HOUSTON, April 27 /PRNewswire-FirstCall/ -- Newfield
Exploration Company (NYSE: NFX) today reported its unaudited
first quarter 2010 financial results. A separate operational update
was released on April 26 and this
release and the operational update release are available through
the investor relations section of our website at
http://www.newfield.com. Newfield will be hosting a conference call
at 7:30 a.m. (CDT) on April 28. To participate in the call, dial
719-457-2731 or listen through the investor relations section of
our website at http://www.newfield.com.
For the first quarter of 2010, Newfield recorded net income of
$244 million, or $1.84 per diluted share (all per share amounts
are on a diluted basis). Net income includes the effect of these
items:
- a net unrealized gain on commodity derivatives of $143 million ($91
million after-tax); and
- an early redemption charge of $10
million ($6 million after-tax)
associated with the purchase and payment of approximately
$143 million of our $175 million aggregate principal amount of 7 5/8%
Senior Notes due 2011 offset by a gain of $2
million ($1 million after-tax)
resulting from the termination of the associated interest rate
swap.
Without the effect of these items, net income for the first
quarter of 2010 would have been $158
million, or $1.19 per
share.
Revenues in the first quarter of 2010 were $458 million. Net cash provided by operating
activities before changes in operating assets and liabilities was
$393 million. See “Explanation and
Reconciliation of Non-GAAP Financial Measures” found after the
financial statements in this release.
Newfield’s production in the first quarter of 2010 was 67 Bcfe.
Natural gas production in the first quarter of 2010 was 48 Bcf, an
average of 533 MMcf/d. Newfield’s oil liftings in the first quarter
of 2010 were 3.2 MMBbls, an average of approximately 35,550 BOPD.
Capital expenditures in the first quarter of 2010 were
approximately $360 million, excluding
the previously announced $215 million
acquisition of properties in the Maverick Basin from TXCO Resources
Inc. (closed February 2010).
2010 Outlook
On Monday, Newfield announced that the Company intends to
allocate additional capital in 2010 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. At current oil
prices, Newfield’s growing crude oil volumes are expected to
account for approximately 60% of 2010 revenues.
As a result of the re-allocation in expenditures, the Company’s
2010 domestic crude oil production is expected to increase
throughout the remainder of 2010 and is expected to be at least 20%
above 2009 domestic oil production. Spending reductions in planned
gas development programs will offset these new oil investments.
Newfield maintains its capital budget of $1.6 billion.
For the full year 2010, Newfield expects that its production
will be in the upper half of its previous production guidance of
278 – 288 Bcfe, representing an expected increase of at least 10%
over 2009 volumes. An intentional reduction in natural gas volumes
in the second half of 2010 should be more than offset by our
growing crude oil volumes.
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 or anticipated second
quarter and full year 2010 results, estimated capital expenditures,
cash flow, 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:
|
|
Investor Relations: Steve Campbell (281)
847-6081
|
|
Media Relations: Keith Schmidt (281)
674-2650
|
|
Email: info@newfield.com
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|
|
1Q10 Actual Results
|
|
|
1Q10
Actual
|
|
|
Domestic
|
Int'l
|
Total
|
|
Production/Liftings
|
|
|
|
|
Natural gas –
Bcf
|
48.0
|
–
|
48.0
|
|
Oil and condensate –
MMBbls
|
1.8
|
1.4
|
3.2
|
|
Total Bcfe
|
58.6
|
8.4
|
67.0
|
|
|
|
|
|
|
Average Realized Prices (Note
1)
|
|
|
|
|
Natural gas –
$/Mcf
|
$
|
6.34
|
$
|
–
|
$
|
6.34
|
|
Oil and condensate –
$/Bbl
|
$
|
88.38
|
$
|
70.50
|
$
|
80.45
|
|
Mcf equivalent –
$/Mcfe
|
$
|
7.91
|
$
|
11.75
|
$
|
8.40
|
|
|
|
|
|
|
|
|
|
Operating Expenses: (Note
2)
|
|
|
|
|
|
|
|
Lease
operating
|
|
|
|
|
|
|
|
Recurring
($MM)
|
$
|
49.9
|
$
|
10.0
|
$
|
59.9
|
|
per/Mcfe
|
$
|
0.87
|
$
|
1.20
|
$
|
0.91
|
|
Major (workovers,
repairs, etc.) ($MM)
|
$
|
6.0
|
$
|
1.2
|
$
|
7.2
|
|
per/Mcfe
|
$
|
0.10
|
$
|
0.14
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
Production and other taxes
($MM)
|
$
|
15.4
|
$
|
9.3
|
$
|
24.7
|
|
per/Mcfe
|
$
|
0.27
|
$
|
1.10
|
$
|
0.38
|
|
|
|
|
|
|
|
|
|
General and
administrative (G&A), net ($MM)
|
$
|
35.5
|
$
|
0.9
|
$
|
36.4
|
|
per/Mcfe
|
$
|
0.62
|
$
|
0.11
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
Capitalized internal costs ($MM)
|
|
|
|
|
$
|
(20.3)
|
|
per/Mcfe
|
|
|
|
|
$
|
(0.31)
|
|
|
|
|
|
|
|
|
|
Interest expense ($MM)
|
|
|
|
|
$
|
37.7
|
|
per/Mcfe
|
|
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
Capitalized interest
($MM)
|
|
|
|
|
$
|
(12.3)
|
|
per/Mcfe
|
|
|
|
|
$
|
(0.19)
|
|
|
|
|
|
|
|
|
|
Note 1: Average
realized prices include the effects of
hedging contracts. If the effects of these contracts were excluded,
the average realized price for total gas would have been $5.04 per
Mcf and the total oil and condensate average realized price would
have been $69.82 per barrel.
