XTO sets new share issue price at $48

(adds details on issue, background, Wednesday's closing share price)

NEW YORK, July 23 (Reuters) - Oil and gas producer XTO Energy (XTO.N), whose shares have slid 17 percent in the past two days, said on Wednesday it had priced the public offering of 26 million new shares at $48 per share.

The $1.25 billion that is expected to be raised by the issue will go help fund XTO's acquisitions, which total $10 billion so far this year.

On Tuesday, the company narrowly beat Wall Street forecasts by posting a 33 percent increase in quarterly earnings to $575 million. But the sharp drop in oil and natural gas prices this month, coupled with XTO's debt and share issues, has pushed the stock sharply lower.

XTO said on Tuesday it would spend more than $2 billion to buy properties in the gas-rich Barnett Shale in Texas as well as other properties.

Last month, the company announced it would buy privately held Hunt Petroleum for $4.2 billion.

Under the terms of the share issue, XTO has granted underwriter Lehman Brothers, JPMorgan and UBS Investment Bank a 30-day option to purchase up to 3.9 million additional shares to cover possible over-allotments.

The offering is expected to settle and close on July 29.

XTO's shares closed down 9.2 percent to $48.24 on the New York Stock Exchange on Wednesday.

XTO shares had rallied 33 percent during the first six months of 2008, but the shares have shed all those gains in July, and currently stand down 6 percent. (Reporting by Matt Daily; editing by Carol Bishopric)