THE WOODLANDS, Texas,
Feb. 21, 2012 /PRNewswire/
-- Newfield Exploration Company (NYSE: NFX) today
announced a $1.5 – $1.7 billion capital investment program for 2012.
The investments will be almost entirely "oil-focused" and are
expected to generate more than 20% year-over-year production growth
in oil and liquids. Approximately $300
million of the budget will be allocated to an aggressive
assessment of a new 125,000 net-acre position in the "liquids-rich"
Cana Woodford play, located in Oklahoma's Anadarko Basin.
2012 Capital Investment Highlights
- Total planned 2012 capital investments of $1.5 – $1.7
billion, or approximately $400
million less than 2011 investments of $2.0 billion. Totals exclude acquisitions and
capitalized overhead and interest of $210
million and $194 million,
respectively;
- Oil and liquids production is expected to grow more than 20%,
natural gas production expected to decline as much as 15%;
- Approximately $500 million, or
nearly one-third of total budget, will be allocated to Uinta Basin
oil plays. Multiple horizontal targets are planned to be tested in
the Central Basin region and area production is expected to grow
more than 20% in 2012;
- One-third of total budget, more than $500 million, will be allocated to the
Mid-Continent. Up to seven operated rigs will be dedicated to the
assessment of a new 125,000 net acre position in the Cana Woodford
play;
- Acceleration of development drilling in Malaysia to yield approximately 35% growth in
area oil production. Approximately 40% of the $235 million international budget will be
allocated to development of the Pearl oil field in China;
- The budget will be funded through the Company's 2012 cash flows
from operations, proceeds from non-strategic asset sales and
borrowings as needed under its existing credit facility;
- Approximately 62% of the Company's expected 2012 gas production
and approximately 95% of the Company's expected 2012 domestic oil
production is hedged. Complete details on Newfield's hedge
positions can be found on the Company's website in the @NFX
publication.
2012 Production Guidance
"We are transitioning to an oil company in 2012 and by the
second half of the year we expect that more than 50% of our
production will be from oil and liquids fields," said Lee K. Boothby, Chairman, President and
CEO. "With the continuing gap between oil and natural gas
prices, we are voluntarily electing to defer natural gas activity
in favor of more profitable oil and liquids opportunities. Because
we took proactive steps over the last several years to build our
oil assets, we have favorable areas to invest in today and expect
that our oil and liquids volumes will grow more than 20% in 2012
from plays in the Uinta and Williston basins, the Anadarko Basin and from our international
developments."
Boothby continued, "Our natural gas production is expected to
fall by approximately 15% in 2012 due to natural field declines. We
are refusing to fund low margin natural gas projects simply for the
sake of absolute production growth. I am confident that we are
making the right long-term decisions for our shareholders. Overall,
we expect that our production in 2012 will range from 290 – 300
Bcfe, or flat to slightly higher than our 290 Bcfe produced in 2011
(pro forma for asset sales). Year to date, we have already deferred
about 2 Bcfe associated with curtailments and deferred completions
in the Mid-Continent. Should prices further deteriorate, we may
elect to curtail, shut-in and/or defer additional natural gas
production."
The following tables detail Newfield's production by area and,
in addition, the impact of non-strategic asset sales, as well as
planned 2012 investments and production by region.
2011 Production and Ongoing Non-Strategic Asset Sales
AREA
|
Liquids
Production
(MMBbl)
|
Gas
Production
(Bcf)
|
Production
(Bcfe)
|
Proceeds
from
Divestitures
($MM)
|
2011
Production
from
Assets
Divested
(Bcfe)
|
2011
Pro
Forma
Production
(Bcfe)
|
Rocky
Mountains
|
7.4
|
16.1
|
60.6
|
415
|
1.8
|
58.8
|
Mid-Continent
|
2.4
|
113.8
|
128.4
|
107
|
3.0
|
125.4
|
International
|
6.7
|
0.1
|
40.4
|
-
|
-
|
40.4
|
Onshore
Gulf Coast
|
1.4
|
31.9
|
40.4
|
159
|
3.1
|
37.2
|
GOM
|
1.7
|
20.0
|
30.1
|
47
|
2.1
|
28.1
|
TOTAL
|
19.7
|
181.9
|
299.9
|
$728*
|
10.0
|
289.9
|
*Includes approximately $18
million in proceeds from asset sales expected to close in
the first quarter of 2012.