Note
2: Recurring lease operating expense includes transportation
expense.
|
|
|
|
|
|
|
|
|
|
|
2Q10 & FY10
Estimates
|
|
|
2Q10 & FY10
Estimates
|
|
|
Domestic
|
Int'l
|
Total
|
|
Production/Liftings
|
2Q10
|
FY10
|
2Q10
|
FY10
|
2Q10
|
FY10
|
|
Natural gas – Bcf
|
50 – 52
|
199 –
202
|
–
|
–
|
50 – 52
|
199 –
202
|
|
Oil and condensate –
MMBbls
|
1.9 –
2.0
|
8.5 –
8.7
|
1.4 –
1.5
|
5.6 –
5.7
|
3.3 –
3.5
|
14.1 –
14.4
|
|
Total Bcfe
|
62 – 64
|
250 –
254
|
8 – 9
|
33 – 34
|
70 – 73
|
283 –
288
|
|
|
|
|
|
|
|
|
|
Average Realized Prices
|
|
|
|
|
|
|
|
Natural gas – $/Mcf
|
Note
1
|
Note
1
|
|
|
|
|
|
Oil and condensate –
$/Bbl
|
Note
2
|
Note
2
|
Note
3
|
Note
3
|
|
|
|
Mcf equivalent –
$/Mcfe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
Lease
operating
|
|
|
|
|
|
|
|
Recurring
($MM)
|
$35 -
$39
|
$148 -
$157
|
$12 -
$14
|
$43 -
$45
|
$47 -
$53
|
$191 -
$202
|
|
per/Mcfe
|
$0.57 -
$0.61
|
$0.59 -
$0.62
|
$1.43 -
$1.48
|
$1.30 -
$1.34
|
$0.67 -
$0.72
|
$0.67 -
$0.72
|
|
Transportation
($MM)
|
$18 -
$20
|
$70 -
$73
|
-
|
-
|
$18 -
$20
|
$70 -
$73
|
|
per/Mcfe
|
$0.25 -
$0.27
|
$0.28 -
$0.29
|
-
|
-
|
$0.25 -
$0.27
|
$0.28 -
$0.29
|
|
Recurring w/ trans
($MM)
|
$53 -
$59
|
$218 -
$230
|
$12 -
$14
|
$43 -
$45
|
$65 -
$73
|
$261 -
$275
|
|
per/Mcfe
|
$0.86 -
$0.92
|
$0.87 -
$0.92
|
$1.43 -
$1.48
|
$1.30 -
$1.34
|
$0.93 -
$0.99
|
$0.93 -
$0.97
|
|
Major (workovers, etc.)
