Newfield Provides 2011 Fourth Quarter and Full-Year Financial and Operating Results

Wednesday, Feb 22, 2012

THE WOODLANDS, Texas, Feb. 21, 2012 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today reported its unaudited fourth quarter and full-year 2011 financial results. Newfield will host a conference call at 10 a.m. CST on February 22, 2012. To participate in the call, dial 719-325-2481 or listen through the investor relations section of our website at http://www.newfield.com.

Fourth Quarter 2011

For the fourth quarter of 2011, Newfield recorded net income of $68 million, or $0.51 per diluted share (all per share amounts are on a diluted basis). Net income for the fourth quarter includes a net unrealized loss on commodity derivatives of $93 million ($59 million after-tax), or $0.44 per share.  Without the effect of this item, net income for the fourth quarter of 2011 would have been $127 million, or $0.95 per share.

Revenues in the fourth quarter of 2011 were $677 million. Net cash provided by operating activities before changes in operating assets and liabilities was $387 million. See “Explanation and Reconciliation of Non-GAAP Financial Measures” found after the financial statements in this release.

Newfield’s oil and liquids liftings in the fourth quarter of 2011 were 6 MMBbls, or an average of approximately 64,000 BOPD. This is about 9,000 BOPD higher than the third quarter of 2011 and 28% higher than the fourth quarter of 2010. Natural gas production in the fourth quarter of 2011 was 44 Bcf, an average of 478 MMcf/d. When combined, Newfield’s production in the fourth quarter of 2011 was 79 Bcfe, of which 44% was oil and liquids. Capital expenditures in the fourth quarter of 2011 were $479 million.

Full-Year 2011

For 2011, Newfield recorded net income of $539 million, or $3.99 per diluted share. Revenues for 2011 were $2.5 billion. Net cash provided by operating activities before changes in operating assets and liabilities was $1.5 billion. See “Explanation and Reconciliation of Non-GAAP Financial Measures” found after the financial statements in this release.

Newfield’s production for the full year of 2011 was 300 Bcfe, an increase of 4% over 2010 production volumes. Oil and liquids production grew more than 20% over 2010 levels and comprised approximately 40% of the Company’s total production. Production associated with approximately $400 million in non-strategic asset sales during the year would have contributed an additional 4 Bcfe. Capital expenditures for 2011 were approximately $2.2 billion, excluding acquisitions.

Year-End 2011 Reserves and Capital Expenditures

At year-end 2011, Newfield’s proved reserves were 3.9 Tcfe and probable reserves were 2.6 Tcfe. This reflects growth of 5% and 4%, respectively, over the prior year. The Company’s proved oil reserves increased nearly 30% during 2011 while proved natural gas reserves declined by 6% as compared to year-end 2010. Proved developed reserves at year-end 2011 were 54% of total proved reserves. Newfield’s present value of its proved reserves discounted 10% (PV-10) increased by more than 20% over the prior year to approximately $6 billion (after-tax), which follows a more than 65% increase in PV-10 during 2010.

Newfield’s proved natural gas reserves at year-end 2011 were 2.3 Tcf compared to 2.5 Tcf at year-end 2010 and 2.6 Tcf at year-end 2009. The Company’s proved crude oil and condensate reserves at year-end 2011 were 263 million barrels compared to 204 million barrels at year-end 2010 and 169 million barrels at year-end 2009. Natural gas comprised about 60%, 67% and 72% of proved reserves at year-end 2011, 2010 and 2009, respectively.

Our total proved reserve revisions in 2011 were 288 Bcfe. Price-related and other revisions were negligible. Of proved undeveloped natural gas reserves, 87 Bcfe were reclassified to probable reserves as the Company directed capital to higher margin oil drilling and the locations associated with these reserves moved outside of a five-year development horizon. Negative performance revisions in 2011 were 198 Bcfe, which included (i) well performance as efforts to extend the Greater Monument Butte Unit (GMBU) Green River section to the northwest encountered higher than expected gas production, (ii) the timing of waterflood response recognition in the GMBU, (iii) wellbore failures in gas reservoirs along the Gulf Coast and (iv) offset well interference in older vertical gas wells in the Mid-Continent, which were adversely impacted by new horizontal well completions.  

Beginning with the year-end 2009, SEC guidelines limit proved undeveloped reserves to those expected to be developed within five years. In long-lived resource plays with a lengthy inventory of drilling locations, such as our Woodford Shale and Uinta Basin plays, this time limit may have a material impact on the total reserves that could otherwise be recognized as proved. At year-end 2011, a total of approximately 1.1 Tcfe, or 42%, of Newfield’s probable reserves meet the definition of proved undeveloped reserves except for the fact that their planned development timing is beyond the prescribed five-year (2012-2016) development horizon for proved reserves.

SOURCE Newfield Exploration Company

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