XTO Energy Announces Record for 4Q and 2005

XTO Energy Inc. (NYSE: XTO) reported record fourth quarter 2005 production of 1.418 billion cubic feet equivalent (Bcfe) per day, up 21% from the fourth quarter 2004 level of 1.169 Bcfe per day. Total revenues for the fourth quarter were a record $1.177 billion, a 96% increase from $601 million the prior year. Earnings for the quarter reached a record $454 million, or $1.25 per share ($1.22 diluted), a 161% increase from fourth quarter 2004 earnings of $174 million, or 50 cents per share (50 cents diluted). After adjusting for the after-tax effects of stock incentive compensation and derivative fair value gain, adjusted earnings for fourth quarter 2005 were $440 million, or $1.21 per share ($1.18 diluted). Fourth quarter 2004 adjusted earnings were $179 million, or 51 cents per share (51 cents diluted).

Operating income for the quarter was $750 million, a 141% increase from fourth quarter 2004 operating income of $311 million. Operating cash flow, defined as cash provided by operations, before changes in operating assets and liabilities and exploration expense, was a record $755 million, up 88% from 2004 fourth quarter comparable operating cash flow of $402 million. See the last page of this release for further explanation and reconciliation of non-GAAP financial measures.

The Company set quarterly production records for all products. Fourth quarter daily gas production averaged 1.102 billion cubic feet (Bcf), up 20% from fourth quarter 2004 daily production of 916 million cubic feet (MMcf). Daily oil production for the fourth quarter was 41,976 barrels, a 25% increase from the fourth quarter 2004 level of 33,494 barrels. During the quarter, natural gas liquids production was 10,643 barrels per day, a 23% increase from the prior year quarter rate of 8,628 barrels per day.

"Once again, I am proud to report exceptional results for both the fourth quarter and full year. In 2005, XTO achieved production and reserve growth of about 30%, marking our twelfth straight year of increases. Our record financial performance highlights the Company's strong cash margins and our robust economic returns on capital investments. XTO's combination of development upsides, low finding costs and financial firepower give us a unique advantage for the future," noted Bob R. Simpson, Chairman and Chief Executive Officer. "We see 2006 as another breakout year for our shareholders. The Company is planning a base of 10% to 12% production growth. Our distribution of all remaining Hugoton Royalty Trust Units to shareholders is equivalent to about a 5% dividend. When combined with XTO's annual cash dividend, value creation for 2006 starts at 16% to 18%."

"Looking forward, our multi-year drilling inventory and long-lived production profile provide the confidence for continued growth," stated Keith A. Hutton, President. "Our diversity of resource basin projects will drive the growth. In East Texas, XTO is the top tight gas producer, and our programs plan to increase production in the Freestone Trend by 50% over the next few years. In the Barnett Shale, our team is the top driller with 19 rigs at work. From the San Juan Basin up through the Rockies, XTO's coal bed methane production is scheduled to increase by 50% as we expand drilling and takeaway capacity. Our tight-oil projects are yielding significant production response in the legacy fields of the Permian Basin. Drilling in the prolific Piceance Basin is now underway. All told, our development work should continue to realize big opportunities."

The average realized gas price for the quarter was $9.09 per thousand cubic feet (Mcf), 71% higher than the fourth quarter 2004 average price of $5.31 per Mcf. The fourth quarter average oil price increased 21% to $49.59 per barrel from the fourth quarter 2004 average price of $41.14 per barrel. Natural gas liquids prices averaged $39.83 per barrel for the quarter, a 28% increase from the 2004 fourth quarter average price of $31.04.

For the year, the Company reported record net income of $1.152 billion, or $3.21 per share ($3.15 diluted), compared with earnings of $508 million or $1.53 per share ($1.51 diluted) for 2004. Earnings for the year include the effects of a derivative fair value gain, stock incentive compensation and a gain on exchange of producing properties. Excluding these items, 2005 earnings were $3.24 per share ($3.17 diluted), compared to similarly adjusted earnings of $1.75 per share ($1.73 diluted) in 2004. Operating cash flow in 2005 was a record $2.276 billion, up 77% from the prior year level of $1.286 billion. Total revenues for 2005 were $3.519 billion, an 81% increase from revenues of $1.948 billion for 2004. Operating income for the year was $1.963 billion, a 114% increase from $919 million for 2004. See the last page of this release for further explanation and reconciliation of these non-GAAP financial measures.

Gas production for the year was a record 1.033 Bcf per day, up 24% from 2004 daily production of 835 MMcf. Oil production for 2005 averaged a record 39,051 barrels per day, a 72% increase from 2004 production of 22,696 barrels per day. Natural gas liquids production for 2005 was a record 10,445 barrels per day, a 40% increase from 2004 production of 7,484 barrels per day.

The average realized gas price for 2005 was $7.04 per Mcf, up 40% from the 2004 average price of $5.04 per Mcf. The average oil price for the year was $47.03 per barrel, a 23% increase from the 2004 average price of $38.38 per barrel. Natural gas liquids averaged $34.10 per barrel, or 29% higher than the 2004 average of $26.44 per barrel.

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. Its properties are concentrated in Texas, New Mexico, Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Alaska, Utah and Louisiana.