XTO Energy has reported a production of 2.73 billion cubic feet equivalent (Bcfe) per day, for the first quarter of 2009, up 29%, compared with the production of 2.11 Bcfe per day, in the year-ago quarter and up 3% consecutively from 2.64 Bcfe per day in the fourth quarter 2008. Total revenues for the first quarter were $2.16 billion, a 29% increase from $1.67 billion the prior year. After adjusting for a $79 million ($51 million after tax) non-cash derivative fair value loss and a $9 million ($6 million after tax) gain on extinguishment of debt, adjusted earnings for first quarter 2009 were $531 million, or $0.92 per share ($0.91 diluted), compared with the year-ago quarter adjusted earnings of $456 million, or $0.91 per share ($0.90 diluted).
Operating income for the first quarter of 2009 was $881 million, up 7%, compared with the operating income of $824 million, in the year-ago quarter. Operating cash flow, defined as cash provided by operations, before changes in operating assets and liabilities, exploration expense and major cash flow effects of earnings adjustments, was $1.49 billion, up 40% from 2008 first quarter comparable operating cash flow of $1.06 billion.
First quarter daily gas production averaged 2.23 billion cubic feet (Bcf), up 30%, compared with the daily production of 1.71 Bcf, in the year-ago quarter. Daily oil production for the first quarter was 65.6 thousand barrels, a 27% raise from the first quarter 2008 level of 51.5 thousand barrels. During the quarter, natural gas liquids production was 18.3 thousand barrels per day, a 15% increase from the previous year quarter rate of 16,000 barrels per day.
Our quarterly results reflect strong old-fashioned performance for XTO Energy, stated Bob R. Simpson, chairman and founder. Our production volumes exceeded expectations, with sequential growth of 3%. The company’s cash flow margins expanded above $6 per Mcfe, as cash costs decreased. We strengthened the balance sheet with debt reduction of about $1.9 billion. All told, our team is determined to fulfill on the promises of a leading growth company: deliver drill-bit growth, manage returns with commodity price hedging and cost control, and prepare to accelerate growth into rebounding economic conditions as the year plays out.
“Our operations team provided another outstanding quarter of production results, even as we began to reduce activity across the board,” continued Keith A. Hutton, chief executive officer. “The Eastern Region, our leading producing area at a net rate of over 900 MMcfe per day, grew 5% sequentially during the period, with the Freestone Trend leading the way. In the Barnett Shale, net production reached 594 MMcfe per day, up 7% from the previous quarter and 40% over the prior year. Our intense drilling in the Woodford and Fayetteville shales has now built gross daily operated production of 65 MMcf and 60 MMcf, respectively, quadruple year ago levels.”
With hedging positions and infrastructure in place, we expect those levels to reach 120 MMcf in the Fayetteville and 80 MMcf in the Woodford by year end. In the Haynesville Shale, XTO Energy now has two wells producing with another four wells awaiting completion and a fourth drilling rig on its way. Finally, we completed XTO Energy’s best well to date in the Bakken Shale, the Boucher 41, at a producing rate of 2,125 barrels of oil per day from the Three Forks Sanish reservoir. Given the success of these prolific regions and our strategic outlook for the year, we are increasing the Company’s growth target to 16%, while holding the capital budget at previously announced levels.
The average gas price for the first quarter declined 6% to $7.24 per thousand cubic feet (Mcf) from $7.70 per Mcf in year-ago quarter. The first quarter average oil price was $104.59 per barrel, a 30% raise from previous year’s first quarter average price of $80.74. Natural gas liquids prices averaged $23.84 per barrel for the quarter, 55% lower than the 2008 quarter average price of $52.98.
