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XTO buying Hunt Petroleum for $4.19 billion

XTO Energy said Tuesday it is buying Hunt Petroleum Corp., the historic Dallas company founded 80 years ago by legendary wildcatter H.L. Hunt, in a deal worth nearly $4.2 billion in cash and stock.

About 70 percent of the Hunt property is in East Texas and Louisiana, already big areas of operation for Fort Worth-based XTO. Most of the rest is along the Gulf Coast, both onshore and offshore, with the remainder in Europe’s North Sea. The production is about 80 percent natural gas and 20 percent oil.

XTO Chairman Bob Simpson called the transaction "a history-making deal for XTO," which also boosted its growth forecast for the rest of the year. XTO officials said its production of natural gas and crude oil should rise about 30 percent based on the Hunt acquisition and last month’s purchase of Dallas-based Headington Oil for $1.85 billion.

XTO will pay $2.6 billion in cash for Hunt Petroleum, plus 23.5 million shares of XTO stock (ticker: XTO). XTO’s shares jumped on the news but were largely unchanged at midday.

XTO said it expects to close the purchase by Sept. 3.

The transaction concludes efforts begun by the Hunt family late last year to sell the privately held company. Family members were in a court fight over ownership following the death last year of Margaret Hunt Hill, eldest daughter of H.L. Hunt.

Hunt Petroleum is separate from Hunt Oil, the Dallas company controlled by Ray L. Hunt, son of H.L. Hunt, who died in 1974.

It is the fifth major acquisition announced by XTO this year, and by far the largest. Altogether, XTO has bought properties worth about $8.5 billion in 2008, and Chairman Bob Simpson told investors he probably will make further acquisitions this year worth between $1 billion and $1.5 billion