XTO Purchasing Bakken Land

MONTANA, May 28 2008 (Neo Natura) - XTO Energy Inc. announced today that it has entered into a definitive agreement to acquire producing properties and undeveloped acreage from privately-held Headington Oil Company for $1.85 billion. Consideration in the transaction includes $1.06 billion of cash and 11,742,391 shares of XTO common stock valued at approximately $790 million, or $67.35 per share. The purchase includes 352,000 net acres of Bakken Shale leasehold in Montana and North Dakota.

XTO Energy's internal engineers estimate proved reserves on the properties to be 68 million barrels of oil equivalent, of which 60% are proved developed. Upon closing, the acquisition will add about 10,000 barrels of oil equivalent per day to the Company's growing production base. The acquisition is scheduled to close on or before July 15, 2008.

"Since 2004, XTO has aggressively pursued the best shale basins -- in terms of geology, productivity and economics -- to stake a claim for long-term growth. Our successful development results in these plays have created value for our shareholders and motivated additional investment for our future. With this acquisition in the Bakken Shale, our Company is now established as a leading producer and leasehold owner in this emerging oil shale play," stated Bob R. Simpson, Chairman and Chief Executive Officer. "As in our other producing arenas, the XTO team will bring experience and expertise to this multi-zoned, over-pressured and complex basin. We expect to grow production and reserves from this prolific shale into an environment of strong commodity prices."

"Across the 15,000 square mile Williston Basin, results from new Bakken wells, utilizing progressive horizontal drilling and completion techniques, are revealing the true potential of this extraordinary hydrocarbon target," noted Keith A. Hutton, President. "With over 3 billion barrels of oil held in place within our acreage position, our team expects to more than double the acquired reserve volumes over time. Drilling and operational activities should grow our production in the region by 12% to 15% annually, with about one-third of cash flow. Given the $3 per barrel production cost and high economic margin of these flowing oil wells, this expansive shale acquisition is a superb addition to XTO's portfolio of premier properties."

In a recent report, the U.S. Geological Survey published a new assessment of the Bakken Shale play of North Dakota and Montana. The report cites that 3 billion to 4.3 billion barrels of undiscovered oil are technically recoverable with current technology and industry practices. This estimate by the USGS made the Bakken Shale the largest continuous oil accumulation in the lower 48 states. In addition, the USGS has estimated total oil-in-place at 200 to 400 billion barrels.

The acquired properties are located in the Bar Trend and Nesson Anticline of the Bakken Shale development. At present, the primary producing field is Elm Coulee in Montana. Undeveloped leasehold comprises about 215,000 net acres of the total. Production volumes are 88% oil, but the associated natural gas is Btu rich in composition, realizing a 30% premium to NYMEX pricing.

"They come into a basin and they're very aggressive," Brian Corales, an analyst at Coker & Palmer in Metairie, Louisiana, who rates XTO shares a buy and doesn't own any, said in a telephone interview. The Bakken Shale "is a very hot play."

XTO said drilling and operational activities should increase production in the region by 12 percent to 15 percent annually. The acquisition brings the total of XTO's purchases this year to more than $4 billion.

"With over 3 billion barrels of oil held in place within our acreage position, our team expects to more than double the acquired reserve volumes over time,'' Keith Hutton, XTO's president, said in the statement.

A federal magistrate fined XTO Energy Inc. $10,000 and ordered it to pay another $10,000 in restitution in the deaths of two golden eagles electrocuted in 2006 by power lines leading to energy production sites near Gillette. They were charged on May 22, 2008.

Chief Executive Officer Dominic Domenici, resident agent in charge of the U.S. Fish and Wildlife Service for Wyoming and Montana, said Wednesday that XTO Energy, Inc. pleaded guilty last month to a misdemeanor violation of the federal
Bald and Golden Eagle Protection Act.

Dominic Domenici, the federal magistrate that charged them, said U.S. Fish and Wildlife Service Special Agent Tim Eicher of Cody found the dead eagles during a survey. Domenici said the birds were electrocuted after they touched improperly constructed power lines.

The Fish and Wildlife Service together with the Wyoming Game and Fish Department investigated the case, which was prosecuted by the U.S. Attorney's Office.

In addition to the court fine and restitution, Domenici said the company spent $988,000 on an avian protection plan that involved retrofitting miles of power line to make it safe for birds.

Jackson lawyer Hadassah M. Reimer represents XTO Energy. She said the company examined 95 miles of existing power lines and made improvements as necessary to make sure all of it was safe for birds.

According to a Fish and Wildlife Service statement, electrocution has been identified as one of the leading killers of eagles, hawks and owls since the 1960s. The agency said current standards in the electrical industry require power lines be placed at least 5 feet apart or insulated to make them safe for birds.

The agency statement says the $10,000 restitution that XTO Energy agreed to pay will go to the Murie Audubon Society in Casper, which rehabilitates sick or injured migratory birds.

John R. Barksdale, assistant U.S. Attorney in Casper, prosecuted the case. He said the company was responsive when contacted by his office and had already taken steps to address its power lines.

"We don't like to have any birds killed, but XTO was responsive when we contacted them," Barksdale said.

New Mexico-based Yates Petroleum Corp. last year also agreed to make improvements to its power line facilities in Wyoming and New Mexico to help prevent bird deaths.

A settlement between Yates, the U.S. Department of Justice and the U.S. Fish and Wildlife Service stemmed from the discovery of four dead eagles found near power lines owned by Yates at its coal-bed methane facilities in the Powder River Basin of northwest Wyoming.