HOUSTON, Feb. 15, 2011 /PRNewswire/ -- Newfield
Exploration Company (NYSE: NFX) today provided a detailed
operational update. The update precedes the announcement of
the Company's fourth quarter and year-end 2010 financial results
planned for after-market close on February
16, 2011. A conference call is planned for
8:30 a.m. CST on February 17, 2011. To participate in the
call, dial 719-325-4751 or listen through the investor relations
section of the website at http://www.newfield.com.
Nearly 60% of Newfield's 2010 investments were focused on oil
and "liquids rich" gas assets within the Company's portfolio.
As a result, 2010 domestic oil production increased 20% over
2009. The Company's domestic oil production exited 2010 at a
rate of 44,000 BOPD, approximately 10,000 BOPD higher than at
year-end 2009.
Newfield's year-end 2010 reserve report reflects margin
optimization and an oil focused business strategy. Oil now
comprises approximately one-third of the Company's total proved
reserves and, as a result, the Company's PV-10 Value of proved
reserves at year end 2010 totaled $6.8
billion, an increase of more than 80% over the comparable
year. See "Explanation of Non-GAAP Financial Measures"
found at the end of this release. Newfield disclosed its
year-end 2010 reserves in a news release dated February 7, 2011, which can be found on the
Company's website.
For the fourth quarter of 2010, Newfield's production was 77
Bcfe, an increase of 20% over the comparable quarter of 2009.
Approximately one-third of fourth quarter 2010 production was
oil. For the full year, Newfield's production was 288 Bcfe,
an increase of 12% over 2009. Approximately 30% of full year
2010 production was oil.
Rocky Mountain's Oil Program
Production from the Company's Rocky Mountain focus area
increased about 12% in 2010. Approximately two-thirds of the
region's production is oil. Current net production from the
area is nearly 30,000 BOEPD and represents nearly 20% of the
Company's total production.
Greater Monument Butte Field Area – In 2010, Newfield operated
five rigs in the Greater Monument Butte field area, and drilling
focused on 20-acre and 40-acre infill drilling in the Monument
Butte Unit as well as assessment and development of the acreage
north and adjacent to the Monument Butte Unit. Sales in the
area increased nearly 20% in 2010. Uinta Basin sales today
are approximately 24,000 BOPD (gross). Due to drilling
efficiencies, the Company drilled a record 375 wells in the field.
Average time to drill and case wells during 2010 was less
than five days, a record. Completed well costs today range
from $700,000 – $900,000 (gross).
In 2011, Newfield plans to maintain a five-rig program in the
field and expects to grow Newfield's Uinta Basin production more
than 15% over 2010. A significant portion of the 2011
drilling program will be dedicated to development and delineation
wells on the acreage north and adjacent to the Monument Butte Unit.
The remainder of the drilling program will focus on
development drilling in the Greater Monument Butte Unit. The
Company estimates that more than 4,500 development drilling
locations remain in its Monument Butte field area. Newfield
has an average working interest of more than 70% in its 200,000 net
acres in the Uinta Basin.
Williston Basin – Newfield more than doubled its Williston Basin
production in 2010 and today the area is producing about 7,000
BOEPD net. Nearly all of the Company's 2011 drilling campaign
is focused on development areas, both on the Nesson Anticline and
west of the Nesson.
As in other resource plays, Newfield has seen increased
efficiencies through drilling super extended lateral (SXLs) wells.
Substantially all of the Company's planned wells in 2011 are
SXLs. In the second half of 2010, Newfield disclosed two SXL
completions with initial gross production rates of more than 3,300
BOEPD. The Company has since drilled an additional eight SXLs
with average lateral lengths of approximately 9,600'. Of the
wells, five were recently completed and are cleaning up following
fracture stimulation. The remainders are awaiting completion.
Average gross completed SXL costs are approximately
$8.5 million.
Newfield now has 120,000 net acres and an additional 54,000
acres in the mature Elm Coulee field. The Company recently
added a fifth operated drilling rig in the Williston Basin and has
secured fracture stimulation services for 2011-2012. Newfield
plans to maintain a five-rig program in the region and double
annualized production.
Southern Alberta Basin – To
date, Newfield has drilled five vertical wells, completed and
placed on production a horizontal well, and has a second horizontal
well awaiting completion. All of the wells to date have
encountered oil. Newfield has 280,000 net acres in the play,
located in Glacier County,
Montana. There are multiple prospective geologic
formations and exploration will continue throughout 2011.
Onshore Gulf Coast
Eagle Ford Shale – The Company's Eagle Ford Shale assessment
program in 2010 was successful. The program included 11 Eagle
Ford wells, all of which encountered light oil with API gravity
ranging from approximately 30 – 50 degrees. Lateral lengths
on the wells were approximately 5,000'. With information
obtained from this assessment, the Company believes that
substantially all of its Eagle Ford acreage in the Maverick Basin
is within the oil window.
In early 2011, the Company released production information on
six wells. Peak gross production rates (24-hour) ranged from
approximately 400 – 900 BOEPD with an average of 630 BOEPD.
Thirty-day gross production averaged approximately 400 BOEPD.
Estimated ultimate recoveries (EUR) for the six wells drilled
with more than 90 days of production range from 200 – 400 MBOE.
Newfield estimates that oil in place on the Company's acreage in
the Lower Eagle Ford ranges from 40 – 60 MMBOE per section.
The Company owns an 85% working interest in approximately
335,000 net acres.
