NEWFIELD EXPLORATION THE WOODLANDS, Texas, Aug. 2, 2016 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today reported its second quarter 2016 unaudited financial and operating results. Additional operational details can be found in the Company's @NFX publication, located on its website.
Newfield plans to host a conference call at 10 a.m. CDT on August 3, 2016. To listen to the call, please visit Newfield's website at http://www.newfield.com. To participate in the call, dial 785-830-7977 and enter conference code 4680250 about 10 minutes prior to the scheduled start time.
"Newfield continued its streak of solid operational results across the organization," said Newfield Chairman Lee K. Boothby. "We have taken proactive steps to improve our capital structure, refine our asset base, and high-grade our investments into the Anadarko Basin. The results are evident - lower operating expenses, improving margins in the face of low commodity prices and the realization of operational efficiencies that we expect to retain in the future.
"Today, we increased our average type curve in STACK by 15% to approximately 1.1 MMBOE gross. This increase is backed by the drilling of more than 100 wells to date - the largest sample set in the industry. Our well results continue to improve as we optimize our completions and look for innovative ways to enhance returns in our upcoming full-field development campaign. We recently closed on our previously announced STACK acquisition and have allocated additional capital to these assets in the second half of this year. We remain excited about STACK and the play's potential to drive our growth in production and reserves for years to come."
Second Quarter 2016 Financial and Production Summary
For the second quarter, the Company recorded a net loss of $667 million, or $3.36 per share (all per share amounts are on a diluted basis). The loss was primarily attributable to the following items:
-- a full-cost ceiling test impairment of $522 million, or $2.63 per share;
-- unrealized derivative losses of $197 million, or $0.99 per share; and
-- organizational restructuring and severance costs of $12 million, or
$0.06 per share.
After adjusting for these effects, net income for the second quarter would have been $64 million, or $0.32 per share.
Revenues for the second quarter were $381 million. Net cash provided by operating activities was $306 million. Discretionary cash flow from operations was $228 million.
Newfield's total net production in the second quarter of 2016 was 15.3 MMBOE, comprised of 45% oil, 18% natural gas liquids and 37% natural gas. Domestic production in the second quarter was 13.7 MMBOE.
2016 Production Guidance and Capital Investments
Newfield again increased expectations for its 2016 production. The increase is related primarily to stronger performance year-to-date from existing assets and the recently acquired assets in the Anadarko Basin STACK play. Domestic net production is now expected to be 53 - 54.5 MMBOE. Total Company net production guidance was raised to 58 - 59.5 (previous forecast: 56 - 58 MMBOE).
The Company's 2016 capital budget was increased to $700 - $750 million (excludes capitalized interest and direct internal costs; excludes acquisitions; previous capital range: $625 - $675 million). The increase reflects approximately $40 million for two STACK pilots (previously disclosed), and approximately $50 million for additional drilling activities on existing assets and assets associated with recently acquired properties in STACK.
2016e Production, Cost and Expense Guidance
-------------------------------------------
Domestic China Total
-------- ----- -----
Production:
-----------
Oil
(Mmbls) 21.1 5.0 26.1
NGLs
(Mmbls) 10.3 - 10.3
Natural
gas
(Bcf) 134 - 134
Total
(Mmboe) 53.0 - 54.5 5.0 58.0 - 59.5
Expenses
($
mm)(1)
--------
LOE(2) $196 $55 $251
Transportation(3) 271 - 271
Production
&
other
taxes 48 1 49
General
&
administrative
(G&A),
net4 $173 $7 $180
Interest
expense,
gross 154 - 154
Capitalized
interest
and
direct
internal
costs ($112) - ($112)
Effective
Tax
rate5 0% (36%) (1%)
Note: Based on strip commodity prices
(1)Cost and expenses are expected to
be within 5% of the estimates above
(2)Total LOE includes recurring,
major expense and non E&P operating
expenses
(3)Estimated transportation /
processing fees include ~$52MM
Arkoma unused firm gas
transportation and ~$21MM Uinta oil
and gas delivery shortfall fees
42016e Net G&A excludes an estimated
~$30MM associated with announced
restructuring
5The effective tax rate reflects
expected future valuation allowances
recorded against deferred tax assets
generated by ceiling test
impairments.
