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XTO Energy Announces 1Q Earnings With Record Production, Revenues and Cash Flow
Posted: 25 April 2005
XTO reported record first quarter 2005 production of 1,199 million cubic feet equivalent (MMcfe) per day, up 34% from the first quarter 2004 level of 893 MMcfe per day. Total revenues for the first quarter were a record $628.9 million, a 59% increase from $394.8 million the prior year. Earnings for the quarter were $166.3 million, or 48 cents per share, compared with first quarter 2004 earnings of $94.1 million, or 30 cents per share. First quarter 2005 earnings include the effects of a derivative fair value loss and non-cash incentive compensation. Excluding these items, the Company's earnings were $190.7 million, or 55 cents per share, compared to first quarter 2004 earnings of $119.1 million, or 38 cents per share. Operating cash flow, defined as cash provided by operations, before changes in operating assets and liabilities and exploration expense, was a record $409.8 million, up 55% from 2004 first quarter comparable operating cash flow of $264.8 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 922 million cubic feet (MMcf), up 19% from first quarter 2004 daily production of 771 MMcf. Daily oil production for the first quarter was 35,627 barrels, a 164% increase from first quarter 2004 level of 13,470 barrels. During the quarter, natural gas liquids production was 10,584 barrels per day, a 56% increase from the prior year quarter rate of 6,766 barrels per day.
"Our disciplined strategy of growth - premium acquisitions and a measured pace of development drilling - continues to deliver record results for our shareholders. With production up 34% year-over-year, the Company's revenues, earnings per share and operating cash flow increased by 59%, 60% and 55%, respectively, marking one of the best financial performances in our history," stated Bob R. Simpson, Chairman and Chief Executive Officer. "We believe XTO is uniquely positioned for long-term growth in this higher commodity price environment. Our team has built a 4 to 5-year development inventory of more than 4,000 drilling locations. Likewise, our acquisition efforts have not only captured $3 billion in quality properties over the last 18 months but have made XTO a preferred partner within the industry. With strong global energy demand, quality investment opportunities and low interest rates, the outlook has never been better."
"Once again, this quarter highlights XTO's strong production performance," commented President-Elect Keith A. Hutton. "We exceeded the high end of guidance by 2%, with a portion of natural gas growth volumes shifting into the NGL category. Moving forward, our drilling and workover efforts are providing solid production growth momentum across the board. In our Eastern Region, daily production from the Freestone Trend increased to more than 470 MMcf as the infrastructure to upgrade take-away capacity to 730 MMcf nears completion. With drilling activity just begun, the Company's daily oil production has increased by more than 2,000 barrels since last quarter. Finally, with the closing of the Antero acquisition, XTO becomes a top producer in the Barnett Shale with 125 new wells planned for 2005. Altogether, the Company has 53 drilling rigs active and expects to deliver 24-26% production growth this year."
On first quarter total revenues of $628.9 million, operating income was $285.8 million, a 69% increase from first quarter 2004 operating income of $169 million.
The average gas price for the first quarter increased 17% to $5.60 per thousand cubic feet (Mcf) from $4.79 per Mcf in first quarter 2004. The first quarter average oil price was $41.78 per barrel, a 25% increase from last year's first quarter average price of $33.38. Natural gas liquids prices averaged $29.12 per barrel for the quarter, 31% higher than the 2004 quarter average price of $22.23.
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 and Louisiana .
The Company's first quarter 2005 earnings and operational review conference call will be broadcast live via Internet webcast at 4:00 P.M. ET ( 3:00 P.M. CT ) on Wednesday, April 20, 2005 . The webcast can be accessed on the Company's website at http://www.xtoenergy.com.
Statements made in this news release, including those relating to future growth, premium acquisitions, results for shareholders, long-term growth, commodity prices, drilling inventory, global energy demand, investment opportunities, interest rates, outlook, production growth and new wells are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and the Company's future performance are both subject to a wide range of business risks and uncertainties and there is no assurance that these goals and projections can or will be met. Any number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, ability to acquire properties that meet our objectives, the timing and extent of changes in oil and gas prices, changes in underlying demand for oil and gas, the timing and results of drilling activity, the availability of and cost of obtaining drilling equipment and technical personnel, delays in completing production, treatment and transportation facilities, higher than expected production costs and other expenses, pipeline curtailments by third-parties and general market conditions. Further information on risks and uncertainties is available in the Company's filings with the Securities and Exchange Commission, which are incorporated by this reference as though fully set forth herein.
Posted by Editor Pipeline Magazine
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