HOUSTON, Oct. 20 /PRNewswire-FirstCall/ -- Newfield
Exploration Company (NYSE: NFX) today reported its unaudited
third quarter 2010 financial results. Newfield will host a
conference call at 8:30 a.m. CDT on
Thursday, October 21. To participate
in the call, dial 719-457-1527 or listen through the investor
relations section of the website at http://www.newfield.com.
For the third quarter of 2010, Newfield recorded net income of
$161 million, or $1.20 per diluted share (all per share amounts
are on a diluted basis). Net income includes the effect of a net
unrealized gain on commodity derivatives of $20 million ($13
million after-tax).
Without the effect of this item, net income for the third
quarter of 2010 would have been $148
million, or $1.10 per
share.
Revenues in the third quarter of 2010 were $449 million. Net cash provided by operating
activities before changes in operating assets and liabilities was
$394 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 2010 was 71 Bcfe.
Production results for the third quarter of 2010 include the impact
of approximately 0.3 MMBbls of deferred production in Malaysia related to a damaged export pipeline.
The pipeline was repaired during the third quarter and is now
operational. Natural gas production in the third quarter of 2010
was 50 Bcf, an average of 548 MMcf/d. Newfield's oil liftings in
the third quarter of 2010 were 3.5 MMBbls, an average of
approximately 38,000 BOPD. Capital expenditures in the third
quarter of 2010 were approximately $386
million.
"In 2010, we have focused on growing our oil production while
improving our operating margins," said Newfield Chairman, President
and CEO Lee K. Boothby. "Our
portfolio has attractive oil projects capable of growth and we
allocated additional capital and people to these areas. Our 2010
domestic oil production is expected to rise nearly 25% over 2009
levels and we have great momentum entering 2011. Our gas assets are
substantially held-by-production and we have the option to slow our
investments in these regions while continuing to re-direct our
focus to oil projects."
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 fourth
quarter and full year 2010 results, estimated capital expenditures,
cash flow, production and cost reductions, drilling and development
plans and the timing of activities and liftings, 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
|
|
|
3Q10 Actual
Results
|
|
|
3Q10
Actual
|
|
|
Domestic
|
Int'l
|
Total
|
|
Production/Liftings
|
|
|
|
|
Natural gas –
Bcf
|
50.4
|
–
|
50.4
|
|
Oil and condensate
– MMBbls Note 1
|
2.2
|
1.3
|
3.5
|
|
Total
Bcfe
|
63.7
|
