NEWFIELD EXPLORATION THE WOODLANDS, Texas, Nov. 3, 2015 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today reported its unaudited third quarter 2015 financial results. In addition, the Company provided an updated @NFX publication on its website and plans to host a conference call at 10:00 a.m. CST on November 4, 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) 424-1666 and enter conference code 7962303.
"Despite a challenging macro environment, Newfield is delivering on the key elements of its business plan in 2015, and we expect to enter 2016 with momentum and an improving cost structure," said Lee K. Boothby, Newfield Chairman, President and CEO. "We took decisive steps in early 2015 to improve our balance sheet, reduce expenses and improve margins, and shifted both people and capital resources to our highest return asset - the Anadarko Basin. Our near-term priorities remain unchanged: maintaining liquidity and a strong capital structure, holding our economically resilient STACK acreage by production, capturing remaining acreage opportunities in the Anadarko Basin and improving our margins across the Company. We are focused on delivering long-term value creation for our stockholders."
Third Quarter 2015 Results
For the third quarter, the Company recorded a net loss of $1.2 billion, or $7.52 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 $1.9 billion ($1.2 billion after-tax, or $7.49 per share). After adjusting for the effect of impairments, unrealized derivative losses and restructuring related costs, net income would have been $34 million, or $0.21 per share.
Revenues for the third quarter were $377 million. Net cash provided by operating activities before changes in operating assets and liabilities was $280 million.
Newfield's total net production in the third quarter of 2015 was 14.3 MMBOE, comprised of 47% oil, 16% natural gas liquids and 37% natural gas. Domestic production in the third quarter was 12.9 MMBOE.
2015 Production Guidance and Capital Investments
Newfield increased its 2015 domestic net production guidance to 50.0 - 50.5 MMBOE (previous forecast: 48.5 - 50.0 MMBOE). With recent strong performance from its wells in the Anadarko Basin's SCOOP and STACK, Newfield again increased its expectations for fourth quarter 2015 average net production in the Anadarko Basin to approximately 74,000 BOEPD (previous forecast: 71,000 BOEPD).
Total Company net production guidance was raised to 55.3 - 55.8 (previous forecast: 53.5 - 55.0 MMBOE). The Company's 2015 capital budget was reiterated at approximately $1.4 billion.
Additional operational highlights for the third 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
3Q15 Actual
3Q15 Actual Results Domestic China Total
------------------- -------- ----- -----
Production/Liftings(1)
Crude oil and
condensate (MMBbls) 5.3 1.4 6.7
Natural gas (Bcf) 32.1 - 32.1
NGLs (MMBbls) 2.3 - 2.3
Total (MMBOE) 12.9 1.4 14.3
Average Realized Prices2, 3
Crude oil and
condensate (per Bbl) $57.45 $42.78 $54.31
Natural gas (per Mcf) 3.54 - 3.54
NGLs (per Bbl) 16.79 - 16.79
Crude oil equivalent
(per BOE) $35.51 $42.78 $36.25
Operating Expenses:(3)
Lease operating (in
millions)
Recurring $51.5 $13.6 $65.1
Major (workovers, etc.) $5.8 $0.4 $6.2
Lease operating (per
BOE)
Recurring $4.09 $9.52 $4.64
Major (workovers, etc.) $0.46 $0.25 $0.44
Transportation and
processing (in
millions) $52.4 $ - $52.4
per BOE $4.20 $ - $3.77
Production and other
taxes (in millions) $12.7 $0.2 $12.9
per BOE $1.01 $0.15 $0.92
General and
administrative (G&A),
net (in millions) $64.1 $1.5 $65.6
per BOE $5.09 $1.03 $4.68
Capitalized direct
internal costs (in
millions) $(14.1)
per BOE $(0.99)
Other operating
expenses, net (in
millions) $0.9
per BOE $0.06
Interest expense (in millions) $37.2
per BOE $2.66
Capitalized interest (in millions) $(8.4)
per BOE $(0.60)
Other non-operating (income) expense (in millions) $(1.2)
per BOE $(0.09)
____
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
September 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 $2.51 per Mcf and the
average realized price for our
domestic and total crude oil
and condensate would have been
$38.41 per barrel and $39.34
per barrel, respectively. We
did not have any derivative
contracts associated with our
NGL or China production as of
September 30, 2015.
