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• Financials
• Form 10-K Table of Contents
• Part IV Exhibits and Financial Statement Schedules
• 15. 5. Consolidated Statements
• 15. 5. 1. Accounting Policies
• 15. 2. Party Transactions
• 15. 3. Debt
• 15. 4. Income Tax
• 15. 5. Retirement Obligations
• 15. 6. Commitments
• 15. 7. Financial Instruments
• 15. 8. Commodity Sales
• 15. 9. Equity
• 15. 10. Earnings Per Share
• 15. 11. Cash Flow
• 15. 12. Employee Benefit Plans
• 15. 13. Acquisitions
• 15. 14. Quarterly Financial Data
• 15. 15. Supplemental Financial Info

Part IV

Item 15.

Exhibits and Financial Statement Schedules

XTO ENERGY INC. Notes to Consolidated Financial Statements

3. Debt

Our long-term debt consists of the following:

	December 31
(in millions)	2007		2006
Bank debt:
Commercial paper, 5.38% at December 31, 2007 and 5.45% at December 31, 2006	$	772	$	159
Revolving credit agreement due April 2012	–		–
Term loan due April 2012, 5.72% at December 31, 2007 and 6.06% at December 31, 2006	300		300
Senior notes:
7.50%, due April 15, 2012	350		350
5.90%, due August 1, 2012, plus premium	553		–
6.25%, due April 15, 2013	400		400
4.90%, due February 1, 2014, net of discount	497		497
5.00%, due January 31, 2015, net of discount	350		350
5.30%, due June 30, 2015, net of discount	399		399
5.65%, due April 1, 2016, net of discount	400		400
6.25%, due August 1, 2017, plus premium	753		–
6.10%, due April 1, 2036, net of discount	596		596
6.75%, due August 1, 2037, plus premium	950		–
Total long-term debt	$	6,320	$	3,451

Because we had both the intent and ability to refinance the commercial paper balance outstanding with borrowings under our revolving credit facility due in April 2012, we have classified these borrowings as long-term debt in our consolidated balance sheets. Before the stated maturities of April 2012, we may renegotiate the revolving credit agreement and term loan to increase the borrowing commitment and/or extend the maturity.

Commercial Paper

In February 2008, we increased our commercial paper program availability to $2.5 billion. Borrowings under the commercial paper program reduce our available capacity under the revolving credit facility on a dollar-for-dollar basis. The commercial paper borrowings may have terms up to 397 days and bear interest at rates agreed to at the time of the borrowing. The interest rate is based on a standard index such as the Federal Funds Rate, LIBOR, or the money market rate as found on the commercial paper market. On December 31, 2007, borrowings were $772 million at a weighted average interest rate of 5.38%. The weighted average interest rate on commercial paper borrowings was 5.42% during 2007.

Bank Debt

On December 31, 2007, we had no borrowings under our revolving credit agreement with commercial banks, and we had available borrowing capacity of $1.2 billion net of our commercial paper borrowings. In February 2008, we amended this agreement to, among other things, increase the borrowing capability to $2.5 billion and to extend the maturity date to April 1, 2013. We have annual options to request successive one-year extensions and the option to increase the commitment up to an additional $1.0 billion. The interest rate on any borrowing is generally based on the one-month LIBOR plus 0.40%. Interest is paid at maturity, or quarterly if the term is for a period of 90 days or more. We also incur a commitment fee on unused borrowing commitments, which is 0.09%. The agreement requires us to maintain a debt-to-total capitalization ratio of not more than 65%. We use the facility for general corporate purposes and as a backup facility for our commercial paper program. We did not make any borrowings under our revolving credit facility during 2007.

In February 2008, we also amended our $300 million term loan credit agreement to increase outstanding borrowings to $500 million and to extend the maturity date to April 1, 2013. In March 2007, we amended our $300 million term loan credit agreement to conform its covenants and pricing to our bank revolving credit agreement and to extend the maturity.

Additionally in February 2008, we entered into a new five-year unsecured term loan agreement with The Royal Bank of Scotland Finance (Ireland) that provides for a maximum loan amount of $100 million available in a single advance that matures February 5, 2013. The interest rate is currently based on LIBOR plus 0.34%, and interest is paid at least quarterly. Other terms and conditions are substantially the same as our term loan. The proceeds were used for general corporate purposes.

We have unsecured and uncommitted lines of credit with commercial banks totaling $300 million. As of December 31, 2007, there were no borrowings under these lines.

Senior Notes

In January 2004, we sold $500 million of 4.9% senior notes that were issued at 99.34% of par to yield 4.98% to maturity. The notes mature in February 2014 and interest is payable each February 1 and August 1. Net proceeds of $490 million were used to fund our January 2004 property acquisitions and to reduce bank debt.

In September 2004, we sold $350 million of 5% senior notes that were issued at 99.918% of par to yield 5.011% to maturity. The notes are due in January 2015 and interest is payable each January 31 and July 31. Net proceeds of $347 million were used to reduce bank debt associated with our 2004 acquisitions.

In April 2005, we sold $400 million of 5.3% senior notes at 99.683% of par to yield 5.338% to maturity. The notes mature in June 2015 and interest is payable each June 30 and December 30. Net proceeds of approximately $395 million were used to reduce borrowings under our bank revolving credit facility.

In March 2006, we sold $400 million of 5.65% senior notes due April 1, 2016 and $600 million of 6.1% senior notes due April 1, 2036. The 5.65% senior notes were issued at 99.917% of par to yield 5.661% to maturity. The 6.1% senior notes were issued at 99.346% of par to yield 6.148% to maturity. Interest is payable on both series of notes each April 1 and October 1, beginning October 1, 2006. Net proceeds of approximately $987 million were used to reduce borrowings outstanding under our bank revolving credit facility and for other general corporate purposes.

In July 2007, we sold $300 million of 5.9% senior notes due August 1, 2012, $450 million of 6.25% senior notes due August 1, 2017 and $500 million of 6.75% senior notes due August 1, 2037. In August 2007, we sold an additional $250 million of the 5.9% senior notes, $300 million of the 6.25% senior notes and $450 million of the 6.75% senior notes that constituted a further issuance of the senior notes issued in July 2007. Together, the 5.9% senior notes were issued at 100.585% of par to yield 5.761% to maturity. The 6.25% senior notes were issued at 100.419% of par to yield 6.193% to maturity. The 6.75% senior notes were issued at 100.022% of par to yield 6.748% to maturity. Interest is payable on each series of notes on February 1 and August 1 of each year, beginning February 1, 2008. Net proceeds of $2.24 billion were used to fund a portion of the acquisition of properties from Dominion Resources, Inc. (Note 13) and to pay down outstanding commercial paper borrowings.

The senior notes require no sinking fund. We may redeem all or a part of the senior notes at any time at a price of 100% of their principal balance plus accrued interest and a make-whole premium payment. The make-whole premium is calculated as any excess over the principal balance of the present value of remaining principal and interest payments at the U.S. Treasury rate for a comparable maturity plus no more than 0.25%.