NEWFIELD EXPLORATION THE WOODLANDS, Texas, Aug. 1, 2017 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today announced second quarter 2017 unaudited financial and operating results. Additional 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 2, 2017. To listen to the call, please visit Newfield's website at http://www.newfield.com. To participate in the call, dial 719-457-2087 and provide conference code 3843455 at least 10 minutes prior to the scheduled start time.
Year-to-date 2017 Highlights
-- Second quarter 2017 net production exceeded the mid-point of domestic
and international guidance ranges.
-- Domestic net production was 141,000 BOEPD (40% oil and 59% liquids),
exceeding the mid-point of guidance by nearly 4,000 BOEPD.
-- Consolidated net production was approximately 150,000 BOEPD (44% oil
and 62% liquids), compared to a guidance mid-point of approximately
145,850 BOEPD.
-- The Company today increased the mid-point of its full-year 2017 domestic
production outlook.
-- The mid-point for 2017 domestic guidance was raised to 149,600 BOEPD
(previous guidance: 148,600 BOEPD). The Company now estimates that
its year-over-year domestic production growth, adjusted for
prior-year asset sales, will be approximately 8%.
-- The mid-point estimate for 2017 total company production was reduced
to approximately 153,600 BOEPD (original guidance was 155,100
BOEPD). Production from the Newfield operated Pearl Field in the
South China Sea was recently suspended due to a mechanical issue
associated with a third-party floating, storage and offloading
vessel located approximately 10 miles from the field. Due to the
uncertainties surrounding the timing of repairs, Newfield has
removed from its guidance approximately 5,000 BOPD net from expected
future liftings in the second half of 2017.
-- At the end of the second quarter, Newfield had approximately $550
million of cash and short-term investments on hand. The cash balance
includes the recent closing on the sale of the Company's asset in Bohai
Bay, China.
-- Recent operational highlights include:
-- In STACK, Newfield has now completed the Company's fourth operated
pilot on increased density spacing. The Stark pilot initiated
production from nine infill SXL wells in the Meramec with each well
testing "GEN17" completions of 2,100 pounds of proppant per foot and
2,100 gallons of liquid per foot. After 60 days, cumulative average
production from the nine infill wells is outperforming the Company's
1.1 MMBOE estimated gross type curve. In addition, average per well
cumulative 60-day production from the Stark infill wells is in-line
with recent held-by-production (HBP) wells with comparable
completions, adjusted for lateral length. The Stark infill wells,
which averaged 1,211 BOEPD over the 30-day period (65% oil, 82%
liquids), are being produced with controlled flowback operations to
minimize draw-down and maximize oil recovery.
-- Newfield is advancing its learnings in STACK by collecting data on
multiple infill well spacing scenarios. In addition to the Stark,
the Freeman and Velta June pilots will test 10 and 12-well spacing,
respectively. Production results from these pads are expected late
this year and early next year.
-- In SCOOP, continued improvements in completions have allowed tighter
density spacing in the Woodford (5-6 wells/per spacing unit compared
to 8-10 wells/per spacing unit today). The Company recently turned
to sales seven Tina infill wells with 17% higher 30-day average
production (1,708 BOEPD) when compared to previous developments with
four to five infill wells/section (1,462 BOEPD). When compared
against offset wells drilled over the last several years, the Tina
infill wells have nearly twice the proppant and fluid loads with 25%
less costs per completed well.
-- In the Williston Basin, recent improvements to completion designs
have allowed the company to raise its estimated type curve to 1
MMBOE gross. Wells completed year-to-date are projecting more than
80% higher 30-day average production rates of 1,883 BOEPD when
compared to 30-day average rates (1,036 BOEPD) from previous wells
drilled in close proximity.
"We are on target to deliver the key objectives within our 2017 business plan and we expect to enter 2018 with strong momentum across the company," said Lee K. Boothby, Newfield Chairman, President and CEO. "We have streamlined our operations to improve our cost structure and margins and we are fortunate to have high-return plays to actively develop in today's commodity price environment. The advancements we are demonstrating in more mature development plays like SCOOP and the Bakken, are great examples of where we are headed in STACK. We have a deep drilling inventory of quality development opportunities to pursue over the next several decades and we continue to be encouraged by the prospectivity of other horizons on our acreage in the Anadarko Basin. With the exception of our contractor's recent mechanical issue in China, where we are hopeful that repairs will be completed by year-end, the year 2017 is shaping up to be another strong year of performance for Newfield."
Second Quarter 2017 Financial and Production Summary
For the second quarter, the Company recorded net income of $98 million, or $0.49 per diluted share (all per share amounts are on a diluted basis). After adjusting for the effect of unrealized derivative gains during the period, net income would have been $85 million, or $0.43 per share.
Revenues for the second quarter were $402 million. Net cash provided by operating activities was $300 million. Discretionary cash flow from operations was $215 million.
