12 June 2008capital raising announcement● NeutralMajor
On June 9, 2008 XTO agreed to buy the privately held Hunt Petroleum companies (Hunt Petroleum Corporation, Hassie Hunt Exploration Company and Hassie Hunt Production Company) for about $4.186B: roughly $2.6B in cash plus 23.5 million XTO shares valued at about $1.586B ($67.50 each). XTO's own engineers estimate 1.052 Tcfe of proved reserves (about 61% developed), mostly in its Eastern Region (East Texas and Louisiana, 70% of reserves), plus 15,000 net Bakken acres and North Sea non-operating interests. Closing is due by September 3, 2008 subject to the antitrust waiting period, with the cash funded from cash flow, commercial paper and debt markets. XTO also raised its 2008 production growth target to 28-30% (from 23%) and hedged 100 MMcf/day of gas for 28 months at $11.08 and added oil hedges for the Headington Bakken deal. This is a much larger deal than Headington and sits alongside it.