NEWFIELD EXPLORATION THE WOODLANDS, Texas, Feb. 21, 2017 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today reported its fourth quarter 2016 financial results, as well as 2016 year-end proved reserves. Additional operational details can be found in the Company's @NFX publication, located on its website. Newfield today issued a separate news release outlining its planned 2017 capital investment program and full-year production expectations. In addition, the Company provided a multi-year outlook for domestic total production, domestic oil production and Anadarko Basin production.
Newfield will host a conference call at 10 a.m. CST, February 22, 2017. To listen to the call, please visit Newfield's website at http://www.newfield.com. To participate in the call, dial 785-830-1924 and enter conference code 5209429 at least 10 minutes prior to the scheduled start time.
Fourth Quarter Financial Summary
For the fourth quarter, the Company recorded net income of $13 million, or $0.07 per diluted share (all per share amounts are on a diluted basis). After adjusting for the effect of unrealized derivative losses, net income would have been $98 million, or $0.49 per share.
Revenues for the fourth quarter were $415 million. Net cash provided by operating activities was $239 million. Discretionary cash flow from operations was $229 million.
Fourth Quarter and Full-Year 2016 Production Summary
Newfield's total net production in the fourth quarter of 2016 was 13.9 MMBOE, comprised of 44% oil, 18% natural gas liquids and 38% natural gas. Domestic net production in the fourth quarter was 12.7 MMBOE, 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 were up 1% year-over-year 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.
The increase in our proved 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. During 2016, we added proved reserves of 77 MMBOE, which included 35 MMBOE of reserves purchased and 42 MMBOE added through extensions, discoveries and other additions. During 2016, we sold non-strategic assets with reserves of 35 MMBOE.
Approximately 56% of proved reserves are liquids and 61% are proved developed. The largest source of reserve additions during 2016 came from the Anadarko Basin, which now total 330 MMBOE and comprise nearly two-thirds of Newfield's total proved reserves. The proved 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 proved 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's proved reserves are, in aggregate, reasonable and within the established audit tolerance guidelines of 10 percent.
Newfield invested approximately $1.3 billion in 2016, which includes approximately $579 million in acquisitions, land and leasehold expenditures and $121 million of capitalized interest and internal costs. The tables below provide additional information on reserves and costs incurred during 2016.
Crude Oil Natural Natural Gas Total
and Gas Liquids
Condensate (MMBOE)
(Bcf) (MMBbls)
(MMBbls)
-------
Total
Company
Reserves
---------
December
31,
2015 207 1,305 84 509
Revisions
of
previous
estimates (9) 116 13 21
Extensions,
discoveries
and
other
additions 19 92 8 42
Purchases
of
properties 12 90 7 35
Sales
of
properties (13) (102) (6) (35)
Production (26) (135) (11) (59)
--- ---- --- ---
December
31,
2016 190 1,366 95 513
SEC pricing used for year-end 2016 reserve calculations: $2.48 per MMBtu for natural gas and $42.82 per barrel for oil, adjusted for market differentials.
The following table presents costs incurred for oil and gas property acquisition, exploration and development for 2016:
Domestic China Total
-------- ----- -----
(in millions)
Property acquisitions:
Unproved $491 $ -- $491
Proved 88 -- 88
Exploration 535 -- 535
Development(1) 210 (1) 209
--- --- ---
Total costs incurred(2) $1,324 $(1) $1,323
(1) Includes ($8) million of asset
retirement costs.
(2) Total costs incurred includes
approximately $121 million of
capitalized interest and internal
costs
Newfield Exploration Company is an independent energy company engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. Our U.S. operations are onshore and focus primarily on large scale liquids-rich resource plays. Our principal areas of operation are the Anadarko and Arkoma basins of Oklahoma, the Williston Basin of North Dakota and the Uinta Basin of Utah. We also have oil producing assets offshore China.
**This 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," "forecast," "outlook," "could," "budget," "objectives," "strategy," "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 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 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, new regulations or changes in tax legislation, environmental liabilities not covered by indemnity or insurance, legislation or regulatory initiatives intended to address seismic activity, and other operating risks. Please see Newfield's 2016 Annual Report on Form 10-K and subsequent public filings, all 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 in this press release or in Newfield's SEC filings 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, 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: IR@newfield.com
4Q16 Actual Results Domestic China Total
------------------- -------- ----- -----
Production/Liftings(1)
Crude oil and condensate (MMBbls) 4.9 1.2 6.1
Natural gas (Bcf) 31.5 - 31.5
NGLs (MMBbls) 2.5 - 2.5
Total (MMBOE) 12.7 1.2 13.9
Average Realized Prices(2)(3)
Crude oil and condensate (per Bbl) $48.43 $49.28 $48.59
Natural gas (per Mcf) 2.37 - 2.37
NGLs (per Bbl) 23.65 - 23.65
Crude oil equivalent (per BOE) $29.59 $49.28 $31.27
Operating Expenses:(3)
Lease operating (in millions)
Recurring $40 $15 $55
Major (workovers, etc.) $6 $ - $6
Lease operating (per BOE)
Recurring $3.22 $12.57 $4.01
Major (workovers, etc.) $0.48 $0.08 $0.45
Transportation and processing (in
millions) $72 $ - $72
per BOE $5.73 $ - $5.24
Production and other taxes (in
millions) $8 $ - $8
per BOE $0.65 $0.25 $0.62
General and administrative (G&A),
net (in millions) $43 $3 $46
per BOE $3.40 $2.60 $3.33
Capitalized direct internal costs
(in millions) $(17)
per BOE $(1.23)
Other operating expenses (income),
net (in millions) $1
per BOE $0.08
Interest expense (in millions) $38
per BOE $2.73
Capitalized interest (in millions) $(16)
per BOE $(1.14)
Other non-operating (income)
expense (in millions) $(3)
per BOE $(0.27)
_______
(1) Represents volumes lifted and
sold regardless of when
produced. Includes natural gas
produced and consumed in
operations of 1.1 Bcf during
the three months ended December
31, 2016.
