NEWFIELD EXPLORATION THE WOODLANDS, Texas, Feb. 24, 2016 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today reported its fourth quarter 2015 financial results, as well as 2015 year-end proved reserves. Additional operational details can be found in the Company's @NFX publication, located on its website. Newfield today issued a separate news release outlining its planned 2016 capital investment program and full-year production expectations.
Newfield will host a conference call at 10 a.m. CST, February 25, 2016. To listen to the call, please visit Newfield's website at http://www.newfield.com. To participate in the call, dial 785-424-1666 and enter conference code 1019964 about 10 minutes prior to the scheduled start time.
Fourth Quarter and Full-Year 2015 Financial Summary
For the fourth quarter, the Company recorded a net loss of $663 million, or $4.06 per diluted share (all per share amounts are on a diluted basis). The loss was primarily related to a full-cost ceiling test impairment of $702 million ($651 million after-tax, or $3.95 per share). After adjusting for the effect of impairments and unrealized derivative losses, net income would have been $50 million, or $0.30 per share.
Revenues for the fourth quarter were $362 million. Net cash provided by operating activities before changes in operating assets and liabilities was $289 million.
For the full-year 2015, Newfield posted a net loss of $3.4 billion, or $21.18 per share. Excluding impairments, unrealized losses on commodity derivatives and the premium to call notes, net income would have been $164 million, or $1.02 per share. Revenues for 2015 were approximately $1.6 billion and consolidated net cash provided by operating activities before changes in operating assets and liabilities was approximately $1.2 billion.
Fourth Quarter and Full-Year 2015 Production Summary
Newfield's total net production in the fourth quarter of 2015 was 14.9 MMBOE, comprised of 47% oil, 16% natural gas liquids and 37% natural gas. Domestic production in the fourth quarter was 13.5 MMBOE.
For the full-year 2015, Newfield's production was 56 MMBOE, of which 5.4 MMBOE was from offshore China.
Proved Reserves and Costs Incurred
Newfield's year-end 2015 proved reserves were 509 MMBOE (98% domestic). Approximately 57% of proved reserves are liquids and 65% are proved developed. The largest source of reserve additions during 2015 came from the Anadarko Basin, which now total 269 MMBOE and comprise more than half of Newfield's total proved reserves. The proved reserve life index for the Company is approximately nine years.
Proved reserves were down year-over-year and were impacted by significantly lower crude oil and natural gas prices used in year-end reserve calculations. Crude oil and natural gas prices used in this calculation were $50.11 per barrel (down 47%) and $2.59 per MMbtu (down 40%), respectively. As a result, pre-tax present value of reserves (discounted at 10%) at year-end 2015 was approximately $2.9 billion, down 67% over the prior year-end.
Net negative revisions to previous estimates were 174 MMBOE. Revisions included price-related negative revisions of approximately 286 MMBOE, which were offset by positive performance and cost revisions of 112 MMBOE. Proved reserve extensions, discoveries and other additions of 101 MMBOE during the year equate to a reserve replacement ratio of approximately 180%.
Newfield engaged the consulting firms DeGolyer and MacNaughton and Ryder Scott Company to perform an audit of the internally prepared reserve estimates on certain fields covering 94% of year-end 2015 proved reserve quantities on a barrel of oil equivalent basis. The purpose of this audit was to provide additional assurance on the reasonableness of internally prepared reserve estimates. Newfield's proved reserves are, in aggregate, reasonable and within the established audit tolerance guidelines of 10 percent.
Newfield invested approximately $1.5 billion in 2015, which includes approximately $304 million in land and leasehold expenditures and $107 million of capitalized interest and internal costs. The tables below provide additional information on reserves and costs incurred during 2015.
Crude Oil and Condensate Natural Gas Natural Gas Liquids Total
(MMBbls) (Bcf) (MMBbls) (MMBOE)
------- ---- ------- ------
Total Company
Reserves
-------------
December 31,
2014 301 1,607 76 645
Revisions of
previous
estimates (112) (352) (3) (174)
Extensions,
discoveries
and other
additions 49 187 20 101
Purchases of
properties 1 2 - 1
Sales of
properties (5) (15) - (8)
Production (27) (124) (9) (56)
--- ---- --- ---
December 31,
2015 207 1,305 84 509
SEC pricing used for year-end 2015 reserve calculations: $2.59 per MMBtu for natural gas and $50.11 per barrel for oil, adjusted for market differentials.
The following table presents costs incurred for oil and gas property acquisition, exploration and development for 2015:
Domestic China Total
-------- ----- -----
(in millions)
Property acquisitions:
Unproved $283 $1 $284
Proved 21 --- 21
Exploration 578 --- 578
Development(1) 630 15 645
--- --- ---
Total costs incurred(2) $1,512 $16 $1,528
====== === ======
(1) Includes $4 million of asset
retirement costs.
