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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 30, 1999
CROSS TIMBERS OIL COMPANY
(Exact name of registrant as specified in its charter)
Delaware 1-10662 75-2347769
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
810 Houston Street, Suite 2000, Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)
(817) 870-2800
(Registrant's telephone number, including area code)
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Item 5. Other Events.
On August 30, 1999, Cross Timbers Oil Company, a Delaware corporation
("the Company"), issued news release number 99-17 (Exhibit 99.1) regarding its
strategic goals for 2000.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit Number
and Description Page
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99.1 Cross Timbers Oil Company News Release Number 99-17 4
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CROSS TIMBERS OIL COMPANY
Date: September 7, 1999 By: /s/ LOUIS G. BALDWIN
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Louis G. Baldwin
Senior Vice President and
Chief Financial Officer
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EXHIBIT 99.1
[CROSS TIMBERS OIL COMPANY NEWS RELEASE LETTERHEAD]
Number 99-17
CROSS TIMBERS ANNOUNCES STRATEGIC GOALS FOR 2000
FORT WORTH, TX (Aug. 30, 1999) - Cross Timbers Oil Company (NYSE-XTO) today
announced strategic goals for 2000, including cash flow from operations of $4.00
per share, proved reserves of 40 Mcfe per share and debt of $.40 per Mcfe.
These goals assume a NYMEX natural gas price of $2.70 per Mcf and a NYMEX price
for crude oil of $21.00 per barrel. The Company's consolidated cash flow per
share should exceed $.80 per share for the third quarter of 1999 and $1.00 in
the fourth quarter based upon current oil and gas prices.
"Our aggressive goals are made possible by the recent acquisition of almost
1/2 trillion cubic feet of natural gas reserves in the Arkoma Basin," stated Bob
R. Simpson, Chairman and CEO. "These acquisitions significantly increase our
exposure to gas during a period of increasing prices. Additionally, we expect
to increase reserves on the Arkoma acquisitions by at least 50% through our
development program over the next few years, in line with our historical
performance on previous acquisitions.
"We anticipate that stockholders' equity will increase from several sources
including: gains from asset sales, net income and a potential equity offering.
Equity will not be offered, however, until our stock price is substantially
higher. We believe that an improved balance sheet coupled with achievement of
these goals will create an equity that will trade at 6 to 8 times cash flow or
$24 to $32 per share." Simpson concluded.
The Company expects development expenditures of $100 million to $120
million in 2000, which are expected to be funded from cash flow. Cash flow in
excess of development will be used to pay down debt or to acquire producing
properties. Asset sales, including the sale of royalty trust units, will be
used to reduce debt.
"We expect 1999 to be another year of significant reserve additions as a
result of our highly successful development activities. Proved reserves at
year-end 1999, assuming no property sales, are expected to exceed two trillion
cubic feet of natural gas equivalents," Steve Palko, Cross Timbers' President
noted. "We believe that Cross Timbers will be ranked among the top ten
independents based on domestic proved reserves.
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Page 2 - Cross Timbers Announces Strategic Goals For 2000
"Our acquisition strategy leads us to pursue high-quality producing
properties, which we define as properties with highly predictable production, a
long production life, high margins and significant upside potential. Based on
this criteria, our current reserve base is the highest quality we've ever had.
"Acquisitions made during the last 18 months in the San Juan Basin and in
East Texas are substantially ahead of projections, with reserve additions
expected to exceed 75% for each acquisition." Palko continued. "Production from
these acquisitions is already 20% higher than at the time of purchase."
Cross Timbers Oil Company is engaged in the acquisition, exploitation and
development of quality, long-lived producing 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 and Alaska.
Contact: Louis G. Baldwin
Senior Vice President and Chief Financial Officer
Cross Timbers Oil Company
817/870-2800
Statements concerning future financial results, production, development
expenditures and future acquisitions and debt levels are forward-looking
statements. 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. 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.
This release can be found at the Company Web site at www.crosstimbers.com
