Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - NEWFIELD EXPLORATION CO /DE/ | nfx8k-02162010.htm |
| EX-99.2 - EARNINGS PRESS RELEASE - NEWFIELD EXPLORATION CO /DE/ | nfx8k-02162010ex992.htm |
| EX-99.3 - @NFX PUBLICATION - NEWFIELD EXPLORATION CO /DE/ | nfx8k-02162010ex993.htm |
Exhibit
99.1
Newfield
Exploration’s ’09 Proved Reserves Increase 23% to 3.6 Tcfe
FOR
IMMEDATE RELEASE
Houston –
February 16, 2010 -- Newfield Exploration Company (NYSE:
NFX) today announced that its proved reserves at December 31, 2009 were
3.6 Tcfe, a 23% increase over proved reserves at year-end 2008. Newfield
replaced approximately 250% of 2009 production with the addition of new proved
reserves, excluding the impact of new Securities and Exchange Commission (SEC)
reserve reporting rules. Substantially all of the reserve additions were from
organic drilling programs. The Company’s proved reserve life index of
approximately 14 years reflects continued growth in longer-lived and more
predictable resource plays.
At
year-end 2009, approximately 53% of the Company’s proved reserves were proved
developed and 72% were natural gas. Proved reserves in Newfield’s two largest
divisions – the Mid-Continent and Rocky Mountains – increased 34% and now
represent more than 80% of the Company’s total proved reserves.
For 2009,
Newfield added 1,342 Bcfe of proved reserves, of which approximately half were
related to recent changes in SEC reserve reporting rules expanding proved
undeveloped reserve locations beyond one offset. Negative price and performance
related revisions were 259 Bcfe and 125 Bcfe, respectively. Our proved developed
reserves at year-end 2009 were 4% higher than our proved developed reserves at
year-end 2008. Proved Oil & Gas Reserves and Capital Expenditures tables are
included below in this release.
Newfield
invested approximately $1.4 billion in 2009. Finding and development (F&D)
costs in 2009, including price and performance revisions, averaged approximately
$1.50 per Mcfe. Excluding the negative impact of price related reserve
revisions, finding and development costs would have been approximately $1.18 per
Mcfe. See “Explanation of
Non-GAAP Financial Measures” found at the end of this release for a
discussion of our calculation of F&D costs.
Without
the benefit of the SEC rule change expanding proved undeveloped reserve
locations beyond one offset, Newfield’s total proved reserves would have been
flat, despite the significant drop in North American natural gas prices. The
Company’s finding and development costs without the benefit of the SEC rule
change and excluding the price related revisions would have been approximately
$2.73 per Mcfe. Assuming a natural gas price of $5.50 per MMBtu for year-end
2009 reserve calculations, substantially all of the price-related natural gas
revisions would not have occurred.
The
following table summarizes our total net natural gas equivalent proved
reserves:
Oil and Gas
Reserves
|
Oil
and Condensate
(MMBbls)
|
Natural
Gas (Bcf)
|
Total
Natural Gas Equivalent (Bcfe)
|
||||||||||
|
December
31, 2008
|
140 | 2,110 | 2,950 | |||||||||
|
Extensions, discoveries and other
additions
|
48 | 1,045 | 1,331 | |||||||||
|
Purchases of
properties
|
1 | 6 | 11 | |||||||||
|
Reserve additions
|
49 | 1,051 | 1,342 | |||||||||
|
Sales of
properties
|
(2 | ) | (26 | ) | (35 | ) | ||||||
|
Price related
revisions
|
5 | (290 | ) | (259 | ) | |||||||
|
Performance
related revisions
|
(9 | ) | (68 | ) | (125 | ) | ||||||
|
Production
|
(14 | ) | (172 | ) | (257 | ) | ||||||
|
December 31, 2009
*
|
169 | 2,605 | 3,616 | |||||||||
*
Prices used for year-end 2009 reserve calculations: $3.87 per MMBtu and $61.14
per barrel, NYMEX adjusted for market differentials.
Recent Changes to SEC
Guidelines
SEC
reserve reporting guidelines changed significantly for year-end 2009 reserve
calculations. These changes were intended to modernize reserve reporting
methodology to better align them with changes in technology, current practices
and development of new resource plays. When compared to 2008, the most
significant changes for Newfield relate to the following:
Methodology for determining
commodity prices – Our 2009 proved reserve calculations are based on the
unweighted average first-day-of-the-month natural gas and crude oil prices for
the prior twelve months, or $3.87 per MMBtu and $61.14 per barrel, respectively,
adjusted for market differentials. Under the previous SEC guidelines, period-end
prices were used in the proved reserve calculations. In 2008, period-end prices
used in the calculation were $5.71 per MMBtu (48% higher than year-end 2009) and
$44.61 (27% lower than year-end 2009) per barrel, adjusted for market
differentials.
Expanded guidelines on
proved undeveloped reserves – Beginning at year-end 2009, proved
undeveloped reserves were expanded beyond one direct offset to a proved well
location. In Newfield’s Woodford Shale play and Monument Butte field, for
example, extensive drilling to date has shown these to be “continuous
accumulations” of oil and gas and undeveloped locations more than one direct
offset from a producing well could meet the definition of proved reserves.
Therefore, some additional proved undeveloped well locations were included in
proved reserves.
Five-Year development
cut-off – 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 Monument Butte plays, this time limit may have a
material impact on the total reserves that could have otherwise been recognized
as proved.
Capital
Expenditures
|
2009
|
||||
|
(in
millions)
|
||||
|
Domestic
property acquisitions:
|
||||
|
Unproved
|
$ | 114 | ||
|
Proved
|
33 | |||
|
Domestic
exploration and development
|
1,128 | |||
|
International
cost incurred
|
157 | |||
|
Total
costs incurred*
|
$ | 1,432 | ||
*
Total costs incurred includes $124 million of capitalized interest and overhead
and $19 million of asset retirement obligations
Explanation of Non-GAAP
Financial Measures
Finding and Development Costs
-- Newfield believes that the analysis of F&D cost is a useful tool
in helping to evaluate capital productivity. We calculate F&D cost by
dividing development, exploitation and exploration capital expenditures by
proved reserve additions for the period. Acquisitions, land, seismic and asset
retirement obligations are included in the calculation. Due to the significant
drop in commodity prices in early 2009, we have presented the F&D costs in
this release both including and excluding the impact of negative price-related
proved reserve revisions to highlight the impact that the significant drop in
prices during 2009 had on net proved reserve additions and to help provide
comparability with F&D costs in prior periods. The metrics provided in this
release should be read and utilized in conjunction with our Annual Report on
Form 10-K and the financial statements therein, which are prepared in accordance
with generally accepted accounting principles.
For
information, contact:
Investor
Relations: Steve Campbell (281) 847-6081
Media
Relations: Keith Schmidt (281) 674-2650
Email:
info@newfield.com