTAL ASSETS
|
$36,642
|
$36,255
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
Accounts payable and accrued
liabilities
|
$1,445
|
$1,482
|
|
|
Payable to royalty
trusts
|
31
|
28
|
|
|
Current maturities of
long-term debt
|
250
|
250
|
|
|
Derivative fair
value
|
158
|
167
|
|
|
Deferred income tax
payable
|
424
|
342
|
|
|
Other
|
36
|
32
|
|
|
Total Current
Liabilities
|
2,344
|
2,301
|
|
|
|
|
|
|
Long-term Debt
|
9,955
|
10,237
|
|
|
|
|
|
|
Other Liabilities:
|
|
|
|
|
Derivative fair
value
|
7
|
6
|
|
|
Deferred income taxes
payable
|
5,650
|
5,522
|
|
|
Asset retirement
obligation
|
813
|
783
|
|
|
Other
|
72
|
80
|
|
|
Total Other
Liabilities
|
6,542
|
6,391
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
Stockholders' Equity:
|
|
|
|
|
Common stock ($.01
par value, 1,000,000,000 shares authorized, 590,629,915 and
589,361,021 shares issued)
|
6
|
6
|
|
|
Additional paid-in
capital
|
8,517
|
8,471
|
|
|
Treasury stock, at cost
(6,410,213 and 6,345,697 shares)
|
(179)
|
(177)
|
|
|
Retained earnings
|
8,574
|
8,317
|
|
|
Accumulated other
comprehensive income (loss)
|
883
|
709
|
|
|
Total Stockholders'
Equity
|
17,801
|
17,326
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
|
$36,642
|
$36,255
|
|
|
|
|
|
|
(a) Includes geological and geophysical costs, as
well as dry hole costs of $3 million in the three-month 2010 period
and $20 million in the three-month 2009 period.
|
|
|
|
|
(b) Includes noncash incentive award compensation of $38
million in the three-month 2010 period and $40 million in the
three-month 2009 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
|
|
|
2010
|
2009
|
|
|
|
|
|
|
Other non-hedge derivatives
|
$13
|
$2
|
|
|
Ineffective portion of hedge
derivatives
|
(19)
|
(8)
|
|
|
|
|
|
|
Total derivative fair value (gain) loss
|
$(6)
|
$(6)
|
|
|
|
|
|
|
(d) Net of capitalized interest of $8 million in
the three-month 2010 period and $13 million in the three-month 2009
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 $2 million for the three-month 2010
period and less than $1 million for the three-month 2009
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
|
|
|
|
2010
|
|
2009
|
|
|
|
Earnings
|
|
Shares
|
|
Earnings
per Share
|
|
Earnings
|
|
Shares
|
|
Earnings
per Share
|
|
|
Total
|
|
$
330
|
|
584.2
|
|
|
|
$
486
|
|
579.7
|
|
|
|
|
Attributable to participating
securities
|
|
(3)
|
|
(4.8)
|
|
|
|
(4)
|
|
(4.7)
|
|
|
|
|
Basic
|
|
$
327
|
|
579.4
|
|
$
0.56
|
|
$
482
|
|
575.0
|
|
$
0.84
|
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock options
|
|
—
|
|
3.2
|
|
|
|
—
|
|
1.8
|
|
|
|
|
Warrants
|
|
—
|
|
1.1
|
|
|
|
—
|
|
1.0
|
|
|
|
|
Diluted
|
|
$
327
|
|
583.7
|
|
$
0.56
|
|
$
482
|
|
577.8
|
|
$
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
2010
|
2009
|
|
|
|
|
|
|
Gas (per Mcf)
|
$6.32
|
$7.32
|
|
|
Natural gas liquids (per Bbl)
|
43.18
|
23.84
|
|
|
Oil (per Bbl)
|
92.18
|
116.40
|
|
|
|
|
|
|
|
|
|
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
|
|
|
(in millions, except per share
amounts)
|
March 31
|
|
|
(Unaudited)
|
2010
|
2009
|
|
|
|
|
|
|
Net income
|
$330
|
$486
|
|
|
|
|
|
|
Adjustments, net of tax:
|
|
|
|
|
Non-cash
derivative fair value (gain) loss
|
(8)
|
51
|
|
|
Gain on extinguishment of
debt
|
-
|
(6)
|
|
|
|
|
|
|
Adjusted earnings
|
$322
|
$531
|
|
|
|
|
|
|
Adjusted earnings per common share:
|
|
|
|
|
Basic
|
$0.55
|
$0.92
|
|
|
Diluted
|
$0.55
|
$0.91
|
|
|
|
|
|
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
|
|
|
(in millions)
|
March 31
|
|
|
(Unaudited)
|
2010
|
2009
|
|
|
|
|
|
|
Cash Provided by Operating Activities
|
$1,228
|
$3,442
|
|
|
|
|
|
|
Changes in operating assets
and liabilities
|
7
|
(1,971)
|
|
|
Exploration expense, excluding
dry hole expense
|
10
|
14
|
|
|
|
|
|
|
Operating Cash Flow
|
$1,245
|
$1,485
|
|
|
|
|
|
SOURCE XTO Energy Inc.