Note 3: All per unit pricing and
expenses exclude natural gas
produced and consumed in
operations.
2015e Production, Cost and Expense Guidance
Domestic China Total
-------- ----- -----
Production:
-----------
Oil (Mmbls) 21.3 5.3 26.6
NGLs
(Mmbls) 8.5 - 8.5
Natural gas
(Bcf) 123 - 123
Total
(MMboe) 50.0 - 50.5 5.3 55.3 - 55.8
Expenses ($
mm)(1)
-----------
LOE(2) $250 $58 $308
Transportation $209 - $209
Production
& other
taxes $57 $1 $58
General &
administrative
(G&A),
net(3) $202 $7 $209
Interest
expense $164 - $164
Capitalized
interest
and direct
internal
costs ($111) - ($111)
Tax rate4 37% 60% 40%
Note: Based on actual commodity
prices through 9/30/15 and 4Q15e
commodity prices of $47.90 NYMEX
WTI and $2.62 per Mcf Henry Hub
(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 $38mm
associated with 1Q15 reduction in
force and the announced
reorganization
4Estimated China tax rate reflects
a 25% taxation in-country, as
well as an additional non-cash
U.S. income tax of 35%, due to
Newfield's current tax position
and its inability to utilize
foreign tax credits.
4Q15e
Production,
Cost and
Expense
Guidance
------------
Domestic China Total
-------- ----- -----
Production:
-----------
Oil (Mmbls) 5.5 1.3 6.8
NGLs (Mmbls) 2.3 - 2.3
Natural gas
(Bcf) 32 - 32
Total (Mmboe) 13.0 - 13.4 1.3 14.3 - 14.7
Expenses ($
mm)(1)
-----------
LOE(2) $65 $16 $81
Transportation $55 - $55
Production &
other taxes $14 - $14
General &
administrative
(G&A), net(3) $63 $2 $65
Interest
expense $36 - $36
Capitalized
interest and
direct
internal
costs ($31) - ($31)
Tax rate 37% 60%4 43%
Note: Based on 4Q15e commodity
prices of $47.90 NYMEX WTI and
$2.62 per Mcf Henry Hub
(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)4Q15e net G&A excludes an
estimated $4mm 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 Nine Months Ended
September 30, September 30,
------------- -------------
2015 2014 2015 2014
---- ---- ---- ----
Oil, gas and NGL revenues $377 $610 $1,195 $1,793
---- ---- ------ ------
Operating expenses:
Lease operating 71 74 219 228
Transportation and processing 52 51 153 125
Production and other taxes 13 32 43 90
Depreciation, depletion and amortization 236 228 721 633
General and administrative 66 48 180 172
Ceiling test and other impairments 1,889 - 4,202 -
Other 1 10 8 15
--- --- --- ---
Total operating expenses 2,328 443 5,526 1,263
----- --- ----- -----
Income (loss) from operations (1,951) 167 (4,331) 530
------ --- ------ ---
Other income (expense):
Interest expense (37) (51) (127) (153)
Capitalized interest 8 13 23 39
Commodity derivative income (expense) 87 303 230 33
Other, net 1 1 (13) 4
--- --- --- ---
Total other income (expense) 59 266 113 (77)
--- --- --- ---
Income (loss) from continuing operations
before income taxes (1,892) 433 (4,218) 453
Income tax provision (benefit) (665) 155 (1,519) 170
---- --- ------ ---
Income (loss) from continuing operations (1,227) 278 (2,699) 283
Income (loss) from discontinued
operations, net of tax - - - 257
--- --- --- ---
Net income (loss) $(1,227) $278 $(2,699) $540
======= ==== ======= ====
Earnings (loss) per share:
Basic:
Income (loss) from continuing
operations $(7.52) $2.04 $(17.17) $2.07
Income (loss) from discontinued
operations - - - 1.89
--- --- --- ----
Basic earnings (loss) per share $(7.52) $2.04 $(17.17) $3.96
====== ===== ======= =====
Diluted:
Income (loss) from continuing
operations $(7.52) $2.02 $(17.17) $2.05
Income (loss) from discontinued
operations - - - 1.87
--- --- --- ----
Diluted earnings (loss) per share $(7.52) $2.02 $(17.17) $3.92
====== ===== ======= =====
Weighted-average number of shares
outstanding for basic earnings (loss)
per share 163 137 157 137
Weighted-average number of shares
outstanding for diluted earnings (loss)
per share 163 138 157 138
CONDENSED CONSOLIDATED
BALANCE SHEET