7.7
|
71.4
|
|
|
|
|
|
|
Average Realized
Prices Note 2
|
|
|
|
|
Natural gas –
$/Mcf
|
$
|
5.66
|
$
|
–
|
$
|
5.66
|
|
Oil and condensate
– $/Bbl
|
$
|
84.63
|
$
|
72.04
|
$
|
80.02
|
|
Mcf equivalent –
$/Mcfe
|
$
|
7.48
|
$
|
12.01
|
$
|
7.98
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Lease
operating
|
|
|
|
|
|
|
|
Recurring
($MM)
|
$
|
38.9
|
$
|
15.7
|
$
|
54.6
|
|
per/Mcfe
|
$
|
0.62
|
$
|
2.05
|
$
|
0.78
|
|
Transportation
($MM)
|
$
|
19.0
|
$
|
–
|
$
|
19.0
|
|
per/Mcfe
|
$
|
0.31
|
$
|
–
|
$
|
0.27
|
|
Recurring w/ trans
($MM)
|
$
|
57.9
|
$
|
15.7
|
$
|
73.6
|
|
per/Mcfe
|
$
|
0.93
|
$
|
2.05
|
$
|
1.05
|
|
Major (workovers,
etc.) ($MM)
|
$
|
10.3
|
$
|
1.8
|
$
|
12.1
|
|
per/Mcfe
|
$
|
0.16
|
$
|
0.23
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
Production and other taxes
($MM)
|
$
|
2.2
|
$
|
19.0
|
$
|
21.2
|
|
per/Mcfe
|
$
|
0.04
|
$
|
2.48
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
General and
administrative (G&A), net ($MM)
|
$
|
38.5
|
$
|
1.1
|
$
|
39.6
|
|
per/Mcfe
|
$
|
0.62
|
$
|
0.14
|
$
|
0.56
|
|
|
|
|
|
|
|
|
|
Capitalized internal costs ($MM)
|
|
|
|
|
$
|
(17.3)
|
|
per/Mcfe
|
|
|
|
|
$
|
(0.25)
|
|
|
|
|
|
|
|
|
|
Interest expense
($MM)
|
|
|
|
|
$
|
39.2
|
|
per/Mcfe
|
|
|
|
|
$
|
0.56
|
|
|
|
|
|
|
|
|
|
Capitalized interest
($MM)
|
|
|
|
|
$
|
(15.3)
|
|
per/Mcfe
|
|
|
|
|
$
|
(0.22)
|
|
|
|
|
|
|
|
|
|
Note 1: International oil
production excludes approximately 0.3 MMBbls of deferred Malaysian
oil production related to a damaged export pipeline.
Note 2: 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 $4.25 per Mcf and the domestic and total oil
and condensate average realized prices would have been $65.92 and
$68.16 per barrel, respectively.
|
|
|
|
|
|
|
|
|
|
|
4Q10 & FY10
Estimates
|
|
|
4Q10 &
FY10 Estimates
|
|
|
Domestic
|
Int'l
|
Total
|
|
Production/Liftings
|
4QE
|
FY10
|
4QE
|
FY10
|
4QE
|
FY10
|
|
Natural gas –
Bcf
|
49 –
51
|
198 –
200
|
–
|
–
|
49 –
51
|
198 –
200
|
|
Oil and condensate –
MMBbls
|
2.5 –
2.7
|
8.6 –
8.8
|
1.8 –
1.9
|
6.0 –
6.1
|
4.3 –
4.6
|
14.6 –
14.9
|
|
Total Bcfe
|
64 –
67
|
250 –
251
|
11 –
12
|
36 –
37
|
75 –
79
|
286 –
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 (per Mcfe):
|
|
|
|
|
|
|
|
Lease
Operating
|
|
|
|
|
|
|
|
Recurring
|
$0.61 -
$0.63
|
$0.58 -
$0.60
|
$1.44 -
$1.47
|
$1.48 -
$1.51
|
$0.73 -
$0.75
|
$0.69 -
$0.71
|
|
Transportation
|
$0.28 -
$0.30
|
$0.28 -
$0.30
|
-
|
-
|
$0.24 -
$0.26
|
$0.24 -
$0.26
|
|
Recurring
with transportation
|
$0.89 -
$0.93
|
$0.86 -
$0.90
|
$1.44 -
$1.47
|
$1.48 -
$1.51
|
$0.97 -
$1.01
|
$0.93 -
$0.97
|
|
Major (workovers,
etc.)
