HOUSTON, April 26 /PRNewswire-FirstCall/ -- Newfield
Exploration Company (NYSE: NFX) today provided a detailed
update on operations in its core operating regions. The update
precedes the announcement of the Company's first quarter of 2010
financial results planned for after-market close on April 27. A conference call is planned for
7:30 a.m. CDT on April 28, 2010. To participate in the call, dial
719-457-2731 or listen through the investor relations section of
the website at http://www.newfield.com.
Newfield began allocating additional capital to oil projects in
its portfolio in the second half of 2009. With the continued spread
between crude oil and natural gas prices, the Company is today
allocating additional capital to its ongoing oil activities in the
Uinta and Williston Basins. Newfield now expects to invest
approximately $700 million in oil
projects in 2010, or nearly 45% of its total budget. This is a
shift of capital investments to oil of approximately $200 million since the beginning of the year
budget. At current oil prices, Newfield's growing crude oil volumes
are expected to account for about 60% of 2010 revenues. The
re-allocation of the 2010 budget will have no impact on total
capital investments, which remain at $1.6
billion.
As a result of the re-allocation in capital expenditures, the
Company's 2010 domestic crude oil production is expected to
increase throughout the remainder of the year and grow
approximately 20% over 2009 levels. Total Company oil production is
expected to be approximately 8% above 2009 oil production. Spending
reductions in planned gas development programs will offset new oil
investments.
For the full year 2010, Newfield expects that its production
will be in the upper half of its production guidance of 278 – 288
Bcfe, representing an expected increase of at least 10% over 2009
volumes. A planned reduction in natural gas volumes in the second
half of 2010 should be more than offset by our growing crude oil
volumes.
"We are reaping the benefits of our high-quality, diverse
portfolio, built throughout the last decade," said Lee K. Boothby, Newfield President and CEO.
"We have growing oil volumes... coming from 'real' oil projects
that we can make increased investments in today to provide superior
returns for our shareholders. Because our large natural gas
developments are substantially held by production, we have
tremendous flexibility in our capital allocation choices. For the
full year, we expect that our total Company production will be in
the upper half of our original guidance, or a minimum of 10% growth
over 2009. Our investments in oil projects in 2010 will have a
positive impact on our 2011 oil production, as well."
Uinta Basin
Monument Butte Field Area – Gross oil production from the
Monument Butte field area reached record production of 19,900 BOPD
in April 2010. This compares to
year-end 2009 gross production of about 17,000 BOPD. With improved
well performance, a re-allocation of rigs within the field and an
increase in the number of development wells planned for 2010,
Newfield now expects that its Monument Butte production will grow
more than 20% in 2010 (previous guidance, issued in Feb. 2010, was for 15% growth). The Company
has firm sales agreements in place on 100% of 2010's estimated oil
volumes and approximately 85% of 2011's estimated oil volumes.
The increased oil production guidance results from drilling
efficiencies and higher initial production rates from recent wells.
Newfield drilling personnel continue to optimize performance and
recently set a drilling record (rig-release to rig-release) of 3.5
days. This compares to a 2009 average of 5.5 days and an average of
approximately 6.5 days when Newfield acquired the field in 2004.
Our year-to-date performance is 4.5 days. Due to these efficiency
gains, the Company has increased its planned number of development
wells in 2010 to more than 350 wells, up from 275 at the beginning
of the year. The increased number of planned development wells will
have a significant impact on 2011 oil volumes from Monument Butte.
Field production is expected to exit 2010 at approximately 25,000
BOPD gross.
Newfield added two operated rigs in the field in late 2009 and
is today running five rigs. The Monument Butte field area covers
approximately 180,000 net acres. Based on the continued strength in
demand for Black Wax crude, Newfield may continue to add additional
rigs in the field.
Newfield has drilled more than 125 wells to date on the Ute
Tribal acreage, an area covering 63,000 net acres north and
adjacent to Monument Butte. The results continue to exceed
expectations. Newfield has drilled significant step out wells
throughout the acreage and estimates that more than 1,000
development locations exist on the acreage at 40-acre spacing.
Newfield's working interest on the Ute Tribal acreage is
approximately 70%.
In total, Newfield estimates that approximately 4,700
development drilling locations remain in the Monument Butte field
area. There are more than 1,350 producing wells in the Monument
Butte field where development drilling is currently underway on
20-acre spacing.
Williston Basin
The Company's recent results in the Williston Basin continue to benefit from
drilling and completion optimizations. Newfield increased its
operated rig count from one to three in early 2010. Two of the rigs
are drilling in the Company's core development areas along the
Nesson Anticline (Westberg and Lost Bear). The Company expects that
its Williston Basin production
will increase more than 40% in 2010. Recent results include the
highest initial production rates achieved by the Company to date in
the Williston Basin.
