Cross Timbers Oil Announces Record Results

Apr 25, 2001, 01:00 ET from Cross Timbers Oil Company

    FORT WORTH, Texas, April 25 /PRNewswire Interactive Release/ -- Cross
 Timbers Oil Company (NYSE:   XTO) today reported record first quarter results,
 including natural gas production, cash flow from operations and earnings
 before the effect of the SFAS No. 133 accounting change for derivatives.
     First quarter cash flow from operations, before changes in operating
 assets and liabilities and exploration expense, increased 186% to a record
 $159.4 million, or $2.00 per share, from $55.7 million, or 77 cents per share,
 in the prior year period.  Excluding the effect of the SFAS No. 133 accounting
 change and a derivative fair value gain, Cross Timbers reported record first
 quarter 2001 earnings of $90.9 million, or $1.14 per share.  Earnings for the
 prior year period, excluding gains and losses related to derivatives and asset
 sales, were $14.1 million, or 19 cents per share.
     First quarter daily gas production averaged 383 million cubic feet, a
 14% increase compared to first quarter 2000 production of 336 million cubic
 feet.  Daily oil production for the first quarter was 13,664 barrels, up
 slightly from first quarter 2000.  During the quarter, natural gas liquids
 production was 3,980 barrels per day, a 6% decrease from the prior year
 quarter.  Increased gas production is attributable to the Company's property
 development activity.
     "Our record quarter amplifies the Company's momentum as we rapidly grow
 our production and reserves," stated Bob R. Simpson, Chairman and Chief
 Executive Officer.  "Our commitment to an aggressive value-creating business
 will continue to generate successive quarters of outstanding results as we
 move toward our goal of 20% annual gas production growth and 3 Tcfe of
 reserves by the end of next year."
     Steffen E. Palko, Vice Chairman and President further noted, "Our
 development portfolio offers a unique opportunity.  With targeted upsides
 exceeding 1.5 Tcfe, shareholders will enjoy multi-year, double-digit growth
 and exceptional economics at any gas price above $2.50 per Mcf."
     Including the effect of the SFAS No. 133 accounting change and net
 derivative gains, the Company reported first quarter earnings of $46.7 million
 or 59 cents per share compared with first quarter 2000 earnings of
 $33.3 million, or 46 cents per share.  The cumulative effect of adoption of
 the new derivative accounting principle, SFAS No. 133, resulted in a first
 quarter 2001 after-tax charge of $44.6 million.
     "SFAS No. 133 primarily affects the timing of recognition of derivative-
 related gains and losses," noted Louis G. Baldwin, Executive Vice President
 and Chief Financial Officer.  "Given current commodity prices, most of the
 effect of its adoption is expected to be offset during the remainder of 2001
 through derivative gains or recognition of higher gas revenue.  We remain
 committed to increasing equity to 50% of book capitalization by year end."
     Total revenues for the first quarter were $249.2 million, 120% above first
 quarter 2000 revenues of $113.3 million.  Operating income for the quarter was
 $157.6 million, a 319% increase over first quarter 2000 operating income of
 $37.6 million.
     The average gas price for the first quarter increased 148% to $5.97 per
 thousand cubic feet (Mcf) from $2.41 per Mcf in first quarter 2000.  The first
 quarter average oil price was $26.43 per barrel, a 5% increase from last
 year's first quarter average price of $25.12.  Natural gas liquids prices
 averaged $22.10 per barrel for the quarter, 19% higher than the 2000 quarter
 average price of $18.55.
 
     Cross Timbers Oil Company is a premier domestic natural gas producer
 engaged in the acquisition, exploitation and development of quality,
 long-lived oil and gas properties.  The Company, whose predecessor companies
 were established in 1986, completed its initial public offering in May 1993.
 Its properties are concentrated in Texas, Oklahoma, Kansas, New Mexico,
 Arkansas, Wyoming, Alaska and Louisiana.
 
