gary d. simpson christi l. huntington - iis windows...

Christi L. HuntingtonSr. Investor Relations Analyst

Phone: 817.885.2256www.xtoenergy.com

(NYSE: XTO)

Gary D. SimpsonSenior VP, Investor Relations & Finance

Phone: 817.885.2619

1Q05 1

Operations Review

OverviewXTO Energy acquires and develops long-lived producing properties in the major gas and oil basins across the U.S.Through our operational efforts, the Company is actively managing underlying production decline, expanding its lowrisk inventory and delivering consistent, predictable production growth.

From 1986 through 2004, our development activities have increased acquired reserves volumes by 85%. As of March 2005, we have identified more than 3.8 Tcfe of development drilling upsides which are not currently quantified in XTO’s proven reserves. This inventory provides XTO visibility for long-term growth.

In 2005, the Company has budgeted $935 million to drill about 750 wells and complete 540 workovers. In 1Q05, the Company spent about $245 million in development capital.

Natural gas production grew by 1% between 4Q and 1Q. Oil production increased 6% from 4Q to 1Q, and NGL production increased 23% from 4Q to 1Q. Year-over-year, total equivalent production for the Company increased to 1,199 MMcfe/d from 893 MMcfe/d, up 34%.

20

136

79

220255

488

0

100

200

300

400

500

600

EasternRegion

PermianRegion

San JuanRegion

Arkoma Mid-Continent

BarnettShale

MM

cfe/

day

Oil NGL's Gas

1Q05 Daily Production by Area41% 21% 18% 11% 7% 2%

77%

18%

5%1Q05 Daily ProductionGas (MMcf) Oil (Bbls) NGL’s (Bbls)Total (MMcfe)

92235,62610,5841,199

Company-operated rig count: 53 active

1Q05 2

Operations Review

Eastern RegionXTO Energy is developing an extensive trend in its Eastern Region. The Company has completed 578 wells inthis multi-pay Freestone Trend. An additional 45,000 net acres (38% increase) were added to the trend during2004, bringing the total to ~166,000 net acres. In 1Q, Freestone Trend gross daily production averaged 454 MMcf(338 net).

In 2005, development plans include drilling between 200 – 230 new wells. With a current inventory of 1,100 to1,300 wells, the Company will continue to grow production at a measured pace and is nearing completion of allfacilities to increase takeaway capacity to 730 MMcf/d.

0

100

200

300

400

500

0

5

10

15

20

25

45 100291

8461,142

1,527

2,030

0

500

1,000

1,500

2,000

2,500

1998 1999 2000 2001 2002 2003 2004

East Texas Freestone TrendNet Reserve Growth

Bcfe

MM

cf/d

(Gro

ss O

pera

ted)

Currently 20 rigs drilling

Completing pipeline andBuilding treating plants to

Increase capacity

05/98 03/0510/01

Rig

Cou

nt

XTO entersthe area

Herdacquisition

Infrastructureimplementation

Marathontrade

1Q05 3

Operations Review

FreestoneFarrar

TeagueOaks

Bald PrairieNorth Area

20%

17%

22%

26%

13%2%

Eastern Region – Freestone Trend

Freestone Field► 142 wells completed to date

• 3 in 1Q► Currently 2 rig drilling► Significant wells completed in 1Q:

• Knight 12: 3.3 MMCFPD (82% W.I.)• John Eppes 1-7: 2.3 MMCFPD (58% W.I.)

Bald Prairie Field► 131 wells completed to date

• 7 in 1Q► Currently 3 rigs drilling► Significant wells completed in 1Q:

• Biggs 13: 2.5 MMCFPD (87% W.I.)• Cecil Barnett 2: 2.6 MMCFPD (100% W.I.)

Oaks/Luna fields► 71 wells completed to date

• 9 in 1Q► Currently 5 rigs drilling► Significant wells completed in 1Q:

• Thomas 5: 2.6 MMCFD (80% W.I.)• Gross 3: 2.2 MMCFPD (100% W.I.)

Teague/Dew fields► 70 wells completed to date

• 5 in 1Q► Currently 2 rigs drilling► Significant wells completed in 1Q

• Boyd Pickett 6: 4.0 MMCFD (75% W.I.)• Clarke 14: 4.0 MMCFPD (100% W.I.)• Barnett 4: 3.4 MMCFPD (100% W.I.)