($MM)
|
$15 -
$20
|
$34 -
$38
|
$2 - $4
|
$20 -
$22
|
$17 -
$24
|
$54 -
$60
|
|
per/Mcfe
|
$0.26 -
$0.28
|
$0.14 -
$0.15
|
$0.34 -
$0.36
|
$0.61 -
$0.64
|
$0.27 -
$0.29
|
$0.19 -
$0.20
|
|
|
|
|
|
|
|
|
|
Production/Taxes
($MM) (Note 4)
|
$15 -
$18
|
$59 -
$72
|
$15 -
$19
|
$53 -
$65
|
$30 -
$37
|
$112 -
$137
|
|
per/Mcfe
|
$0.25 -
$0.26
|
$0.25 -
$0.27
|
$1.93 -
$1.97
|
$1.73 -
$1.76
|
$0.46 -
$0.47
|
$0.42 -
$0.45
|
|
|
|
|
|
|
|
|
|
G&A, net
($MM)
|
$31 -
$37
|
$129 -
$143
|
$1 - $2
|
$4 - $5
|
$32 -
$39
|
$133 -
$148
|
|
per/Mcfe
|
$0.54 -
$0.55
|
$0.54 -
$0.55
|
$0.13 -
$0.14
|
$0.12 -
$0.13
|
$0.49 -
$0.50
|
$0.49 -
$0.50
|
|
|
|
|
|
|
|
|
|
Capitalized internal
costs ($MM)
|
|
|
|
|
($19 -
$23)
|
($75 -
$92)
|
|
per/Mcfe
|
|
|
|
|
($0.29 -
$0.30)
|
($0.29 -
$0.30)
|
|
|
|
|
|
|
|
|
|
Interest expense ($MM)
|
|
|
|
|
$35 -
$43
|
$137 -
$168
|
|
per/Mcfe
|
|
|
|
|
$0.54 -
$0.55
|
$0.53 -
$0.54
|
|
|
|
|
|
|
|
|
|
Capitalized interest
($MM)
|
|
|
|
|
($11 -
$13)
|
($41 -
$51)
|
|
per/Mcfe
|
|
|
|
|
($0.16 -
$0.17)
|
($0.15 -
$0.16)
|
|
|
|
|
|
|
|
|
|
Tax rate (%) (Note 5)
|
|
|
|
|
35% -
37%
|
35% -
37%
|
|
|
|
|
|
|
|
|
|
Income taxes (%)
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
14% -
16%
|
14% -
16%
|
|
Deferred
|
|
|
|
|
84% -
86%
|
84% -
86%
|
|
|
|
|
|
|
|
|
|
Note 1: The price that we
receive for natural gas production from the Gulf of Mexico and
onshore Gulf Coast, after basis differentials, transportation and
handling charges, typically averages $0.25 - $0.50 per MMBtu less
than the Henry Hub Index. Realized natural gas prices for our
Mid-Continent properties, after basis differentials, transportation
and handling charges, typically average 85-90% of the Henry Hub
Index.
|
|
Note 2: The price we receive for
our Gulf Coast oil production typically averages about 90-95% of
the NYMEX West Texas Intermediate (WTI) price. The price we receive
for our oil production in the Rocky Mountains is currently
averaging about $12-$14 per barrel below the WTI price. Oil
production from our Mid-Continent properties typically averages
88-92% of the WTI price.
|
|
Note 3: Oil sales from our
operations in Malaysia typically sell at a slight discount to
Tapis, or about 90-95% of WTI. Oil sales from our operations in
China typically sell at $4-$6 per barrel less than the WTI
price.
|
|
Note 4: Guidance for
production taxes determined using $75/Bbl oil and $5.00/MMBtu
gas.
|
|
Note 5: Tax rate applied
to earnings excluding unrealized gains or losses on commodity
derivatives.
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in millions, except per share
data)
|
For
the
Three Months
Ended
March
31,
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
Oil and gas revenues
|
$
458
|
|
$
262
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
Lease operating
|
67
|
|
71
|
|
|
Production and other taxes
|
25
|
|
9
|
|
|
Depreciation, depletion and
amortization
|
147
|
|
159
|
|
|
General and administrative
|
36
|
|
32
|
|
|
Ceiling test writedown
|
—
|
|
1,344
|
|
|
Other
|
8
|
|
2
|
|
|
Total operating
expenses
|
283
|
|
1,617
|
|
|
|
|
|
|
|
|
Income (loss) from operations
|
175
|
|
(1,355)
|
|
|
|
|
|
|
|
|
Other income (expenses):
|
|
|
|
|
|
Interest expense
|
(38)
|
|
(32)
|
|
|
Capitalized interest
|
12
|
|
14
|
|
|
Commodity derivative income
|
237
|
|
278
|
|
|
Other
|
2
|
|
3
|
|
|
Total other income
(expenses)
|
213
|
|
263
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes
|
388
|
|
(1,092)
|
|
|
|
|
|
|
|
|
Income tax provision (benefit)
|
144
|
|
(398)
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$
244
|
|
$
(694)
|
|
|
|
|
|
|
|
|
Income (loss) per share:
|
|
|
|
|
|
Basic --
|
$
1.87
|
|
$
(5.35)
|
|
|
|
|
|
|
|
|
Diluted --
|
$
1.84
|
|
$
(5.35)
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding or basic income (loss) per share
|
130
|
|
130
|
|
|
Weighted average number of
shares outstanding for diluted income (loss) per share *
|
133
|
|
130
|
|
|
* Had
we recognized net income for the three month period ended March 31,
2009, the weighted average number of shares outstanding for the
