XTO Energy Announces Record 1Q Earnings

XTO Energy Inc. (NYSE: XTO) reported record first quarter 2006 production of 1.460 billion cubic feet equivalent (Bcfe) per day, up 22% from the first quarter 2005 level of 1.199 Bcfe per day. Total revenues for the first quarter were a record $1.22 billion, a 93% increase from $629 million the prior year. Earnings for the quarter were a record $467 million, or $1.28 per share ($1.26 diluted), compared with first quarter 2005 earnings of $166 million, or 48 cents per share (47 cents diluted). First quarter 2006 earnings include the effects of a derivative fair value gain and non-cash performance share award compensation. Excluding these items, the Company's earnings were $449 million, or $1.23 per share ($1.22 diluted), compared to first quarter 2005 earnings of $191 million, or 55 cents per share (54 cents diluted). First quarter 2006 earnings are also net of $2 million after-tax, or less than 1 cent per share, related to expensing stock options as required upon adoption of SFAS 123R as of January 1, 2006.

Operating income for the quarter was $769 million, a 169% increase from first quarter 2005 operating income of $286 million. Operating cash flow, defined as cash provided by operations, before changes in operating assets and liabilities and exploration expense, was a record $803 million, up 96% from 2005 first quarter comparable operating cash flow of $410 million. See the last page of this release for further explanation and reconciliation of these non-GAAP financial measures.

The Company set records for each of its production components. First quarter daily gas production averaged 1.126 billion cubic feet (Bcf), up 22% from first quarter 2005 daily production of 922 MMcf. Daily oil production for the first quarter was 44,563 barrels, a 25% increase from the first quarter 2005 level of 35,627 barrels. During the quarter, natural gas liquids production was 11,126 barrels per day, a 5% increase from the prior year quarter rate of 10,584 barrels per day.

"For XTO Energy and our investors, the long-term outlook is stronger than ever. Our Company is delivering a confident growth program while achieving the best economic returns in its history," stated Bob R. Simpson, Chairman and Chief Executive Officer. "When we combine record margins, double-digit production growth and more than 12 Tcfe of captured resource potential, XTO is providing a supercharged investment vehicle while building value for the future. We are also realizing some of that value for our owners through the distribution of our Hugoton Royalty Trust units on May 12th to all shareholders of record on April 24th. This dividend currently equates to about $1.90 per share or an additional yield of about 4% on the XTO share price."

Keith A. Hutton, President, further comments. "With 70 drilling rigs now active, the Company is on pace to achieve 11-12% production growth for 2006. Given the fourth quarter-to-first quarter volume increase of about 3%, XTO's operational teams continue to drive growth in several exciting resource plays across our basins. The Freestone Trend reached 540 MMcf per day, up about 5% from the last quarter, and we are drilling ahead with 21 rigs. The Company's net production in the Barnett Shale averaged 149 MMcf per day, ahead of schedule to reach our target rate of 160 MMcf per day by year-end. New wells in the core-area of the play continue to exceed expectations. In the Piceance Basin, we have reached total depth of about 15,000 feet on our first well, cutting through a column of 4,000 feet of gas-charged formations. As we initiate plans for testing, this well is flaring gas and we anticipate completion in the second quarter. In West Texas, oil volumes are steadily growing as horizontal drilling, refined completion techniques and tighter well spacing are accessing new reserves and production in legacy fields. Even with the reduction to production of about 37 MMcfe per day associated with the HGT distribution, we look forward to sharp production increases in the back half of the year."

The average gas price for the first quarter increased 62% to $9.08 per thousand cubic feet (Mcf) from $5.60 per Mcf in first quarter 2005. The first quarter average oil price was $56.98 per barrel, a 36% increase from last year's first quarter average price of $41.78. Natural gas liquids prices averaged $34.76 per barrel for the quarter, 19% higher than the 2005 quarter average price of $29.12..

XTO Energy Inc. is a domestic natural gas producer engaged in the acquisition, exploitation and development 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, Louisiana and Mississippi.