Farrar/Bear Grass fields► 149 wells completed to date

• 9 in 1Q► Currently 8 rigs drilling► Significant wells in 1Q

• Thompson 12: 5.2 MMCFPD (100% W.I.)• Gibson 1-15: 3.0 MMCFPD (100% W.I.)• Phillips A 13: 2.6 MMCFPD (100% W.I.)

Rischer Store/Reed fields► 2 wells completed to date► Currently testing 2 wells

Production by Field

TOWNSITE PLANT & COMP

BLALOCK COMP FARRAR PLANTBAILEY COMP

FREESTONE COMPEUBANKS PLANT

on May ‘05

TEAGUE PLANT

BOA PLANT

ETC Pipeline

NE TEAGUE COMP

BALD PRAIRIE PLANT

Infrastructure Expansion

North Area

50,500 acres(30,500 net)

Central Area

107,000 acres(86,000 net)

South Area

67,500 acres(50,000 net)

Total225,000 acres(166,500 net)

New 2004 AcreageXTO Base AcreageNew Processing Facilities

478 MMCFPDCURRENT PRODUCTION

1Q05 4

Operations ReviewEastern Region

Sabine Uplift/Cotton Valley

The Company expects to drill 60 – 70 wells inthis area during 2005.

North Lansing Field► Significant wells completed in 1Q:

• Tecaro Wood 4: 1.7 MMCFPD (100% W.I.)

Willow Springs Field► Significant wells completed in 1Q:

• WSCGU 544: 2.6 MMCFPD (100% W.I.)• WSGU 11-9: 1.9 MMCFPD (100% W.I.)• Skipper GU 3: 1.8 MMCFPD (100% W.I.)

Carthage Field ► Currently 1 rig running► Significant wells completed in 1Q:

• Woolworth 12: 1.1 MMCFPD (64% W.I.)• Pirkle 13: 1.1 MMCFPD (55% W.I.)

PXP AcquisitionXTO expands their holdings in the Sabine andCotton Valley trends with the purchase of 175 Bcfefrom Plains.

• Expected closing June 1, 2005• Current net production 35 MMCFPD• Operations in the following field areas:

− Rosewood− Beckville− Carthage

• 60% of value operated by XTO

Cotton Valley Field► Currently 1 rig running► Completing Cox 22► Evaluating 3-D seismic data

8 wells proposed for 2005

COTTON VALLEY FIELD

3-D shoot area

SABINE UPLIFT/COTTON VALLEY

ARAR

LALA

OKOK

TXTX

SABINE UPLIFTSABINE UPLIFT

COTTON VALLEYCOTTON VALLEY


’05 AcquisitionBase acreage

Cox 22

1Q05 5

Operations Review

Permian Region

XTO Energy has an established history of success in the Permian Basin through enhancing reserve recovery inpremier reservoirs. Over the past decade, results have yielded increases in acquired reserves above 100% in multiple fields including University Block 9, Prentice and Cornell.

In 2004, the Company significantly expanded its presence in the region with acquisitions from ChevronTexacoand Exxon Mobil. These properties have steadily increased oil production through extensive workover activity including returning shut-in wells to production and optimizing existing well performance. The drilling program on these new assets has now begun and we expect encouraging results throughout the year.

The Company anticipates drilling 120 to 140 wells in 2005.

WEST TEXAS


Se Maljamar Unit

Prentice Unit

Cornell Unit

University Block 9

Russell

Goldsmith

Puckett/Gray Ranch

Yates

Amacker-Tippett

Penwell

Eunice Monument/Arrowhead

Mahoney

1Q05 6

Operations Review

Permian RegionUniversity Block 9► Currently producing 3,800 BOPD► Significant wells in 1Q:

• Univ. 9D 1H: 400 BOPD (horizontal)• Penn Unit 76: 100 BOPD (commingle Penn/Dev)

Cornell Unit (Wasson Field)► Currently producing 1,650 BOPD► Gas cap production at 5.2 MMCFPD► Significant wells in 1Q:

• 3157: 54 BOPD (frac stimluation)• 3154: 40 BOPD (frac stimulation)

Prentice Unit► Currently producing 3,000 BOPD► Drilled 3 wells of the 10 well program► Significant wells in 1Q:

• PNUE 613: 100 BOPD

Mahoney Lease► Currently producing 1,950 BOPD► Significant wells in 1Q:

• #24: 120 BOPD (frac stimluation)• #73: 105 BOPD (frac stimulation)

