Oil and gas exploration and production company XTO Energy has announced that its board of directors has approved a revised 2009 capital budget for development and exploration expenditures of $2.75 billion.
The company has announced an additional budget of $450 million for the construction of pipeline infrastructure, compression and processing facilities.
This compares to its earlier budget of $3.3 billion for development and exploration; and $500 million for pipeline infrastructure, compression and processing facilities. The company now plans to increase 2009 production volumes by 14% over 2008 levels.
Keith Hutton, CEO of XTO Energy, said: “With our 14% growth projections, free cash flow is expected to exceed $2 billion. As drilling activity across the industry collapses, we will concentrate on managing falling costs to maximize returns and unit margins.”
Earlier in the second week of January 2009, XTO Energy announced that over the past thirty days it has entered into early settlement and reset arrangements with respect to 37% of its 2009 commodity hedge volumes. As a result of these early settlements, the company realized about $900 million of after-tax proceeds which it used to reduce its outstanding debt. The company expects to end the first quarter of 2009 with net debt of approximately $11 billion.
