THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

XTO Energy Inc. (XTO)

4/13/2006 Proxy Information

Mr. Kevil, a Certified Public Accountant, retired from XTO Energy, Inc. in 1997. He served as Vice President of Taxation or held similar positions with XTO and its predecessors from 1987 to 1997.

Mr. Randall, a director of the Company, was a co-founder and director of Randall & Dewey Partners, LP. In January 2005, Randall & Dewey Partners, LP was acquired by Jefferies Group, Inc. The company now operates as Randall & Dewey, a Division of Jefferies & Company, Inc. The Company, following approval by the disinterested members of the Board of Directors in accordance with Delaware General Corporation Law, hired Randall & Dewey for advisory and consulting services in connection with acquisitions and other strategic transactions by the Company in 2005. During 2005, the Company paid Randall & Dewey $5,040,000. Additionally, during 2005, Randall & Dewey represented a party that sold $25,000,000 in properties to the Company. Randall & Dewey received transaction fees of approximately $350,000 from the seller in connection with that transaction. The Board was advised of Randall & Dewey’s representation of the seller prior to the approval of the transaction by the disinterested directors. The Company also paid Jefferies & Company, Inc. a fee of $52,000 during 2005 as an underwriter on a senior note offering by the Company. Jefferies & Company Inc. was also an underwriter on a senior note offering by the Company in March 2006. The disinterested members of the Board have authorized the Company to engage Randall & Dewey to act as a broker in connection with the potential sale of certain of the Company’s assets, and the Company expects that Randall & Dewey will provide additional services to the Company in 2006.

In August 2004, the Company entered into an exchange agreement with three companies that are either wholly owned or majority owned by David L. Simpson and April D. Simpson, adult children of Bob R. Simpson, Chairman of the Board and Chief Executive Officer, and one of which was partially owned by Mr. Simpson’s brother, Ken Simpson. Under the agreement, the Company transferred to the three companies a total of $37,800,000 of oil and gas properties acquired by the Company in August 2004 from Chevron U.S.A. Inc. (“ChevronTexaco”) and other miscellaneous properties acquired in 2003, in exchange for 19,000 net contiguous acres in the Company’s new core operating area, the Barnett Shale of North Texas, and $25,400,000 in cash or other consideration. In connection with this exchange, the Company also granted these companies an option to purchase other properties included in the ChevronTexaco acquisition at the allocated value. On March 1, 2005, these companies purchased the option properties for an adjusted purchase price of $11,500,000. The purchase price paid for the properties equaled the value the Company allocated to the properties when they were acquired by the Company, with adjustments for certain expenditures by the Company between the date acquired and the date they were sold. The properties transferred were considered non-strategic, and most of the properties transferred had been previously identified for disposition at the time of the acquisition from ChevronTexaco. The Company’s internal engineers provided an evaluation of the transaction, and the Company obtained a fairness opinion from Lehman Brothers Inc. regarding the fairness to the Company of the consideration being received for the properties. The Audit Committee and the Board of Directors were informed of the interest of Mr. Simpson’s children and brother in the transaction, and they reviewed the fairness opinion prior to approving the transactions in accordance with Delaware General Corporation Law.

Effective November 15, 2005, the Company entered into indemnification agreements with its directors, executive officers, and certain other officers. The general purpose of the indemnification agreements is to indemnify the directors and officers to the fullest extent permitted by law against risks of claims and actions against them arising out of their service to and activities on behalf of the Company. The agreements require the Company to advance expenses to such persons in connection with claims made against them and are in addition to any other rights the Company’s directors and officers may have under the Company’s Restated Certificate of Incorporation, Bylaws and applicable law. These agreements were approved in part to enable the Company to attract and retain qualified directors and officers.

4/15/2005 Proxy Information

Mr. Kevil served as Vice President of Taxation or held similar positions with XTO Energy, Inc. and its predecessors from 1987 to 1997.

Mr. Randall, a director of the Company, was a co-founder and director of Randall & Dewey Partners, LP. The Company, following approval by the Board of Directors in accordance with Delaware General Corporation Law, entered into an agreement with Randall & Dewey to establish fees the Company would pay Randall & Dewey for advisory and consulting services it provided in connection with acquisitions and other strategic transactions by the Company. The agreement was effective from November 2003 through December 2004 and applied to an expected maximum of $800 million in transactions by the Company. Under the agreement, the Company agreed to pay Randall & Dewey a transaction fee of $250,000 on the first transaction closed, plus a transaction fee equal to 0.75% for the first $800 million in transactions. For transactions in excess of $800 million during 2004, the Board of Directors separately approved payment to Randall & Dewey of a transaction fee of 0.55%. During 2004, the Company paid Randall & Dewey $8.8 million. Additionally, during 2004, Randall & Dewey represented several sellers of properties to the Company totaling $186 million, for which Randall & Dewey received transaction fees of approximately $1.84 million from the sellers. Randall & Dewey Partners, LP was acquired by Jefferies Group, Inc. in January 2005. The company now operates as Randall & Dewey Division of Jefferies & Company Inc. We expect that Randall & Dewey Division of Jefferies & Company Inc. will provide services to the Company in 2005.

