NEWFIELD EXPLORATION THE WOODLANDS, Texas, May 5, 2015 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today reported its unaudited first quarter 2015 financial results and provided an update on its operations. Newfield also provided an updated @NFX publication on its website. Newfield plans to host a conference call at 10:00 a.m. CDT on May 6, 2015. To listen to the call and to view the slide deck please visit Newfield's website at http://www.newfield.com. To participate in the call, dial 913-312-0968 and enter conference code 1677827.
"Newfield is focused on executing its 2015 business plan which high grades our investments, improves our cost structure and combines growth and value creation through our Anadarko Basin drilling program, said Lee K. Boothby, Chairman, President and CEO. "In addition to our solid operating results in the first quarter, we took decisive financial steps to improve our balance sheet and position us to excel in today's environment of lower commodity prices. For the first time in more than a decade, we issued equity and raised $815 million to repay borrowings under our money market lines of credit and our revolver. We issued $700 million in new senior notes at 5 3/8% due 2026 and retired a commensurate amount of 6 7/8% long term debt due 2020. In addition, our credit facility was upsized by $400 million to $1.8 billion and its term was extended two years to 2020. We are in great shape today and are focused on the right objectives to continue delivering shareholder value."
First Quarter 2015 Results
For the first quarter, the Company recorded a net loss of $480 million, or $3.30 per diluted share (all per share amounts are on a diluted basis). The loss was primarily related to a full-cost ceiling test and other impairments of $792 million ($498 million after-tax, or $3.42 per share). After adjusting for the effect of impairments, unrealized derivate gains and severance costs related to a reduction in workforce, net income would have been $3 million, or $0.02 per share.
Revenues for the first quarter were $349 million. Net cash provided by operating activities before changes in operating assets and liabilities was $255 million.
Newfield's total net production in the first quarter of 2015 was 12.6 million BOE, comprised of 46% oil, 15% natural gas liquids and 39% natural gas.
Approximately 70% of the Company's planned capital investments in 2015 are being allocated to the Anadarko Basin SCOOP and STACK plays. SCOOP and STACK net production grew nearly 80% over the comparable quarter in 2014 and is expected to grow more than a 45% year-over-year.
Complete operational highlights for the first quarter of 2015 can be found in @NFX.
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.
See "Explanation and Reconciliation of Non-GAAP Financial Measures" found after the financial statements in this release.
**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 drilling results, oil and gas prices, 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 2014 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
1Q15 Actual
1Q15 Actual Results Domestic China Total
------------------- -------- ----- -----
Production/LiftingsNote 1
Crude oil and
condensate -MMBbls 5.0 0.9 5.9
Natural gas - Bcf 29.5 - 29.5
NGLs - MMBbls 1.8 - 1.8
Total MMBOE 11.7 0.9 12.6
Average Realized PricesNote 2
Crude oil and
condensate -$/Bbl $57.51 $50.78 $56.47
Natural gas - $/Mcf $3.62 $ - $3.62
NGLs - $/Bbl $19.96 $ - $19.96
Bbl equivalent - $/BOE $37.27 $50.78 $38.27
Operating Expenses:
Lease operating ($MM)
Recurring $56.9 $9.5 $66.4
Major (workovers, etc.) $8.2 $ - $8.2
Lease operating (per
BOE)
Recurring $5.04 $10.37 $5.42
Major (workovers, etc.) $0.72 $ - $0.67
Transportation and
processing ($MM) $49.2 $ - $49.2
per BOE $4.33 $ - $4.01
Production and other
taxes ($MM) $13.4 $ - $13.4
per BOE $1.18 $ - $1.10
General and
administrative (G&A),
net ($MM) $60.5 $2.2 $62.7
per BOE $5.31 $2.64 $5.11
Capitalized direct
internal costs ($MM) $(24.9)
per BOE $(2.03)
Other operating
expenses, net ($MM) $3.8
per BOE $0.31
Interest expense ($MM) $43.7
per BOE $3.57
Capitalized interest ($MM) $(6.9)
per BOE $(0.57)
Other non-operating (income) expense ($MM) $(8.0)
per BOE $(0.65)
_____
Note 1: Represents volumes lifted and sold regardless of when produced. Includes natural gas produced and
consumed in our operations of 2.2 Bcf during the three months ended March 31, 2015.