Russell Field► Currently producing 2,300 BOPD► Drilled 5 lower Clearfork wells and 1 Devonian well► Significant wells in 1Q:

• RCFU 314: 120 BOPD • RCFU 404: 80 BOPD

► Artificial uplift upgrades• H&J 451 #6: +100 BOPD• H&J 451 #11: +80 BOPD• RCFU 243: +50 BOPD

► Goldsmith Field► Currently producing 2,800 BOPD► Drilled 5 wells (completing now)► Significant wells in 1Q:

• CAG 1086: +40 BOPD (Cleanout & Stim)• CAG 1233: +30 BOPD (Cleanout & Stim)• CAG 1284: +40 BOPD (Cleanout & Stim)

Proven oilProspective

San Andres

GlorietaUpperClearfork

Lower ClearforkFU

TUR

E U

NIT

Top of Unit

Base of Unit

Devonian

GraniteSimpsonEllenburger

Horizontal potential

Additional pay not captured by old wells

New Well New WellProposedDeep Test

Russell Field Opportunities

0

1,000

2,000

3,000

4,000

BO

PD (g

ross

)

‘90 ‘92 ‘94 ‘96 ‘98 ‘00 ‘02 ‘04

+ 800 BOPD

Current Production2,300 BOPD (2,000 net)

RUSSELL CLEARFORK FIELD

XTO

0

1,000

2,000

3,000

4,000

5,000

BO

PD (g

ross

)‘90 ‘92 ‘94 ‘96 ‘98 ‘00 ‘02 ‘04

UNIVERSITY BLOCK 9

1Q05 7

Operations Review

Permian RegionYates Field► Currently producing 24,300 BOPD (6,400 net)► Continuation of successful horizontal

sidetrack program► Completed 35 wells in 2005

““CC””

““AA””

GranitePoint

TradingBay

McArthurRiver

N. CookCookInlet

Gas FieldField

Middle GroundShoal Field

XTO OnshoreFacility

TesoroRefinery

ALASKA

WaterOilGas

CO2 Injection Horizontal

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

BO

PD (g

ross

)

‘90 ‘92 ‘94 ‘96 ‘98 ‘00 ‘02 ‘04

Horizontal ProgramResponding

YATES FIELD PRODUCTION

Alaska – Middle Ground Shoal Field► Average production for 1Q was 4,000 BOPD (3,508 net)► Converted 4 wells to injection► Drilled 10 horizontal/high-angle sidetracks

• Average IP 400 BOPD• Average 750 MBO of reserves per well

► Significant activity in 1Q: • Drilling C41-23LN (Completing now)

YATES FIELD

Yates Reservoir Management ► Initiated injection of CO2 into the gas-cap in late 2004► Response evident in well performance results

1Q05 8

Operations Review

Barnett ShaleXTO entered the Barnett Shale play in January 2004 with the acquisition of 118 Bcf of reserves primarily in the core area. Since that time, the Company hasgrown its position to 149,000 net acres, 50% lying in the core area.

Daily net production is now 85 MMcf/d, ranking XTO as the 2nd largest producer in the basin. The Company plans to double production to 160MMcf/d net by year-end 2006. The drilling program targets 120 to 140 new wells in 2005.

Original XTO Position► Current net production 20 MMCFPD► Significant core area wells in 1Q:

• Fossil Hill 7H: 2.4 MMCFPD• Langley Revelstoke 2H: 1.8 MMCFPD

► Drilling results in Tier 1:• Johnson Neeley 2H: 2.1 MMCFPD

► Several 3-D seismic surveys underway► Currently running 4 rigs

2005 Antero Acquisition► Closed: April 1, 2005► Net acreage: 66,000

• 50,000 in the core area► Current net production: 65 MMCFPD ► Significant core area wells in 1Q:

• Copeland L 1H: 6.0 MMCFPD• Martin 2H: 2.5 MMCFPD

► Currently running 11 rigs► Seismic data: 80 mi2

► Midstream assets: 80 miles of pipeline with 300 MMCFPD of throughput capacity and associated compression with processing facilities