Newfield's total net production in the second quarter of 2017 was approximately 150,000 BOEPD, comprised of 44% oil, 18% natural gas liquids and 38% natural gas. Domestic production in the second quarter was approximately 141,000 BOEPD, comprised of 40% oil, 19% natural gas liquids and 41% natural gas.
2017e Production, Cost and Expense Guidance
Domestic China Total
-------- ----- -----
Production
----------
Oil % 41% 100% 42%
NGLs % 19% - 19%
Natural
Gas % 40% - 39%
Total
(mboepd)(1) 145.4 - 153.8 4.0 149.4 - 157.8
Expenses
($/boe)(2)
----------
LOE3,5 $3.41 $16.48 $3.76
Transportation4 5.58 - 5.43
Production
&
other
taxes 1.07 0.21 1.05
General
&
administrative
(G&A),
net5 $3.54 $5.02 $3.58
Interest
expense,
gross - - 2.66
Capitalized
interest
and
direct
internal
costs - - $(2.20)
Effective
Tax
rate 0 - 5% 0 - 5% 0 - 5%
(1)Total Company and China volumes
include impact of Bohai Bay
divestiture
(2)Cost and expenses are expected
to be within 5% of the estimates
above
(3)Total LOE includes recurring,
major expense and non E&P
operating expenses
42017e transportation /processing
fees include ~$52 million for
Arkoma unused firm gas
transportation and ~$33 million
for Uinta oil and gas delivery
shortfall fees
5Total LOE and G&A includes $4
million and $4 million,
respectively, associated with
remainder of 2017 activity in
China
3Q17e Production, Cost and Expense Guidance
Domestic China Total
-------- ----- -----
Production
----------
Oil % 41% - 41%
NGLs % 19% - 19%
Natural Gas
% 40% - 40%
Total 151.0 -
(mboepd) 157.7 - 151.0 - 157.7
Expenses
($/boe)(1)
-----------
LOE4 $3.26 $3.37
-
Transportation(3) 5.71 - 5.71
Production &
other taxes 1.14 - 1.14
General &
administrative
(G&A), net4 $3.62 - $3.76
Interest
expense,
gross - - 2.63
Capitalized
interest
and direct
internal
costs - - $(2.15)
Effective
Tax rate 0 - 5% 0% 0 - 5%
(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)3Q17e transportation /
processing fees include ~$13
million for Arkoma unused firm gas
transportation and ~$8 million for
Uinta oil and gas delivery
shortfall fees
4Total LOE and G&A includes $2
million and $2 million,
respectively, associated with Q3
2017 activity in China
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. Our principal areas of operation are the Anadarko and Arkoma basins of Oklahoma, the Williston Basin of North Dakota and the Uinta Basin of Utah. We also have oil 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 future operating costs, expenses and other financial measures, estimated future tax rates, 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 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, drilling results, our liquidity and the availability of capital resources, operating risks, industry conditions, U.S. and China 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, 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, and other operating risks. Please see Newfield's 2016 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q 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
2Q17 Actual
2Q17 Actual Results Domestic China Total
------------------- -------- ----- -----
Production/Liftings(1)
Crude oil and condensate (MBbls) 5,132 830 5,962
Natural gas (Bcf) 31.2 - 31.2
NGLs (MBbls) 2,491 - 2,491
Total (MBOE) 12,818 830 13,648
Average Realized Prices(2)(3)
Crude oil and condensate (per
Bbl) $46.46 $49.01 $46.81
Natural gas (per Mcf) 2.61 - 2.61
NGLs (per Bbl) 24.54 - 24.54
Crude oil equivalent (per BOE) $29.93 $49.01 $31.11
Operating Expenses:(3)
Lease operating (in millions)
Recurring $39 $11 $50
Major (workovers, etc.) $6 $2 $8
Lease operating (per BOE)
Recurring $3.09 $13.18 $3.72
Major (workovers, etc.) $0.43 $1.98 $0.52
Transportation and processing (in
millions) $71 $ - $71
per BOE $5.67 $ - $5.32
Production and other taxes (in
millions) $13 $ - $13
per BOE $1.03 $0.14 $0.97
General and administrative (G&A),
net (in millions) $49 $2 $51
per BOE $3.90 $2.13 $3.79
Capitalized direct internal costs
(in millions) $(16)
per BOE $(1.19)
Other operating expenses
(income), net (in millions) $ -
per BOE $0.02
Interest expense (in millions) $37
per BOE $2.78
Capitalized interest (in
millions) $(15)
per BOE $(1.15)
Other non-operating (income)
expense (in millions) $(2)
per BOE $(0.14)
(1) Represents volumes
lifted and sold
regardless of
when produced.
Includes natural
gas produced and
consumed in
operations of 1.2
Bcf during the
three months
ended June 30,
2017.