(Unaudited, in millions)
September 30, December 31,
2015 2014
---- ----
ASSETS
Current assets:
Cash and cash equivalents $7 $14
Derivative assets 334 431
Other current assets 322 495
--- ---
Total current assets 663 940
Oil and gas properties,
net (full cost method) 4,418 8,232
Derivative assets 148 190
Deferred taxes 49 -
Other assets 235 236
--- ---
Total assets $5,513 $9,598
====== ======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Derivative liabilities $8 $8
Other current liabilities 710 1,093
--- -----
Total current liabilities 718 1,101
Other liabilities 47 45
Derivative liabilities 6 -
Long-term debt 2,498 2,892
Asset retirement
obligations 192 183
Deferred taxes 21 1,484
--- -----
Total long-term
liabilities 2,764 4,604
----- -----
Stockholders' Equity:
Common stock, treasury
stock and additional
paid-in capital 2,405 1,567
Accumulated other
comprehensive gain (loss) (2) (1)
Retained earnings
(deficit) (372) 2,327
---- -----
Total stockholders' equity 2,031 3,893
----- -----
Total liabilities and
stockholders' equity $5,513 $9,598
====== ======
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
(Unaudited, in millions)
Nine Months Ended
September 30,
-------------
2015 2014
---- ----
Cash flows from operating
activities:
Net income (loss) $(2,699) $540
Adjustments to reconcile
net income (loss) to net
cash provided by (used
in) operating activities:
Depreciation, depletion
and amortization 721 665
Deferred tax provision
(benefit) (1,544) 308
Stock-based compensation 19 15
Unrealized (gain) loss on
derivative contracts 145 (139)
Ceiling test and other
impairments 4,202 -
Gain on sale of Malaysia
business - (388)
Other, net 38 1
--- ---
882 1,002
Changes in operating
assets and liabilities 7 68
--- ---
Net cash provided by (used
in) operating activities 889 1,070
--- -----
Cash flows from investing
activities:
Additions to oil and gas
properties and other (1,428) (1,578)
Proceeds from sales of oil
and gas properties 86 616
Proceeds received from
sale of Malaysia
business, net - 809
Redemptions of investments - 39
Proceeds from insurance
settlement, net 57 -
--- ---
Net cash provided by (used
in) investing activities (1,285) (114)
------ ----
Cash flows from financing
activities:
Net proceeds (repayments)
under credit arrangements (398) (649)
Proceeds from issuance of
senior notes 691 -
Repayment of senior
subordinated notes (700) -
Proceeds from issuances of
common stock, net 817 4
Other, net (21) (10)
--- ---
Net cash provided by (used
in) financing activities 389 (655)
--- ----
Increase (decrease) in
cash and cash equivalents (7) 301
Cash and cash equivalents,
beginning of period 14 95
--- ---
Cash and cash equivalents,
end of period $7 $396
=== ====
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 third quarter of 2015 for our continuing operations stated without the effect of certain items to net income (loss) is shown below:
3Q15
----
(in millions)
Net Income (loss) $(1,227)
Ceiling test 1,889
Unrealized
(gain) loss
on
derivative
contracts(1) 44
Restructuring
related costs 18
Income tax
adjustment
for above
items (690)
Earnings stated without the
effect of the above items $34
===
(1) The calculation of
"Unrealized (gain) loss on
derivative contracts" for
the third quarter of 2015 is
as follows:
3Q15
----
(in
millions)
Commodity derivative income
(expense) $87
Less: Realized gain (loss) on
derivative contracts 131
---
$(44)
Unrealized
loss on
derivative
contracts
==========
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:
3Q15
----
(in
millions)
Net cash provided by operating
activities $312
Net changes
in
operating
assets and
liabilities (32)
Net cash provided by operating
activities before changes
in
operating
assets and
liabilities $280
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SOURCE Newfield Exploration Company
