NEWFIELD EXPLORATION THE WOODLANDS, Texas, Aug. 4, 2015 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today provided a detailed operational update on its STACK drilling program in the Anadarko Basin. In addition, Newfield reported its unaudited second quarter 2015 financial results. Newfield provided an updated @NFX publication on its website and plans to host a conference call at 8:00 a.m. CDT on August 5, 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 785-830-1997 and enter conference code 9266678.
"At mid-year, we are firing on all cylinders," said Lee K. Boothby, Newfield Chairman, President and CEO. "Although the backdrop of low oil prices is presenting very challenging issues for industry, our business plan and strong balance sheet continue to differentiate Newfield in the current environment. Our team is driving down costs, improving margins and realizing efficiencies and attractive returns in the Anadarko Basin. Furthermore, we are well hedged for 2015-16 and have significant liquidity. Our priorities remain a balance of maintaining financial strength, holding our economically resilient STACK acreage position by production and capturing remaining acreage opportunities in the Anadarko Basin. At our current pace, we are accelerating the timing to full-field development and expect to be 100% held-by-production in STACK by the end of 2016. I am confident in our plan and its ability to continue delivering stockholder value."
Second Quarter 2015 Results
For the second quarter, the Company recorded a net loss of $992 million, or $6.09 per diluted share (all per share amounts are on a diluted basis). The loss was primarily related to a full-cost ceiling test impairment of $1.5 billion ($958 million after-tax, or $5.88 per share). After adjusting for the effect of impairments, unrealized derivative losses, long-term debt redemption related costs and restructuring related costs, net income would have been $75 million, or $0.46 per share.
Revenues for the second quarter were $469 million. Net cash provided by operating activities before changes in operating assets and liabilities was $347 million.
Newfield's total net production in the second quarter of 2015 was 14.1 million BOE, comprised of 51% oil, 14% natural gas liquids and 35% natural gas. Domestic production in the second quarter was 12.4 MMBOE. Newfield estimates that weather issues and third-party mid-stream curtailments in SCOOP during the second quarter negatively impacted net production by approximately 0.2 MMBOE.
2015 Production Guidance and Capital Investments
Newfield increased its 2015 domestic production guidance to 48.5 - 50.0 MMBOE (previous mid-point was 48.5 MMBOE). Total company net production guidance is expected to be 53. 5 - 55.0 MMBOE.
The Company's 2015 capital budget was increased to $1.4 billion (previous budget was $1.2 billion). The increase relates to the recent addition of approximately 20,000 net acres in the Anadarko Basin, the quickening pace of drilling in SCOOP and STACK and the planned drilling and completion of 15 additional wells in STACK. Outside of the Anadarko Basin, the Company's 2015 planned investments remain unchanged.
Additional planned drilling in STACK will reduce lease renewal costs by approximately $40 million. Newfield now expects its fourth quarter 2015 average net production in the Anadarko Basin to be more than 71,000 BOEPD (previous guidance was 68,000 BOEPD).
Complete operational highlights for the second 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 focus 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
2Q15 Actual
2Q15 Actual Results Domestic China Total
------------------- -------- ----- -----
Production/Liftings(1)
Crude oil and
condensate (MMBbls) 5.5 1.7 7.2
Natural gas (Bcf) 29.8 - 29.8
NGLs (MMBbls) 2.0 - 2.0
Total (MMBOE) 12.4 1.7 14.1
Average Realized Prices2, 3
Crude oil and
condensate (per Bbl) $64.18 $60.24 $63.28
Natural gas (per Mcf) 3.50 - 3.50
NGLs (per Bbl) 19.17 - 19.17
Crude oil equivalent
(per BOE) $40.34 $60.24 $42.71
Operating Expenses:(3)
Lease operating (in
millions)
Recurring $50.5 $17.0 $67.5
Major (workovers, etc.) $5.3 $0.1 $5.4
Lease operating (per
BOE)
Recurring $4.15 $10.38 $4.89
Major (workovers, etc.) $0.43 $0.07 $0.39
Transportation and
processing (in
millions) $51.5 $ - $51.5
per BOE $4.22 $ - $3.72
Production and other
taxes (in millions) $16.5 $0.3 $16.8
per BOE $1.35 $0.19 $1.21
General and
administrative (G&A),
net (in millions) $49.4 $1.6 $51.0
per BOE $4.09 $0.96 $3.72
Capitalized direct
internal costs (in
millions) $(18.7)
per BOE $(1.35)
Other operating
expenses, net (in
millions) $2.9
per BOE $0.21
Interest expense (in millions) $46.1
per BOE $3.34
Capitalized interest (in millions) $(7.7)
per BOE $(0.56)
Other non-operating (income) expense (in millions) $22.4
per BOE $1.62
____
Note 1: Represents volumes
lifted and sold regardless of
when produced. Includes natural
gas produced and consumed in
operations of 1.9 Bcf during
the three months ended June 30,
2015.
