XTO Energy: Updated estimates Goldman April 01, 2005
We are updating our EPS estimates to reflect the announced acquisition of producing properties from Plains Exploration & Production, valued at $350 million. We estimate the acquisition is neutral to mid-cycle EPS but accretive to 2005 and 2006 EPS. We see upside to XTO's drilling inventory if the company can economically downspace properties to 40 acres from 80 acres. XTO has identified about 150-200 gross locations (with about 50 classified as proved undeveloped), and we believe that could double in the event of successful downspacing. Our 2005E and 2006E EPS estimates are now $2.56 (previously $2.52) and $3.38 (previously $3.33) respectively. Our Q1, Q2, Q3, and Q4 for 2005 are now $0.54 (unchanged), $0.56 (unchanged), $0.68 (previously $0.66), and $0.76 (previously $0.74) respectively. We maintain an In-Line rating on XTO Energy relative to an Attractive coverage view.
Each of the analysts named below hereby certifies that, with respect to each subject company and its securities for which the analyst is responsible in this report, (1) all of the views expressed in this report accurately reflect his or her personal views about the subject companies and securities, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report: Brian Singer, Arjun Murti.
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