NEWFIELD EXPLORATION THE WOODLANDS, Texas, Oct. 31, 2017 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today announced third 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 November 1, 2017. To listen to the call, please visit Newfield's website at http://www.newfield.com. To participate in the call, dial 719-457-2641 and provide conference code 7914344 at least 10 minutes prior to the scheduled start time.
Highlights
-- Third quarter 2017 net production significantly exceeded guidance
expectations.
-- Domestic net production was 159,000 BOEPD (41% oil and 64% liquids),
exceeding the mid-point guidance by approximately 4,650 BOEPD. The
better than expected results during the quarter were primarily
related to higher volumes in STACK.
-- Consolidated net production was approximately 161,700 BOEPD (42% oil
and 64% liquids). In China, the Company lifted approximately 239,000
barrels of remaining oil from the damaged storage vessel during the
quarter. Oil liftings in China are expected to resume in the first
half of 2018 following repairs to the third-party storage vessel.
-- Newfield's Anadarko Basin production increased approximately 20%
quarter-over-quarter (3Q17 vs 2Q17), averaging approximately 105,000
BOEPD during the third quarter. The Anadarko Basin now comprises
approximately two-thirds of total domestic production.
-- Anadarko Basin net oil production grew more than 25%
quarter-over-quarter (3Q17 vs 2Q17) to achieve a record average
quarterly output of 37,000 BOPD.
-- Based on state records, Newfield is now the largest gross oil
producer in the State of Oklahoma.
-- Realized oil prices in STACK continue to improve, averaging $48.04
per barrel, or approximately 99% of NYMEX WTI during the quarter.
-- Anadarko Basin lease operating expenses averaged $1.69 per BOE
during the quarter, the lowest LOE within the Company's operating
regions.
-- Newfield's production in the Williston Basin increased during the third
quarter, averaging nearly 22,000 BOEPD. Approximately 65% of the
production was oil and the average sales price during the quarter was
$45.21 per barrel.
-- The Company today increased the mid-point of its full-year 2017
production outlook.
-- For the fourth quarter of 2017, Newfield expects its net domestic
production to average approximately 168,000 BOEPD.
-- The mid-point for 2017 domestic guidance was raised to approximately
152,000 BOEPD (previous guidance: 149,600 BOEPD). The Company now
estimates that its year-over-year domestic production growth,
adjusted for prior-year asset sales, will be approximately 9 - 10%.
-- The mid-point estimate for 2017 total company production was
increased to approximately 156,700 BOEPD (previous guidance was
153,600 BOEPD).
-- At the end of the third quarter, the Company had approximately $428
million of cash on hand.
-- Recent Anadarko Basin operational highlights include:
-- In STACK, Newfield has now completed the Company's fourth operated
pilot on increased density spacing. The Freeman development pad
initiated production early in the third quarter from nine SXL infill
wells in the Meramec. The wells were completed with Newfield's GEN17
completion design of 2,100 pounds of proppant per foot and 2,100
gallons of liquid per foot. Although early, cumulative average
production, both oil and barrels of oil equivalent, after 60 days is
outperforming the Company's 1.1 MMBOE gross type curve.
-- After more than 120 days, production from nine Meramec infill wells
(both oil and barrels of oil equivalent) on the Stark pad continues
to exceed the Company's 1.1 MMBOE gross type curve. Newfield
estimates that this development is generating a before tax internal
rate of return of more than 50% at a flat price of $50 per barrel
(NYMEX WTI).
-- Newfield today provided data on eight recent HBP wells in STACK,
including the play's "record setting" Hoile well, which had the
play's highest oil production per 1,000' of lateral over a 24-hour
period. The Hoile recently commenced production with a 24-hr initial
production rate of 5,100 BOEPD (67% oil) from 7,140' lateral.
Thirty-day production data is not yet available. A comprehensive
list of recent STACK completions can be found in @NFX.
-- In SCOOP, two developments were brought on-line during the third
quarter. The McClelland pad was our first development with eight
infill wells drilled in the Woodford. The average 30-day rate for
the eight infill wells was 1,966 BOEPD (36% oil). The McClelland
infill wells are performing in-line with Newfield's recent Tina
development (2Q17 completions), where production per well has
averaged 1,465 BOEPD (41% oil) over the first 120 days. Complete
details on both pads referenced above can be found in @NFX.
-- The Holinsworth development pad, also located in SCOOP, commenced
production late in the third quarter from seven infill wells drilled
in the Woodford. Initial 24-hour production per well averaged 3,193
BOEPD (33% oil). Thirty day production data is not yet available. In
addition, a non-operated SCOOP development was recently completed
and is currently producing at high rates from the condensate window
of the play. Newfield's net share is more than 10,000 BOEPD, of
which only 11% is black oil. The Company expects that the rich gas
will lead to higher natural gas volumes in the fourth quarter -- see
fourth quarter guidance in this news release.
