Item 2.02 Results of Operations and Financial Condition
On July 29, 2014, Newfield Exploration Company (“Newfield”) issued a news release announcing its second quarter 2014 financial results. A copy of that press release is furnished herewith as Exhibit 99.1.
The information in Item 2.02 of this Current Report, including the exhibit attached hereto as Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 2.02 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.
Item 7.01 Regulation FD Disclosure
On July 29, 2014, Newfield issued its @NFX publication, which provides first quarter 2014 update of the Company’s operational highlights and complete hedging positions as of July 28, 2014. A copy of the publication is furnished herewith as Exhibit 99.2.
Also on July 29, 2014, Newfield issued a news release announcing the signing of a $588 million purchase and sale agreement for its Granite Wash assets to Oklahoma City-based Templar Energy LLC (operating through Le Norman Operating LLC). The sale will have an effective date of July 1, 2014 and is expected to close in the third quarter of 2014. A copy of the news release is furnished herewith as Exhibit 99.3.
The information in Item 7.01 of this Current Report, including the exhibits attached hereto as Exhibit 99.2 and 99.3, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 7.01 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.
Item 9.01 Financial Statements and Exhibits
|
(d)
|
Exhibits
|
| |
99.1
|
Second Quarter 2014 Financial Results issued by Newfield on July 29, 2014
|
| |
99.2
|
@ NFX Publication issued by Newfield on July 29, 2014
|
| |
99.3
|
News Release issued by Newfield on July 29, 2014
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
NEWFIELD EXPLORATION COMPANY
|
| |
|
|
| |
|
|
|
Date: July 31, 2014
|
By:
|
/s/ John D. Marziotti
|
| |
|
John D. Marziotti
|
| |
|
General Counsel and Corporate Secretary
|
Exhibit Index
|
Exhibit No.
|
|
Description
|
|
99.1
|
|
Second Quarter 2014 Financial Results issued by Newfield on July 29, 2014
|
|
99.2
|
|
@ NFX Publication issued by Newfield on July 29, 2014
|
|
99.3
|
|
News Release issued by Newfield on July 29, 2014
|
4
Newfield Exploration Company
News Release
July 29, 2014
Newfield Exploration Reports Second Quarter 2014 Results
Year-over-year oil production up more than 30% and averages nearly 50,000 BOPD in 2Q14
The Woodlands, Texas – July 29, 2014 – Newfield Exploration Company (NYSE: NFX) today reported its unaudited second quarter 2014 financial results and provided an update on its operations. Recent operational highlights are detailed in the Company’s @NFX publication, located on its website. Newfield will host a conference call at 10 a.m. CDT, July 30, 2014. To listen to the call, visit Newfield’s website at http://www.newfield.com. To participate in the call, dial 913-312-1462.
With the recent sale of Newfield’s Malaysia business and the process underway to divest its China business, the financial and operating results for the Company’s international businesses are reported as “discontinued operations.”
For the second quarter of 2014, Newfield reported a consolidated net loss of $22 million, or $0.16 per share. Net income would have been $59 million, or $0.43 per share, excluding an unrealized loss on commodity derivatives of $127 million ($82 million after-tax), or $0.59 per share.
Second quarter consolidated net cash provided by operating activities before changes in operating assets and liabilities was $336 million. See “Explanation and Reconciliation of Non-GAAP Financial Measures” found after the financial statements in this release.
Newfield’s net production from continuing operations in the second quarter of 2014 was 12.1 MMBOE, exceeding the mid-point of quarterly guidance by approximately 1.1 MMBOE. Net liftings from discontinued operations totaled approximately 0.04 MMBOE. Domestic liquids production in the second quarter was up 13% compared to the first quarter of 2014 and 40% over the comparable period in 2013. Liquids comprised approximately 55% of total second quarter domestic production.
Operational Highlights
For complete highlights and a summary of wells completed in the second quarter of 2014, see the Company’s @NFX publication located on its website. Newfield published a detailed update on its Uinta Basin oil developments, including results from recent SXL wells in the Central Basin.
Uinta Basin
Uinta Basin second quarter net production averaged 26,100 BOEPD, up 5% from an average of 24,900 BOEPD in the first quarter of 2014. Based on strong well performance, primarily from the Central Basin, Newfield nearly doubled its beginning of the year guidance for the basin and now expects Uinta production to grow about 10% year-over-year.
