XTO Energy Inc.'s (XTO) second-quarter profit fell 14% amid
higher-than-expected production volume and lower costs, which
helped the results top analysts' estimates.
The energy producer also raised its 2009 production and capital
spending forecasts again. It is now aiming for production growth of
20%, up from its already increased forecast in May of 16%. It also
increased its full-year capital budget 13% to $3.1 billion.
Shares rose 3.3% premarket to $43.99. The stock is up nearly 50%
since early this year.
Chairman Bob R. Simpson said with strong cash flow margins and
75% of second-half production hedged, 2009 operating cash flow for
2009 is headed toward a record $6 billion.
"Looking ahead to 2010, we anticipate a recovering economy,
decreasing natural gas supply and increasing natural gas demand,"
Simpson added.
Many oil and gas companies have seen profits fall as prices
tumbled from last summer's peaks, prompting many to curtail output.
But producers could also benefit from a recent and long-awaited
drop in the cost of drilling and maintaining wells, easing the
profit squeeze from lower prices.
On that note, Chief Executive Keith A. Hutton on Wednesday said
drilling costs have dropped about 30% while lease operating costs
also have fallen.
XTO's profit fell to $496 million, or 85 cents a share, from
$575 million, or $1.11 a share, a year earlier. Excluding hedging
and other impacts, earnings fell to 87 cents a share from
$1.06.
Revenue rose 17% to $2.27 billion as output surged 32%. Hedging
helped keep average-price declines to under 20%; commodity prices
have fallen much further than that.
Analysts polled by Thomson Reuters most recently were looking
for earnings of 82 cents a share on revenue of $2.15 billion
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com;