Third Quarter 2017 Financial and Production Summary
For the third quarter, the Company recorded net income of $87 million, or $0.44 per diluted share (all per share amounts are on a diluted basis). Earnings were impacted by one time tax benefits of $17 million, or $0.09 per share, due to the carryback of net operating losses, and an unrealized derivative loss of $34 million, or $0.17 per share. After adjusting for the effect of the tax benefit and unrealized derivative loss during the period, net income would have been $104 million, or $0.52 per share. See the "Explanation and Reconciliation of Non-GAAP Financial Measures" at the end of this press release for additional disclosures.
Revenues for the third quarter were $439 million. Net cash provided by operating activities was $173 million. Discretionary cash flow from operations was $262 million.
Newfield's total net production in the third quarter of 2017 was approximately 161,700 BOEPD, comprised of 42% oil, 22% natural gas liquids and 36% natural gas. Domestic production in the third quarter was approximately 159,000 BOEPD, comprised of 41% oil, 23% natural gas liquids and 36% natural gas.
2017e Production, Cost and Expense Guidance
Domestic China Total
-------- ----- -----
Production
----------
Oil % 40% 100% 42%
NGLs % 21% - 20%
Natural Gas % 39% - 38%
Total (MBOEPD)(1) 150.0 - 154.0 4.7 154.7 - 158.7
Expenses ($/BOE)(2)
-------------------
LOE3,5 $3.48 $15.65 $3.84
Transportation4 5.58 - 5.41
Production & other
taxes 1.07 0.18 1.04
General &
administrative (G&A),
net5 $3.58 $3.88 $3.59
Interest expense, gross - - 2.62
Capitalized interest
and direct internal
costs $ - $ - $(2.21)
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 of Arkoma
unused firm gas transportation and
~$33 million of Uinta oil and gas
delivery shortfall fees
5Total LOE and G&A includes $2
million and $2 million,
respectively, associated with
remainder of 2017 activity in China
4Q17e Production, Cost and Expense Guidance
Domestic China Total
-------- ----- -----
Production
----------
Oil % 39% - 39%
NGLs % 22% - 22%
Natural Gas
% 39% - 39%
Total 162.0 -
(MBOEPD) 174.0 - 162.0 - 174.0
Expenses
($/BOE)(1)
-----------
LOE2,4 $3.20 $ - $3.30
Transportation(3) 5.58 - 5.58
Production &
other taxes 1.07 - 1.07
General &
administrative
(G&A), net4 $3.31 $ - $3.44
Interest
expense,
gross - - 2.41
Capitalized
interest
and direct
internal
costs $ - $ - $(1.89)
Effective
Tax rate 0 - 5% - 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)4Q17e transportation /processing
fees include ~$13 million of Arkoma
unused firm gas transportation and
~$9 million of Uinta oil and gas
delivery shortfall fees
4Total LOE and G&A includes $2
million and $2 million,
respectively, associated with
remainder of 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 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 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 and other 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
3Q17 Actual
3Q17 Actual Results Domestic China Total
------------------- -------- ----- -----
Production/Liftings(1)
Crude oil and condensate (MBbls) 6,028 239 6,267
Natural gas (Bcf) 32.0 - 32.0
NGLs (MBbls) 3,279 - 3,279
Total (MBOE) 14,635 239 14,874
Average Realized Prices(2)(3)
Crude oil and condensate (per
Bbl) $45.70 $48.22 $45.80
Natural gas (per Mcf) 2.52 - 2.52
NGLs (per Bbl) 25.72 - 25.72
Crude oil equivalent (per BOE) $30.32 $48.22 $30.61
Operating Expenses:(3)
Lease operating (in millions)
Recurring $41 $4 $45
Major (workovers, etc.) $8 $ - $8
Lease operating (per BOE)
Recurring $2.79 $19.11 $3.06
Major (workovers, etc.) $0.55 $0.07 $0.54
Transportation and processing (in
millions) $80 $ - $80
per BOE $5.55 $ - $5.46
Production and other taxes (in
millions) $16 $ - $16
per BOE $1.12 $ - $1.11
General and administrative (G&A),
net (in millions) $51 $2 $53
per BOE $3.63 $6.11 $3.67
Capitalized direct internal costs
(in millions) $(18)
per BOE $(1.20)
Other operating expenses
(income), net (in millions) $1
per BOE $0.05
Interest expense (in millions) $37
per BOE $2.56
Capitalized interest (in
millions) $(15)
per BOE $(1.02)
Other non-operating (income)
expense (in millions) $(1)
per BOE $(0.13)
(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 September 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 $2.58 per Mcf and the average realized
price for our domestic and total crude oil
and condensate would have been $43.79 per
barrel and $43.96 per barrel, respectively.
