Newfield Exploration Reports Fourth Quarter and Full-Year 2013 Results
THE WOODLANDS, Texas, Feb. 25, 2014 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today reported its unaudited fourth quarter and full-year 2013 financial results and provided an update on its operations. In a separate release, the Company today also disclosed its year-end 2013 proved reserves. Recent operational highlights are detailed in the Company's @NFX publication, located on its website.
Newfield will host a conference call at 10 a.m. CST, February 26, 2014. To listen to the call, please visit Newfield's website at http://www.newfield.com. To participate in the call, dial 719-325-2456.
"In 2013, we focused on superior execution," said Lee K. Boothby. "Our operating teams delivered exceptional performance. We achieved 'year one' targets in our three-year plan and issued guidance through 2016 that combines growth in liquids production and cash flow. The recent sale of our Malaysian business allowed us to reduce our short-term borrowings and accelerate the development of our quality onshore assets. Our focus today is very clear – profitably grow our oil and liquids production in our key U.S. operating areas."
Mr. Boothby continued, "In a separate release today, we disclosed our year-end 2013 proved reserves. Domestic proved reserves were up 8% year-over-year to 576 MMBOE. More importantly, our domestic pre-tax PV10 value grew 44%, reflecting a 26% increase in domestic liquids reserves. Our proactive steps to accelerate our domestic developments are adding significant value. I'm excited about 2014 and remain confident that our plans will translate into stockholder value."
Fourth Quarter and Full-Year 2013 Financial Summary
With the recent sale of Newfield's Malaysian business and the process underway to divest its China business, the financial and operating results for the Company's international businesses are reported as "discontinued operations."
For the fourth quarter of 2013, the Company posted net income from continuing operations of $31 million, or $0.23 per diluted share (all per share amounts are on a diluted basis), which includes the impact of an unrealized loss on commodity derivatives of $48 million ($31 million after-tax, or $0.23 per share) and an unrealized loss on auction rate securities of $6 million ($4 million after-tax, or $0.03 per share). The Company reported a net loss of $14 million, or $0.10 per share, from discontinued operations. Excluding the unrealized losses, consolidated net income for the fourth quarter of 2013 would have been $52 million, or $0.38 per share.
Excluding the unrealized losses on commodity derivatives and auction rate securities and discontinued international operations, net income for the fourth quarter of 2013 would have been $66 million, or $0.48 per diluted share. Revenues for the fourth quarter of 2013 were $498 million, excluding $232 million from discontinued operations.
Fourth quarter net cash provided by operating activities before changes in operating assets and liabilities was $398 million. See "Explanation and Reconciliation of Non-GAAP Financial Measures" found after the financial statements in this release.
For the full-year 2013, Newfield posted net income of $147 million, or $0.94 per share. Excluding the unrealized losses on commodity derivatives and auction rate securities, net income from continuing operations would have been $213 million, or $1.56 per share. Revenues were approximately $1.8 billion in 2013, excluding approximately $891 million in revenues from discontinued operations. For 2013, income from discontinued operations was $39 million, or $0.14 per share. Full-year EPS was reduced by the $20 million purchase of preferred shares of Newfield China, LDC, a now wholly-owned subsidiary. For 2013, consolidated net cash provided by operating activities before changes in operating assets and liabilities was approximately $1.4 billion.
Fourth Quarter and Full-Year 2013 Production Summary
Newfield's net production in the fourth quarter of 2013 was 12.8 MMBOE, of which 2.2 MMBOE was from the Company's international businesses, which are classified as discontinued operations. Domestic liquids production in the fourth quarter was up 11% compared to the third quarter of 2013. The composition of fourth quarter total production was 49% oil, 12% natural gas liquids and 39% natural gas.
For the full-year 2013, Newfield's production was 48.3 MMBOE, of which 8.2 MMBOE was from the Company's international businesses.
2013 Operational Highlights
For complete highlights, see the Company's @NFX publication located on its website.
Anadarko Basin
The Company's fastest growing region is the Anadarko Basin of Oklahoma. For 2013, Anadarko Basin net production totaled 7.1 MMBOE. Newfield is planning to operate eight rigs in its SCOOP and STACK plays throughout the year and expects to double its 2014 production in the basin to more than 14 MMBOE. Newfield has more than 225,000 net acres in the Anadarko Basin. The SCOOP and STACK plays offer multiple "stacked" geologic horizons for exploitation.
