XTO Energy to buy Hunt Petroleum in $4.19 billion cash-stock deal

10 June 2008

US natural gas producer XTO Energy Inc. today said it will pay $4.19 billion in cash and stock to buy closely-held Hunt Petroleum Corp, as it moved to boost its reserves and production by up to a third.

Owners of Hunt Petroleum, originally created by late billionaire HL Hunt, will receive $2.6 billion in cash and about $1.6 billion in XTO stock, the Fort Worth, Texas-based buyer said in a statement.

The transaction will boost XTO's gas output by 12 per cent, oil production by 16 per cent and gas liquids by 14 per cent, according to the statement. Gas accounts for about 80 per cent of the company's output.

Daily production of 197 million cubic feet, 8,500 barrels of oil and 2,300 barrels of natural gas liquids will be added to XTO's production after the expected closing date of 3 September.

"With the current outlook for commodity prices and our development plan, we have facilitated a history-making deal for XTO which should generate over $1.2 billion in cash flow next year," said the company, marking its second major acquisition in two weeks, after a $1.85 billion purchase announced last month.

XTO said it's locking in sales of 100 million cubic feet of daily output, or 56 per cent of the gas production it will gain by acquiring Hunt, for 28 months at $11.08 per thousand cubic feet.