XTO Energy Inc. has updated operational and financial guidance for the remainder of 2005 based on current expectations for increased production, expenses and other parameters resulting from ongoing operations and development budget activities.
The Company is increasing the 2005 budget for development events from $1 billion to $1.3 billion to accommodate increased drilling activities, additional workovers and expected cost inflation. This budget reflects an expected drill-bit finding cost for replacing reserves of $1.10 to $1.20 for the year.
For the quarter, the Company's realized natural gas prices are expected to be $2.25 to $2.75 below the NYMEX Henry Hub price, assuming a $13.50 per Mcf NYMEX gas price and before consideration of hedging activities. Natural gas liquids prices are expected to be about 55% to 65% of the average NYMEX oil price. The Company's realized oil prices should be about $4.25 to $5.25 below
the average NYMEX price, assuming a $60.00 per Bbl oil price and before consideration of hedging activities.
The following table presents the Company's expected expenses per Mcfe for the remainder of 2005 assuming a $13.50 per Mcf NYMEX gas price and a $60.00 per Bbl NYMEX oil price:
Expense ($/Mcfe) Q4
Production $0.80 - $0.85
Taxes, transportation and other 0.85 - 0.95
Exploration 0.05 - 0.10
Depreciation, depletion and amortization 1.45 - 1.50
Accretion of asset retirement obligation 0.02 - 0.03
General and administrative (a) 0.23 - 0.27
Interest 0.30 - 0.35
(a) Excludes stock-based incentive compensation
The Company's hedging positions for natural gas and oil are:
Mcf or Bbls NYMEX Price
per Day per Mcf or Bbl
Natural Gas *
Oct-Dec 2005 200,000 $ 13.40
260,000 $ 5.97
Jan-Dec 2006 10,000 $ 7.78
Oct-Dec 2005 15,000 $ 38.37
* Includes 10,000 Mcf per day of hedges acquired in the
Antero Resources acquisition, at their average April 1, 2005
mark-to-market NYMEX price of $7.78 per Mcf.
The Company is increasing guidance for annual production volume growth to 30-31% for 2005. The estimated ranges of average daily production going forward are:
Natural Gas (Mmcf) 1,090 - 1,105
NGL (Mbbl) 9 - 10
Oil (Mbbl) 40 - 42
Total Gas Equivalent (Mcfe) 1,384 - 1,417
The Company projects a 37% effective tax rate, with up to 60% of that amount expected to be currently payable.