|
$0.13 -
$0.15
|
$0.15 -
$0.17
|
$0.52 -
$0.54
|
$0.27 -
$0.29
|
$0.19 -
$0.21
|
$0.17 -
$0.19
|
|
|
|
|
|
|
|
|
|
Production/Taxes
Note
4
|
$0.29 -
$0.31
|
$0.20 -
$0.22
|
$1.94 -
$1.98
|
$1.81-
$1.85
|
$0.52 -
$0.55
|
$0.36 -
$0.43
|
|
|
|
|
|
|
|
|
|
G&A, net
|
$0.55 -
$0.57
|
$0.58 -
$0.60
|
$0.11 -
$0.12
|
$0.15 -
$0.16
|
$0.48 -
$0.50
|
$0.53 -
$0.55
|
|
|
|
|
|
|
|
|
|
Capitalized
internal costs
|
|
|
|
|
($0.23 -
$0.24)
|
($0.24 -
$0.25)
|
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
|
|
$0.47 -
$0.51
|
$0.52 -
$0.55
|
|
|
|
|
|
|
|
|
|
Capitalized
Interest
|
|
|
|
|
($0.19 -
$0.20)
|
($0.20 -
$0.21)
|
|
|
|
|
|
|
|
|
|
Tax rate
(%)Note 5
|
|
|
|
|
36% -
38%
|
36% -
38%
|
|
|
|
|
|
|
|
|
|
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 $78/Bbl oil and $4/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
September
30,
|
|
For
the
Nine Months
Ended
September
30,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Oil and gas
revenues
|
$ 449
|
|
$ 375
|
|
$ 1,355
|
|
$ 924
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Lease operating
|
86
|
|
64
|
|
237
|
|
192
|
|
Production and other
taxes
|
21
|
|
14
|
|
77
|
|
38
|
|
Depreciation, depletion and
amortization
|
156
|
|
144
|
|
463
|
|
440
|
|
General and
administrative
|
40
|
|
40
|
|
117
|
|
106
|
|
Ceiling test
writedown
|
—
|
|
—
|
|
—
|
|
1,344
|
|
Other
|
—
|
|
1
|
|
10
|
|
8
|
|
Total
operating expenses
|
303
|
|
263
|
|
904
|
|
2,128
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
146
|
|
112
|
|
451
|
|
(1,204)
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
Interest expense
|
(39)
|
|
(31)
|
|
(116)
|
|
(95)
|
|
Capitalized interest
|
15
|
|
13
|
|
43
|
|
39
|
|
Commodity derivative income
(expense)
|
131
|
|
(8)
|
|
414
|
|
189
|
|
Other
|
1
|
|
(1)
|
|
2
|
|
4
|
|
Total other
income (expenses)
|
108
|
|
(27)
|
|
343
|
|
137
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income
taxes
|
254
|
|
85
|
|
794
|
|
(1,067)
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
(benefit)
|
93
|
|
7
|
|
293
|
|
(412)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
$ 161
|
|
$ 78
|
|
$ 501
|
|
$ (655)
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per
share:
|
|
|
|
|
|
|
|
|
Basic --
|
$ 1.22
|
|
$ 0.59
|
|
$ 3.80
|
|
$ (5.06)
|
|
|
|
|
|
|
|
|
|
|
Diluted --
|
$ 1.20
|
|
$ 0.58
|
|
$ 3.75
|
|
$ (5.06)
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
shares outstanding
for basic income (loss)
per share
|
132
|
|
130
|
|
132
|
|
129
|
|
Weighted average number of
shares outstanding
for diluted income (loss)
per share *
|
134
|
|
132
|
|
134
|
|
129
|
|
* Had we recognized net
income for the nine month period ended
September 30, 2009, the weighted average number of shares
outstanding for the computation of diluted earnings per share would
have increased by 2 million shares.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE
SHEET
(Unaudited, in
millions)
|
September
30,
2010
|
|
December
31,
2009
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
$ 128
|
|
$ 78
|
|
Derivative assets
|
296
|
|
269
|
|
Other current assets
|
436
|
|
546
|
|
Total current
assets
|
860
|
|
893
|
|
|
|
|
|
|
Property and equipment, net
(full cost method)
|
6,184
|
|
5,247
|
|
Derivative assets
|
73
|
|
19
|
|
Other assets
|
109
|
|
95
|
|
Total assets
|
$ 7,226
|
|
$ 6,254
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
Current liabilities
|
$ 876
|
|
$ 873