FORT WORTH

BARNETT SHALE

ARAR

LALA

OKOK

TXTX


FORT WORTHWEATHERFORD

CLEBURNE

HILLSBORO

DENTONBRIDGEPORT

Oua

chita

Thr

ust B

elt

Muenster Arch

CORE

Tier 1

Tier 2

Parker

Wise Denton

Tarrant

JohnsonHood

Hill

Viola Limit

Acreage Locator

Antero XTO Overlap

Copeland L 1HCopeland L 1H

Fossil Hill 7HFossil Hill 7H

Martin 2HMartin 2H

Johnson Johnson NeeleyNeeley 2H2H

1Q05 9

Operations Review

XTO Energy has identified 575 - 775new well locations to develop these complex, multi-pay basins. The drilling program focuses on expanding the Mesaverde, Dakota, and Paradox conventional production, along with the Fruitland, Raton, Vermejo, and Ferron coals. Also, Deeper Burro Canyon and Morrison intervals in theSan Juan should provide discoveryupsides. XTO will target multi-zonecompletions in the down-spaced Mesaverde/Dakota intervals.

The Company has increased its operatedcoal bed methane production from 2 MMcf/d in 1997 to over 150 MMcf/d today. Inventory for coal bed wellsincludes over 100 in the San Juan Basin, 180 - 280 wells in the Raton Basin and 100 - 150 in the Uinta Basin.Development costs for the CBM well will range from $0.15 - $0.65 per Mcfe. The Company expects to drill 110to 130 wells during 2005.

Net production for the region averaged 178 MMcf/d, 248 BOPD and 6,626 NGL BPD during 1Q.

UINTA BASINUINTA BASIN

SAN JUAN BASINSAN JUAN BASIN

RATONRATONBASINBASIN


COLORADO

NEW MEXICO

UTAH

94 MMCFPD

37 MMCFPD

20 MMCFPD

Gross operated CBM production

San Juan Region

SAN JUAN BASIN

CR

ETA

CE

OU

SJ U

R.

MESAVERDE

GALLUP

PARADOX

PICTURED CLIFFS

FRUITLAND COAL

1,500 - 2,500

4,500 - 5,500

6,500 - 7,500

8,500 - 9,500

PE

NN

.

LEWIS SHALE/CHACRA

DAKOTABURRO CANYON

MORRISON

Reduced spacing & Increasing

productive limits

Reduced spacing& commingling

Discovery

Expand productivity

ActionPay ZoneDepth

0

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100

‘90 ‘92 ‘94 ‘96 ‘98 ‘00 ‘02 ‘04

SAN JUAN CONVENTIONAL

MMCFPD (net)

1Q05 10

Operations Review

San Juan RegionChacra/Mesaverde/Gallup/Dakota/Paradox► 8 wells completed► Significant wells in 1Q:

• Evenson 4: 750 MCFPD (100% W.I.)• Fullerton Federal 6R: 750 MCFPD (100% W.I.)• L.C. Kelly 19: 1,400 MCFPD (100% W.I.)

Fruitland Coal/Pictured Cliffs► 2 wells completed► Significant wells in 1Q:

• Florance D19: 350 MCFPD (100% W.I.)• State AX 2: 500 MCFPD (75% W.I.)

Vermejo Coal/Raton Coal► Significant wells in 1Q:

• Apache Canyon 3-05: 300 MCFPD (100% W.I.)• Hill Ranch 22-08: 360 MCFPD (100% W.I.)• Golden Eagle 17-14: 380 MCFPD (100% W.I.)

Ferron Coal► 15 wells budgeted for 2005► Facilities upgrade required in 2005 to improve

takeaway capacity

Farmington

Durango

FRUITLAND COALTREND EXTENSION

AREA

FRUITLAND COAL160-acre

DRILLING AREA

COLORADONEW MEXICO

XTO BASE ACREAGE

SAN JUAN BASIN

GOLDENEAGLE

APACHECANYON

HILLRANCH

COLORADO

NEW MEXICO

2005 DRILLINGAREAS

RATON BASINUINTA BASINSTATE OF UTAH KK 32-144

1.6 MMCFPD

STATE OF UTAH SS 22-165250 MCFPD

80--acreCONVENTIONALDRILLING AREA

1Q05 11

Operations Review

Arkoma Basin

XTO Energy is the top gas producer in the state of Arkansas with over 500,000 acres of leasehold. With its prolific multi-pay nature, this complex basin offers a wealth of upside potential for new wells and recompletions.

Our “fault-block analysis” technique has identified trapped hydrocarbons in offsetting and new reservoirs. Across the basin, we have utilized wellhead compression and artificial lift to enhance rate and reserves. The Company’s main development activities have focused on recompletions and stimulation techniques, followed by new development wells.

