XTO Cuts 2009 Capital Spending and Resets Hedges (XTO)

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By Douglas A. McIntyre Updated Published
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Oil_well_imageXTO Energy Inc. (NYSE:XTO) has cut its 2009 capital spending budget from $3.8 billion to $3.2 billion. Development and exploration expenses are now expected at $2.75 billion and pipeline construction is set at $450 million.

The company also plans to increase production by 14% over last year,lower than the 18% production growth it forecast just last November.XTO’s chairman noted, "Increasing production too rapidly into thecurrently over-supplied natural gas markets is not a prudent use of ourshareholders’ resources." At least XTO understands that producing moreand selling it for less is never in shareholders’ best interests.

The company also executed an early monetization of a third of its 2009commodity volume hedges, realizing $800 million after taxes. XTO usedthe money to reduce debt.

The company’s shares fell in early trading, but have recovered somewhatnow to $36.15. The 52-week trading range is $23.80-$73.74.

Paul Ausick
February 3, 2009

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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