|
|
|
|
|
|
|
Other liabilities
|
201
|
|
142
|
|
Long-term debt
|
2,169
|
|
2,037
|
|
Deferred taxes
|
680
|
|
434
|
|
Total long-term
liabilities
|
3,050
|
|
2,613
|
|
|
|
|
|
|
Commitments and
contingencies
|
—
|
|
—
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
Common stock
|
1
|
|
1
|
|
Additional paid-in
capital
|
1,430
|
|
1,389
|
|
Treasury stock
|
(41)
|
|
(33)
|
|
Accumulated other comprehensive
loss
|
(13)
|
|
(11)
|
|
Retained earnings
|
1,923
|
|
1,422
|
|
Total stockholders'
equity
|
3,300
|
|
2,768
|
|
Total liabilities and
stockholders' equity
|
$ 7,226
|
|
$ 6,254
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS
(Unaudited, in
millions)
|
For
the
Nine Months
Ended
September
30,
|
|
|
2010
|
|
2009
|
|
Cash flows from operating
activities:
|
|
|
|
|
Net income (loss)
|
$ 501
|
|
$ (655)
|
|
Adjustments to reconcile net
income (loss) to net cash provided by
operating
activities:
|
|
|
|
|
Depreciation, depletion
and amortization
|
463
|
|
440
|
|
Deferred tax provision
(benefit)
|
259
|
|
(448)
|
|
Stock-based
compensation
|
16
|
|
22
|
|
Ceiling test
writedown
|
—
|
|
1,344
|
|
Commodity derivative
income
|
(414)
|
|
(189)
|
|
Cash receipts on derivative
settlements
|
345
|
|
701
|
|
|
1,170
|
|
1,215
|
|
Changes in operating assets and
liabilities
|
137
|
|
2
|
|
Net cash provided by operating
activities
|
1,307
|
|
1,217
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
Additions to oil and gas
properties and other, net
|
(1,202)
|
|
(1,052)
|
|
Acquisitions of oil and gas
properties
|
(209)
|
|
(9)
|
|
Proceeds from sales of oil and
gas properties
|
14
|
|
—
|
|
Redemptions of
investments
|
5
|
|
18
|
|
Net cash used in investing
activities
|
(1,392)
|
|
(1,043)
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
Net repayments under credit
arrangements
|
(384)
|
|
(107)
|
|
Net proceeds from issuance of
senior subordinated notes
|
686
|
|
—
|
|
Repayment of senior
notes
|
(175)
|
|
—
|
|
Other
|
8
|
|
5
|
|
Net cash
provided by (used in) financing activities
|
135
|
|
(102)
|
|
|
|
|
|
|
|
|
|
|
|
Increase in cash and cash
equivalents
|
50
|
|
72
|
|
Cash and cash equivalents,
beginning of period
|
78
|
|
24
|
|
|
|
|
|
|
Cash and cash equivalents, end
of period
|
$ 128
|
|
$ 96
|
|
|
|
|
|
|
|
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 third quarter of 2010
stated without the effect of certain items to net income is shown
below:
|
|
|
|
|
3Q10
|
|
|
(in
millions)
|
|
Net income
|
$ 161
|
|
Net unrealized gain on
commodity derivatives (1)
|
(20)
|
|
Income tax adjustment for
above item
|
7
|
|
Earnings stated without the
effect of the above item
|
$ 148
|
|
|
|
(1) The determination of "Net
unrealized gain on commodity derivatives" for the third quarter of
2010 is as follows:
|
|
|
|
|
|
3Q10
|
|
|
(in
millions)
|
|
Commodity
derivative income
|
$ 131
|
|
Cash receipts on
derivative settlements
|
(118)
|
|
Option premiums
associated with derivatives settled
during the
period
|
7
|
|
Net
unrealized gain on commodity derivatives
|
$ 20
|
|
|
|
|
|
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:
|
|
|
3Q10
|
|
|
(in millions)
|
|
Net cash provided by operating
activities
|
$ 419
|
|
Net change in operating
assets and liabilities
|
(25)
|
|
Net cash provided by operating
activities before changes
in operating assets and
liabilities
|
$ 394
|
|
|
|
|
|
SOURCE Newfield Exploration Company
Copyright . 20 PR Newswire