(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
$2.75 per Mcf and
the average
realized price
for our domestic
and total crude
oil and
condensate would
have been $42.52
per barrel and
$43.42 per
barrel,
respectively. We
did not have any
derivative
contracts
associated with
our NGL or China
production as of
June 30, 2017.
(3) All per unit
pricing and
expenses exclude
natural gas
produced and
consumed in
operations.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited, in millions)
June 30, December 31,
2017 2016
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $522 $555
Short-term
investments 25 25
Derivative
assets 33 75
Other current
assets 303 294
Total current
assets 883 949
--- ---
Oil and gas
properties,
net (full
cost method) 3,479 3,140
Derivative
assets 1 -
Other assets 232 223
Total assets $4,595 $4,312
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Derivative
liabilities $13 $97
Other current
liabilities 665 587
--- ---
Total current
liabilities 678 684
--- ---
Other
liabilities 67 63
Derivative
liabilities - 3
Long-term
debt 2,432 2,431
Asset
retirement
obligations 156 154
Deferred
taxes 55 39
Total long-
term
liabilities 2,710 2,690
----- -----
Stockholders' equity:
Common stock,
treasury
stock and
additional
paid-in
capital 3,228 3,205
Accumulated
other
comprehensive
income
(loss) (1) (2)
Retained
earnings
(deficit) (2,020) (2,265)
------ ------
Total
stockholders'
equity 1,207 938
----- ---
Total
liabilities
and
stockholders'
equity $4,595 $4,312
====== ======
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in millions, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2017 2016 2017 2016
---- ---- ---- ----
Oil, gas and NGL
revenues $402 $381 $819 $665
---- ---- ---- ----
Operating expenses:
Lease operating 58 62 114 123
Transportation and
processing 71 66 143 129
Production and other
taxes 13 11 27 21
Depreciation,
depletion and
amortization 110 160 216 337
General and
administrative 51 58 98 102
Ceiling test and
other impairments - 522 - 1,028
Other - - 1 1
Total operating
expenses 303 879 599 1,741
--- --- --- -----
Income (loss) from
operations 99 (498) 220 (1,076)
--- ---- --- ------
Other income (expense):
Interest expense (37) (38) (75) (79)
Capitalized interest 15 11 31 20
Commodity derivative
income (expense) 28 (133) 81 (150)
Other, net 2 - 4 1
--- --- --- ---
Total other income
(expense) 8 (160) 41 (208)
--- ---- --- ----
Income (loss) before
income taxes 107 (658) 261 (1,284)
Income tax provision
(benefit) 9 9 16 7
--- --- --- ---
Net income (loss) $98 $(667) $245 $(1,291)
=== ===== ==== =======
Earnings (loss) per share:
Basic $0.49 $(3.36) $1.23 $(6.87)
===== ====== ===== ======
Diluted $0.49 $(3.36) $1.22 $(6.87)
===== ====== ===== ======
Weighted-average
number of shares
outstanding for
basic earnings
(loss) per share 199 198 199 188
=== === === ===
Weighted-average
number of shares
outstanding for
diluted earnings
(loss) per share 200 198 200 188
=== === === ===
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Six Months Ended
June 30,
2017 2016
---- ----
Cash flows from operating
activities:
Net income (loss) $245 $(1,291)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation,
depletion and
amortization 216 337
Deferred tax
provision (benefit) 16 3
Stock-based
compensation 20 19
Unrealized (gain)
loss on derivative
contracts (46) 296
Ceiling test and
other impairments - 1,028
Other, net 7 6
--- ---
458 398
Changes in operating
assets and
liabilities 9 (20)
Net cash provided by
(used in) operating
activities 467 378
--- ---
Cash flows from investing
activities:
Additions to and
acquisitions of oil
and gas properties
and other (521) (974)
Proceeds from sales
of oil and gas
properties 28 29
--- ---
Net cash provided by
(used in) investing
activities (493) (945)
---- ----
Cash flows from financing
activities:
Net proceeds
(repayments) of
borrowings under
credit arrangements - (39)
Proceeds from
issuances of common
stock, net 2 777
Other, net (9) (11)
Net cash provided by
(used in) financing
activities (7) 727
--- ---
Increase (decrease)
in cash and cash
equivalents (33) 160
Cash and cash
equivalents,
beginning of period 555 5
--- ---
Cash and cash
equivalents, end of
period $522 $165
==== ====
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 2017 stated without the effect of certain items to net income (loss) is shown below:
2Q17
----
(In
millions)
Net Income (loss) $98
Unrealized (gain) loss on derivative
contracts (13)
Earnings stated without the effect of
the above items 85
===
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:
2Q17
----
(In millions)
Net cash provided by operating
activities $300
Net changes in operating assets and
liabilities (85)
Discretionary cash flow from
operations 215
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SOURCE Newfield Exploration Company