(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
$2.68 per Mcf and the average
realized price for our domestic
and total crude oil and
condensate would have been
$43.39 per barrel and $44.52
per barrel, respectively. We
did not have any derivative
contracts associated with our
NGL or China production as of
December 31, 2016.
(3) All per unit pricing and
expenses exclude natural gas
produced and consumed in
operations.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited, in millions)
December 31,
2016 2015
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $555 $5
Short-term
investments 25 -
Derivative assets 75 284
Other current assets 294 336
Total current assets 949 625
--- ---
Oil and gas
properties, net
(full cost method) 3,140 3,819
Derivative assets - 105
Other assets 223 219
Total assets $4,312 $4,768
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Derivative
liabilities 97 13
Other current
liabilities 587 634
Total current
liabilities 684 647
--- ---
Other liabilities 63 48
Derivative
liabilities 3 9
Long-term debt 2,431 2,467
Asset retirement
obligations 154 192
Deferred taxes 39 26
--- ---
Total long-term
liabilities 2,690 2,742
----- -----
Stockholders' equity:
Common stock,
treasury stock and
additional paid-in
capital 3,205 2,416
Accumulated other
comprehensive income
(loss) (2) (2)
Retained earnings
(deficit) (2,265) (1,035)
------ ------
Total stockholders'
equity 938 1,379
--- -----
Total liabilities and
stockholders' equity $4,312 $4,768
====== ======
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited, in millions, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2016 2015 2016 2015
---- ---- ---- ----
Oil, gas and NGL
revenues $415 $362 $1,472 $1,557
---- ---- ------ ------
Operating expenses:
Lease operating 61 66 244 285
Transportation and
processing 72 59 272 212
Production and other
taxes 8 3 42 46
Depreciation,
depletion and
amortization 115 196 572 917
General and
administrative 46 64 213 244
Ceiling test and other
impairments - 702 1,028 4,904
Other 1 2 20 10
Total operating
expenses 303 1,092 2,391 6,618
--- ----- ----- -----
Income (loss) from
operations 112 (730) (919) (5,061)
--- ---- ---- ------
Other income
(expense):
Interest expense (38) (37) (154) (164)
Capitalized interest 16 10 51 33
Commodity derivative
income (expense) (69) 29 (191) 259
Other, net 3 (1) 5 (14)
--- ---
Total other income
(expense) (88) 1 (289) 114
--- --- ---- ---
Income (loss) before
income taxes 24 (729) (1,208) (4,947)
Income tax provision
(benefit) 11 (66) 22 (1,585)
--- ------
Net income (loss) $13 $(663) $(1,230) $(3,362)
=== ===== ======= =======
Earnings (loss) per
share:
Basic $0.07 $(4.06) $(6.36) $(21.18)
===== ====== ====== =======
Diluted $0.07 $(4.06) $(6.36) $(21.18)
===== ====== ====== =======
Weighted-average
number of shares
outstanding for basic
earnings (loss) per
share 199 163 193 159
=== === === ===
Weighted-average
number of shares
outstanding for
diluted earnings
(loss) per share 200 163 193 159
=== === === ===
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
(Unaudited, in millions)
Year Ended
December 31,
2016 2015
---- ----
Cash flows from
operating activities:
Net income (loss) $(1,230) $(3,362)
Adjustments to reconcile
net income (loss) to
net cash provided by
(used in) operating
activities:
Depreciation, depletion
and amortization 572 917
Deferred tax provision
(benefit) 13 (1,602)
Stock-based compensation 22 25
Unrealized (gain) loss
on derivative contracts 392 246
Ceiling test and other
impairments 1,028 4,904
Other, net 13 43
--- ---
810 1,171
Changes in operating
assets and liabilities 16 38
Net cash provided by
(used in) operating
activities 826 1,209
--- -----
Cash flows from
investing activities:
Additions to and
acquisitions of oil and
gas properties and
other (1,371) (1,745)
Proceeds from sales of
oil and gas properties 405 90
Proceeds from insurance
settlement, net - 57
Purchases of investments (25) -
--- ---
Net cash provided by
(used in) investing
activities (991) (1,598)
---- ------
Cash flows from
financing activities:
Net proceeds
(repayments) of
borrowings under credit
arrangements (39) (407)
Proceeds from issuance
of senior notes - 691
Repayment of senior
subordinated notes - (700)
Debt issue costs - (8)
Proceeds from issuances
of common stock, net 779 819
Other, net (25) (15)
Net cash provided by
(used in) financing
activities 715 380
--- ---
Increase (decrease) in
cash and cash
equivalents 550 (9)
Cash and cash
equivalents, beginning
of period 5 14
--- ---
Cash and cash
equivalents, end of
period $555 $5
==== ===
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 fourth quarter of 2016 stated without the effect of certain items to net income (loss) is shown below:
4Q16
----
(In
millions)
Net Income (loss) $13
Unrealized (gain) loss on derivative
contracts 85
Earnings stated without the effect
of the above items $98
===
Discretionary Cash Flow from Operations
Discretionary cash flow from operations represents net cash provided by operating activities before changes in operating assets and liabilities and 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 discretionary cash flow from operations is shown below:
4Q16
----
(In millions)
Net cash provided by operating
activities $239
Net changes in operating assets
and liabilities (10)
Discretionary cash flow from
operations $229
====
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SOURCE Newfield Exploration Company