Drilling inventory consists of 200 - 300 drilling locations in three important trend areas: the Arkansas OverthrustTrend, the Arkansas Fairway Trend and the Oklahoma Cromwell/Atoka Trend. The Company expects to drill 60 to 70 wells in 2005.

During 1Q, net production for the basin averaged 136 MMcfe/d.

19%

13%

68% 0

50

100

150

200

250

300

MM

CFP

D (g

ross

)

‘90 ‘92 ‘94 ‘96 ‘98 ‘00 ‘02 ‘04

XTO

Arkoma

Overthrust Oklahoma Fairway

Production

OKLAHOMA ARKANSAS

Overthrust Trend down-spaced to 40 acres per well

Dow Oliver 5Dow Oliver 5--33

John Weeks 2John Weeks 2--1414

DuckettDuckett 66--2020McClung 6McClung 6--1515


TrendField

Lemons 11Lemons 11--2525

Love 3Love 3--1111

SilexSilex 99--2222

Dawson 4Dawson 4--2424

Phillips 10Phillips 10--1919

1Q05 12

Operations Review

Arkoma BasinArkansas Fairway Trend► Significant wells in 1Q:

• John Weeks 2-4 (Caulksville Field): 1.6 MMCFPD (W.I. 37%)• Dow Oliver 5-3 (Cecil Field): 1.7 MMCFPD (W.I. 46%)

► Significant recompletions in 1Q:• Silex 9-22 (Silex Field): 1.0 MMCFPD (W.I. 100%)

Arkansas Overthrust Trend► Significant wells in 1Q:

• Duckett 6-20 (Gragg Field): 2.6 MMCFPD (W.I. 100%)• Dawson 4-24 (Gragg Field): 3.0 MMCFPD (W.I. 68%)• Love 3-11 (Chismville Field): 1.5 MMCFPD (W.I. 55%)• Phillips 10-19 (Booneville Field): 2.2 MMCFPD (W.I. 55%)

Oklahoma Cromwell Trend► Significant wells in 1Q:

• McClung 6-15 (S. Ashland Field): 1.2 MMCFPD (W.I. 67%)• Lemons 11-25 (S. Ashland Field): 0.8 MMCFPD (W.I. 65%)

PAY ZONESHartshorne SSCarpenter SS

Viola, SimpsonArbuckle

Penters Hunton

Boone LS

Hale SS

Areci, Casey

Penn

sylv

ania

nM

is.

Sil.

Ord

.

Dunn A

Chattanooga

Dev

.

R. Barton

Dunn C

Orr SS

PHILLIPS UNIT - OVERTHRUST TREND

Northeast Southwest#9

2004#3

2003#1

1966#6

2004#102004

#72004

#52004

Depth

3000’

4000’

5000’

6000’

7000’

Nichols

Borum

EUR5.1 Bcf

EUR3.6 Bcf

EUR9.7 Bcf

EUR4.1 Bcf

WOC EUR5.3 Bcf EUR

1.5 Bcf

Borum

1Q05 13

Operations Review

Disclaimer

Statements concerning production growth, cash flow margins, finding costs, future gas prices, reserve potential and debt levels are forward-looking statements. Financial results are subject to audit by independent auditors. These statements are based on assumptions concerning commodity prices, drilling results, production, administrative costs and interest costs that management believes are reasonable based on currently available information; however, management’s assumptions and the Company’s future performance are both subject to a wide range of business risks and uncertainties, and there is no assurance that these goals and projections can or will be met. In addition, acquisitions that meet the Company’s profitability, size and geographic and other criteria may not be available on economic terms. Further information on risks and uncertainties is available in the Company’s filings with the Securities and Exchange Commission, which are incorporated by this reference as though fully set forth herein.

Reserve estimates and estimates of reserve potential or upside with respect to the pending acquisition were made by our internal engineers without review by an independent petroleum engineering firm. Data used to make these estimates were furnished by the seller and may not be as complete as that which is available for our owned properties. We believe our estimates of proved reserves comply with criteria provided under rules of the Securities and Exchange Commission.

The Securities and Exchange Commission has generally permitted oil and gas companies, in their filings made with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation test to be economically and legally producible under existing economic and operating conditions. We use the terms reserve “potential” or “upside” or other descriptions of volumes of reserves potentially recoverable through additional drilling or recovery techniques that the SEC’s guidelines may prohibit us from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being actually realized by the company.

gary d. simpson christi l. huntington - iis windows...

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