NEWFIELD EXPLORATION THE WOODLANDS, Texas, Nov. 1, 2016 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today reported its third 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 November 2, 2016. To listen to the call, please visit Newfield's website at http://www.newfield.com. To participate in the call, dial 785-830-1926 and provide conference code 6637930 about 10 minutes prior to the scheduled start time.
"Our teams are delivering on our strategic objectives for 2016," said Newfield Chairman Lee K. Boothby. "Including today, we raised production guidance each quarter throughout the year and we expect to beat our original 2016 production guidance (excluding acquisitions) by approximately 3.5 MMBOE, or 7% over our beginning of the year forecast.
"We high-graded our portfolio during the year by selling non-strategic assets in Texas and acquiring additional core acreage in STACK, and we have successfully reduced costs and improved margins across the Company. Today, Newfield has a strong balance sheet, cash on hand and advantaged assets ready for rapid acceleration. We are planning to add additional rigs to our Anadarko Basin drilling program as we enter 2017. Our heightened activity levels can quickly be adjusted if commodity prices weaken moving into next year."
Third Quarter 2016 Financial and Production Summary
For the third quarter, the Company recorded net income of $48 million, or $0.24 per share (all per share amounts are on a diluted basis). Adjusted net income for the third quarter was $89 million, or $0.45 per share after adjustment for the items below:
-- a legal settlement charge of $18 million, or $0.08 per share;
-- unrealized derivative losses of $11 million, or $0.05 per share; and
-- organizational restructuring and severance costs of $16 million, or
$0.08 per share.
Revenues for the third quarter were $392 million. Net cash provided by operating activities was $209 million. Discretionary cash flow from operations was $183 million.
Newfield's total net production in the third quarter of 2016 was 15.2 MMBOE, comprised of 42% oil, 19% natural gas liquids and 39% natural gas. Domestic production in the third quarter was 14.3 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. Domestic net production is now expected to be 53.7 - 54.1 MMBOE and total Company net production guidance was raised to 58.8 - 59.2 MMBOE (previous forecasts included 1.1 MMBOE in the fourth quarter of 2016 for recently sold Eagle Ford and South Texas assets). See table in @NFX for additional production detail.
The Company's 2016 capital investments are now expected to be approximately $750 million, or the upper end of its previous $700 - $750 million capital investment range (excludes capitalized interest and direct internal costs; excludes acquisitions). The increase to the upper end of our previous range reflects the planned addition of drilling rigs in the Anadarko Basin in late 2016.
2016e Production, Cost and Expense Guidance
-------------------------------------------
Domestic China Total
-------- ----- -----
Production:
-----------
Oil
(Mmbls) 20.8 - 21.0 5.1 25.9 - 26.1
NGLs
(Mmbls) 10.6 - 10.7 - 10.6 - 10.7
Natural
gas (Bcf) 134 - 135 - 134 - 135
Total
(Mmboe) 53.7 - 54.1 5.1 58.8 - 59.2
Expenses
($ mm)(1)
----------
LOE(2) $207 $53 $260
Transportation(3) 271 - 271
Production
& other
taxes 45 1 46
General &
administrative
(G&A),
net4 $176 $7 $183
Interest
expense,
gross 154 - 154
Capitalized
