NEWFIELD EXPLORATION THE WOODLANDS, Texas, May 3, 2016 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today reported its first quarter 2016 unaudited financial and operating results. Additional operational 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 May 4, 2016. To listen to the call, please visit Newfield's website at http://www.newfield.com. To participate in the call, dial 785-830-7977 and enter conference code 5140605 about 10 minutes prior to the scheduled start time.
"Newfield posted solid results for the first quarter and we are delivering on the objectives outlined in our near-term business plan," said Newfield Chairman Lee K. Boothby. "We have taken strategic steps to preserve liquidity and strengthen our balance sheet while reducing expenses across the organization. Despite today's backdrop of lower commodity prices, we are improving our margins and outlook on future returns - particularly in the Anadarko Basin where well costs and margins continue to move in the right direction. Today, we raised our outlook for 2016 production and reiterated our guidance around lower operating expenses."
First Quarter 2016 Financial and Production Summary
For the first quarter, the Company recorded a net loss of $624 million, or $3.52 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 $506 million, or $2.85 per share. After adjusting for the effect of impairments, credit facility amendment fees and unrealized derivative losses, the net loss for the first quarter would have been $16 million, or $0.09 per share.
Revenues for the first quarter were $284 million. Net cash provided by operating activities was approximately $72 million. Net cash provided by operating activities before changes in operating assets and liabilities was $170 million.
Newfield's total net production in the first quarter of 2016 was 15.2 MMBOE, comprised of 46% oil, 16% natural gas liquids and 38% natural gas. Domestic production in the first quarter was 13.5 MMBOE.
2016 Production Guidance and Capital Investments
Newfield increased its 2016 domestic net production guidance to 50 - 52 MMBOE (previous forecast: 49 - 51.0 MMBOE). Total Company net production guidance was raised to 54.5 - 56.5 (previous forecast: 53.3 - 55.3 MMBOE). Newfield is planning to commence drilling later this year on two infill spacing pilots in STACK. The pilots will test well spacing and include multiple wells on single pad locations. Newfield estimates it will be able to conduct the pilots within its previously stated 2016 capital investment outlook of $625 - $675 million (excludes capitalized interest and direct internal costs).
2016e Production, Cost and Expense Guidance
Domestic China Total
-------- ----- -----
Production:
-----------
Oil (Mmbls) 20.0 - 20.6 4.5 24.5 - 25.1
NGLs (Mmbls) 9.2 - 9.6 - 9.2 - 9.6
Natural gas (Bcf) 125 - 130 - 125 - 130
Total (Mmboe) 50.0 - 52.0 4.5 54.5 - 56.5
Expenses ($ mm)(1)
-----------------
LOE(2) $200 $54 $254
Transportation(3) 260 - 260
Production & other taxes 45 1 46
General & administrative
(G&A), net $165 $7 $172
Interest expense 154 - 154
Capitalized interest and
direct internal costs ($103) - ($103)
Effective Tax rate4 2% 1% 1%
Note: Based on strip commodity
prices in 2016
(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)Estimated transportation /
processing fees include ~$52MM
Arkoma unused firm gas
transportation and ~$21MM Uinta oil
and gas delivery shortfall fees
4The effective tax rate reflects
expected future valuation allowances
recorded against deferred tax assets
generated by ceiling test
impairments.
2Q16e Production, Cost and Expense Guidance
Domestic China Total
-------- ----- -----
Production:
-----------
Oil (Mmbls) 5.0 - 5.2 1.4 6.4 - 6.6
NGLs (Mmbls) 2.5 - 2.8 - 2.5 - 2.8
Natural gas (Bcf) 33 - 33
Total (Mmboe) 13.0 - 13.5 1.4 14.4 - 14.9
Expenses ($ mm)(1)
-----------------
LOE(2) $50 $14 $64
Transportation(3) 66 - 66
Production & other taxes 11 - 11
General & administrative
(G&A), net $42 2 $44
Interest expense 38 - 38
Capitalized interest and
direct internal costs ($26) - ($26)
Effective Tax rate4 2% 1% 1%
Note: Based on strip commodity
prices in 2016
(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)Estimated transportation /
processing fees include ~$13MM
Arkoma unused firm gas
transportation and ~$3MM Uinta oil
and gas delivery shortfall fees
4 The effective tax rate reflects
expected future valuation allowances
recorded against deferred tax assets
generated by ceiling test
impairments.