      Contact:  John M. O'Rear              Gary D. Simpson
                Vice President & Treasurer  Vice President - Investor Relations
                Cross Timbers Oil Company   Cross Timbers Oil Company
                817/870-2800                817/870-2800
 
     Company management will host a conference call at 4:00 P.M. (EDT) on
 Wednesday, April 25th.  The call may be accessed at our Company Web site:
 www.crosstimbers.com
 
     Statements concerning future financial results, development activities,
 gas production and proved reserves are forward-looking statements within the
 meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
 Securities Act of 1934.  These statements are based on assumptions concerning
 commodity prices, drilling results and production 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 there is no assurance that these goals
 and projections can or will be met.  Any number of factors could cause actual
 results to differ materially from those in the forward-looking statements,
 including, but not limited to, the timing and extent of changes in oil and gas
 prices and the timing and results of drilling activity.  The Company
 undertakes no obligation to publicly update or revise any forward-looking
 statements.  Further information 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.
 
 
      CROSS TIMBERS OIL COMPANY
      (in thousands, except production, per share and per unit data)
 
                                                       Three Months Ended
                                                             March 31,
                                                        2001          2000
      Consolidated Income Statements
 
      REVENUES
        Oil and condensate                            $  32,500     $  31,083
        Gas and natural gas liquids                     213,638        80,746
        Gas gathering, processing and marketing           3,156         1,638
        Other                                              (142)         (141)
          Total Revenues                                249,152       113,326
 
      EXPENSES
        Production                                       26,666        19,918
        Taxes, transportation and other                  21,911        10,835
        Exploration (A)                                     234           362
        Depreciation, depletion and amortization         33,991        31,937
        Gas gathering and processing                      2,297         2,233
        General and administrative (B)                    7,191         7,361
        Derivative fair value (gain) loss (C)              (735)        3,044
          Total Expenses                                 91,555        75,690
 
      OPERATING INCOME                                  157,597        37,636
 
      OTHER INCOME (EXPENSE)
        Gain on significant property divestitures           ---        18,979
        Gain on investment in equity securities             ---        13,092
        Interest expense, net                           (16,032)      (18,637)
          Total Other Income                            (16,032)       13,434
 
      INCOME BEFORE INCOME TAX, MINORITY INTEREST
       AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE       141,565        51,070
 
      INCOME TAX
        Current                                          15,013           284
        Deferred                                         35,215        17,015
          Total Income Tax Expense                       50,228        17,299
 
      MINORITY INTEREST
        In Net Income of Consolidated Subsidiaries          ---           (59)
 
      NET INCOME BEFORE CUMULATIVE EFFECT
       OF ACCOUNTING CHANGE                              91,337        33,712
 
        Cumulative effect of accounting change,
         net of tax (D)                                 (44,589)          ---
 
      NET INCOME                                         46,748        33,712
 
        Preferred stock dividends                           ---          (445)
 
      EARNINGS AVAILABLE TO COMMON STOCK              $  46,748     $  33,267
 
      EARNINGS PER COMMON SHARE
        Basic                                         $    0.59     $    0.46
        Diluted                                       $    0.56     $    0.44
 
      WEIGHTED AVERAGE COMMON SHARES OUTSTANDING         79,760        72,441
 
      Consolidated Statement of Cash Flows Data
 
        Cash Flow from Operations, before changes
         in operating assets and liabilities and
         exploration expense                          $ 159,356     $  55,730
 
      Average Daily Production
 
        Oil (Bbls)                                       13,664        13,600
        Gas (Mcf)                                       382,977       335,913
        Natural Gas Liquids (Bbls)                        3,980         4,249
 
      Average Sales Prices
 
        Oil (per Bbl)                                 $   26.43     $   25.12
        Gas (per Mcf)                                 $    5.97     $    2.41
        Natural Gas Liquids (per Bbl)                 $   22.10     $   18.55
 
 
                                                     March 31,    December 31,
                                                        2001          2000
 
      Consolidated Balance Sheet Data
 
        Total Assets                                 $1,816,971    $1,591,904
        Long-term Debt                               $  830,000    $  769,000
        Total Stockholders' Equity                   $  516,778    $  497,367
 
      (A)  Primarily includes geological and geophysical costs.
      (B)  Includes non-cash incentive compensation of $300,000 in the
           three-month 2001 period and $2.4 million for the three-month 2000
           period.
      (C)  Reflects the change in fair value of derivative financial
           instruments not providing effective hedges.
      (D)  Charge for initial adoption of Statement of Financial Accounting
           Standards No. 133, Accounting for Derivative Investments and Hedging
           Activities, as of January 1, 2001.
 
