XTO Energy shares my not look especially cheap at around $56, trading in line with peers like Apache, Anadarko Petroleum and Devon Energy, but according to Barron's the company holds a number of competitive advantages -- such as its large amount of proven and potential reserves, which will allow it to increase production going forward. The company is successful at expanding its reserves, having recently completed one of its largest deals ever with the purchase of gas-producing fields from Dominion Resources. It also is very successful at replacing reserves -- one of the biggest challenges for an energy business. Making the shares more attractive are their pullback from $64 in June amid investor nervousness as natural gas prices dropped to under $6/MCF from $8. With oil trading at over $76/bbl., Barron's says gas should be closer to $10/MCF based on historical price patterns. One asset manager who holds XTO shares values the stock at $70/share conservatively but up to $85-$100 based on higher natural gas prices.
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