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 $2.36 per Mcf and the
average realized price for our
domestic and total crude oil
and condensate would have been
$47.59 per barrel and $50.49
per barrel, respectively. We
did not have any derivative
contracts associated with our
NGL or China production as of
June 30, 2015.
Note 3: All per unit pricing and
expenses exclude natural gas
produced and consumed in
operations.
2015e Production, Cost and Expense Guidance
-------------------------------------------
Domestic China Total
-------- ----- -----
Production:
-----------
Oil
(Mmbls) 20.9 - 21.5 5.0 25.9 - 26.5
NGLs
(Mmbls) 7.8 - 8.1 - 7.8 - 8.1
Natural
gas (Bcf) 119 - 123 - 119 - 123
Total
(MMboe) 48.5 - 50.0 5.0 53.5 - 55.0
Expenses
($ MM)(1)
----------
LOE(2) $258 $61 $319
Transportation $200 - $200
Production
& other
taxes $65 $1 $66
General &
administrative
(G&A),
net(3) $196 $7 $203
Interest
expense $163 - $163
Capitalized
interest
and
direct
internal
costs ($109) ($1) ($110)
Tax rate 37% 60%4 42%
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 $41mm
associated with 1Q15 reduction in
force and the announced
reorganization
4Estimated China tax rate reflects
a 25% taxation in-country, as
well as an additional non-cash
U.S. income tax of 35%, due to
Newfield's current tax position
and its inability to utilize
foreign tax credits.
3Q15e Production, Cost and Expense Guidance
-------------------------------------------
Domestic China Total
-------- ----- -----
Production:
-----------
Oil
(Mmbls) 5.3 1.3 6.6
NGLs
(Mmbls) 2.1 - 2.1
Natural
gas
(Bcf) 31 - 31
Total
(Mmboe) 12.4 - 12.6 1.3 13.7 - 13.9
Expenses
($
mm)(1)
--------
LOE(2) $66 $17 $83
Transportation $51 - $51
Production
& other
taxes $18 - $18
General
&
administrative
(G&A),
net(3) $49 $2 $51
Interest
expense $36 - $36
Capitalized
interest
and
direct
internal
costs ($26) - ($26)
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)3Q15e net G&A excludes an
estimated $17mm associated with
announced reorganization
4Estimated 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 Six Months Ended
June 30, June 30,
-------- --------
2015 2014 2015 2014
---- ---- ---- ----
Oil, gas and NGL revenues $469 $612 $818 $1,183
---- ---- ---- ------
Operating expenses:
Lease operating 73 80 148 154
Transportation and processing 52 37 101 74
Production and other taxes 17 30 30 58
Depreciation, depletion and
amortization 248 213 485 405
General and administrative 51 68 114 124
Ceiling test and other impairments 1,521 - 2,313 -
Other 3 3 7 5
--- --- --- ---
Total operating expenses 1,965 431 3,198 820
----- --- ----- ---
Income (loss) from operations (1,496) 181 (2,380) 363
------ --- ------ ---
Other income (expense):
Interest expense (46) (51) (90) (102)
Capitalized interest 8 13 15 26
Commodity derivative income
(expense) (10) (174) 143 (270)
Other, net (22) 1 (14) 3
--- --- --- ---
Total other income (expense) (70) (211) 54 (343)
--- ---- --- ----
Income (loss) from continuing
operations before income taxes (1,566) (30) (2,326) 20
Income tax provision (benefit) (574) (8) (854) 15
---- --- ---- ---
Income (loss) from continuing
operations (992) (22) (1,472) 5
Income (loss) from discontinued
operations, net of tax - - - 257
--- --- --- ---
Net income (loss) $(992) $(22) $(1,472) $262
===== ==== ======= ====
Earnings (loss) per share:
Basic:
Income (loss) from continuing
operations $(6.09) $(0.16) $(9.55) $0.03
Income (loss) from discontinued
operations - - - 1.89
--- --- --- ----
Basic earnings (loss) per share $(6.09) $0.16 $(9.55) $1.92
====== ===== ====== =====
Diluted:
Income (loss) from continuing
operations $(6.09) $(0.16) $(9.55) $0.03
Income (loss) from discontinued
operations - - - 1.87
--- --- --- ----
Diluted earnings (loss) per share $(6.09) $0.16 $(9.55) $1.90
====== ===== ====== =====
Weighted-average number of shares
outstanding for basic earnings
(loss) per share 163 136 154 136
Weighted-average number of shares
outstanding for diluted earnings
(loss) per share 163 136 154 138