(2) Total costs incurred includes
approximately $107 million of
capitalized interest and internal
costs
Newfield Exploration Company is an independent energy company engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. We are focused on U.S. resource plays and our principal areas of operation include the Mid-Continent, the Rocky Mountains and onshore Texas. We also have offshore oil developments in 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, planned capital expenditures, and estimated production, 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 oil and gas prices, environmental liabilities not covered by indemnity or insurance, legislation or regulatory initiatives intended to address seismic activity, industry conditions, the prices of goods and services, the availability of drilling rigs and other support services, the availability and cost of capital resources, new regulations or changes in tax legislation, labor conditions and severe weather conditions. In addition, the drilling of oil and natural gas wells and the production of hydrocarbons are subject to numerous governmental regulations and operating risks. Other factors that could impact forward-looking statements are described in "Risk Factors" in Newfield's Annual Report on Form 10-K 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 additional information, please contact Newfield's Investor Relations department.
Phone: 281-210-5321
Email: info@newfield.com
4Q15 Actual
4Q15 Actual Results Domestic China Total
------------------- -------- ----- -----
Production/Liftings(1)
Crude oil and
condensate
(MMBbls) 5.6 1.4 7.0
Natural gas
(Bcf) 32.6 - 32.6
NGLs (MMBbls) 2.4 - 2.4
Total (MMBOE) 13.5 1.4 14.9
Average Realized Prices2, 3
Crude oil and
condensate (per
Bbl) $50.88 $39.25 $48.53
Natural gas (per
Mcf) 3.41 - 3.41
NGLs (per Bbl) 18.12 - 18.12
Crude oil
equivalent (per
BOE) $33.00 $39.25 $33.61
Operating Expenses:(3)
Lease operating
(in millions)
Recurring $47.9 $13.4 $61.3
Major (workovers,
etc.) $4.8 $0.3 $5.1
Lease operating
(per BOE)
Recurring $3.64 $9.52 $4.21
Major (workovers,
etc.) $0.37 $0.28 $0.36
Transportation and
processing (in
millions) $58.5 $ - $58.5
per BOE $4.42 $ - $3.99
Production and
other taxes (in
millions) $2.5 $0.3 $2.8
per BOE $0.19 $0.16 $0.19
General and
administrative
(G&A), net (in
millions) $62.5 $1.6 $64.1
per BOE $4.75 $1.13 $4.39
Capitalized direct
internal costs
(in millions) $(17.3)
per BOE $(1.19)
Other operating
expenses, net (in
millions) $2.9
per BOE $0.20
Interest expense (in millions) $37.3
per BOE $2.56
Capitalized interest (in millions) $(9.5)
per BOE $(0.65)
Other non-operating (income) expense (in millions) $0.5
per BOE $0.02
____
Note 1: Represents volumes lifted and sold regardless of when produced. Includes natural gas produced and
consumed in operations of 1.7 Bcf during the three months ended December 31, 2015.
Note 2: Average realized prices include the effects of derivative contracts. Excluding these effects, the
average realized price for domestic and total natural gas would have been $2.07 per Mcf and the average
realized price for our domestic and total crude oil and condensate would have been $35.17 per barrel and
$35.99 per barrel, respectively. We did not have any derivative contracts associated with our NGL or China
production as of December 31, 2015.
Note 3: All per unit pricing and expenses exclude natural gas produced and consumed in operations.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in
millions, except
per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
Oil, gas and NGL
revenues $362 $495 $1,557 $2,288
---- ---- ------ ------
Operating expenses:
Lease operating 66 83 285 311
Transportation and
processing 59 49 212 174
Production and other
taxes 3 21 46 111
Depreciation,
depletion and
amortization 196 237 917 870
General and
administrative 64 50 244 222
Ceiling test and
other impairments 702 - 4,904 -
Other 2 10 10 25
--- --- --- ---
Total operating
expenses 1,092 450 6,618 1,713
----- --- ----- -----
Income (loss) from
operations (730) 45 (5,061) 575
---- --- ------ ---
Other income
(expense):
Interest expense (37) (47) (164) (200)
Capitalized interest 10 14 33 53
Commodity derivative
income (expense) 29 577 259 610
Other, net (1) (10) (14) (6)
--- --- --- ---
Total other income
(expense) 1 534 114 457
--- --- --- ---
Income (loss) from
continuing
operations before
income taxes (729) 579 (4,947) 1,032
Income tax provision
(benefit) (66) 212 (1,585) 382
--- --- ------ ---
Income (loss) from
continuing
operations (663) 367 (3,362) 650
Income (loss) from
discontinued
operations, net of
tax - (7) - 250
--- --- --- ---
Net income (loss) $(663) $360 $(3,362) $900
===== ==== ======= ====
Earnings (loss) per
share:
Basic:
Income (loss) from
continuing
operations $(4.06) $2.67 $(21.18) $4.76
Income (loss) from
discontinued
operations - (0.05) - 1.83
--- ----- --- ----
Basic earnings
(loss) per share $(4.06) $2.62 $(21.18) $6.59
====== ===== ======= =====
