XTO Energy Inc. has entered into a definitive agreement to acquire producing properties and undeveloped acreage from privately-held Headington Oil Company for $1.85 billion. Consideration in the transaction includes $1.06 billion of cash and 11,742,391 shares of XTO common stock valued at approximately $790 million, or $67.35 per share. The purchase includes 352,000 net acres of Bakken Shale leasehold in Montana and North Dakota. XTO Energy's internal engineers estimate proved reserves on the properties to be 68 million barrels of oil equivalent, of which 60% are proved developed. Upon closing, the acquisition will add about 10,000 barrels of oil equivalent per day to the Company's growing production base.

"Since 2004, XTO has aggressively pursued the best shale basins -- in terms of geology, productivity and economics -- to stake a claim for long-term growth. Our successful development results in these plays have created value for our shareholders and motivated additional investment for our future. With this acquisition in the Bakken Shale, our Company is now established as a leading producer and leasehold owner in this emerging oil shale play," stated Bob R. Simpson, Chairman and Chief Executive Officer. "As in our other producing arenas, the XTO team will bring experience and expertise to this multi-zoned, over-pressured and complex basin. We expect to grow production and reserves from this prolific shale into an environment of strong commodity prices."

"Across the 15,000 square mile Williston Basin, results from new Bakken wells, utilizing progressive horizontal drilling and completion techniques, are revealing the true potential of this extraordinary hydrocarbon target," noted Keith A. Hutton, President. "With over 3 billion barrels of oil held in place within our acreage position, our team expects to more than double the acquired reserve volumes over time. Drilling and operational activities should grow our production in the region by 12% to 15% annually, with about one-third of cash flow. Given the $3 per barrel production cost and high economic margin of these flowing oil wells, this expansive shale acquisition is a superb addition to XTO's portfolio of premier properties."

Tags: Headington Oil Company, XTO Energy Inc.