3Q16e Production, Cost and Expense Guidance
-------------------------------------------
Domestic China Total
-------- ----- -----
Production:
-----------
Oil
(Mmbls) 5.3 0.8 6.1
NGLs
(Mmbls) 2.6 - 2.6
Natural
gas (Bcf) 34 - 34
Total
(Mmboe) 13.5 - 13.7 0.8 14.3 - 14.5
Expenses
($ mm)(1)
----------
LOE(2) $52 $10 $62
Transportation(3) 70 - 70
Production
& other
taxes 13 - 13
General &
administrative
(G&A),
net(3) $44 $2 $46
Interest
expense,
gross 38 - 38
Capitalized
interest
and
direct
internal
costs ($29) - ($29)
Effective
Tax rate5 (1%) (22%) (2%)
Note: Based on strip commodity prices
(1)Cost and expenses are expected to
be within 5% of the estimates above
(2)Total LOE includes recurring,
major expense and non E&P operating
expenses
(3)Estimated transportation /
processing fees include ~$13MM
Arkoma unused firm gas
transportation and ~$5MM Uinta oil
and gas delivery shortfall fees
43Q16e Net G&A excludes an estimated
~$10MM associated with announced
restructuring
5The effective tax rate reflects
expected future valuation allowances
recorded against deferred tax assets
generated by ceiling test
impairments.
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 news 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," "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 news release, all information and statements, including but not limited to information regarding planned capital expenditures, estimated reserves, estimated production targets, drilling and development plans, the timing of production, planned capital expenditures, and other plans and objectives for future operations, are forward-looking statements. Although, as of the date of this news 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. Actual results may vary significantly from those anticipated due to many factors, including but not limited to commodity prices, drilling results, our liquidity and the availability of capital resources, operating risks, industry conditions, China and U.S. governmental 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, and other operating risks. Please see Newfield's 2015 Annual Report on Form 10-K and subsequent public filings 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 herein or in Newfield's SEC filings could also have material adverse effects on actual results. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news 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: info@newfield.com
2Q16 Actual
2Q16 Actual Results Domestic China Total
------------------- -------- ----- -----
Production/Liftings(1)
Crude oil and
condensate (MMBbls) 5.2 1.6 6.8
Natural gas (Bcf) 33.8 - 33.8
NGLs (MMBbls) 2.8 - 2.8
Total (MMBOE) 13.7 1.6 15.3
Average Realized Prices2, 3
Crude oil and
condensate (per Bbl) $49.12 $43.95 $47.90
Natural gas (per Mcf) 1.86 - 1.86
NGLs (per Bbl) 19.23 - 19.23
Crude oil equivalent
(per BOE) $27.65 $43.95 $29.41
Operating Expenses:(3)
Lease operating (in
millions)
Recurring $42.4 $15.3 $57.7
Major (workovers, etc.) $3.8 $0.2 $4.0
Lease operating (per
BOE)
Recurring $3.14 $9.33 $3.82
Major (workovers, etc.) $0.28 $0.12 $0.26
Transportation and
processing (in
millions) $65.5 $ - $65.5
per BOE $4.86 $ - $4.34
Production and other
taxes (in millions) $11.0 $0.2 $11.2
per BOE $0.82 $0.12 $0.74
General and
administrative (G&A),
net (in millions) $56.4 $1.6 $58.0
per BOE $4.21 $0.97 $3.86
Capitalized direct
internal costs (in
millions) $(19.2)
per BOE $(1.27)
Other operating
expenses (income), net
(in millions) $(0.1)
per BOE $(0.01)
Interest expense (in millions) $37.6
per BOE $2.49
Capitalized interest (in millions) $(10.5)
per BOE $(0.68)
Other non-operating (income) expense (in millions) $(0.4)
per BOE $(0.06)
____
Note 1: Represents volumes
lifted and sold regardless of
when produced. Includes natural
gas produced and consumed in
operations of 1.3 Bcf during
the three months ended June 30,
2016.
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 $1.69 per Mcf and the
average realized price for our
domestic and total crude oil
and condensate would have been
$38.17 per barrel and $39.54
per barrel, respectively. We
did not have any derivative
contracts associated with our
NGL or China production as of
June 30, 2016.