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SOURCE Cross Timbers Oil Company
    FORT WORTH, Texas, April 25 /PRNewswire Interactive Release/ -- Cross
 Timbers Oil Company (NYSE:   XTO) today reported record first quarter results,
 including natural gas production, cash flow from operations and earnings
 before the effect of the SFAS No. 133 accounting change for derivatives.
     First quarter cash flow from operations, before changes in operating
 assets and liabilities and exploration expense, increased 186% to a record
 $159.4 million, or $2.00 per share, from $55.7 million, or 77 cents per share,
 in the prior year period.  Excluding the effect of the SFAS No. 133 accounting
 change and a derivative fair value gain, Cross Timbers reported record first
 quarter 2001 earnings of $90.9 million, or $1.14 per share.  Earnings for the
 prior year period, excluding gains and losses related to derivatives and asset
 sales, were $14.1 million, or 19 cents per share.
     First quarter daily gas production averaged 383 million cubic feet, a
 14% increase compared to first quarter 2000 production of 336 million cubic
 feet.  Daily oil production for the first quarter was 13,664 barrels, up
 slightly from first quarter 2000.  During the quarter, natural gas liquids
 production was 3,980 barrels per day, a 6% decrease from the prior year
 quarter.  Increased gas production is attributable to the Company's property
 development activity.
     "Our record quarter amplifies the Company's momentum as we rapidly grow
 our production and reserves," stated Bob R. Simpson, Chairman and Chief
 Executive Officer.  "Our commitment to an aggressive value-creating business
 will continue to generate successive quarters of outstanding results as we
 move toward our goal of 20% annual gas production growth and 3 Tcfe of
 reserves by the end of next year."
     Steffen E. Palko, Vice Chairman and President further noted, "Our
 development portfolio offers a unique opportunity.  With targeted upsides
 exceeding 1.5 Tcfe, shareholders will enjoy multi-year, double-digit growth
 and exceptional economics at any gas price above $2.50 per Mcf."
     Including the effect of the SFAS No. 133 accounting change and net
 derivative gains, the Company reported first quarter earnings of $46.7 million
 or 59 cents per share compared with first quarter 2000 earnings of
 $33.3 million, or 46 cents per share.  The cumulative effect of adoption of
 the new derivative accounting principle, SFAS No. 133, resulted in a first
 quarter 2001 after-tax charge of $44.6 million.
     "SFAS No. 133 primarily affects the timing of recognition of derivative-
 related gains and losses," noted Louis G. Baldwin, Executive Vice President
 and Chief Financial Officer.  "Given current commodity prices, most of the
 effect of its adoption is expected to be offset during the remainder of 2001
 through derivative gains or recognition of higher gas revenue.  We remain
 committed to increasing equity to 50% of book capitalization by year end."
     Total revenues for the first quarter were $249.2 million, 120% above first
 quarter 2000 revenues of $113.3 million.  Operating income for the quarter was
 $157.6 million, a 319% increase over first quarter 2000 operating income of
 $37.6 million.
     The average gas price for the first quarter increased 148% to $5.97 per
 thousand cubic feet (Mcf) from $2.41 per Mcf in first quarter 2000.  The first
 quarter average oil price was $26.43 per barrel, a 5% increase from last
 year's first quarter average price of $25.12.  Natural gas liquids prices
 averaged $22.10 per barrel for the quarter, 19% higher than the 2000 quarter
 average price of $18.55.
 
     Cross Timbers Oil Company is a premier domestic natural gas producer
 engaged in the acquisition, exploitation and development of quality,
 long-lived oil and gas properties.  The Company, whose predecessor companies
 were established in 1986, completed its initial public offering in May 1993.
 Its properties are concentrated in Texas, Oklahoma, Kansas, New Mexico,
 Arkansas, Wyoming, Alaska and Louisiana.
 