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.
This news 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," "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 news release, all information and statements, including but not limited to information regarding planned capital expenditures, estimated reserves, estimated production targets, 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 news 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. 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, China and U.S. 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, and other operating risks. Please see Newfield's 2015 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for 1Q 2016, both 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 herein or in Newfield's SEC filings could also have material adverse effects on actual results. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this news 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: info@newfield.com
1Q16 Actual Results Domestic China Total
------------------- -------- ----- -----
Production/Liftings1
Crude oil and
condensate (MMBbls) 5.3 1.7 7.0
Natural gas (Bcf) 34.4 - 34.4
NGLs (MMBbls) 2.5 - 2.5
Total (MMBOE) 13.5 1.7 15.2
Average Realized Prices2, 3
Crude oil and
condensate (per Bbl) $38.96 $29.89 $36.82
Natural gas (per Mcf) 2.18 - 2.18
NGLs (per Bbl) 14.75 - 14.75
Crude oil equivalent
(per BOE) $23.79 $29.89 $24.46
Operating Expenses:3
Lease operating (in
millions)
Recurring $43.0 $14.3 $57.3
Major (workovers, etc.) $3.6 $ - $3.6
Lease operating (per
BOE)
Recurring $3.24 $8.69 $3.84
Major (workovers, etc.) $0.27 $0.03 $0.25
Transportation and
processing (in
millions) $63.4 $ - $63.4
per BOE $4.77 $ - $4.25
Production and other
taxes (in millions) $9.5 $0.2 $9.7
per BOE $0.71 $0.11 $0.65
General and
administrative (G&A),
net (in millions) $42.5 $1.4 $43.9
per BOE $3.20 $0.85 $2.94
Capitalized direct
internal costs (in
millions) $(17.2)
per BOE $(1.15)
Other operating
expenses, net (in
millions) $0.9
per BOE $0.06
Interest expense (in millions) $41.1
per BOE $2.75
Capitalized interest (in millions) $(9.3)
per BOE $(0.62)
Other non-operating (income) expense (in millions) $(0.5)
per BOE $(0.03)
____
Note 1: Represents volumes lifted and sold regardless of when produced. Includes natural gas produced and
consumed in operations of 1.5 Bcf during the three months ended March 31, 2016.
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 $1.83 per Mcf and the average
realized price for our domestic and total crude oil and condensate would have been $25.72 per barrel and
$26.70 per barrel, respectively. We did not have any derivative contracts associated with our NGL or China
production as of March 31, 2016.
