Fourth quarter completion of a new pipeline and three processing plants should expand production capacity in XTO Energy Inc.’s Freestone Trend by more than 60% to 730 MMcf/d, but the Fort Worth-based independent said estimated volumes will be lower than previous forecasts to reflect “ongoing curtailments imposed by third-party pipeline purchases.”

Fourth quarter estimates also were adjusted to reflect preferential purchase right elections, property trades and sales associated with properties acquired this year from ChevronTexaco. In August, XTO completed the largest acquisition in its history with the purchase of 150 onshore producing assets for $1.1 billion from ChevronTexaco (see Daily GPI, May 18). The purchase added 88 MMcf/d of gas and 14,000 bbl/d of oil from properties in seven states.

Under its revised estimates, XTO now expects fourth quarter gas production to be in the range of 910-920 MMcf/d, down from a previous estimate of 925-930 MMcf/d. Oil production was revised to a range of 31,500-32,000 bbl/d, down from 33,000-33,500 bbl/d. Natural gas liquids (NGLs), however, were revised upward to a range of 7,000-7,500 bbl/d from 6,500-7,000 bbl/d.

For the third quarter, XTO posted strong profit, which was fueled by higher production and higher prices. Quarterly earnings reached $140.8 million (54 cents/share), up from $102.8 million (45 cents) in 3Q2003. Excluding expenses for stock-based compensation, XTO earned $151 million (58 cents), which beat Thomson First Call estimates of 55 cents/share.

Total revenue was up 58% to $507.4 million from $322.1 million a year ago, with oil production doubling to 25,984 bbl/d. Average prices were also up 35% to $38.58/bbl. Gas production also increased 19% in the quarter, to 874 MMcf/d, with average prices up 20% to $5.02/Mcf. NGL production was down 9% to 7,070 bbl/d.

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