In August 2004, the Company entered into an exchange agreement with three companies that are either wholly owned or majority owned by David L. Simpson and April S. McKnight, adult children of Bob R. Simpson, Chairman of the Board and Chief Executive Officer, and one of which was partially owned by Mr. Simpson’s brother, Ken Simpson. Under the agreement, the Company transferred to the three companies a total of $37.8 million of oil and gas properties acquired by the Company in August 2004 from Chevron U.S.A. Inc. (“ChevronTexaco”) and other miscellaneous properties acquired in 2003, in exchange for 19,000 net contiguous acres in the Company’s new core operating area, the Barnett Shale of North Texas, and $25.4 million in cash or other consideration. In connection with this exchange, the Company also granted these companies an option to purchase other properties included in the ChevronTexaco acquisition at the allocated value. On March 1, 2005, these companies purchased the option properties for an adjusted purchase price of $11.5 million. The purchase price paid for the properties equaled the value the Company allocated to the properties when they were acquired by the Company, with adjustments for certain expenditures by the Company between the date acquired and the date they were sold. The properties transferred were considered nonstrategic and most of the properties transferred had been previously identified for disposition at the time of the acquisition from ChevronTexaco. The Company’s internal engineers provided an evaluation of the transaction, and the Company obtained a fairness opinion from Lehman Brothers Inc. regarding the fairness to the Company of the consideration being received for the properties. The Audit Committee and the Board of Directors were informed of the interest of Mr. Simpson’s children and brother in the transaction, and they reviewed the fairness opinion prior to approving the transaction in accordance with Delaware General Corporation Law.

Mr. Steffen Palko’s son, Erich Palko, is an employee of XTO Energy with the title of Manager, Reservoir Development, Mid-Continent. In 2004, he was paid annual compensation in excess of $60,000. Erich Palko is not an officer of the Company and did not report directly to Mr. Steffen Palko.

4/21/2004 Proxy Information

Mr. Randall, a director of the Company, is a co-founder and director of Randall & Dewey, LP. The Company, following approval by the Board of Directors in accordance with Delaware General Corporation Law, entered into an agreement with Randall & Dewey to establish fees the Company will pay Randall & Dewey for any advisory or consulting services they provide in connection with acquisitions and other strategic transactions by the Company. The agreement is effective from November 2003 through December 2004 and applies to an expected maximum of $800 million in transactions by the Company. Under the agreement, Randall & Dewey will receive a fee of $250,000, plus a transaction fee equal to 0.75% of the transaction value, for the first transaction, and will receive only the transaction fee for subsequent transactions. No fees had been paid under this agreement as of March 31, 2004, but Randall & Dewey has provided services in connection with several transactions for which they will be entitled to receive a fee upon closing. Additionally, during 2003, Randall & Dewey represented several sellers of properties to the Company totaling $186 million for which Randall & Dewey received a fee from the sellers. In September 1999, Randall & Dewey also represented Merchant Resources #1 L.P. in its purchase from the Company of certain oil and gas properties for $63.5 million. The Company’s gas marketing subsidiary continued to market gas for Merchant Resources #1 L.P. from some of the properties sold until April 2003. Further, as a limited partner, the Company invested $584,000 in St. John’s Operating #1 L.P., which has a small limited partnership interest in Merchant Resources #1 L.P., and in which Randall & Dewey is an indirect limited partner. In April 2003, Merchant Resources #1 L.P. sold the properties it acquired from XTO Energy and will soon be making a final distribution to the Company for its interest in St. John’s Operating #1 L.P. Based on an impairment evaluation in 2003, the Company wrote down this investment to $100,000.

Mr. Kevil served as Vice President-Taxation or held similar positions with XTO Energy, Inc. and its predecessors from 1987 to 1997.

4/16/2003 Proxy Information

Relationships and Transactions with Management and Others

Mr. Randall, a director of the Company, is the 50% owner of Randall & Dewey, Inc. Randall & Dewey, Inc. performed consulting services in 2002 in connection with the Company’s acquisition of producing properties in East Texas, Louisiana and the San Juan Basin of New Mexico. As compensation for these services, Randall & Dewey, Inc. received a fee of $2,440,000, which represented 1% of the total of the property purchase price and the value of a related property exchange transaction in connection with the acquisitions of the properties. The Board of Directors had been informed that Randall & Dewey, Inc. was providing services in connection with the acquisition and approved the payment of the fees. Randall & Dewey, Inc. also represented Merchant Resources #1 L.P. in its purchase on September 14, 1999 from the Company of certain oil and gas properties for $63.5 million. The Company’s gas marketing subsidiary continues to market gas from some of the properties sold. Further, as a limited partner, the Company invested $600,000 in St. John’s Operating #1 L.P., which is a limited partner in Merchant Resources #1 L.P., and in which Randall & Dewey, Inc. is an indirect limited partner. We expect that Randall & Dewey, Inc. will provide services to the Company in 2003.

Compensation Committee Interlocks and Insider Participation in Compensation Decisions

Mr. Simons, a member of the Compensation Committee, is of counsel with the law firm of Winstead Sechrest & Minick P.C., which provided services to the Company in 2002. During 2002, the Company incurred fees of $4,565 and expenses of $207 with Winstead Sechrest & Minick P.C. The Company does not intend to use the firm for services in 2003.

Effective August 2002, the Company adopted an Outside Director Severance Plan. The plan provides that in the event of a change in control of the Company, each non-employee director and each non-employee advisory director will receive a payment equal to three times the annual cash retainer then in effect for such directors and advisory directors plus an amount equal to three times the number of performance shares most recently granted to the director or advisory director as part of their annual compensation multiplied by the closing price of the Company’s common stock on the day a change in control occurs. A “change in control” of the Company is deemed to have occurred only if: any person, or persons acting together as a group, shall become the direct or indirect beneficial owners of more than 25% of the Company’s voting shares; a merger or consolidation results in the Company’s stockholders holding less than 50% of the voting shares of the surviving entity; certain specified majority changes in the composition of the Board of Directors occur; or a plan or agreement is adopted, approved, or executed to dispose of all or substantially all the assets or outstanding Common Stock.