Newfield Reports Financial, Operational Results for Q1 2009

Newfield Exploration Company reported its unaudited first quarter 2009 financial and operating results.

"Our first quarter operating results were solid and we're off to a great start in 2009, despite the macro-challenges in our industry today," said President Lee K. Boothby. "Our cost and expenses in the first quarter were within or below our guidance levels, reflecting a continuing reduction in service costs and the diligent efforts of our teams to lower costs and maximize returns throughout the Company. We are confident in our ability to deliver on our 2009 production goals (up 6-10% over 2008) while living within cash flow. More importantly, we have the people and prospects in place today to grow production, while again living within cash flow, in 2010-2011."

First Quarter 2009

For the first quarter of 2009, Newfield recorded a net loss of $694 million, or $5.35 per diluted share (all per share amounts are on a diluted basis). The loss reflects the following items:

  • a $1.3 billion ($854 million after-tax), or $6.59 per share, reduction in the carrying value of oil and gas properties due to significantly lower gas prices at the end of the first quarter of 2009. This non-cash adjustment resulted from the application of full cost accounting rules. Using the quarter-end natural gas price of $3.63 per MMBtu, the Company's total estimated proved reserves were negatively impacted by approximately 400 Bcfe. The revision was primarily related to proved undeveloped reserves in the Mid-Continent and Rocky Mountain regions; and
  • a net unrealized gain on commodity derivatives of $73 million ($49 million after-tax), or $0.38 per share.

Without the effect of the above items, net income for the first quarter of 2009 would have been $112 million, or $0.85 per share.

Revenues in the first quarter of 2009 were $262 million. Net cash provided by operating activities before changes in operating assets and liabilities was $347 million. See "Explanation and Reconciliation of Non-GAAP Financial Measures" found after the financial statements in this release.

Newfield's production in the first quarter of 2009 was 63 Bcfe. Capital expenditures in the first quarter of 2009 were $369 million.


  • Williston Basin Acreage Grows, Successful Drilling Results - Newfield recently added an additional 14,400 net acres in the Williston Basin of North Dakota. The Company has approximately 500,000 net acres, with nearly 200,000 acres in prospective development areas. Newfield has drilled 10 successful oil wells in the Williston Basin and gross operated production is approximately 4,800 BOPD. Recent drilling has been focused in North Dakota on the southern end of the Nesson Anticline. Results from the most recent wells are below:
    • The Gladys 1-9H is a Bakken completion with a 24-hour average gross initial production rate of 1,328 BOEPD. This was a 4,000' lateral, located in McKenzie County, North Dakota. Newfield operates the well with a 48% working interest.
    • The Wisness 1-4H is a Bakken completion with a 24-hour average gross initial production rate of 1,256 BOEPD. This was a 4,400' lateral, located in McKenzie County, North Dakota. Newfield operates the well with a 40% working interest.
    • The Moberg 1-29H is currently drilling. The well is expected to have an 8,500' lateral completion. The well, located in McKenzie County, North Dakota, is operated by Newfield, with a 72% working interest.
  • Mid-Continent Region Update - Gross operated production from the Mid-Continent division is about 400 MMcfe/d, or nearly 300 MMcfe/d net. Both metrics are recent Company records.
    • Stiles Ranch Field Achieves Record Production - Production from the Stiles Ranch Field, located in the Texas Panhandle, recently reached record gross production of 145 MMcfe/d. Newfield recently added a rig in the field and has three rigs drilling horizontal wells. Newfield has an approximate 80% working interest in the field.
    • Woodford Shale Update - Newfield recently released an operated rig in the Woodford and now has 11 operated rigs under term contract in the field, with six of the remaining rigs rolling off of term contract in 2009. The timing of rig contract expirations and the fact that more than 90% of the Company's 165,000 net acres now held-by-production provide Newfield with operational flexibility in the second half of 2009. Due to the recent weakness in natural gas prices and a continued decline in service costs, Newfield has been intentionally slowing its pace of new well completions. Gross operated production in the Woodford is approximately 240 MMcfe/d. The average lateral length in 2009 is expected to be more than 5,000' in length.
    • Mid-Continent Express to Improve Realized Gas Prices - Beginning late in the second quarter of 2009, Newfield's realized prices for Mid-Continent properties are expected to improve to 80-85% of the Henry Hub Index as the Company begins to utilize firm transportation agreements that provide guaranteed pipeline capacity at a fixed price to move this natural gas production to the Perryville, Louisiana markets.
  • Monument Butte Update - Gross oil sales from Monument Butte, located in the Uinta Basin of Utah, are currently averaging about 19,000 BOPD, up from approximately 17,000 BOPD at year-end 2008. The increased sales volumes reflect improved demand for Black Wax crude. Differentials have narrowed recently to approximately $12 per barrel below WTI (including transportation expense). Newfield continues to run a three-rig program in the Monument Butte field area, which covers approximately 180,000 gross acres. Substantially all of the acreage is held by production.

Newfield Exploration Company is an independent crude oil and natural gas exploration and production company. The Company relies on a proven growth strategy of growing reserves through an active drilling program and select acquisitions. Newfield's domestic areas of operation include the Anadarko and Arkoma Basins of the Mid-Continent, the Rocky Mountains, onshore Texas and the Gulf of Mexico. The Company has international operations in Malaysia and China.