Note 2: Average realized prices include the effects of derivative contracts. If the effects of these contracts
were excluded, the average realized price for natural gas for our domestic and total natural gas would have
been $2.70 per Mcf and our domestic and total crude oil and condensate average realized prices would have been
$38.21 per barrel and $40.15 per barrel, respectively. We did not have any derivative contracts associated
with our NGL or China production as of March 31, 2015.
2015e Production, Cost and Expense Guidance
-------------------------------------------
Domestic China Total
-------- ----- -----
Production:
-----------
Oil (Mmbls) 20.1 - 21.4 5.0 25.1 - 26.4
NGLs (Mmbls) 7.7 - 8.2 - 7.7 - 8.2
Natural gas
(Bcf) 115 - 122 - 115 - 122
Total (Mmboe) 47.0 - 50.0 5.0 52.0 - 55.0
Expenses ($
mm)(1)
-----------
LOE(2) $270 $72 $342
Transportation $200 - $200
Production &
other taxes $71 $1 $72
General &
administrative
(G&A), net(3) $200 $7 $207
Interest expense $160 - $160
Capitalized
interest and
direct internal
costs ($117) - ($117)
Tax rate 37% 60%4 44%
Note: Based on $55 /$3 commodity prices in 2015 for oil and gas,
respectively
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 Net G&A excludes one-time expenses of an estimated $35mm
associated with 1Q15 reduction in force and the announced
reorganization
4 Estimated China tax rate reflects a 25% taxation in-
country, as well as an additional non-cash U.S. income
tax of 35%, due to Newfield's current tax position and its
inability to utilize foreign tax credits.
2Q15e Production, Cost and Expense Guidance
-------------------------------------------
Domestic China Total
-------- ----- -----
Production:
-----------
Oil (Mmbls) 5.3 - 5.5 1.2 6.5 - 6.7
NGLs
(Mmbls) 1.9 - 2.0 - 1.9 - 20
Natural gas
(Bcf) 29 - 30 - 29 - 30
Total
(Mmboe) 12.1 - 12.5 1.2 13.3 - 13.7
Expenses ($
mm)(1)
-----------
LOE(2) $69 $14 $83
Transportation $50 - $50
Production
& other
taxes $19 - $19
General &
administrative
(G&A),
net(3) $52 $2 $54
Interest
expense $46 - $46
Capitalized
interest
and direct
internal
costs ($36) - ($36)
Tax rate 37% 60%4 44%
Note: Based on $55 /$3 commodity prices in 2015 for oil and gas,
respectively
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 2Q15e net G&A excludes an estimated $5mm associated with
the announced reorganization
4 Estimated China tax rate reflects a 25% taxation in-
country, as well as an additional non-cash U.S. income
tax of 35%, due to Newfield's current tax position and its
inability to utilize foreign tax credits.
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited, in millions, except per share data)
Three Months Ended
March 31,
---------
2015 2014
---- ----
Oil, gas and NGL revenues $349 $571
---- ----
Operating expenses:
Lease operating 75 74
Transportation and processing 49 37
Production and other taxes 13 28
Depreciation, depletion and amortization 237 192
General and administrative 63 56
Ceiling test and other impairments 792 -
Other 4 2
--- ---
Total operating expenses 1,233 389
----- ---
Income (loss) from operations (884) 182
---- ---
Other income (expense):
Interest expense (44) (51)
Capitalized interest 7 13
Commodity derivative income (expense) 153 (96)
Other, net 8 2
--- ---
Total other income (expense) 124 (132)
--- ----
Income (loss) from continuing operations
before income taxes (760) 50
Income tax provision (benefit) (280) 23
---- ---
Income (loss) from continuing operations (480) 27
Income (loss) from discontinued operations,
net of tax - 257
--- ---
Net income (loss) $(480) $284
===== ====
Earnings (loss) per share:
Basic
Income (loss) from continuing operations $(3.30) $0.19
Income (loss) from discontinued operations - 1.89
--- ----
Basic earnings (loss) per share $(3.30) $2.08
====== =====
Diluted
Income (loss) from continuing operations $(3.30) $0.19
Income (loss) from discontinued operations - 1.88
--- ----
Diluted earnings (loss) per share $(3.30) $2.07
====== =====
Weighted-average number of shares
outstanding for basic earnings (loss) per
share 145 136