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 Six Months Ended
June 30, June 30,
-------- --------
2016 2015 2016 2015
---- ---- ---- ----
Oil, gas and NGL
revenues $381 $469 $665 $818
---- ---- ---- ----
Operating expenses:
Lease operating 62 73 123 148
Transportation and
processing 66 52 129 101
Production and other
taxes 11 17 21 30
Depreciation,
depletion and
amortization 160 248 337 485
General and
administrative 58 51 102 114
Ceiling test and
other impairments 522 1,521 1,028 2,313
Other - 3 1 7
--- --- --- ---
Total operating
expenses 879 1,965 1,741 3,198
--- ----- ----- -----
Income (loss) from
operations (498) (1,496) (1,076) (2,380)
---- ------ ------ ------
Other income
(expense):
Interest expense (38) (46) (79) 90
Capitalized interest 11 8 20 15
Commodity derivative
income (expense) (133) (10) (150) 143
Other, net - (22) 1 (14)
--- --- --- ---
Total other income
(expense) (160) (70) (208) 54
---- --- ---- ---
Income (loss) before
income taxes (658) (1,566) (1,284) (2,326)
Income tax provision
(benefit) 9 (574) 7 (854)
--- ---- --- ----
Net income (loss) $(667) $(992) $(1,291) $(1,472)
===== ===== ======= =======
Earnings (loss) per
share:
Basic $(3.36) $(6.09) $(6.87) $(9.55)
====== ====== ====== ======
Diluted $(3.36) $(6.09) $(6.87) $(9.55)
====== ====== ====== ======
Weighted-average
number of shares
outstanding for
basic earnings
(loss) per share 198 163 188 154
=== === === ===
Weighted-average
number of shares
outstanding for
diluted earnings
(loss) per share 198 163 188 154
=== === === ===
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited, in millions)
June 30, December 31,
2016 2015
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $165 $5
Derivative assets 150 284
Other current assets 323 336
--- ---
Total current assets 638 625
Oil and gas properties, net
(full cost method) 3,403 3,819
Derivative assets 20 105
Other assets 224 219
--- ---
Total assets $4,285 $4,768
====== ======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Derivative
liabilities $78 $13
Other current liabilities 579 634
--- ---
Total current liabilities 657 647
Other liabilities 72 48
Derivative liabilities 21 9
Long-term debt 2,430 2,467
Asset retirement
obligations 204 192
Deferred taxes 29 26
--- ---
Total long-term
liabilities 2,756 2,742
----- -----
Stockholders' equity:
Common stock, treasury
stock and additional paid-
in capital 3,200 2,416
Accumulated other
comprehensive gain (loss) (2) (2)
Retained earnings (deficit) (2,326) (1,035)
------ ------
Total stockholders' equity 872 1,379
--- -----
Total liabilities
and
stockholders'
equity $4,285 $4,768
====== ======
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Six Months Ended
June 30,
--------
2016 2015
---- ----
Cash flows from
operating activities:
Net income (loss) $(1,291) $(1,472)
Adjustments to reconcile
net income (loss) to
net cash provided by
(used in) operating
activities:
Depreciation, depletion
and amortization 337 485
Deferred tax provision
(benefit) 3 (872)
Stock-based
compensation 19 25
Unrealized (gain) loss
on derivative contracts 296 101
Ceiling test and other
impairments 1,028 2,313
Other, net 6 22
--- ---
398 602
Changes in operating
assets and liabilities (20) (25)
--- ---
Net cash provided by
(used in) operating
activities 378 577
--- ---
Cash flows from
investing activities:
Additions and
acquisitions of oil and
gas properties and
other (974) (927)
Proceeds from sales of
oil and gas properties 29 29
--- ---
Net cash provided by
(used in) investing
activities (945) (898)
---- ----
Cash flows from
financing activities:
Net proceeds
(repayments) of
borrowings under credit
arrangements (39) (446)
Proceeds from issuance
of senior notes - 691
Repayment of senior
subordinated notes - (700)
Debt issue costs - (8)
Proceeds from issuances
of common stock, net 777 817
Other, net (11) (5)
--- ---
Net cash provided by
(used in) financing
activities 727 349
--- ---
Increase (decrease) in
cash and cash
equivalents 160 28
Cash and cash
equivalents, beginning
of period 5 14
--- ---
Cash and cash
equivalents, end of
period $165 $42
==== ===
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 second quarter of 2016 stated without the effect of certain items to net income (loss) is shown below:
2Q16
----
(in
millions)
Net Income (loss) $(667)
Ceiling test
impairments 522
Unrealized
(gain) loss
on
derivative
contracts 197
Restructuring
related costs 12
Income tax
adjustment
for above
items(1) -
Earnings stated without the effect
of the above items $64
===
(1) Our effective tax rate is
less than 1% due to valuation
allowances on our deferred
tax assets.
Discretionary Cash Flow from Operations
Discretionary cash flow from operations represents net cash provided by operating activities before changes in operating assets and liabilities and 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 discretionary cash flow from operations is shown below:
2Q16
----
(in
millions)
Net cash provided by operating
activities $306
Net changes
in
operating
assets and
liabilities (78)
Discretionary cash flow from operations $228
====
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/newfield-exploration-reports-results-for-second-quarter-2016-300307975.html
SOURCE Newfield Exploration Company