Planned 2014 capital investments of $400 million are focused on two areas – the waterflood development of the Greater Monument Butte Unit (GMBU) and recent drilling in high-potential, horizontal plays in the adjacent Central Basin.
Newfield released results on its five most recent SXL wells completed in the Central Basin’s Uteland Butte and Wasatch plays. The table below details the highlights. Complete well data is available in today’s @NFX publication.
|
Well Type
|
# Wells
|
Avg. BOEPD
Gross IP
(24-Hours)
|
Avg. BOEPD
Gross
30-Day Rate
|
Avg. BOEPD
Gross
60-Day Rate
|
Avg. BOEPD
Gross
90-Day Rate
|
|
Uteland Butte SXL (1)
|
3
|
2,157
|
1,532
|
1,323
|
1,154
|
|
Wasatch SXL (2)
|
2
|
2,068
|
1,428
|
1,479
|
1,583
|
|
Central Basin Avg. SXL (3) (4)
|
5
|
2,122
|
1,480
|
1,401
|
1,297
|
|
(1) 30-day, 60-day and 90-day rates include 2 wells
(2) 60-day and 90-day rates include 1 well
(3) 30-day rate includes 4 wells
(4) 60-day and 90-day rates include 3 wells
|
Early production data from recent SXL wells is supportive of the Company’s original average type curves for the Uteland Butte and Wasatch plays. Oil cuts for the new wells are averaging about 90% after the first 90 days of production. Newfield expects to drill 15 – 20 SXLs in the Central Basin in 2014.
Consistent with the Company’s other SXL programs (Eagle Ford, Williston, Anadarko Basin), Newfield is demonstrating the economic benefits of drilling and completing longer laterals. A recent “best-in-class” Uteland Butte SXL well was drilled and completed for approximately $11.6 million gross.
Anadarko Basin
The Company’s second quarter 2014 production from the Anadarko Basin increased more than 30% over the first quarter of 2014 and is expected to more than double year-over-year. Newfield’s second quarter net production in the Anadarko Basin averaged 39,000 BOEPD compared to 29,500 BOEPD in first quarter of 2014. The Anadarko Basin is Newfield’s largest investment region in 2014 (more than $750 million), constituting approximately 45% of planned total investments.
The Company is planning to drill about 70 wells in the SCOOP and STACK plays and exit 2014 with net production of nearly 50,000 BOEPD.
The SCOOP and STACK plays offer multiple “stacked” geologic horizons for exploitation. The Company continues to add to its acreage position in the Anadarko Basin and has leased an additional 25,000 net acres year-to-date. Newfield today has more than 250,000 net acres in the Anadarko Basin.
The “Yandell” development, located in SCOOP Wet Gas, recently commenced production from five XL wells (lateral length 4,950’). The wells had an individual average 24-hour initial production of approximately 1,300 BOEPD gross, of which 41% was oil.
Newfield’s 2014 production estimate for the Anadarko Basin is now 14.8 MMBOE, up from its beginning of the year guidance of 14.3 MMBOE. Through the end of the second quarter of 2014, the Company “made up” for its beginning of the year shortfall in sales related to mid-stream infrastructure expansions and has increased its second half 2014 guidance.
Williston Basin
Williston Basin net production in the second quarter of 2014 averaged 18,100 BOEPD, up 21% over its first quarter 2014 average of 14,900 BOEPD. Year-over-year production in the Williston Basin has increased more than 50%. Based on the strength of well performance and field-level execution, Newfield increased its 2014 Williston Basin growth outlook by an additional 4%. The Company expects its 2014 volumes in the Williston Basin to increase 41% over 2013 levels.
Newfield continues to see drilling efficiencies through execution of its SXL development campaign in the Williston. Year-to-date, SXL well (10,000’ lateral lengths) costs are averaging $7.9 million, including about $0.8 million in artificial lift and facilities. Recent wells are being drilled in under 20 days and the Company expects these efficiencies will allow for the drilling of about eight additional wells in 2014. With its continued four-rig program, Newfield now expects to drill more than 55 wells in 2014.
Eagle Ford
Eagle Ford net production in the second quarter of 2014 averaged 12,300 BOEPD, up approximately 12% from its first quarter 2014 average. The Company is running a single-rig program to develop its West Asherton field and Fashing area. Production is expected to grow approximately 39% year-over-year. Newfield expects to drill about 20 wells during 2014.