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|
Well Name
|
IP Rate
(BOEPD)
|
30-Day Avg.
Prod. (BOEPD)
|
Formation
|
Lateral
Length
|
Working
Interest
|
|
Clear Creek State
1-36
|
1,300
|
502
|
Bakken
|
3,932'
|
50%
|
|
Arkadios 1-18H
|
1,686
|
457
|
Sanish/TF
|
4,079'
|
79%
|
|
Pittsburg 1-3H
|
3,371
|
1,200
|
Sanish/TF
|
4,143'
|
33%
|
|
Sand Creek Federal
1-21H
|
3,568
|
1,137
|
Bakken
|
4,182'
|
53%
|
|
|
|
|
|
|
|
|
|
Newfield has drilled 20 successful oil wells in the North Dakota portion of the Williston Basin since entering the region in
late 2007. The planned 2010 program will consist of development
drilling along the Nesson (Westberg and Lost Bear areas) as well as
continued assessment of areas west of the Nesson. Newfield may
elect to add an additional rig in the Williston Basin.
Newfield has approximately 400,000 net acres in the Williston Basin. The total includes
approximately 160,000 net acres in development and appraisal areas
(Nesson Anticline and west of the Nesson) and approximately 240,000
net exploratory acres.
Malaysia Oil Developments
In April 2010, Newfield's
Malaysian operations set record gross production volumes of more
than 45,000 BOPD, or more than 19,000 BOPD net. The recent increase
is due to higher than planned production volumes from the operated
developments at the East Belumut and Chermingat fields, located on
shallow water block PM 323.
Although Newfield had originally estimated that its Malaysian
production would decline about 18% in 2010 due to natural declines,
recent well performance should reduce the expected decline to less
than half that amount.
In mid-2009, Newfield accelerated the timing by six months on
six planned development wells in the East Belumut field. The
Company was able to drill a total of seven development wells during
the time allotted for the rig. In addition, the seven wells were
drilled within the original six-well budget. The wells had an
average lateral length of more than 7,000' and boosted East Belumut
field production to more than 24,000 BOPD gross.
Ongoing international developments that will add future oil
production include: West Belumut on PM 323 (first production
October 2010), PM 329 (first
production October 2011) and the
Pearl development in the South China Sea (first production
2013).
New Oil Plays Entering Assessment Phase
In late 2009 and early 2010, Newfield added large operated
acreage positions in two new oil plays – the Southern Alberta Basin of northwestern
Montana and the Eagle Ford Shale
play in southwest Texas. Both of
these new plays will be assessed in the second half of 2010.
Southern Alberta Basin –
Newfield this week spud its first well in the Southern Alberta Basin where the Company has
an operated interest in approximately 224,000 net acres in
Glacier County, Montana.
Prospective geologic formations included the Lodgepole, Middle
Bakken, Three Forks and
Nisku. Newfield plans to drill
eight exploratory assessment wells in 2010.
Eagle Ford Shale – In early 2010, Newfield purchased a package
of assets from TXCO Resources Inc. and now owns interests in more
than 300,000 net acres in the Maverick Basin of southwest
Texas with multiple geologic
targets, including the Eagle Ford and Pearsall Shale plays. Newfield expects to drill
about 20 wells in the Maverick Basin with a multi-rig exploratory
program commencing in mid-2010.
Natural Gas Developments
"We have a great luxury in the fact that our foundational gas
developments are held-by-production," said Boothby. "The
Woodford and Granite Wash both are expected to grow 20% or more
this year because of the momentum we had coming into 2010 and
continued great results. Today, however, we are electing to slow
the pace of our development drilling in the Woodford and plan to
drop several rigs in the second half of this year. This is the
right economic choice today – to slow growth in gas plays.
"However, it's important that we keep working hard to improve
our drilling and completion performance in these gas plays. We are
attaining great results in lowering our finding and development
costs in the Woodford and the recent success of our 'super extended
laterals' in the Woodford keeps this resource play competitive with
all other domestic gas plays."
Newfield's largest gas plays are the Granite Wash and
Woodford Shale, both located in the
Mid-Continent. Newfield recently set a production record in its
Mid-Continent division of more than 550 MMcfe/d gross, or 345
MMcfe/d net. The Company's current production guidance allows for
the option to defer natural gas completions in the second half of
2010.
Granite Wash – The Company's success in the Granite Wash play
continues. Gross production in the first quarter of 2010 set an
area record of nearly 180 MMcfe/d gross (nearly 110 MMcfe/d net).