We did not have any derivative contracts
associated with our NGL or China production
as of September 30, 2017.
(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,
2017 2016
---- ----
ASSETS
Current assets:
Cash and
cash
equivalents $428 $555
Short-
term
investments - 25
Derivative
assets 10 75
Other
current
assets 398 294
Total
current
assets 836 949
--- ---
Oil and
gas
properties,
net (full
cost
method) 3,670 3,140
Other
assets 238 223
Total
assets $4,744 $4,312
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Derivative
liabilities $18 $97
Other
current
liabilities 694 587
--- ---
Total
current
liabilities 712 684
--- ---
Other
liabilities 71 63
Derivative
liabilities 5 3
Long-term
debt 2,433 2,431
Asset
retirement
obligations 158 154
Deferred
taxes 64 39
Total
long-
term
liabilities 2,731 2,690
----- -----
Stockholders' equity:
Common
stock,
treasury
stock and
additional
paid-in
capital 3,235 3,205
Accumulated
other
comprehensive
income
(loss) (1) (2)
Retained
earnings
(deficit) (1,933) (2,265)
------ ------
Total
stockholders'
equity 1,301 938
----- ---
Total
liabilities
and
stockholders'
equity $4,744 $4,312
====== ======
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in millions, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
Oil, gas and NGL
revenues $439 $392 $1,258 $1,057
---- ---- ------ ------
Operating expenses:
Lease operating 53 60 167 183
Transportation and
processing 80 71 223 200
Production and other
taxes 16 13 43 34
Depreciation,
depletion and
amortization 124 120 340 457
General and
administrative 53 65 151 167
Ceiling test and other
impairments - - - 1,028
Other 1 18 2 19
Total operating
expenses 327 347 926 2,088
--- --- --- -----
Income (loss) from
operations 112 45 332 (1,031)
--- --- --- ------
Other income (expense):
Interest expense (37) (37) (112) (116)
Capitalized interest 15 15 46 35
Commodity derivative
income (expense) (23) 28 58 (122)
Other, net 1 1 5 2
--- --- --- ---
Total other income
(expense) (44) 7 (3) (201)
--- --- --- ----
Income (loss) before
income taxes 68 52 329 (1,232)
Income tax provision
(benefit) (19) 4 (3) 11
--- --- --- ---
Net income (loss) $87 $48 $332 $(1,243)
=== === ==== =======
Earnings (loss) per share:
Basic $0.44 $0.24 $1.67 $(6.50)
===== ===== ===== ======
Diluted $0.44 $0.24 $1.66 $(6.50)
===== ===== ===== ======
Weighted-average
number of shares
outstanding for basic
earnings (loss) per
share 199 199 199 191
=== === === ===
Weighted-average
number of shares
outstanding for
diluted earnings
(loss) per share 200 200 200 191
=== === === ===
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Nine Months Ended
September 30,
2017 2016
---- ----
Cash flows from operating
activities:
Net income (loss) $332 $(1,243)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation,
depletion and
amortization 340 457
Deferred tax
provision
(benefit) 25 8
Stock-based
compensation 25 14
Unrealized (gain)
loss on
derivative
contracts (12) 307
Ceiling test and
other impairments - 1,028
Other, net 10 10
--- ---
720 581
Changes in
operating assets
and liabilities (80) 6
Net cash provided
by (used in)
operating
activities 640 587
--- ---
Cash flows from investing
activities:
Additions to and
acquisitions of
oil and gas
properties and
other (828) (1,228)
Proceeds from
sales of oil and
gas properties 74 399
--- ---
Net cash provided
by (used in)
investing
activities (754) (829)
---- ----
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 (15) (23)
Net cash provided
by (used in)
financing
activities (13) 715
--- ---
Increase
(decrease) in
cash and cash
equivalents (127) 473
Cash and cash
equivalents,
beginning of
period 555 5
--- ---
Cash and cash
equivalents, end
of period $428 $478
==== ====
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 2017 stated without the effect of certain items to net income (loss) is shown below (in millions, except per share data):
3Q17
In millions Per diluted
share
-----
Net Income (loss) $87 $0.44
Unrealized (gain) loss
on derivative
contracts 34 0.17
Carryback of net
operating losses (17) (0.09)
---
Earnings stated without
the effect of the
above items 104 0.52
=== ====
Weighted-average
number of shares
outstanding for per
diluted share 200
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:
3Q17
----
(In millions)
Net cash provided by operating
activities $173
Net changes in operating assets and
liabilities 89
Discretionary cash flow from
operations 262
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SOURCE Newfield Exploration Company
