XTO Energy Inc. has reported record second quarter 2009 production of 2.89 billion cubic feet equivalent (Bcfe) per day, up 32% from the second quarter 2008 level of 2.20 Bcfe per day, and up 6% sequentially from 2.73 Bcfe per day in first quarter 2009. Total revenues for the second quarter were $2.27 billion, a 17% increase from $1.94 billion the prior year. Earnings for the quarter were $496 million, or $0.86 per share ($0.85 diluted), compared with second quarter 2008 earnings of $575 million, or $1.12 per share ($1.11 diluted). After adjusting for a $28 million ($18 million after tax) non-cash derivative fair value loss and an $8 million ($5 million after tax) gain on extinguishment of debt, adjusted earnings for second quarter 2009 were $509 million, or $0.88 per share ($0.87 diluted), compared to second quarter 2008 adjusted earnings of $553 million, or $1.08 per share ($1.06 diluted). (1)

Operating income for the quarter was $898 million, an 11% decrease from second quarter 2008 operating income of $1.01 billion. Operating cash flow was $1.51 billion, up 23% from 2008 second quarter comparable operating cash flow of $1.23 billion. (1)

Second quarter daily gas production averaged 2.35 billion cubic feet (Bcf), up 31% from second quarter 2008 daily production of 1.80 Bcf. Daily oil production for the second quarter was 69.2 thousand barrels, a 35% increase from the second quarter 2008 level of 51.3 thousand barrels. During the quarter, natural gas liquids production was 20.7 thousand barrels per day, a 33% increase from the prior year quarter rate of 15.6 thousand barrels per day.

"XTO's outstanding results highlight the wisdom of the Company's time-tested strategy - own quality properties, manage robust cash flow and plan for expansive growth. Once again, record production exceeded expectations, increasing 6% sequentially, and 32% from last year. With strong cash flow margins and 75% of second half production hedged at an equivalent price of $10.69 per Mcfe, operating cash flow for 2009 is headed towards a record $6 billion," stated Bob R. Simpson, Chairman and Founder. "Looking ahead to 2010, we anticipate a recovering economy, decreasing natural gas supply and increasing natural gas demand. Through our hedging program, the Company has already secured an equivalent price of $11.33 per Mcfe on about 40% of expected production. With these convictions, XTO is increasing its 2009 production growth target to 20%, from 16%, while modestly increasing our capital budget to $3.6 billion."

"All told, our operating efficiencies are strengthening with exceptional production results, drilling costs down by about 30% and lease operating costs now below $0.95 per Mcfe," continued Keith A. Hutton, Chief Executive Officer. "During this quarter, Barnett Shale net production increased to 621 MMcfe per day, up 5% sequentially and 34% year-over-year. In the Eastern Region, the Company's largest producing area, daily net production averaged 903 MMcfe in the quarter, up 27% year-over-year, including 16% growth in the Freestone Trend. Expanding success in the Fayetteville and Woodford shale plays fueled 18% sequential volume growth in our Mid-Continent Region. In this area, gross daily operated production reached more than 85 MMcfe in the Fayetteville and 75 MMcfe in the Woodford, where a combined nine drilling rigs are at work. Our team continues to define our highly prolific Haynesville Shale acreage with four drilling rigs active, and a target of 60 to 70 MMcfe in daily production from this play by year end. Finally, in our Bakken Shale program, the Three Forks/Sanish reservoir continues to raise expectations as three new wells were completed with daily rates above 1,500 barrels of oil equivalent per well. Going forward, our drill bit activities in multiple growth regions, position XTO for double-digit growth."

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