Production, Costs and Expenses
The following table depicts our actual production and costs and expenses from continuing operations for the second quarter of 2014, as well as our third quarter and full-year 2014 estimates.
| |
22Q14
|
|
3Q14e14e
|
|
2014e
|
|
|
Production:
|
|
|
|
|
|
|
|
Oil (MMBO)
|
4.5
|
|
4.6 – 4.8
|
|
18.1 – 18.7
|
|
|
NGLs (MMBbls)
|
2.0
|
|
2.1 – 2.2
|
|
7.6 – 8.1
|
|
|
Natural Gas (Bcf)
|
33.1
|
|
32
|
|
125 – 130
|
|
|
Total (MMBOE)
|
12.1
|
|
12.1 – 12.3
|
|
46.5 – 48.5
|
|
| |
|
|
|
|
|
|
|
Costs and Expenses:*
|
|
|
|
|
|
|
|
Total LOE ($MM) **
|
$119
|
|
$127
|
|
$486
|
|
|
Production & Other Taxes ($MM)***
|
$29
|
|
$36
|
|
$125
|
|
|
DD&A Expense ($MM)
|
$212
|
|
$216
|
|
$850
|
|
|
General & Administrative (G&A), net ($MM)
|
$68
|
|
$55
|
|
$235
|
|
|
Capitalized Internal Costs ($MM)
|
($50)
|
|
($35)
|
|
($156)
|
|
|
Interest Expense ($MM)
|
$51
|
|
$51
|
|
$205
|
|
|
Capitalized Interest ($MM)
|
($13)
|
|
($13)
|
|
($52)
|
|
*Production, Costs and Expenses are based on continuing operations and Costs and Expenses are expected to be within 7% of the estimates above.
** The increase in full-year LOE guidance relates to increased transportation expense and reflects new processing agreements and growing NGL volumes. The increase in expense should be offset by higher realized prices for sales volumes.
***Table assumes 1H14 actual commodity prices and strip commodity prices for 2H14.
Newfield Exploration Company is an independent energy company engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. We are focused on North American resource plays and our principal areas of operation include the Mid-Continent, the Rocky Mountains and onshore Gulf Coast.
This release contains forward-looking information. All information other than historical facts included in this release, such as information regarding estimated or anticipated drilling plans, planned capital expenditures, and estimated production, is forward-looking information. Although Newfield believes that these expectations are reasonable, this information is based upon assumptions and anticipated results that are subject to numerous uncertainties and risks. Actual results may vary significantly from those anticipated due to many factors, including drilling results, oil and gas prices, industry conditions, the prices of goods and services, the availability of drilling rigs and other support services, the availability of refining capacity for the crude oil Newfield produces in the Uinta Basin, the availability and cost of capital resources, new regulations or changes in tax legislation, labor conditions and severe weather conditions. In addition, the drilling of oil and natural gas wells and the production of hydrocarbons are subject to numerous governmental regulations and operating risks. Other factors that could impact forward-looking statements are described in "Risk Factors" in Newfield's 2013 Annual Report on Form 10-K and other subsequent public filings with the Securities and Exchange Commission, which can be found at www.sec.gov. Unpredictable or unknown factors, not discussed in this press release, could also have material adverse effects on forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Unless legally required, Newfield undertakes no obligation to publicly update or revise any forward-looking statements.
For additional information, please contact Newfield’s Investor Relations department.
Phone: 281-210-5321
Email: info@newfield.com
| |
|
2Q14 Actual
|
|
|
2Q14 Actual Results
|
|
Domestic
(Continuing
Operations)
|
|
|
Int'l
(Discontinued
Operations)
|
|
|
Total
|
|
| |
|
|
|
|
|
|
|
|
|
|
Production/LiftingsNote 1
|
|
|
|
|
|
|
|
|
|
|
Crude oil and condensate - MMBbls
|
|
|
4.5 |
|
|
|
0.04 |
|
|
|
4.5 |
|
|
Natural gas - Bcf
|
|
|
33.1 |
|
|
|
— |
|
|
|
33.1 |
|
|
NGLs - MMBbls
|
|
|
2.0 |
|
|
|
— |
|
|
|
2.0 |
|
|
Total MMBOE
|
|
|
12.1 |
|
|
|
0.04 |
|
|
|
12.1 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Realized PricesNote 2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude oil and condensate - $/Bbl
|
|
$ |
82.46 |
|
|
$ |
106.86 |
|
|
$ |
82.67 |
|
|
Natural gas - $/Mcf
|
|
$ |
3.90 |
|
|
$ |
— |
|
|
$ |
3.90 |
|
|
NGLs - $/Bbl
|
|
$ |
31.11 |
|
|
$ |
— |
|
|
$ |
31.11 |
|
|
Bbl equivalent - $/BOE
|
|
$ |
47.74 |
|
|
$ |
106.86 |
|
|
$ |
47.94 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating ($MM)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
|
|
$ |
63.4 |
|
|
$ |
1.3 |
|
|
$ |
64.7 |
|
|
Major (workovers, etc.)