Weighted-average number of shares
outstanding for diluted earnings (loss)
per share 145 137
CONDENSED CONSOLIDATED
BALANCE SHEET
(Unaudited, in millions)
March 31, December 31,
2015 2014
---- ----
ASSETS
Current assets:
Cash and cash equivalents $783 $14
Derivative assets 425 431
Other current assets 402 495
--- ---
Total current assets 1,610 940
Oil and gas properties,
net (full cost method) 7,603 8,232
Derivative assets 224 190
Other assets 241 236
--- ---
Total assets $9,678 $9,598
====== ======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Derivative liabilities $1 $8
Other current liabilities 861 1,093
--- -----
Total current liabilities 862 1,101
Other liabilities
45 45
Derivative liabilities 2 -
Long-term debt 3,146 2,892
Asset retirement
obligations 183 183
Deferred taxes 1,202 1,484
----- -----
Total long-term
liabilities 4,578 4,604
----- -----
STOCKHOLDERS' EQUITY
Common stock, treasury
stock and additional
paid-in capital 2,392 1,567
Accumulated other
comprehensive gain (loss) (1) (1)
Retained earnings 1,847 2,327
----- -----
Total stockholders' equity 4,238 3,893
----- -----
Total liabilities and
stockholders' equity $9,678 $9,598
====== ======
CONDENSED CONSOLIDATED
STATEMENT OF
CASH FLOWS
(Unaudited, in millions)
Three Months Ended
March 31,
---------
2015 2014
---- ----
Cash flows from operating
activities:
Net income (loss) $(480) $284
Adjustments to reconcile
net income (loss) to net
cash
provided by (used in)
operating activities:
Depreciation, depletion
and amortization 237 224
Deferred tax provision
(benefit) (283) 161
Stock-based compensation 15 11
Unrealized (gain) loss on
derivative contracts (32) 57
Ceiling test and other
impairments 792 -
Gain on sale of Malaysia
business - (388)
Other, net 6 (4)
--- ---
255 345
Changes in operating
assets and liabilities (50) 20
--- ---
Net cash provided by
(used in) operating
activities 205 365
--- ---
Cash flows from investing
activities:
Additions to oil and gas
properties and other (515) (561)
Proceeds from sales of
oil and gas properties 29 10
Proceeds received from
sale of Malaysia
business, net - 809
Redemptions of
investments - 39
--- ---
Net cash provided by
(used in) investing
activities (486) 297
---- ---
Cash flows from financing
activities:
Net proceeds (repayments)
under credit
arrangements (446) (649)
Net proceeds from
issuance of senior notes 690 -
Net proceeds from
issuances of common
stock 815 -
Other, net (9) (1)
--- ---
Net cash provided by
(used in) financing
activities 1,050 (650)
----- ----
Increase (decrease) in
cash and cash
equivalents 769 12
Cash and cash
equivalents, beginning
of period 14 95
--- ---
Cash and cash
equivalents, end of
period $783 $107
==== ====
Explanation and Reconciliation of Non-GAAP Financial Measures
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.
A reconciliation of earnings for the first quarter of 2015 for our continuing operations stated without the effect of certain items to net income is shown below:
1Q15
----
(in millions)
Income (loss) from continuing
operations (480)
Ceiling test
and other
impairments 792
Unrealized
(gain) loss
on
commodity
derivatives(1) (32)
Reduction in
force 9
Income tax
adjustment
for above
items (286)
Earnings stated without the effect of
the above items $3
===
(1) The determination of "Unrealized
(gain) loss on commodity
derivatives" for the first
quarter of 2015 is as follows:
1Q15
----
(in
millions)
Commodity derivative income (expense) $153
Cash payments (receipts) related to
derivative contracts, net (121)
----
Unrealized gain on commodity
derivatives $32
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 as 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 before changes in operating assets and liabilities to net cash provided by operating activities is shown below:
1Q15
----
(in
millions)
Net cash provided by operating activities $205
Net change
in
operating
assets and
liabilities 50
$
Discretionary cash flow 255
===
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SOURCE Newfield Exploration Company