In 2011, Newfield plans to run two to three operated rigs and
has a service agreement in place for fracture stimulation services
in 2011 – 2012. With continued success, Newfield may elect to
increase its activity in the second half of 2011.
Newfield recently commenced a process to sell certain
non-strategic domestic assets. The planned sales are expected
to come from some conventional Onshore Gulf Coast assets and will
have a minimal impact on 2011 production. The Company expects
proceeds to be approximately $200
million.
Mid-Continent
Granite Wash – Newfield continues to have success in its Granite
Wash development program, located primarily in Wheeler County, Texas. To date, the
Company has drilled 40 horizontal wells and gross initial
production has averaged approximately 16 MMcfe/d (24-hour rate)
from the 35 wells completed and producing. Newfield has
successfully assessed 10 geologic horizons and additional
prospective intervals remain.
Over the last year, Newfield added about 13,000 net acres in the
Granite Wash play. For 2011, the Company plans to drill about
24 wells with a four-rig operated program. This level of
activity is expected to grow production more than 20% over 2010.
The planned 2011 program will focus almost exclusively on the
condensate and "liquids rich" Marmaton formation in
Stiles/Britt Ranch and initial
assessment of new acreage.
Woodford Shale –With
substantially all of its Woodford acreage in the gas portion of the
play held by production, the Company has shifted its primary focus
to a new play in the area – the "oily" Woodford. This play is
located along the western edge of the Company's acreage in
Coal and Hughes Counties, Oklahoma.
Last week, Newfield released initial results in the oily
Woodford. Peak gross production (24-hour) from five wells
drilled to date averaged 1,410 BOEPD. Approximately 35% of
the hydrocarbon stream is oil (API gravity of 41 degrees), with the
remainder 1,300 Btu gas. The wells have an average lateral
length of approximately 8,500' and were drilled and completed for
an average of less than $8.5 million
(gross). Newfield has substantially a 100% working interest
in these wells.
For 2011, Newfield plans to run a two to three operated rig
program in the Arkoma Basin,
primarily focusing on the oil and "liquids rich" portion of the
play. As a result, the Company expects that its natural gas
production in the region will moderately decline in 2011.
International Oil Developments
Newfield's 2010 international oil liftings were 6.1 MMBbls, or
nearly 20% above beginning of the year expectations. The
largest contributor to Newfield's international oil production was
Malaysia where net liftings
averaged approximately 14,000 BOPD in 2010. The Company
commenced production in late 2010 at West Belumut on PM 323, and
plans to add new oil volumes in late 2011 from East Piatu on the PM
329 block. East Piatu is expected to commence production at
approximately 10,000 BOPD gross. Newfield has a 70% interest
in the new development.
In late 2010, Newfield made a gas discovery associated with its
pinnacle reef play on license area SK 310. The Company's
first well drilled under this PSC found a 258 meter gas column.
Newfield is evaluating development options with its partner.
The Company has a 30% interest in the recent discovery.
Deepwater Gulf of Mexico
Newfield's deepwater Gulf of
Mexico production in 2010 was 32 Bcfe (net). In late
2010, the Company announced the deferral of exploratory drilling in
the Gulf for 2011. The Gladden oil development, located at
Mississippi Canyon 800, is expected to commence production in late
February 2011 at approximately 4,750
BOPD gross. Newfield operates Gladden with a 57.5% working
interest. In addition to Gladden, Pyrenees, located at Garden
Banks 293, is expected to commence production in late 2011.
Outside-operated developments, Axe and Dalmatian, are
schedule for first production in 2013.
2011 Capital Investment and Production Summary
Newfield plans to invest approximately $1.7 billion in 2011. The planned budget
excludes capitalized interest and overhead of approximately
$170 million. This budget
approximates the Company's estimate of 2011 cash flow from
operations. Approximately two-thirds of the 2011 budget will
be allocated to oil projects and substantially all of the remainder
is planned for "liquids rich" gas plays.
For 2011, Newfield expects that its production will be 312 – 323
Bcfe, up 8 –12% over 2010. Domestic oil production is
expected to increase about 50% in 2011. Natural gas
production is expected to remain flat in 2011, despite a
significant reduction in natural gas investments.
Explanation of Non-GAAP Financial Measures
PV-10 Value – This term is considered a non-GAAP
financial measure under SEC regulations and differs from the
Standardized Measure of Discounted Future Net Cash Flows
("Standardized Measure") in that PV-10 Value is a pre-tax number,
while the Standardized Measure includes the effect of estimated
future income taxes. Newfield believes that pre-tax PV10%
Value is an important measure that can be used to evaluate the
relative significance of its oil and natural gas properties and
that pre-tax PV10% Value is widely used by security analysts and
investors when evaluating oil and natural gas companies.
Because many factors that are unique to each individual
company impact the amount of future income taxes to be paid, the
use of a pre-tax measure provides greater comparability of assets
when evaluating companies. Newfield's Standardized Measure
for the year ended December 31, 2010
was approximately $4.9 billion.
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,
Appalachia, 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
drilling plans and planned capital expenditures, 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. Other factors
that could impact forward-looking statements are described in "Risk
Factors" in Newfield's 2009 Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q, 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 information,
contact:
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Investor Relations:
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Steve Campbell (281)
847-6081
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Danny Aguirre (281)
668-2657
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Media Relations:
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Keith Schmidt (281)
674-2650
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Email: info@newfield.com
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SOURCE Newfield Exploration Company