XTO Extends Barnett Shale Acreage for $800MM
XTO Energy Inc. announced that it has entered into a definitive agreement to acquire 12,900 net acres adjacent to XTO's existing operations in the Barnett Shale core for approximately $800 million, from an undisclosed third party. XTO Energy's internal engineers estimate proved reserves to be in excess of 300 billion cubic feet of natural gas equivalent, of which about 25% is proved developed. The acquisition will initially add 35 million cubic feet of natural gas equivalent per day to the Company's production base.
"XTO's position in the core of the Barnett Shale has provided confident production growth, increasing resource potential and value creation for our shareholders. These properties are located right in the heart of our operations and provide for more of the same," stated Bob R. Simpson, Chairman and Chief Executive Officer. "Given our extensive knowledge of the shale in this region, we anticipate ultimate recovery from these assets will be more than 1 TCF of natural gas over time."
Keith A. Hutton, President, further commented, "Our overall position in the Barnett Shale play now includes about 280,000 net acres. Approximately 55%, or 155,000 acres, is situated in the premier core area of the play where the geology offers the best productivity. This bolt-on acquisition is perfectly situated in the fairway of our ongoing development in the core."
The transaction is scheduled to close in early October 2008 with an effective date of July 1, 2008. Closing is subject to customary closing conditions and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The final closing price will reflect typical closing and post-closing adjustments. Funding is expected to be provided through a combination of the issuance of equity, long-term senior notes and the Company's commercial paper program.
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