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Gas industry

Cross Timbers Oil Co. Plans $250 Million Acquisition Spending by 1998

Strategic Insights

— 1 min read

Cross Timbers Oil Co. is set to make significant strides in the energy sector as it plans to spend $250 million on property acquisitions by 1998. The company, a natural gas and petroleum producer, has already invested $110 million in energy properties since its initial public offering last May. With a team of seasoned analysts behind it, Cross Timbers is poised to take advantage of opportunities arising from majors and other companies paring down their non-essential assets.

Key Takeaways:

  • Cross Timbers Oil Co. plans to spend $250 million on property acquisitions by 1998, in addition to the $110 million already invested since its initial public offering in May 1993.
  • The company's conservative strategy has earned praise from analysts, who believe it will stay strong as long as the industry continues to focus on selling off properties.
  • Cross Timbers has acquired numerous energy properties, including the Prentice Northeast unit in West Texas, the Quitman field in the East Texas Basin, and the Pratt field in New Mexico.
  • The company's management team, responsible for building Southland Royalty Co. into a company well-regarded on Wall Street, is committed to a responsible growth strategy.
  • Cross Timbers has set a capital budget of $18.3 million this year, focusing on natural gas development, and expects to drill 40 gas wells and conduct 65 gas-related workovers.
  • The company's cash flow is estimated to rise to $2.75-$3/share this year, from $2.03/share last year, driven by late-year acquisitions and increased production.

Statistics:

  • Cross Timbers Oil Co. plans to spend $250 million on property acquisitions by 1998.
  • The company has already invested $110 million in energy properties since its initial public offering last May.
  • Cross Timbers has acquired the Prentice Northeast unit in West Texas, which produces 3,700 b/d of oil and 1.3 MMcfd of natural gas.
  • The company's cash flow is estimated to rise to $2.75-$3/share this year, from $2.03/share last year.
  • Cross Timbers has set a capital budget of $18.3 million this year, focusing on natural gas development.

Sources:

  • Houston Chronicle, 1993
  • PaineWebber Inc. analyst David Bradshaw quoted in the Houston Chronicle, 1993

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