|
|
$ |
18.3 |
|
|
$ |
0.1 |
|
|
$ |
18.4 |
|
|
Transportation
|
|
$ |
37.7 |
|
|
$ |
— |
|
|
$ |
37.7 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating (per BOE)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring
|
|
$ |
5.45 |
|
|
$ |
34.24 |
|
|
$ |
5.54 |
|
|
Major (workovers, etc.)
|
|
$ |
1.57 |
|
|
$ |
4.0 |
|
|
$ |
1.58 |
|
|
Transportation
|
|
$ |
3.24 |
|
|
$ |
— |
|
|
$ |
3.23 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and other taxes ($MM)
|
|
$ |
29.0 |
|
|
$ |
1.2 |
|
|
$ |
30.2 |
|
|
per BOE
|
|
$ |
2.49 |
|
|
$ |
31.04 |
|
|
$ |
2.58 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative (G&A), net ($MM)
|
|
$ |
68.1 |
|
|
$ |
— |
|
|
$ |
68.1 |
|
|
per BOE
|
|
$ |
5.85 |
|
|
$ |
— |
|
|
$ |
5.83 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized internal costs ($MM)
|
|
|
|
|
|
|
|
|
|
$ |
(51.9 |
) |
|
per BOE
|
|
|
|
|
|
|
|
|
|
$ |
(4.44 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense ($MM)
|
|
|
|
|
|
|
|
|
|
$ |
50.5 |
|
|
per BOE
|
|
|
|
|
|
|
|
|
|
$ |
4.32 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalized interest ($MM)
|
|
|
|
|
|
|
|
|
|
$ |
(13.3 |
) |
|
per BOE
|
|
|
|
|
|
|
|
|
|
$ |
(1.14 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
______
Note 1: Represents volumes lifted and sold regardless of when produced. Includes natural gas produced and consumed in our operations of 2.6 Bcf during the three months ended June 30, 2014.
|
|
|
Note 2: Average realized prices include the effects of hedging contracts. If the effects of these contracts were excluded, the average realized price for domestic natural gas would have been $4.32 per Mcf and the domestic and total crude oil and condensate average realized prices would have been $90.19 and $90.33 per barrel, respectively. We did not have any hedging contracts associated with NGL production as of June 30, 2014.
|
|
|
CONSOLIDATED STATEMENT OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended
June 30,
|
|
|
For the
Six Months Ended
June 30,
|
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, gas and NGL revenues
|
|
$ |
608 |
|
|
$ |
435 |
|
|
$ |
1,161 |
|
|
$ |
805 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
|
|
|
119 |
|
|
|
107 |
|
|
|
230 |
|
|
|
195 |
|
|
Production and other taxes
|
|
|
29 |
|
|
|
21 |
|
|
|
54 |
|
|
|
33 |
|
|
Depreciation, depletion and amortization
|
|
|
212 |
|
|
|
164 |
|
|
|
400 |
|
|
|
311 |
|
|
General and administrative
|
|
|
68 |
|
|
|
54 |
|
|
|
124 |
|
|
|
99 |
|
|
Total operating expenses
|
|
|
428 |
|
|
|
346 |
|
|
|
808 |
|
|
|
638 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
180 |
|
|
|
89 |
|
|
|
353 |
|
|
|
167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(51 |
) |
|
|
(50 |
) |
|
|
(102 |
) |
|
|
(101 |
) |
|
Capitalized interest
|
|
|
13 |
|
|
|
13 |
|
|
|
26 |
|
|
|
27 |
|
|
Commodity derivative income (expense)
|
|
|
(174 |
) |
|
|
117 |
|
|
|
(270 |
) |
|
|
33 |
|
|
Other, net
|
|
|
1 |
|
|
|
2 |
|
|
|
3 |
|
|
|
4 |
|
|
Total other income (expense)
|
|
|
(211 |
) |
|
|
82 |
|
|
|
(343 |
) |
|
|
(37 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations before income taxes
|
|
|
(31 |
) |
|
|
171 |
|
|
|
10 |
|
|
|
130 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision (benefit)
|
|
|
(8 |
) |
|
|
65 |
|
|
|
9 |
|
|
|
49 |
|
|
Income (loss) from continuing operations
|
|
|
(23 |
) |
|
|
106 |
|
|
|
1 |
|
|
|
81 |
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