2012 Planned Capital Investments and Expected Production by
Area
AREA
|
Capital
Investments
($MM)
|
Liquids
Production
(MMBbl)
|
Gas
Production
(Bcf)
|
Production
(Bcfe)
|
Rocky
Mountains
|
700-800
|
9.3
|
15.3
|
70.9
|
Mid-Continent
|
480-525
|
2.8
|
103.2
|
120.2
|
International
|
220-265
|
8.4
|
0.5
|
50.7
|
Onshore
Gulf Coast
|
100-110
|
1.3
|
20.6
|
28.4
|
GOM
|
-
|
1.5
|
15.6
|
24.8
|
TOTAL
|
$1,500-1,700
|
23.3
|
155.2
|
295
|
Full-Year 2012 Guidance
The following table provides production and certain cost
guidance for the full year 2012. For the first quarter of 2012,
Newfield expects that its production will be approximately 72 Bcfe
(comprised of 39 Bcfe of natural gas, 3.2 MMBbls of domestic oil
and 2.3 MMBbls of international oil). Early in the first quarter of
2012, Newfield deferred production of approximately 2 Bcfe
associated with well shut-ins and deferred completions in the
Mid-Continent. Our cost structure per Mcfe during the first quarter
of 2012 is expected to be within 5% of the amounts listed
below.
|
2012
Estimates
|
|
Domestic
|
Int'l
|
Total
|
Production/Liftings (Note 1)
|
|
|
|
Natural gas – Bcf
|
155
|
–
|
155
|
Oil and condensate – MMBbls
|
14.9
|
8.4
|
23.3
|
Total Bcfe
|
244
|
51
|
295
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
Lease operating (per Mcfe)
|
|
|
|
|
|
|
Recurring
|
$
|
0.95
|
$
|
1.80
|
$
|
1.10
|
Major (workovers, etc.) (Note
2)
|
$
|
0.25
|
$
|
0.30
|
$
|
0.25
|
Transportation
|
$
|
0.45
|
$
|
–
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and other taxes (per Mcfe) (Note 3)
|
$
|
0.35
|
$
|
6.45
|
$
|
1.40
|
|
|
|
|
|
|
|
DD&A expense (per Mcfe) (Note
4)
|
$
|
2.80
|
$
|
4.25
|
$
|
3.10
|
|
|
|
|
|
|
|
General and administrative (G&A), net (per Mcfe)
|
|
|
|
|
$
|
0.70
|
|
|
|
|
|
|
|
Capitalized internal costs (per Mcfe)
|
|
|
|
|
$
|
(0.45)
|
|
|
|
|
|
|
|
Interest expense (per Mcfe)
|
|
|
|
|
$
|
0.45
|
|
|
|
|
|
|
|
Capitalized interest (per Mcfe)
|
|
|
|
|
$
|
(0.30)
|
|
|
|
|
|
|
|
Note 1:
|
Production/liftings is subject to timing and can vary
by quarter.
|
Note 2:
|
The timing
of "major expense" items varies and includes well workovers and
repairs and related expenses.
|
Note 3:
|
Production
and other taxes are dependent on commodity prices as well as the
terms of our international PSC's. Guidance for production taxes was
determined using $100 Bbl WTI NYMEX and $3.25/MMBtu NYMEX gas
prices.
|
Note
4:
|
The
DD&A rate per Mcfe is reflective of the composition of the
investments and reserves associated with our existing asset base
and the assumed cost to add new reserves during the year. The
timing and impact of our activities on this rate will vary by
quarter.
|
Cana Woodford Assessment
In 2011, Newfield invested approximately $100 million to build a 125,000 net-acre position
in the Cana Woodford, located in the Anadarko Basin of Oklahoma. This acreage is a southeast
extension of the prolific Cana Woodford play. Newfield plans to
invest approximately $300 million in
the new area in 2012 and expects to operate up to seven drilling
rigs. The Company believes that the acreage lies in both oil and
"liquids-rich" gas areas of the play. Newfield will provide an
update on its drilling results around mid-year 2012. Today,
Newfield has more than 300,000 net acres in Oklahoma's Woodford play.
Newfield Exploration Company is an independent energy company
engaged in the exploration, development and production of crude
oil, natural gas and natural gas liquids. Our domestic areas
of operation include the Mid-Continent, the Rocky Mountains and
onshore Texas. Internationally, we focus on offshore oil
developments 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 in the Uinta Basin, the availability and cost of capital
resources, new regulations or changes in tax legislation, labor
conditions and severe weather conditions (such as hurricanes). In
addition, the drilling of oil and natural 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 2010 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 more
information, contact:
|
Investor
Relations:
|
Steve
Campbell (281) 210-5200
|
|
Danny
Aguirre (281) 210-5203
|
Media
Relations:
|
Keith
Schmidt (281) 210-5202
|
SOURCE Newfield Exploration Company