      Contact:  John M. O'Rear              Gary D. Simpson
                Vice President & Treasurer  Vice President - Investor Relations
                Cross Timbers Oil Company   Cross Timbers Oil Company
                817/870-2800                817/870-2800
 
     Company management will host a conference call at 4:00 P.M. (EDT) on
 Wednesday, April 25th.  The call may be accessed at our Company Web site:
 www.crosstimbers.com
 
     Statements concerning future financial results, development activities,
 gas production and proved reserves are forward-looking statements within the
 meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
 Securities Act of 1934.  These statements are based on assumptions concerning
 commodity prices, drilling results and production 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 there is no assurance that these goals
 and projections can or will be met.  Any number of factors could cause actual
 results to differ materially from those in the forward-looking statements,
 including, but not limited to, the timing and extent of changes in oil and gas
 prices and the timing and results of drilling activity.  The Company
 undertakes no obligation to publicly update or revise any forward-looking
 statements.  Further information 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.
 
 
      CROSS TIMBERS OIL COMPANY
      (in thousands, except production, per share and per unit data)
 
                                                       Three Months Ended
                                                             March 31,
                                                        2001          2000
      Consolidated Income Statements
 
      REVENUES
        Oil and condensate                            $  32,500     $  31,083
        Gas and natural gas liquids                     213,638        80,746
        Gas gathering, processing and marketing           3,156         1,638
        Other                                              (142)         (141)
          Total Revenues                                249,152       113,326
 
      EXPENSES
        Production                                       26,666        19,918
        Taxes, transportation and other                  21,911        10,835
        Exploration (A)                                     234           362
        Depreciation, depletion and amortization         33,991        31,937
        Gas gathering and processing                      2,297         2,233
        General and administrative (B)                    7,191         7,361
        Derivative fair value (gain) loss (C)              (735)        3,044
          Total Expenses                                 91,555        75,690
 
      OPERATING INCOME                                  157,597        37,636
 
      OTHER INCOME (EXPENSE)
        Gain on significant property divestitures           ---        18,979
        Gain on investment in equity securities             ---        13,092
        Interest expense, net                           (16,032)      (18,637)
          Total Other Income                            (16,032)       13,434
 
      INCOME BEFORE INCOME TAX, MINORITY INTEREST
       AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE       141,565        51,070
 
      INCOME TAX
        Current                                          15,013           284
        Deferred                                         35,215        17,015
          Total Income Tax Expense                       50,228        17,299
 
      MINORITY INTEREST
        In Net Income of Consolidated Subsidiaries          ---           (59)
 
      NET INCOME BEFORE CUMULATIVE EFFECT
       OF ACCOUNTING CHANGE                              91,337        33,712
 
        Cumulative effect of accounting change,
         net of tax (D)                                 (44,589)          ---
 
      NET INCOME                                         46,748        33,712
 
        Preferred stock dividends                           ---          (445)
 
      EARNINGS AVAILABLE TO COMMON STOCK              $  46,748     $  33,267
 
      EARNINGS PER COMMON SHARE
        Basic                                         $    0.59     $    0.46
        Diluted                                       $    0.56     $    0.44
 
      WEIGHTED AVERAGE COMMON SHARES OUTSTANDING         79,760        72,441
 
      Consolidated Statement of Cash Flows Data
 
        Cash Flow from Operations, before changes
         in operating assets and liabilities and
         exploration expense                          $ 159,356     $  55,730
 
      Average Daily Production
 
        Oil (Bbls)                                       13,664        13,600
        Gas (Mcf)                                       382,977       335,913
        Natural Gas Liquids (Bbls)                        3,980         4,249
 
      Average Sales Prices
 
        Oil (per Bbl)                                 $   26.43     $   25.12
        Gas (per Mcf)                                 $    5.97     $    2.41
        Natural Gas Liquids (per Bbl)                 $   22.10     $   18.55
 
 
                                                     March 31,    December 31,
                                                        2001          2000
 
      Consolidated Balance Sheet Data
 
        Total Assets                                 $1,816,971    $1,591,904
        Long-term Debt                               $  830,000    $  769,000
        Total Stockholders' Equity                   $  516,778    $  497,367
 
      (A)  Primarily includes geological and geophysical costs.
      (B)  Includes non-cash incentive compensation of $300,000 in the
           three-month 2001 period and $2.4 million for the three-month 2000
           period.
      (C)  Reflects the change in fair value of derivative financial
           instruments not providing effective hedges.
      (D)  Charge for initial adoption of Statement of Financial Accounting
           Standards No. 133, Accounting for Derivative Investments and Hedging
           Activities, as of January 1, 2001.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X13578364
 
 SOURCE  Cross Timbers Oil Company