Fort Worth-based XTO Energy Inc.'s proven oil and natural gas reserves shot up 40% year-over-year in 2004, to a record 5.86 Tcfe from 4.185 Tcfe in 2003. XTO said it added 2.047 Tcfe at a cost of $1.26/Mcfe, replacing 551% of production in 2004.
The company's development program also replaced 195% of production or 724 Bcfe at a cost of $0.88/Mcfe. Natural gas reserves increased 29% to 4.715 Tcf, and natural gas combined with natural gas liquids of 38.5 million bbl equaled 84% of total reserves. Oil reserves increased 175% to 152.5 million bbl. Proved developed reserves accounted for 72.3% of total proved reserves on an Mcfe basis. At year-end 2004, the company's reserve-to-production index was 15.1 years.
"Our proven strategy, acquiring quality assets and making them better, continues to build a property base that delivers both consistent growth and leading economic returns for our shareholders," said CEO Bob R. Simpson. "The results of our development program illustrate the ongoing prosperity of our low-risk drilling inventory. In conjunction, the 2004 record acquisitions of $2 billion scale-up our growth platform at yesterday's prices."
Based on year-end prices of $5.69/Mcf, $28.24/bbl of natural gas liquids (NGL) and $41.03/bbl of oil and on constant cost assumptions, estimated future net cash flows, before income taxes, totaled $23.6 billion at Dec. 31, 2004. The current value before income tax, discounted at 10%, was $12.2 billion, compared with $8.6 billion at year-end 2003. Year-end 2003 prices were $5.71/Mcf of gas, $23.17/bbl of NGL and $30.55/bbl of oil.
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