interest
and
direct
internal
costs ($120) - ($120)
Effective
Tax rate5 0% (52%) (1%)
Note:
(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 ~$54MM Arkoma unused
firm gas transportation and ~$16MM
Uinta oil and gas delivery shortfall
fees
4 2016e Net G&A excludes an estimated
~$33MM associated with announced
restructuring
5 The effective tax rate reflects the
impact of future valuation allowance
changes related to deferred tax
assets
4Q16e Production, Cost and Expense Guidance
-------------------------------------------
Domestic China Total
-------- ----- -----
Production:
-----------
Oil (Mmbls) 4.7 - 4.9 0.9 5.6 - 5.9
NGLs (Mmbls) 2.4 - 2.5 - 2.4 - 2.5
Natural gas
(Bcf) 30 - 31 - 30 - 31
Total (Mmboe) 12.2 - 12.6 0.9 13.1 - 13.5
Expenses ($
mm)(1)
-----------
LOE(2) $45 $13 $58
Transportation(3) 71 - 71
Production &
other taxes 12 - 12
General &
administrative
(G&A),
net(3) $41 $2 $43
Interest
expense,
gross 37 - 37
Capitalized
interest and
direct
internal
costs ($31) - ($31)
Effective Tax
rate5 5% 21% 8%
Note:
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 ~$9MM
Uinta oil and gas delivery shortfall
fees
4 4Q16e Net G&A excludes an estimated
~$5MM associated with announced
restructuring
5 The effective tax rate reflects the
impact of future valuation allowance
changes related to deferred tax
assets
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 and the Rocky Mountains. 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, estimated expenses, 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. federal and state 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, Quarterly Reports on Form 10-Q 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: IR@newfield.com
3Q16 Actual
3Q16 Actual Results Domestic China Total
------------------- -------- ----- -----
Production/Liftings(1)
Crude oil and condensate (MMBbls) 5.5 0.9 6.4
Natural gas (Bcf) 35.6 - 35.6
NGLs (MMBbls) 2.9 - 2.9
Total (MMBOE) 14.3 0.9 15.2
Average Realized Prices(2)(3)
Crude oil and condensate (per Bbl) $47.20 $41.33 $46.34
Natural gas (per Mcf) 2.38 - 2.38
NGLs (per Bbl) 18.53 - 18.53
Crude oil equivalent (per BOE) $27.91 $41.33 $28.74
Operating Expenses:(3)
Lease operating (in millions)
Recurring $44 $10 $54
Major (workovers, etc.) $6 $ - $6
Lease operating (per BOE)
Recurring $3.11 $11.02 $3.60
Major (workovers, etc.) $0.46 $0.28 $0.45
Transportation and processing (in
millions) $71 $ - $71
per BOE $5.04 $ - $4.72
Production and other taxes (in
millions) $12 $1 $13
per BOE $0.89 $0.15 $0.85
General and administrative (G&A),
net (in millions) $63 $2 $65
per BOE $4.49 $1.81 $4.32
Capitalized direct internal costs
(in millions) $(17)
per BOE $(1.14)
Other operating expenses (income),
net (in millions) $18
per BOE $1.23
Interest expense (in millions) $37
per BOE $2.51
Capitalized interest (in millions) $(15)
per BOE $(1.06)
Other non-operating (income)
expense (in millions) $(1)
per BOE $(0.02)
(1) Represents volumes lifted and
sold regardless of when
produced. Includes natural gas
produced and consumed in
operations of 1.4 Bcf during
the three months ended
September 30, 2016.
(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
$2.55 per Mcf and the average
realized price for our domestic
and total crude oil and
condensate would have been
$38.80 per barrel and $39.17
per barrel, respectively. We
did not have any derivative
contracts associated with our
NGL or China production as of
September 30, 2016.