Diluted:
Income (loss) from
continuing
operations $(4.06) $2.65 $(21.18) $4.71
Income (loss) from
discontinued
operations - (0.05) - 1.81
--- ----- --- ----
Diluted earnings
(loss) per share $(4.06) $2.60 $(21.18) $6.52
====== ===== ======= =====
Weighted-average
number of shares
outstanding for
basic earnings
(loss) per share 163 137 159 137
Weighted-average
number of shares
outstanding for
diluted earnings
(loss) per share 163 138 159 138
CONDENSED
CONSOLIDATED
BALANCE SHEET
(Unaudited, in
millions)
December 31, December 31,
2015 2014
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $5 $14
Derivative assets 284 431
Other current assets 336 495
--- ---
Total current assets 625 940
Oil and gas
properties, net
(full cost method) 3,819 8,232
Derivative assets 105 190
Other assets 219 218
--- ---
Total assets $4,768 $9,580
====== ======
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Current liabilities:
Derivative
liabilities $13 $8
Other current
liabilities 634 1,093
--- -----
Total current
liabilities 647 1,101
Other liabilities
48 45
Derivative
liabilities 9 -
Long-term debt 2,467 2,874
Asset retirement
obligations 192 183
Deferred taxes 26 1,484
--- -----
Total long-term
liabilities 2,742 4,586
----- -----
Stockholders'
equity:
Common stock,
treasury stock and
additional paid-in
capital 2,416 1,567
Accumulated other
comprehensive gain
(loss) (2) (1)
Retained earnings
(deficit) (1,035) 2,327
------ -----
Total stockholders'
equity 1,379 3,893
----- -----
Total liabilities
and stockholders'
equity $4,768 $9,580
====== ======
CONDENSED CONSOLIDATED STATEMENT
OF CASH FLOWS
(Unaudited, in millions)
Year Ended
December 31,
------------
2015 2014
---- ----
Cash flows from operating
activities:
Net income (loss) $(3,362) $900
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation, depletion and
amortization 917 903
Deferred tax provision (benefit) (1,602) 509
Stock-based compensation 25 28
Unrealized (gain) loss on
derivative contracts 246 (649)
Gain on sale of Malaysia
business - (373)
Ceiling test and other
impairments 4,904 -
Other, net 43 21
--- ---
1,171 1,339
Changes in operating assets and
liabilities 38 48
--- ---
Net cash provided by (used in)
operating activities 1,209 1,387
----- -----
Cash flows from investing
activities:
Additions and acquisitions of
oil and gas properties and
other (1,745) (2,128)
Proceeds from sales of oil and
gas properties 90 620
Proceeds received from sale of
Malaysia business, net - 809
Redemptions of investments - 39
Proceeds from insurance
settlement, net 57 -
--- ---
Net cash provided by (used in)
investing activities (1,598) (660)
------ ----
Cash flows from financing
activities:
Net proceeds (repayments) of
borrowings under credit
arrangements (407) (203)
Proceeds from issuance of senior
notes 691 -
Repayment of senior subordinated
notes (700) (600)
Proceeds from issuances of
common stock, net 819 6
Other, net (23) (11)
--- ---
Net cash provided by (used in)
financing activities 380 (808)
--- ----
Increase (decrease) in cash and
cash equivalents (9) (81)
Cash and cash equivalents,
beginning of period 14 95
--- ---
Cash and cash equivalents, end
of period $5 $14
=== ===
Explanation and Reconciliation of Non-GAAP Financial Measures
Adjusted Net Income (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. This measure should not be considered an alternative to net income (loss) as defined by generally accepted accounting principles.
A reconciliation of earnings for the fourth quarter and full year of 2015 for our continuing operations stated without the effect of certain items to net income (loss) is shown below:
4Q15 2015
---- ----
(in millions)
Net Income (loss) $(663) $(3,362)
Ceiling test
and other
impairments 702 4,904
Unrealized
(gain) loss
on
derivative
contracts(1) 101 246
Restructuring
related costs 2 39
Production
tax credits (7) (7)
Premium on
debt
redemption - 24
Unamortized debt
issuance costs
and discount
from redemption - 8
Income tax
adjustment
for above
items (85) (1,688)
Earnings stated without the
effect of the above items $50 $164
=== ====
(1) The calculation of "Unrealized (gain) loss on derivative
contracts" for the fourth quarter and full year of 2015 is as
follows:
4Q15 2015
---- ----
(in millions)
Commodity derivative
income (expense) $29 $259
Less: Realized gain
(loss) on derivative
contracts 130 505
--- ---
Unrealized
loss on
derivative
contracts $(101) $(246)
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 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 to net cash provided by operating activities before changes in operating assets and liabilities is shown below:
4Q15 2015
---- ----
(in millions)
Net cash provided
by operating
activities $320 $1,209
Net changes in
operating
assets and
liabilities (31) (38)
Net cash provided
by operating
activities before
changes
in operating
assets and
liabilities $289 $1,171
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SOURCE Newfield Exploration Company
