Newfield began shutting in production in preparation for Hurricane Katrina on August 27. Since that time, approximately 2.6 billion cubic feet equivalent (Bcfe) net has been deferred. Newfield has restored 90% of its operated production in the Gulf of Mexico and has approximately 60 MMcfe/d shut-in at this time.
Based on the assessments to date, total deferred production for 2005 will likely be 7 - 9 Bcfe. Newfield now expects that its total production for 2005 will be approximately 258 - 260 Bcfe.
The increase in commodity prices as a result of Hurricane Katrina will likely offset the negative impact on 2005 revenues, earnings and cash flow from the deferral of production. Newfield carries business interruption insurance on a portion of the affected properties. Business interruption insurance proceeds, if any, would further offset the affect of deferred production on operating results in 2006.
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