CONDENSED CONSOLIDATED
BALANCE SHEET
(Unaudited, in millions)
June 30, December 31,
2015 2014
---- ----
ASSETS
Current assets:
Cash and cash equivalents $42 $14
Derivative assets 353 431
Other current assets 490 495
--- ---
Total current assets 885 940
Oil and gas properties, net
(full cost method) 6,134 8,232
Derivative assets 168 190
Other assets 271 236
--- ---
Total assets $7,458 $9,598
====== ======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Derivative liabilities $5 $8
Other current liabilities 840 1,093
--- -----
Total current liabilities 845 1,101
Other liabilities
46 45
Derivative liabilities 4 -
Long-term debt 2,450 2,892
Asset retirement
obligations 187 183
Deferred taxes 669 1,484
--- -----
Total long-term
liabilities 3,356 4,604
----- -----
Stockholders' Equity:
Common stock, treasury
stock and additional paid-
in capital 2,403 1,567
Accumulated other
comprehensive gain (loss) (1) (1)
Retained earnings 855 2,327
--- -----
Total stockholders' equity 3,257 3,893
----- -----
Total liabilities and
stockholders' equity $7,458 $9,598
====== ======
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Six Months Ended
June 30,
--------
2015 2014
---- ----
Cash flows
from
operating
activities:
Net income
(loss) $(1,472) $262
Adjustments to
reconcile net
income (loss)
to net cash
provided by
(used in)
operating
activities:
Depreciation,
depletion and
amortization 485 437
Deferred tax
provision
(benefit) (872) 153
Stock-based
compensation 25 35
Unrealized
(gain) loss
on derivative
contracts 101 184
Ceiling test
and other
impairments 2,313 -
Gain on sale
of Malaysia
business - (388)
Other, net 22 (2)
--- ---
602 681
Changes in
operating
assets and
liabilities (25) 52
--- ---
Net cash
provided by
(used in)
operating
activities 577 733
--- ---
Cash flows
from
investing
activities:
Additions to
oil and gas
properties
and other (927) (1,036)
Proceeds from
sales of oil
and gas
properties 29 12
Proceeds
received from
sale of
Malaysia
business, net - 809
Redemptions of
investments - 39
--- ---
Net cash
provided by
(used in)
investing
activities (898) (176)
---- ----
Cash flows
from
financing
activities:
Net proceeds
(repayments)
under credit
arrangements (446) (618)
Proceeds from
issuance of
senior notes 691 -
Repayment of
senior
subordinated
notes (700) -
Proceeds from
issuances of
common stock,
net 817 2
Other, net (13) -
--- ---
Net cash
provided by
(used in)
financing
activities 349 (616)
--- ----
Increase
(decrease) in
cash and cash
equivalents 28 (59)
Cash and cash
equivalents,
beginning of
period 14 95
--- ---
Cash and cash
equivalents,
end of period $42 $36
=== ===
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 second quarter of 2015 stated without the effect of certain items to net income (loss) is shown below:
2Q15
----
(in millions)
Net Income (loss) $(992)
Ceiling test
and other
impairments 1,521
Unrealized
(gain) loss
on
derivative
contracts(1) 133
Restructuring
related costs
and reduction
in force 5
Premium on
debt
redemption 24
Unamortized
debt
issuance
costs and
discount
from
redemption 8
Income tax
adjustment
for above
items (624)
Earnings stated without the
effect of the above items $75
===
(1) The calculation of "Unrealized (gain) loss on derivative contracts" for the second quarter of 2015 is as follows:
2Q15
----
(in millions)
Commodity derivative income (expense) $(10)
Cash payments (receipts) related to
derivative contracts, net (123)
----
Unrealized
loss on
derivative
contracts $(133)
=====
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 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 net cash provided by operating activities before changes in operating assets and liabilities is shown below:
2Q15
----
(in millions)
Net cash provided by
operating activities $372
Net change in
operating
assets and
liabilities (25)
Net cash provided by
operating activities before
changes
in operating
assets and
liabilities $347
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SOURCE Newfield Exploration Company
