868809--3/2/2006--XTO_ENERGY_INC

related topics
{gas, price, oil}
{loss, insurance, financial}
{acquisition, growth, future}
{debt, indebtedness, cash}
{operation, natural, condition}
{competitive, industry, competition}
{regulation, change, law}
Oil, natural gas and natural gas liquids prices fluctuate due to a number of uncontrollable factors, and any decline will adversely affect our financial condition. Our use of hedging arrangements could result in financial losses or reduce our income. We have substantial capital requirements, and we may be unable to obtain needed financing on satisfactory terms. We have substantial indebtedness and may incur substantially more debt. Any failure to meet our debt obligations would adversely affect our business and financial condition. Competition in the oil and natural gas industry is intense, and some of our competitors have greater financial, technological and other resources than we have. The failure to replace our reserves could adversely affect our financial condition. Reserve estimates depend on many assumptions that may turn out to be inaccurate. Any material inaccuracies in our reserve estimates or underlying assumptions could cause the quantities and net present value of our reserves to be overstated. Property acquisitions are a component of our growth strategy, and our failure to complete future acquisitions successfully could reduce our earnings and slow our growth. Acquisitions are subject to the uncertainties of evaluating recoverable reserves and potential liabilities. There are risks in acquiring producing properties, including difficulties in integrating acquired properties into our business, additional liabilities and expenses associated with acquired properties, diversion of management attention, and costs of increased scope, geographic diversity and complexity of our operations. Drilling oil and natural gas wells is a high-risk activity and subjects us to a variety of factors that we cannot control. The marketability of our production is dependent upon transportation and processing facilities over which we may have no control. We are subject to complex federal, state and local laws and regulations that could adversely affect our business. Our business involves many operating risks that may result in substantial losses, and insurance may be unavailable or inadequate to protect us against these risks. Terrorist activities and military and other actions could adversely affect our business. We have limited control over the activities on properties we do not operate.

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