XTO Cuts Capex By 17%, Sees $800 Million In Hedging Gains

   DOW JONES NEWSWIRES 
 

XTO Energy Inc. (XTO) cut its planned 2009 capital spending by 17% as the oil-and-gas explorer generated some $800 million in proceeds from settling hedging agreements.

That money will go toward reducing debt, which surged last year amid acquisitions that culminated in XTO's $4.2 billion acquisition of closely held Hunt Petroleum.

XTO's capital budget for development and exploration is now $2.75 billion, down from $3.3 billion. Budgeted outlays for constructing pipeline infrastructure, compression and processing facilities is now $450 million, down 10%.

Chairman and founder Bob R. Simpson said that increasing production too rapidly into the currently oversupplied natural gas markets is not a prudent use of shareholders' resources, adding the company is looking to capitalize instead on its hedge position, which represents 80% of expected sales volumes.

As such, XTO cut its 2009 production-growth target to 14%.

Shares rose 0.7% premarket to $36.27. The stock has been halved since crude-oil prices peaked midyear 2008.

-By Shirleen Dorman, Dow Jones Newswires; 201-938-2310; [e-mail]

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