Upcoming AWS Coverage on Diamondback Energy Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 9, 2017 / Active Wall St. announces its post-earnings coverage on Newfield Exploration Co. (NYSE: NFX). The Company posted its fourth quarter and fiscal 2016 financial results on February 21, 2017. The independent oil and gas Company outperformed top- and bottom-line expectations and also provided full year 2017 production guidance. Register with us now for your free membership at:

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One of Newfield Exploration's competitors within the Independent Oil & Gas space, Diamondback Energy, Inc. (NASDAQ: FANG), reported on February 14, 2017, its financial and operating results for Q4 ended December 31, 2016. AWS will be initiating a research report on Diamondback Energy in the coming days.

Today, AWS is promoting its earnings coverage on NFX; touching on FANG. Get our free coverage by signing up to:

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Earnings Reviewed

For the quarter ended December 31, 2016, Newfield recorded revenues of $415 million compared to revenues of $362 million in the year ago same period. The Company's reported numbers surpassed analysts' consensus of $401 million. For FY16, Newfield generated revenue of $1.47 billion compared to revenue of $1.56 billion for FY15.

For Q4 2016, Newfield reported net income of $13 million, or $0.07 per diluted share, compared to net loss of $663 million, or $4.06 per diluted share, for the prior year's comparable period. After adjusting for the effect of unrealized derivative losses, the Company's net income for the reported quarter would have been $98 million, or $0.49 per share. Newfield's adjusted numbers comfortably surpassed market expectations for earnings of $0.38 per share.

Production Summary

Newfield's total net production in Q4 2016 was 13.9 million barrels of oil equivalent (MMBOE), which was comprised of 44% oil, 18% natural gas liquids, and 38% natural gas. The Company's domestic net production in the reported quarter was 12.7 MMBOE, which was comprised of 39% oil, 20% natural gas liquids, and 41% natural gas. For the full-year 2016, Newfield's net production was 59.6 MMBOE, of which 5.4 MMBOE was from offshore China.

Proved Reserves and Costs Incurred

Newfield's year-end 2016 proved reserves increased 1% on a y-o-y basis to 513 MMBOE (99% domestic), despite the impact of lower crude oil and natural gas prices used in year-end reserve calculations. Crude oil and natural gas prices used in this calculation were $42.82 per barrel, down 15%, and $2.48 per MMbtu, down 4%, respectively. As a result, pre-tax present value of reserves (discounted at 10%) at year-end 2016 was approximately $2.7 billion, down 9% over the prior year-end.

Newfield stated that the increase in its proven reserves of 4 MMBOE resulted from positive revisions of 36 MMBOE and cost structure improvement revisions of 7 MMBOE which were partially offset by negative revisions of 22 MMBOE resulting from commodity price decreases.

Approximately 56% of Newfield's proven reserves are liquids and 61% are proven developed. The largest source of reserve additions during 2016 came from the Anadarko Basin, which now totals 330 MMBOE and comprise nearly two-thirds of Newfield's total proven reserves. The proven reserve life index for the Company is approximately nine years.

Newfield engaged the consulting firms DeGolyer and MacNaughton and Ryder Scott Company to perform an audit of the internally prepared reserve estimates on certain fields covering 93% of year-end 2016 proven reserve quantities on a barrel of oil equivalent basis. The purpose of these audits was to provide additional assurance on the reasonableness of internally prepared reserve estimates. Newfield stated that its proven reserves are, in aggregate, reasonable and within the established audit tolerance guidelines of 10%

Cash Flow & Balance Sheet

During Q4 2016, Newfield's net cash provided by operating activities was $239 million. Discretionary cash flow from operations was $229 million.

Newfield invested approximately $1.3 billion in FY16, which included approximately $579 million in acquisitions, land and leasehold expenditures and $121 million of capitalized interest and internal costs.

Outlook

In a separate press release on the same day it released its earnings results, Newfield provided its 2017 capital plan and a multi-year production growth outlook for the Company.

Newfield's capital budget for FY17 is approximately $1.0 billion, excluding about $120 million in capitalized interest and internal costs. Substantially, the entire budget is allocated to domestic operations and approximately 85% is earmarked for SCOOP and STACK. Newfield expects to drill 85-90 wells in STACK and up to 50 wells in SCOOP.

The Company's domestic net production for FY17 is expected to average 142,500 ? 145,500 BOEPD, or an increase of 3%-5%. The Q4 2017 net domestic production average is expected to be 150,000 ? 160,000 BOEPD. Newfield expects to run about 10 operated rigs in the Anadarko Basin in 2017-19. The Company expects Q4 2017 net production from the Anadarko Basin to increase to approximately 105,000 ? 115,000 BOEPD, an approximate 25% increase over Q4 2016 levels. Looking forward, SCOOP and STACK volumes are expected to average 150,000 ? 170,000 BOEPD in Q4 2019.

The Company plans to continue operating a single rig in the Williston Basin throughout 2017 where recent SXL wells are being drilled and completed (including facilities) for about $5 million gross. In addition, drilling will continue in the Uinta Basin with a single rig operating under a joint venture in the Central Basin. Recent results have delivered significantly lower total well costs.

Newfield announced that no additional capital is planned for investment in China. The Company recently reached an agreement to sell its interest in non-operated producing oil fields in Bohai Bay China for approximately $39 million. The sale is expected to close around mid-year 2017. Including the impact of the Bohai Bay sale at mid-year 2017, the Company's 2017 net production in China is expected to average nearly 6,000 BOEPD.

Stock Performance

At the close of trading session on Wednesday, March 08, 2017, Newfield Exploration's stock price dropped 5.41% to end the day at $33.92. A total volume of 5.52 million shares were exchanged during the session, which was above the 3-month average volume of 2.65 million shares. The Company's share price has gained 17.09% in the past twelve months. The stock currently has a market cap of $6.79 billion.

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