XTO Energy Inc. said Tuesday it has agreed to acquire $1 billion worth of oil and gas properties, which will help it reach significantly higher production and reserve targets.

The Fort Worth-based oil and gas producer also said it will not pursue the master limited partnership it had been considering for certain assets.

XTO has agreed with multiple parties to acquire more than 25 sites in Texas, Louisiana, New Mexico and Colorado. Chief Executive Bob Simpson said the company expects to acquire further assets in 2008.

“XTO is well positioned to continue to purchase ‘bolt-on’ properties,” Simpson said in the statement. The company will not establish the MLP, he said, because of its bullish outlook as well as recent uncertainty in the financial markets.

XTO expects the acquisitions to close within the first quarter and add 212 billion cubic feet of natural-gas equivalent to its proved reserves. That represents about 1.9 percent of the total reserves XTO reported at the end of 2007.

The acquisitions will help XTO reach its targets to significantly increase production and reserves in the near term. The company said it expects to lift production 17 percent to 20 percent this year and is targeting 32.9 percent more reserves by the end of 2009.

Two thirds of the reserve additions will come from developing existing assets, with the rest from acquisitions, Simpson said.

Also Tuesday, XTO said its profit rose in the fourth quarter as higher prices for oil and natural-gas liquids offset lower natural-gas prices.

The oil and gas producer’s net income rose 8.2 percent to $464 million, or 95 cents per share, from $429 million, or 92 cents per share, a year earlier. Revenue rose 32.9 percent to $1.59 billion from $1.2 billion.

Analysts polled by Thomson Financial expected a profit of 92 cents per share on revenue of $1.54 billion, on average.

XTO lifted overall production nearly 30 percent during the quarter. The company posted a 25 percent rise in realized oil prices as well as a 69 percent rise in realized prices for natural-gas liquids, on average. Its realized natural-gas prices fell 4 percent.

Full-year earnings were hurt by a decline in the value of its derivative contracts in 2007 and a significant special gain in 2006.

XTO’s profit fell 9.1 percent to $1.69 billion, or $3.53 per share, in 2007, from $1.86 billion, or $4.02 per share, in 2006. Its revenue rose 20.5 percent to $5.51 billion from $4.58 billion.

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