1 |
|
|
|
5 |
|
|
|
261 |
|
|
|
22 |
|
|
Net income (loss)
|
|
$ |
(22 |
) |
|
$ |
111 |
|
|
$ |
262 |
|
|
$ |
103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$ |
(0.16 |
) |
|
$ |
0.78 |
|
|
$ |
0.01 |
|
|
$ |
0.60 |
|
|
Income (loss) from discontinued operations
|
|
|
— |
|
|
|
0.04 |
|
|
|
1.91 |
|
|
|
0.16 |
|
|
Basic earnings (loss) per share
|
|
$ |
(0.16 |
) |
|
$ |
0.82 |
|
|
$ |
1.92 |
|
|
$ |
0.76 |
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations
|
|
$ |
(0.16 |
) |
|
$ |
0.78 |
|
|
$ |
0.01 |
|
|
$ |
0.60 |
|
|
Income (loss) from discontinued operations
|
|
|
— |
|
|
|
0.04 |
|
|
|
1.89 |
|
|
|
0.16 |
|
|
Diluted earnings (loss) per share
|
|
$ |
(0.16 |
) |
|
$ |
0.82 |
|
|
$ |
1.90 |
|
|
$ |
0.76 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding for basic income (loss) per share
|
|
|
136 |
|
|
|
135 |
|
|
|
136 |
|
|
|
135 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average number of shares outstanding for diluted income (loss) per share
|
|
|
136 |
|
|
|
136 |
|
|
|
138 |
|
|
|
136 |
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
|
|
|
|
|
|
(Unaudited, in millions)
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
36 |
|
|
$ |
95 |
|
|
Restricted cash
|
|
|
— |
|
|
|
90 |
|
|
Other current assets
|
|
|
492 |
|
|
|
716 |
|
|
Total current assets
|
|
|
528 |
|
|
|
901 |
|
|
|
|
|
|
|
|
|
|
|
|
Oil and gas properties, net (full cost method)
|
|
|
8,185 |
|
|
|
8,101 |
|
|
Derivative assets
|
|
|
5 |
|
|
|
26 |
|
|
Other assets
|
|
|
238 |
|
|
|
293 |
|
|
Total assets
|
|
$ |
8,956 |
|
|
$ |
9,321 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Derivative liabilities
|
|
$ |
— |
|
|
$ |
90 |
|
|
Other current liabilities
|
|
|
1,129 |
|
|
|
1,200 |
|
|
Total current liabilities
|
|
|
1,129 |
|
|
|
1,290 |
|
|
|
|
|
|
|
|
|
|
|
|
Other liabilities
|
|
|
35 |
|
|
|
38 |
|
|
Derivative liabilities
|
|
|
58 |
|
|
|
— |
|
|
Long-term debt
|
|
|
3,077 |
|
|
|
3,694 |
|
|
Asset retirement obligations
|
|
|
108 |
|
|
|
201 |
|
|
Deferred taxes
|
|
|
1,307 |
|
|
|
1,142 |
|
|
Total long-term liabilities
|
|
|
4,585 |
|
|
|
5,075 |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Common stock and additional paid-in capital
|
|
|
1,551 |
|
|
|
1,527 |
|
|
Accumulated other comprehensive loss
|
|
|
2 |
|
|
|
2 |
|
|
Retained earnings
|
|
|
1,689 |
|
|
|
1,427 |
|
|
Total stockholders' equity
|
|
|
3,242 |
|
|
|
2,956 |
|
|
Total liabilities and stockholders' equity
|
|
$ |
8,956 |
|
|
$ |
9,321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF
CASH FLOWS
|
|
|
|
|
(Unaudited, in millions)
|
|
|
|
|
|
|
|
|
|
For the
Six Months Ended
June 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$ |
262 |
|
|
$ |
103 |
|
|
Adjustments to reconcile net income (loss) to net cash
|
|
|
|
|
|
|
|
|
|
provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
437 |
|
|
|
439 |
|
|
Deferred tax provision (benefit)
|
|
|
153 |
|
|
|
68 |
|
|
Stock-based compensation
|
|
|
35 |
|
|
|
17 |
|
|
Commodity derivative (income) expense
|
|
|
270 |
|
|
|
(33 |
) |
|
Cash receipts (payments) on derivative settlements, net
|
|
|
(86 |
) |
|
|
35 |
|
|
Gain on sale of Malaysia business
|
|
|
(388 |
) |
|
|
— |
|
|
Other, net
|
|
|
(2 |
) |
|
|
4 |
|
|
|
|
|
681 |
|
|
|
633 |
|
|
Changes in operating assets and liabilities
|
|
|
52 |
|
|
|
(23 |
) |
|
Net cash provided by (used in) operating activities
|
|
|
733 |
|
|
|
