THE WOODLANDS, Texas,
Feb. 20, 2018 /PRNewswire/ --
Newfield Exploration Company (NYSE: NFX) today provided a
detailed overview of the Company's business plan, including annual
guidance expectations for capital investments and key operating and
financial metrics for 2018 - 20. In addition, quarterly specific
guidance was provided for 2018. Additional information is provided
through the @NFX publication, located on its website at
www.newfield.com.
Newfield plans to host a conference call with analysts and
investors at 10 a.m. CST,
February 21.
"Newfield is in an excellent place today and our
three-year outlook has been strategically crafted to maximize our
returns and grow our cash flow from operations," said
Lee K. Boothby, Newfield Chairman,
President and CEO. "Now that our Anadarko Basin assets are substantially held
by production and we have a better understanding of infill well
spacing and completion optimizations throughout the company, we are
better able to construct a plan that delivers an improving growth
outlook with strong returns. Our oil growth is being driven by the
Anadarko and Williston basins. We have high levels of
confidence in these areas and, at current commodity prices, expect
the Company to generate free cash beginning in the second half of
2018 and well into the future."
The key takeaways from our 2018 strategic plan and three-year
plan (3YR Plan) are summarized below. Additional slides can be
found in @NFX:
- Newfield expects 2018 domestic production will increase by 14 -
18% over 2017. Domestic oil production growth is expected to be 20
- 25% year-over-year. Importantly, the 3YR Plan is expected to
deliver a compound annual growth rate (CAGR) in debt-adjusted
production per share of 15 - 20% over the plan period.
- Internal rates of return (IRRs), on a pre-tax basis, in the
Company's 3YR plan are expected to average in excess of 50%,
assuming a NYMEX WTI oil price of $55
per barrel and natural gas price of $2.85 per thousand cubic feet. With these price
assumptions, the Company expects that its 2018 deficit to cash flow
will be less than $100 million and
neutrality will be achieved in the second half of the year. At
current STRIP commodity prices (Feb. 19,
2018), forecasted operating cash flow is expected to be more
than $1.2 billion. The 2018 capital
program is estimated to be cash flow "breakeven" at an estimated
NYMEX WTI oil price of approximately $58 per barrel, including the impact of in-place
derivative contracts.
- Our 2018 capital investment budget is $1.3 billion, excluding about $120 million in capitalized interest and internal
costs. Of the total, more than 85% is earmarked for drilling and
completion (D&C) investments, with approximately 80% allocated
to SCOOP and STACK. Substantially all of the remaining D&C
investments will be allocated to the Rocky Mountains (Williston and Uinta basins). Modest levels of
service cost inflation (predominately back half 2018-weighted) have
been included in the outlook. Capital spending for 2018 is expected
to be funded from cash flows from operations and cash on hand. For
2019 and 2020, Newfield expects to invest approximately
$1.4 billion and $1.5 billion, respectively. For 2019-20,
cumulative cash flow of approximately $3.3
billion (at $55 NYMEX WTI and
$2.85 Mcf) is expected to more than
offset combined capital investments of just under $3 billion.
- For 2018, Newfield expects to run 10-11 rigs in the
Anadarko Basin, with activity
heavily weighted to multi-well pad developments in SCOOP and STACK.
With continuing gains in operational efficiencies in the
Anadarko Basin, Newfield expects
to place about 150 wells on line during 2018. Of the total wells,
approximately 70% are expected to be drilled and completed in
STACK. As the assets mature and investments migrate to development,
investments in 2018 regional infrastructure and land are estimated
to decrease about 25% year-over-year to approximately $85 million.
- The cornerstone of the Company's multi-year growth outlook is
the Anadarko Basin, which is
expected to deliver a CAGR in production of 20 - 25% over the 3YR
Plan. For 2018, growth in oil in the Anadarko Basin is
estimated at 25 - 30%.
- In 2018, approximately $245
million is being allocated to ongoing drilling programs in
the Rocky Mountains. In the Williston Basin, the Company intends to invest
$130 million to drill 20 - 25
high-return oil wells. The Williston program is expected to generate
$90 - $100
million of free cash flow in 2018 at current STRIP commodity
prices. Following recent encouraging results from a 20-well joint
venture program and subsequent drilling, Newfield plans to maintain
a single-rig drilling program in the Central Basin region of the
Uinta Basin to drill an additional 10 - 15 wells in 2018. The
program is focused on HBP drilling as the Company secures the vast
majority of its more than 225,000 net acres. For 2018, crude oil
production from the Williston and
Uinta basins is expected to grow 10% and 19% over the prior year,
respectively.
- To mitigate commodity price risks, Newfield has added to its
near-term derivatives positions. For 2018, a daily average of
approximately 56,000 barrels of oil per day and approximately
237,500 mmbtu of natural gas per day has been hedged. Complete
details can be found in @NFX.