computation of diluted earnings per share would have increased by 1
million shares
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE
SHEET
(Unaudited, in millions)
|
March
31,
2010
|
|
December 31,
2009
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
$
112
|
|
$
78
|
|
Derivative assets
|
349
|
|
269
|
|
Other current assets
|
517
|
|
546
|
|
Total current
assets
|
978
|
|
893
|
|
|
|
|
|
|
Property and equipment, net (full cost
method)
|
5,671
|
|
5,247
|
|
Derivative assets
|
75
|
|
19
|
|
Other assets
|
103
|
|
95
|
|
Total assets
|
$
6,827
|
|
$
6,254
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
Current liabilities
|
$
890
|
|
$
873
|
|
Current debt
|
32
|
|
—
|
|
Total current
liabilities
|
922
|
|
873
|
|
|
|
|
|
|
Other liabilities
|
159
|
|
142
|
|
Long-term debt
|
2,189
|
|
2,037
|
|
Deferred taxes
|
537
|
|
434
|
|
Total long-term
liabilities
|
2,885
|
|
2,613
|
|
|
|
|
|
|
Commitments and
contingencies
|
—
|
|
—
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
Common stock
|
1
|
|
1
|
|
Additional paid-in capital
|
1,410
|
|
1,389
|
|
Treasury stock
|
(47)
|
|
(33)
|
|
Accumulated other comprehensive
loss
|
(10)
|
|
(11)
|
|
Retained earnings
|
1,666
|
|
1,422
|
|
Total stockholders' equity
|
3,020
|
|
2,768
|
|
Total liabilities and stockholders'
equity
|
$
6,827
|
|
$
6,254
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
(Unaudited, in millions)
|
For
the
Three Months
Ended
March
31,
|
|
|
2010
|
|
2009
|
|
Cash flows from operating
activities:
|
|
|
|
|
Net income (loss)
|
$
244
|
|
$
(694)
|
|
Adjustments to reconcile net income
(loss) to net cash provided by
operating
activities:
|
|
|
|
|
Depreciation, depletion and
amortization
|
147
|
|
159
|
|
Deferred tax provision
(benefit)
|
131
|
|
(403)
|
|
Stock-based
compensation
|
6
|
|
8
|
|
Ceiling test
writedown
|
—
|
|
1,344
|
|
Commodity derivative
income
|
(237)
|
|
(278)
|
|
Cash receipts on derivative
settlements
|
102
|
|
211
|
|
|
393
|
|
347
|
|
Changes in operating assets and
liabilities
|
21
|
|
2
|
|
Net cash provided by operating
activities
|
414
|
|
349
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
Additions to oil and gas
properties and other, net
|
(340)
|
|
(405)
|
|
Acquisitions of oil and gas
properties
|
(217)
|
|
(9)
|
|
Redemptions of
investments
|
1
|
|
7
|
|
Net cash used in investing
activities
|
(556)
|
|
(407)
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
Net proceeds (repayments) under
credit arrangements
|
(364)
|
|
73
|
|
Net proceeds from issuance of
senior subordinated notes
|
686
|
|
—
|
|
Repayment of senior
notes
|
(143)
|
|
—
|
|
Other
|
(3)
|
|
(1)
|
|
Net cash provided
by financing activities
|
176
|
|
72
|
|
|
|
|
|
|
|
|
|
|
|
Increase in cash and cash
equivalents
|
34
|
|
14
|
|
Cash and cash equivalents, beginning
of period
|
78
|
|
24
|
|
|
|
|
|
|
Cash and cash equivalents, end of
period
|
$
112
|
|
$
38
|
|
|
|
|
|
|
|
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 first quarter of 2010
stated without the effect of certain items to net income is shown
below:
|
1Q10
|
|
|
(in
millions)
|
|
Net income
|
$
244
|
|
Net unrealized gain on
commodity derivatives (1)
|
(143)
|
|
Early redemption
charge
|
10
|
|
Termination of interest rate
swap
|
(2)
|
|
Income tax adjustment for above
items
|
49
|
|
Earnings stated without the effect of
the above items
|
$
158
|
|
|
|
(1) The determination of "Net
unrealized gain on commodity derivatives" for
the first quarter of 2010 is as follows:
|
|
|
|
|
1Q10
|
|
|
(in
millions)
|
|
Commodity derivative
income
|
$
237
|
|
Cash receipts on
derivative settlements
|
(102)
|
|
Option premiums
associated with derivatives settled during the period
|
8
|
|
Net
unrealized gain on commodity derivatives
|
$
143
|
|
|
|
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:
|
1Q10
|
|
|
(in
millions)
|
|
Net cash provided by operating
activities
|
$
414
|
|
Net change in operating assets
and liabilities
|
(21)
|
|
Net
cash provided by operating activities before changes in operating
assets and liabilities
|
$
393
|
|
|
|
SOURCE Newfield Exploration Company