(3) All per unit pricing and
expenses exclude natural gas
produced and consumed in
operations.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited, in millions)
September 30, December 31,
2016 2015
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $478 $5
Short-term
investments 25 -
Derivative assets 115 284
Other current
assets 281 336
--- ---
Total current
assets 899 625
--- ---
Oil and gas
properties, net
(full cost
method) 3,076 3,819
Derivative assets 10 105
Other assets 228 219
Total assets $4,213 $4,768
====== ======
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Current
liabilities:
Derivative
liabilities $55 $13
Other current
liabilities 530 634
--- ---
Total current
liabilities 585 647
--- ---
Other liabilities 65 48
Derivative
liabilities 10 9
Long-term debt 2,430 2,467
Asset retirement
obligations 173 192
Deferred taxes 34 26
Total long-term
liabilities 2,712 2,742
----- -----
Stockholders'
equity:
Common stock,
treasury stock
and additional
paid-in capital 3,196 2,416
Accumulated other
comprehensive
gain (loss) (2) (2)
Retained earnings
(deficit) (2,278) (1,035)
Total
stockholders'
equity 916 1,379
--- -----
Total liabilities
and stockholders'
equity $4,213 $4,768
====== ======
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in millions, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2016 2015 2016 2015
---- ---- ---- ----
Oil, gas and NGL
revenues $392 $377 $1,057 $1,195
---- ---- ------ ------
Operating expenses:
Lease operating 60 71 183 219
Transportation and
processing 71 52 200 153
Production and other
taxes 13 13 34 43
Depreciation,
depletion and
amortization 120 236 457 721
General and
administrative 65 66 167 180
Ceiling test and other
impairments - 1,889 1,028 4,202
Other 18 1 19 8
Total operating
expenses 347 2,328 2,088 5,526
--- ----- ----- -----
Income (loss) from
operations 45 (1,951) (1,031) (4,331)
--- ------ ------ ------
Other income
(expense):
Interest expense (37) (37) (116) (127)
Capitalized interest 15 8 35 23
Commodity derivative
income (expense) 28 87 (122) 230
Other, net 1 1 2 (13)
Total other income
(expense) 7 59 (201) 113
--- --- ---- ---
Income (loss) before
income taxes 52 (1,892) (1,232) (4,218)
Income tax provision
(benefit) 4 (665) 11 (1,519)
--- ---- --- ------
Net income (loss) $48 $(1,227) $(1,243) $(2,699)
=== ======= ======= =======
Earnings (loss) per
share:
Basic $0.24 $(7.52) $(6.50) $(17.17)
===== ====== ====== =======
Diluted $0.24 $(7.52) $(6.50) $(17.17)
===== ====== ====== =======
Weighted-average
number of shares
outstanding for basic
earnings (loss) per
share 199 163 191 157
=== === === ===
Weighted-average
number of shares
outstanding for
diluted earnings
(loss) per share 200 163 191 157
=== === === ===
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Nine Months Ended
September 30,
-------------
2016 2015
---- ----
Cash flows from
operating
activities:
Net income
(loss) $(1,243) $(2,699)
Adjustments to
reconcile net
income (loss)
to net cash
provided by
(used in)
operating
activities:
Depreciation,
depletion and
amortization 457 721
Deferred tax
provision
(benefit) 8 (1,544)
Stock-based
compensation 14 19
Unrealized
(gain) loss on
derivative
contracts 307 145
Ceiling test and
other
impairments 1,028 4,202
Other, net 10 38
--- ---
581 882
Changes in
operating
assets and
liabilities 6 7
Net cash
provided by
(used in)
operating
activities 587 889
--- ---
Cash flows from
investing
activities:
Additions to and
acquisitions of
oil and gas
properties and
other (1,203) (1,428)
Proceeds from
sales of oil
and gas
properties 399 86
Proceeds from
insurance
settlement, net - 57
Purchases of
investments (25) -
---
Net cash
provided by
(used in)
investing
activities (829) (1,285)
---- ------
Cash flows from
financing
activities:
Net proceeds
(repayments) of
borrowings
under credit
arrangements (39) (398)
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 (23) (13)
--- ---
Net cash
provided by
(used in)
financing
activities 715 389
--- ---
Increase
(decrease) in
cash and cash
equivalents 473 (7)
Cash and cash
equivalents,
beginning of
period 5 14
--- ---
Cash and cash
equivalents,
end of period $478 $7
==== ===
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 third quarter of 2016 stated without the effect of certain items to net income (loss) is shown below:
3Q16
----
(In millions)
Net Income (loss) $48
Unrealized (gain) loss on derivative
contracts 11
Restructuring related costs 16
Legal settlement 18
Income tax adjustment for above items (4)
Earnings stated without the effect of the
above items $89
===
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:
3Q16
----
(In millions)
Net cash provided by operating
activities $209
Net changes in operating assets and
liabilities (26)
Discretionary cash flow from
operations $183
====
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SOURCE Newfield Exploration Company