- Throughout its 3YR Plan, Newfield's net debt/EBITDA ratio is
estimated to improve and average well within the Company's
previously stated target range of 1.5x - 2.5x. At year-end 2017,
the ratio was 2.0x.
- No additional capital is planned for investment in the Pearl
field offshore China. Production
from the field was restored in early 2018 and a lifting of
approximately 250,000 net barrels is expected in the first quarter.
Daily net production is expected to average approximately 3,000 -
5,000 BOEPD in 2018.
- Newfield will amend its annual incentive pay metrics to include
debt-adjusted production growth and cash flow per share metrics, a
cash on cash return metric for 2018 and a heightened focus on
corporate responsibility. Additional details can be found in
@NFX.
2018e Production,
Cost and Expense Guidance
|
|
|
2017
ACTUAL
|
|
2018
ESTIMATES
|
DOMESTIC
GUIDANCE
|
|
|
|
PRODUCTION
|
|
|
|
Oil
(mbopd)
|
61.2
|
|
74
|
NGL
(mbopd)
|
31.7
|
|
35
|
Gas
(mmcfpd)
|
356.5
|
|
408
|
Total
(mboepd)
|
152.2
|
|
170 -
183
|
EXPENSES
($/BOE)
|
|
|
|
LOE
|
$3.47
|
|
$3.43
|
Transportation(1)
|
$5.40
|
|
$5.09
|
Production
& other taxes
|
3.8%
|
|
4.2%
|
General &
administrative, net
|
$3.49
|
|
$3.44
|
Interest
expense, net
|
$1.62
|
|
$1.42
|
CAPEX
($MM)
|
|
|
|
Drilling &
Completion
|
$992
|
|
$1,160
|
Other
|
$161
|
|
$140
|
Total
CAPEX(2)
|
$1,153
|
|
$1,300
|
CHINA
GUIDANCE
|
|
|
|
PRODUCTION
|
|
|
|
Oil
(mbopd)(3)
|
4.7
|
|
3 -
5
|
___________________
|
(1) 2017A
Transportation fee include $52 million and $29 million of firm gas
transportation in the Arkoma Basin and shortfall fees in the Uinta
Basin, respectively. 2018E transportation fees include $38 million
and $20 million of firm gas transportation in the Arkoma Basin and
shortfall fees in the Uinta Basin, respectively.
|
(2) 2017A and 2018E
exclude ~$120 million and ~$100 million of capitalized interest and
direct internal cost, respectively.
|
(3) 2017A China
volumes include impact of Bohai Bay divestiture.
|
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 U.S. operations are
onshore and focus primarily on large scale, liquids-rich resource
plays in the Anadarko and
Arkoma basins of Oklahoma, the Williston Basin of North Dakota and the Uinta Basin of
Utah. In addition, we have oil
producing assets offshore China.
**This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
The words "may," "forecast," "outlook," "could," "budget,"
"objectives," "strategy," "believe," "expect," "anticipate,"
"intend," "estimate," "project," "target," "goal," "plan,"
"should," "will," "predict," "guidance," "potential" or other
similar expressions are intended to identify forward-looking
statements. Other than historical facts included in this release,
all information and statements, including but not limited to
information regarding planned capital expenditures, estimated
reserves, estimated production targets, estimated pre-tax wellhead
rates of return, estimated future operating costs and other
expenses and other financial measures, estimated future tax rates,
drilling and development plans, the timing of production, and other
plans and objectives for future operations, are forward-looking
statements. Although, as of the date of this release,
Newfield believes that these expectations are reasonable, this
information is based upon assumptions and anticipated results that
are subject to numerous uncertainties and risks and no assurance
can be given that such expectations will prove to have been
correct.
Actual results may vary significantly from those anticipated
due to many factors, including but not limited to commodity prices
and our ability to hedge commodity prices, drilling results,
accessibility to economic transportation modes and processing
facilities, our liquidity and the availability of capital
resources, operating risks, failures and hazards, industry
conditions, governmental regulations in the areas we operate in,
including water regulations, financial counterparty risks, the
prices of goods and services, the availability of drilling rigs and
other support services, our ability to monetize assets and repay or
refinance our existing indebtedness, labor conditions, severe
weather conditions, new regulations or changes in tax or
environmental legislation, environmental liabilities not covered by
indemnity or insurance, legislation or regulatory initiatives
intended to address seismic activity or induced seismicity, and
other operating risks.
Please see Newfield's 2017 Annual Report on Form 10-K and
other subsequent public filings, all filed with the U.S. Securities
and Exchange Commission (SEC), for a discussion of other factors
that may cause actual results to vary. Unpredictable or unknown
factors not discussed in this press release or in Newfield's SEC
filings could also have material adverse effects on Newfield's
actual results as compared to its anticipated results. Readers are
cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date of this release. Unless
legally required, Newfield undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
For additional information, please contact Newfield's Investor
Relations department.
Phone: 281-210-5321
Email: IR@newfield.com
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SOURCE Newfield Exploration Company