610 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Additions to oil and gas properties and other
|
|
|
(1,021 |
) |
|
|
(890 |
) |
|
Acquisitions of oil and gas properties
|
|
|
(15 |
) |
|
|
(3 |
) |
|
Proceeds from sales of oil and gas properties
|
|
|
12 |
|
|
|
19 |
|
|
Proceeds received from sale of Malaysia business, net
|
|
|
809 |
|
|
|
— |
|
|
Redemptions of investments
|
|
|
39 |
|
|
|
1 |
|
|
Net cash provided by (used in) investing activities
|
|
|
(176 |
) |
|
|
(873 |
) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Net proceeds under credit arrangements
|
|
|
(618 |
) |
|
|
231 |
|
|
Other
|
|
|
2 |
|
|
|
(5 |
) |
|
Net cash provided by (used in) financing activities
|
|
|
(616 |
) |
|
|
226 |
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash and cash equivalents
|
|
|
(59 |
) |
|
|
(37 |
) |
|
Cash and cash equivalents, beginning of period
|
|
|
95 |
|
|
|
88 |
|
|
Cash and cash equivalents, end of period
|
|
$ |
36 |
|
|
$ |
51 |
|
|
|
|
|
|
|
|
|
|
|
Explanation and Reconciliation of Non-GAAP Financial Measures
Earnings Stated Without the Effect of Certain Items
Earnings stated without the effect of certain items is a non-GAAP financial measure. Earnings without the effect of these items are presented because they affect the comparability of operating results from period to period. In addition, earnings without the effect of these items are more comparable to earnings estimates provided by securities analysts.
A reconciliation of earnings for the second quarter of 2014 for our continuing operations stated without the effect of certain items to net loss is shown below:
| |
|
|
2Q14 |
|
|
| |
|
(in millions)
|
|
Net loss
|
|
$ |
(22 |
) |
|
|
Income from discontinued operations, net of tax
|
|
|
1 |
|
|
|
Loss from continuing operations
|
|
|
(23 |
) |
|
|
Net unrealized loss on commodity derivatives(1)
|
|
|
127 |
|
|
|
Income tax adjustment for above items
|
|
|
(45 |
) |
|
|
Earnings stated without the effect of the above items
|
|
$ |
59 |
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
|
(1) The determination of "Net unrealized loss on commodity derivatives" for the second quarter 2014 is as follows:
|
|
|
|
|
2Q14 |
|
|
|
|
(in millions)
|
|
|
Commodity derivative expense
|
|
$ |
(174 |
) |
|
Cash receipts on derivative settlements, net
|
|
|
47 |
|
|
Net unrealized loss on commodity derivatives
|
|
$ |
(127 |
) |
|
|
|
|
|
|
Net Cash Provided by Operating Activities Before Changes in Operating Assets and Liabilities
Net cash provided by operating activities before changes in operating assets and liabilities is presented because of its acceptance as an indicator of an oil and gas exploration and production company’s ability to internally fund exploration and development activities and to service or incur additional debt. This measure should not be considered as an alternative to net cash provided by operating activities as defined by generally accepted accounting principles.
A reconciliation of net cash provided by operating activities before changes in operating assets and liabilities to net cash provided by operating activities is shown below:
|
|
|
2Q14
|
|
|
|
|
(in millions)
|
|
|
Net cash provided by operating activities
|
|
$
|
368
|
|
|
Net change in operating assets and liabilities
|
|
|
(32)
|
|
|
Net cash provided by operating activities before changes
|
|
|
|
|
|
in operating assets and liabilities
|
|
$
|
336
|
|
10
Exhibit 99.2