Newfield Increases Proved Reserves 10%
Newfield Exploration Company's total reserves at year-end 2007 were 2.5 Tcfe, an increase of 10% over year-end 2006 reserves. Newfield sold 396 Bcfe of proved reserves during 2007. Net reserve additions from all sources were 869 Bcfe with 221 Bcfe, of the total coming from purchases of properties.
The Company's natural gas production in the first quarter of 2008 is expected to be 36 to 40 Bcf (400 to 435 MMcf/d). Realized gas prices for the Company's Mid-Continent properties, after basis differentials, transportation and handling charges, typically average 75 - 85% of the Henry Hub Index. Based on current prices, Newfield estimates that its realized price for natural gas production from the deepwater Gulf of Mexico and onshore Gulf Coast, after basis differentials, transportation and handling charges, will average $0.40 - $0.60 per MMBtu less than the Henry Hub Index. Although Newfield's Rocky Mountain production is primarily oil, the Company does produce approximately 40 MMcfe/d of natural gas in this region. Newfield hedged the basis differential associated with 50% of the expected production from the proved producing fields acquired from Stone Energy in the second quarter of 2007. The basis hedges extend through 2012 at a weighted average hedged differential of ($1.18) per Mcf. Hedging gains or losses will affect price realizations.
The Company's oil production in the first quarter of 2008, including international liftings, is expected to be 2.1 - 2.3 million barrels (23,000 - 25,200 BOPD). Newfield expects to produce approximately 7,400 BOPD net from its Malaysian operations, and 1,400 BOPD net from China. The timing of liftings in Malaysia and China may affect total reported production. The price the Company receives for Gulf Coast production typically averages about $2 per barrel below the NYMEX West Texas Intermediate (WTI) price. The price the Company receives for its production in the Rocky Mountains averages about $13 - $15 per barrel below WTI. Oil production from the Mid-Continent typically sells at a $1.00 - $1.50 per barrel discount to WTI. Oil production from Malaysia typically sells at Tapis, or about even with WTI. Oil production from China typically sells at $10 - $12 per barrel less than WTI. Hedging gains or losses will affect price realizations.
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