XTO Energy Inc. has completed its $4.2 billion acquisition of privately held Hunt Petroleum Corp. and has updated its natural gas and oil hedges through 2010.
Hunt, which agreed to the transaction in June (see Daily GPI, June 11), sold XTO total estimated proved reserves of 1.05 Tcfe, 62% proved developed. Production was estimated at 197 MMcf/d of gas, 8,500 b/d of oil and 2,300 b/d of natural gas liquids. XTO paid Hunt $2.6 billion in cash and provided about 23.5 million shares of XTO common stock.
CEO Bob Simpson said the Hunt portfolio “substantially” overlaps some of XTO’s positions “and our team already recognizes tremendous upside potential for development.”
About 70% of the acquired properties are in East Texas and in central and northern Louisiana where XTO has stepped up its exploration activities (see Daily GPI, Nov. 16, 2007). Another 28% of the reserves, both onshore and offshore, are along the Gulf Coast of Texas, Louisiana, Mississippi and Alabama. Nonoperating interests, reflecting more than 300,000 net acres of potential in the North Sea and the balance of proved reserves, also were conveyed in the deal. In addition, XTO gained about 15,000 net acres of leasehold in the Bakken Shale region of North Dakota.
In conjunction with the transaction XTO added gas and oil hedges through 2010. For gas XTO hedged through December 1.45 Bcf/d at $8.79/Mcf.; total gas equivalent hedged through December is 1.75 Bcfe/d at $10.06/Mcfe. XTO hedged 1.185 Bcf/d at $9.59/Mcf for 2009; total gas equivalent hedged is 1.515 Bcfe/d at $11.97/Mcfe. And for 2010 XTO hedged 300 MMcf/d at $9.50/Mcf; total gas equivalent hedged is 450 MMcfe/d at $13.57/Mcfe.
“For 2009, we now have secured hedging on more than 50% of our expected production volumes, up from 40%” at the end of August, “at an equivalent natural gas price of $11.97/Mcfe,” Simpson said.
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