Note 3: All per unit pricing and expenses exclude natural gas produced and consumed in operations.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in millions, except per share data)
Three Months Ended
March 31,
---------
2016 2015
---- ----
Oil, gas and NGL revenues $284 $349
---- ----
Operating expenses:
Lease operating 61 75
Transportation and processing 63 49
Production and other taxes 10 13
Depreciation, depletion and
amortization 177 237
General and administrative 44 63
Ceiling test and other
impairments 506 792
Other 1 4
--- ---
Total operating expenses 862 1,233
--- -----
Income (loss) from operations (578) (884)
---- ----
Other income (expense):
Interest expense (41) (44)
Capitalized interest 9 7
Commodity derivative income
(expense) (17) 153
Other, net 1 8
--- ---
Total other income (expense) (48) 124
--- ---
Income (loss) before income taxes (626) (760)
---- ----
Income tax provision (benefit) (2) (280)
--- ----
Net income (loss) $(624) $(480)
===== =====
Earnings (loss) per share:
Basic $(3.52) $(3.30)
====== ======
Diluted $(3.52) $(3.30)
====== ======
Weighted-average number of
shares outstanding for basic
earnings (loss) per share 177 145
=== ===
Weighted-average number of
shares outstanding for diluted
earnings (loss) per share 177 145
=== ===
CONDENSED
CONSOLIDATED
BALANCE SHEET
(Unaudited, in
millions)
March 31, December 31,
2016 2015
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $537 $5
Derivative assets 234 284
Other current assets 317 336
--- ---
Total current assets 1,088 625
----- ---
Oil and gas
properties, net
(full cost method) 3,403 3,819
Derivative assets 65 105
Other assets 221 219
--- ---
Total assets $4,777 $4,768
====== ======
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Current liabilities:
Derivative
liabilities $24 $13
Other current
liabilities 501 634
--- ---
Total current
liabilities 525 647
--- ---
Other liabilities 59 48
Derivative
liabilities 7 9
Long-term debt 2,429 2,467
Asset retirement
obligations 193 192
Deferred taxes 26 26
--- ---
Total long-term
liabilities 2,714 2,742
----- -----
Stockholders'
equity:
Common stock,
treasury stock and
additional paid-in
capital 3,199 2,416
Accumulated other
comprehensive gain
(loss) (2) (2)
Retained earnings
(deficit) (1,659) (1,035)
------ ------
Total stockholders'
equity 1,538 1,379
----- -----
Total liabilities
and stockholders'
equity $4,777 $4,768
====== ======
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
(Unaudited, in millions)
Three Months Ended
March 31,
---------
2016 2015
---- ----
Cash flows from
operating activities:
Net income (loss) $(624) $(480)
Adjustments to
reconcile net income
(loss) to net cash
provided by (used in)
operating activities:
Depreciation,
depletion and
amortization 177 237
Deferred tax provision
(benefit) - (283)
Stock-based
compensation 8 15
Unrealized (gain) loss
on derivative
contracts 99 (32)
Ceiling test and other
impairments 506 792
Other, net 4 6
--- ---
170 255
Changes in operating
assets and
liabilities (98) (50)
--- ---
Net cash provided by
(used in) operating
activities 72 205
--- ---
Cash flows from
investing activities:
Additions and
acquisitions of oil
and gas properties
and other (278) (515)
Proceeds from sales of
oil and gas
properties 3 29
--- ---
Net cash provided by
(used in) investing
activities (275) (486)
---- ----
Cash flows from
financing activities:
Net proceeds
(repayments) of
borrowings under
credit arrangements (39) (446)
Proceeds from issuance
of senior notes - 691
Debt issue costs - (8)
Proceeds from
issuances of common
stock, net 776 815
Other, net (2) (2)
--- ---
Net cash provided by
(used in) financing
activities 735 1,050
--- -----
Increase (decrease) in
cash and cash
equivalents 532 769
Cash and cash
equivalents,
beginning of period 5 14
--- ---
Cash and cash
equivalents, end of
period $537 $783
==== ====
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 first quarter of 2016 stated without the effect of certain items to net income (loss) is shown below:
1Q16
----
(in
millions)
Net Income (loss) $(624)
Ceiling test
impairments 506
Unrealized
(gain) loss
on
derivative
contracts 99
Credit facility
amendment fees 3
Income tax
adjustment
for above
items(1) -
Earnings stated without the effect
of the above items $(16)
====
(1) Our effective tax rate
is less than 1% due to
valuation allowances on our
deferred tax assets.
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:
1Q16
----
(in
millions)
Net cash provided by operating
activities $72
Net changes in operating
assets and liabilities 98
$170
Net cash provided by operating
activities before changes in
operating assets and liabilities
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SOURCE Newfield Exploration Company