During 2009, Newfield drilled 19 horizontal wells in the Stiles
Ranch field. The average initial production from the 19 wells
drilled to date is approximately 18 MMcfe/d (24-hour rate). Five of
the most recent seven wells were drilled in the Atoka formation, a
known dry gas producer. The Atoka drilling program is being
conducted to fully assess the field's potential. A table with the
most recent wells follows.
|
|
Well Name
|
IP Rate
(MMcfe/d)
|
Producing
Formation
|
Lateral
Length
|
Working
Interest
|
|
|
|
|
|
|
|
Britt 8-6H
|
14.5
|
Atoka
|
4,300'
|
66%
|
|
Britt 7-12H
|
20.1
|
Atoka
|
4,472'
|
51%
|
|
Thomas Britt 6-13H
|
12.0
|
Atoka
|
3,795'
|
100%
|
|
Britt 7-11H
|
15.1
|
Atoka
|
4,477'
|
51%
|
|
Huff Ranch 47-5H
|
11.7
|
Atoka
|
4,300'
|
58%
|
|
Carr 1-2H*
|
12.3
|
Marmaton
|
4,118'
|
100%
|
|
Lunsford 3-4H*
|
15.0
|
Marmaton
|
4,202'
|
100%
|
|
* represents a
previously untested area, approximately 8 miles west of Stiles
Ranch
|
|
|
|
|
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The Company plans to continue running four operated rigs in the
Granite Wash. The majority of the drilling program in the second
half of the year is expected to focus on drilling development wells
in the Marmaton formation. The Company's seven Marmaton wells
drilled to date have included a significant condensate yield.
The Carr and Lunsford wells
(listed above) were drilled in the Briscoe area, located approximately eight
miles west of Stiles Ranch. Prior to these recent wells, all of the
Company's drilling to date had been conducted in the Stiles Ranch
field. Newfield's interest in the play averages approximately 75%.
Newfield expects to drill 20-25 wells in the play in 2010. The
Company owns interests in approximately 40,000 net acres in the
play.
Woodford Shale – Production in
April 2010 set a record of
approximately 345 MMcfe/d gross operated (nearly 210 MMcfe/d net).
The production growth is attributable to increased completions in
early 2010 and the results of "super extended laterals," or
SXLs.
Newfield continues to focus its efforts on drilling SXLs, or
wells with a horizontal length greater than 5,000'. Newfield
expects that its average Woodford lateral length in 2010 will be
more than 6,000'. To date, the Company has drilled 14 SXLs with an
average lateral length of approximately 9,000,' with average gross
initial production (24-hour rate) of approximately 9 MMcfe/d. Three
SXLs are in various stages of completion.
The Company is currently running eight operated rigs in the
Woodford. However, with the recent increase in capital allocated to
oil projects, the operated rig count is expected to be reduced to
4-5 rigs in the second half of 2010. Despite the reduction in
planned development wells and the re-allocation of capital to oil
projects, Woodford production in 2010 is expected to increase
approximately 20% in 2010 over 2009 levels (previous guidance,
Feb. 2010, was 25% growth).
Deepwater Gulf of Mexico – Newfield's Sargent development commenced production in
March 2010 and is on-line at
approximately 38 MMcfe/d gross (outside operated, 25% interest).
The Company has three additional deepwater developments underway in
the Gulf of Mexico which are
expected to provide significant future production growth. The
current deepwater developments are Gladden (first production late
2010), and Dalmatian and Pyrenees (first production 2011).
The Company is currently drilling two exploration wells in the
deepwater Gulf – Saluki (Operated, 50% working interest/35% cost
interest, Garden Banks 425) and Axe (Non-operated, 23% working
interest, DeSoto Canyon 4). The Company expects to participate in
the drilling of 1-2 additional deepwater wells in 2010.
Newfield Exploration Company is an independent crude oil and
natural gas exploration and production company. The Company relies
on a proven growth strategy of growing reserves through an active
drilling program and select acquisitions. Newfield's domestic areas
of operation include the Mid-Continent, the Rocky Mountains,
onshore Texas and the Gulf of Mexico. The Company has international
operations in Malaysia and
China.
**This release contains forward-looking information. All
information other than historical facts included in this release,
such as information regarding estimated capital expenditures,
production and cost reductions, drilling and development plans and
the timing of activities, 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 from its
Monument Butte field in Utah, the
availability and cost of capital resources, labor conditions and
severe weather conditions (such as hurricanes). In addition, the
drilling of oil and gas wells and the production of hydrocarbons
are subject to governmental regulations and operating
risks.
For information,
contact:
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|
Investor Relations:
Steve Campbell (281) 847-6081
|
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Media Relations:
Keith Schmidt (281) 674-2650
|
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Email:
info@newfield.com
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SOURCE Newfield Exploration Company