Newfield Exploration: Reserves Up 3% On Growing Oil Investment

Newfield Exploration Co. (NFX) said Monday that its proved reserves rose 3% to 3.7 trillion cubic feet equivalent of oil and gas, about a third of which were in oil-producing assets.

The Houston-based company said the oil component of its prove reserves rose 20% to 200 million barrels, as higher oil prices increased the amount of reserves that can be considered recoverable and the company shifted more of its capital spending to oil. Most of the growth in the company's oil reserves came from its Rocky Mountain operations.

Newfield downgraded about 315 billion cubic feet equivalent of proved natural gas reserves to "probable" reserves because it deferred development plans in some gas-producing assets. Low natural-gas prices make the commodity less profitable than oil, and Newfield is one among many independent energy producers that are seeking to shift their spending to crude oil.

Newfield announced that it would invest about $1.7 billion in its capital program for 2011, most of it in oil assets. The company spent $2 billion in 2010, but that amount included $314 million in acquisitions.

The company said in a statement that its 2011 production should be between 312 and 323 billion cubic feet equivalent of oil and gas, up 8% to 12% from 2010. Oil production is expected to rise 50% while natural gas production will remain flat, Newfield said.

-By Angel Gonzalez, Dow Jones Newswires; 713-547-9214;

angel.gonzalez@dowjones.com

Newfield Exp Com (NYSE:NFX)
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