Oct. 21, 2009 (PR Newswire) -- HOUSTON, Oct. 21 /PRNewswire-FirstCall/ -- Newfield Exploration Company (NYSE: NFX) today reported its unaudited third quarter 2009 financial and operating results. Newfield will be hosting a conference call at 8:30 a.m. (CDT) on October 22. To participate in the call, dial 719-325-2138 or listen through the website at http://www.newfield.com.
Third Quarter 2009
For the third quarter of 2009, Newfield recorded net income of $78 million, or $0.58 per diluted share (all per share amounts are on a diluted basis). Net income includes the effect of the following items:
-- a net unrealized loss on commodity derivatives of $243 million ($155
million after-tax); and
-- the recognition of a $24 million tax benefit, or $0.18 per share,
associated with deferred tax assets in Malaysia.
Without the effect of these items, net income for the third quarter of 2009 would have been $209 million, or $1.58 per share.
Revenues in the third quarter of 2009 were $375 million. Net cash provided by operating activities before changes in operating assets and liabilities was $451 million. See "Explanation and Reconciliation of Non-GAAP Financial Measures" found after the financial statements in this release.
Newfield's production in the third quarter of 2009 was 65.5 Bcfe, an increase of 7% over the third quarter of 2008. Newfield's oil liftings in the third quarter were 3.8 MMBbls, or an average of approximately 41,300 BOPD. This represents a 40% increase over the same period in 2008 and is primarily attributable to the timing of international oil liftings. Natural gas production in the third quarter was 42.5 Bcfe, an average of 462 MMcf/d, and excludes approximately 2.6 Bcfe of voluntary natural gas curtailments due to low natural gas prices. Capital expenditures in the third quarter of 2009 were $285 million.
Highlights
-- Improving Cost Structure - Domestic recurring lease operating expense
for the third quarter of 2009, stated on a unit of production basis, was
$0.81 per Mcfe and reflects lower service costs, reduced water handling
costs due to deferred completions and the ongoing efforts to lower
expenses throughout the Company's core operating regions.
-- Mid-Continent Production Reaches New Highs, Woodford Production up
Nearly 30% - Gross operated production from the Mid-Continent recently
set a new high and is currently 460 MMcfe/d gross, or 323 MMcfe/d net.
Woodford Shale production is 308 MMcfe/d compared to about 240 MMcfe/d
at the end of the second quarter of 2009. Newfield began returning
previously curtailed wells to production during October 2009. Newfield
has a 30 well inventory of uncompleted wells that are expected to be
completed by early 2010.
-- Woodford Shale - The Company has 10 operated rigs running under term
contracts, with three of the remaining rigs rolling off of term
before the end of 2009. Newfield continues to improve upon
efficiency gains in its Woodford development. Some recent examples
are listed below:
-- Increasing Lateral Lengths - Newfield expects that its average
lateral length in 2009 will exceed 5,000 feet. By year-end 2009,
the Company expects to have drilled eight "super extended
lateral" wells with horizontal lengths in excess of 8,000 feet.
Two of the wells drilled to date have lateral lengths greater
than 10,000 feet. Initial production results from the first
super extended laterals are expected in December 2009.
-- Optimizing Fracture Stimulation Operations - The Company is
fracture stimulating its wells with greater efficiency in 2009.
The average number of fracs per day has increased to more than
five on recent pad completions, compared to three fracs per day
in 2008.
-- Company Adds Fourth Operated Rig in Granite Wash Play - Based on the
success of the initial horizontal drilling program in the Granite
Wash, Newfield added a fourth operated rig in October in its Stiles
Ranch field, located in Wheeler County, Texas. In July 2009,
Newfield announced that its first seven horizontal wells in Stiles
Ranch had an average gross initial production rate of 22 MMcfe/d.
Recent well completions have been deferred and the Company expects
to have production results from 6 - 8 additional completions in
early 2010. Newfield has an approximate 80% working interest in
Stiles Ranch.
-- Newfield Enters the Marcellus Shale - On October 14, 2009, Newfield
announced the signing of a joint exploration agreement with Hess
Corporation in the Marcellus Shale play. The agreement covers up to
140,000 gross acres primarily in Susquehanna and Wayne Counties,
Pennsylvania. Newfield will operate the new venture with each company
having a 50 percent interest. The 2009 portion of Newfield's Marcellus
Shale activities will be funded within the Company's existing $1.45
billion capital budget. Drilling operations are not expected to commence
until 2010.
-- Additional Exploration Test Planned Offshore China - In the third
quarter of 2009, the Company announced an oil discovery with its LF 7-1
Pearl prospect, located in the Pearl River Mouth Basin, offshore China.
Prior to year-end 2009, the Company expects to spud its Jade prospect to
test a fault-separated target to the northeast. The Newfield operated
Pearl development is underway with first production expected in late
2012.
-- Deepwater Gulf of Mexico Update - Newfield has seven deepwater
developments underway in the deepwater Gulf of Mexico which are expected
to provide significant future production growth.
-- Fastball - The Fastball development, located at Viosca Knoll 1003,
commenced production on October 19, 2009. Gross production is
expected to ramp up to 40 MMcf/d and 3,200 BOPD. Newfield operates
Fastball with a 66% working interest.
-- Pyrenees - In the second quarter of 2009, Newfield announced a
significant operated discovery on its Pyrenees prospect, located at
Garden Banks 293 in approximately 2,100 feet of water. A recent
sidetrack delineated the downdip limits in the three proven pay
sands seen in the discovery well and provided encouragement for the
exploration potential of both the shallow and deep sand sections on
the feature. Additional drilling is planned for 2010. Newfield
operates the development with a 40% working interest.
-- Company Increasing Monument Butte Operated Rig Count to Five - Based on
increased demand, narrowing price differentials and a shift to oil
investments, Newfield recently added a fourth operated rig in its
Monument Butte oil field, located in the Uinta Basin of Utah. The
Company is planning to add a fifth operated rig in the field in the near
future. Gross oil production from Monument Butte is about 16,000 BOPD. A
five-rig program in the field is expected to grow annual field
production by at least 10%. The Monument Butte field area covers
approximately 180,000 gross acres, substantially all held-by-production.
-- Company to Add Additional Rigs in Williston Basin - Newfield expects to
add up to two additional operated rigs in its Williston Basin
development areas. The Company has been running a one-rig program since
early 2009. Newfield has approximately 200,000 net acres in prospective
development areas, located primarily on the Nesson Anticline and west of
the Nesson. An additional 200,000 net acres are located in northern
Montana where several exploration plays are underway. Newfield has
drilled 12 successful oil wells in the North Dakota portion of the
Williston Basin since entering the region in late 2007. Two wells were
drilled since the second quarter 2009. The first was an exploratory well
in the Big Valley area, covering more than 50,000 net acres in northern
North Dakota. The well recently commenced production and continues to
clean-up following fracture stimulation. Results warrant additional
exploratory drilling to assess this large area. The second well was
drilled in the Catwalk area, which covers 25,300 net acres.
