XTO Energy to buy Hunt for $4.19 billion

/ Source: The Associated Press

XTO Energy Inc. said Tuesday it is acquiring privately held Hunt Petroleum Corp. for $4.19 billion in cash and stock in a deal made more attractive by high oil and gas prices.

XTO Energy said the deal includes $2.6 billion in cash and 23.5 million shares of XTO stock. The stock portion of the deal is valued at about $1.6 billion, or $67.50 per XTO share.

The company said it would pay the $2.6 billion cash portion from its cash flow and borrowing, although it didn’t provide a breakdown.

XTO shares rose 36 cents to $68.08 in late morning trading Tuesday after rising to a 52-week high of $70.63 earlier in the session.

The sale would mean the end to the independent Hunt company, which was started by famed Texas wildcatter H.L. Hunt, who was considered one of the wealthiest men in America before his death in 1974. His heirs have fought over billions of dollars in trust fund assets.

In November, one of Hunt’s great-grandsons sued his father and several other family members, claiming they conspired to exclude him from part of his inheritance because he opposed a plan to sell Hunt Petroleum.

Fort Worth-based XTO estimates Hunt’s properties’ proved reserves total about 1.052 trillion cubic feet of natural gas equivalent.

XTO said that at expected oil and gas prices, the deal should generate more than $1.2 billion in cash flow next year.

It could add 197 million cubic feet of natural gas, 8,500 barrels of oil and 2,300 barrels of natural gas liquids to XTO’s daily production, the company said.

About 70 percent of the properties are in east Texas, central and northern Louisiana. Most of the rest are along the Gulf Coast and in the Gulf of Mexico, with a small percentage in the North Sea.

XTO President Keith A. Hutton said the Hunt properties overlap with XTO’s efforts to extract gas and oil from sand formations and carbonates. He said the Hunt assets would let XTO increase production in the east Texas and Louisiana region by 15 percent per year.

The acquisition is expected to close around Sept. 3, subject to antitrust clearance.

XTO produces oil and natural gas in Texas, Louisiana, New Mexico, Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Alaska, Utah, Mississippi and Montana.