XTO Energy

XTO Energy doesn’t actually find new sources of oil and gas. Instead, the Fort Worth company, under CEO Bob Simpson, has thrived by doing what it calls “wildcat exploitation.” It snaps up existing wells and fields in the U.S. where production has already declined to about half the initial rate. The company figures that it can squeeze out years—or decades—worth of oil and gas at lower costs through better management and by drilling new wells in already-producing fields. The strategy has worked. Production has grown 13 years in a row. Since a 1993 IPO at a price of 13, the stock has split seven times, rising to today’s 51.38. In 2006, revenues and net income jumped 30% and 61%, respectively, from 2005. There’s no end in sight. XTO’s proven reserves, concentrated in Texas, New Mexico, Arkansas, and nearby states, are at their highest levels ever, all ready to be tapped.

Overall Grade


Market Data


Market Value

$18.9 Billion




Sales Growth Rate**



12-Month Sales

$4.6 Billion

12-Month Net Income

$1.9 Billion

Total Return Past 12 Months


Past 36 Months


Economic SectorEnergy
IndustryOil & Gas Exploration & Production
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.

Bob R. Simpson

Bob R. Simpson, 58

CEO since 1996

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Data as of 2/28/07 provided by Standard & Poor's Compustat