XTO Revenues for Q4 Top A Record $1.59 Billion
XTO Energy reported that total revenues for the fourth quarter were a record $1.59 billion, a 33% increase from $1.20 billion the prior year. Earnings for the quarter were $464 million, or $0.96 per share ($0.95 diluted), an 8% increase from fourth quarter 2006 earnings of $429 million, or $0.94 per share ($0.92 diluted). After adjusting for the after-tax effects of a non-cash derivative fair value loss, adjusted earnings for fourth quarter 2007 were $465 million, or $0.96 per share ($0.95 diluted). Fourth quarter 2006 adjusted earnings were $443 million, or $0.97 per share ($0.95 diluted).
Operating income for the quarter was $813 million, a 15% increase from fourth quarter 2006 operating income of $707 million. Operating cash flow, defined as cash provided by operations, before changes in operating assets and liabilities, exploration expense and significant cash flow effects of earnings adjustments, was a record $1.16 billion, up 28% from 2006 fourth quarter comparable operating cash flow of $910 million.
"Once again, we are proud to announce another record year of operational and financial performance for XTO. Production volumes increased more than 19%, with about 13% growth resulting from our development activities. These producing properties and leasehold acquisitions, totaling about $4 billion during 2007, added immediate growth impact and even more important, expansive upsides for future growth. All told, the Company achieved record cash flow which we invested in projects that we expect to continue creating long-term value for our shareholders," stated Bob R. Simpson, Chairman and Chief Executive Officer. "Moving ahead, XTO has a richer opportunity base than at anytime in our history. Our growth platforms are diverse, including leading positions in multiple shale plays, the tight-gas basins from East Texas to the Rockies, dynamic coal bed methane fields and legacy oil properties. As a result, our production is targeted to increase by 20% for 2008."
Keith A. Hutton, President, further comments. "Our operational teams delivered another outstanding quarter of results to close out 2007 as production volumes climbed 6%, sequentially. In East Texas, the gross daily rate for the Freestone Trend averaged 656 MMcfe, bringing year-over-year growth for fourth quarter to 17%. The horizontal drilling program in the Cotton Valley Lime continues to show strong results with the Gail King 20H well completed at 13 MMcf per day. Barnett Shale net production climbed 25% during the fourth quarter, reaching 425 MMcfe per day. We continued our development efforts in the Woodford Shale, completing an additional two wells at an average rate of 3 MMcf per day. In the Fayetteville play, XTO's initial two wells produced at an average daily rate of 2 MMcf. Overall, with strong company-wide results, we continue to pursue leasehold positions and 'bolt-on' acquisitions to expand drilling inventory. We look forward to providing a comprehensive discussion of the Company's opportunities at our Analyst Conference later this month."
For the year, the Company reported earnings of $1.69 billion, or $3.58 per share ($3.53 diluted), compared with earnings of $1.86 billion, or $4.08 per share ($4.02 diluted) for 2006. After adjusting for the after-tax effects of a non-cash derivative fair value loss, 2007 adjusted earnings were $1.72 billion, or $3.64 per share ($3.59 diluted) compared to 2006 adjusted earnings of $1.58 billion, or $3.45 per share ($3.41 diluted).(1) Adjustments to 2006 earnings include a $469 million gain ($295 million after-tax) on the distribution of Hugoton Royalty Trust units and $34 million of income tax expense related to enactment of the State of Texas margin tax. Operating cash flow in 2007 was a record $3.74 billion, up 22% from the prior year level of $3.08 billion.(1) Total revenues for 2007 were $5.51 billion, a 20% increase from revenues of $4.58 billion for 2006. Operating income for the year was $2.89 billion, an 8% increase from $2.67 billion for 2006.
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