Since late 2013, Newfield has been awaiting the completion of a large, third-party field gathering system upgrade in the SCOOP region. The recent completion of the system will allow Newfield to increase its net sales by approximately 4,500 BOEPD. Current net production in the SCOOP and STACK plays is soon expected to be 31,000 BOEPD. Although the upgrade was completed approximately six weeks late, the delay is not expected to negatively impact the Company's full-year guidance.
The table below includes a summary of the Company's 2013 drilling program in the Anadarko Basin:
| Well Type |
# Wells |
Avg. Gross IP (24-HR) BOEPD |
Avg. Gross 30-Day BOEPD |
Avg. Gross 60-Day BOEPD |
Avg. Gross 90-Day BOEPD |
| SCOOP Wet Gas* |
15 |
1,903 |
1,439 |
1,424 |
1,430 |
| SCOOP Oil |
7 |
1,511 |
1,106 |
1,111 |
1,112 |
| STACK** |
8 |
961 |
667 |
608 |
580 |
| *60 and 90-day rates include 10 wells **60 and 90-day rates include 7 wells |
|||||
Williston Basin
Williston Basin net production in 2013 was approximately 4.4 MMBOE, up 40% over 2012. Production from the region exceeded our beginning-of-the-year forecast primarily due to better production from existing "base" wells and the timely completion of pad drilling programs throughout the year.
As Newfield's Williston Basin program has transitioned to full-field development, significant cost savings have been achieved. Newfield completed 42 wells in 2013 and completed well costs averaged approximately $8.4 million, including about $0.8 million in artificial lift and facilities costs.
The table below includes a summary of Newfield's 2013 drilling program in the Williston Basin:
| Well Type |
# Wells |
Avg. Gross IP (24-HR) BOEPD |
Avg. Gross 30-Day BOEPD |
Avg. Gross 60-Day BOEPD |
Avg. Gross 90-Day BOEPD |
| Middle-Bakken* |
34 |
2,233 |
800 |
656 |
574 |
| Three Forks** |
8 |
2,091 |
678 |
614 |
565 |
| *60 and 90-day rates include 31 wells **60 and 90-day rates include 6 wells |
|||||
Eagle Ford
Eagle Ford net production in 2013 was 3 MMBOE, up nearly 70% year-over-year. The growth was related to the development of the Company's West Asherton area, located in Dimmitt County, Texas. Newfield completed 29 wells in the area in 2013. These were primarily super extended lateral (SXL) wells drilled from common pad locations. Newfield has achieved significant operational efficiencies in its Eagle Ford development. Current SXL gross well costs are averaging approximately $7.3 million, including artificial lift and facilities. Well costs are down more than 20% year-over-year.
Uinta Basin
Uinta Basin net production in 2013 was 8.2 MMBOE. The Company's 2013 program was balanced between the waterflood development of the Greater Monument Butte Unit (GMBU) and the assessment of high-potential, horizontal plays in the adjacent Central Basin.
In the GMBU, Newfield drilled more than 200 wells as it developed its giant waterflood. Water injection rates in GMBU were increased to nearly 90,000 barrels per day. In addition to the ongoing development on 40 and 20-acre spacing, Newfield also is testing 10-acre spacing in portions of the GMBU.
The following table details our 2013 drilling results in the Central Basin:
| Well Type |
# Wells |
Avg. Gross IP (24-HR) BOEPD |
Avg. Gross 30-Day BOEPD |
Avg. Gross 60-Day BOEPD* |
Avg. Gross 90-Day BOEPD |
| Uteland Butte SXL |
4 |
1,695 |
1,100 |
818 |
782** |
| Wasatch XL |
5 |
1,098 |
849 |
667 |
-- |
| *includes 3 wells ** includes 2 wells |
|||||
The following table depicts our actual production and costs and expenses from continuing operations for 2013, as well as our full-year and first quarter 2014 estimates.
| 2013 |
2014e |
1Q14e |
||||
| Production: |
||||||
| Oil (MMBO) |
14.2 |
16.4 – 18.2 |
3.8 – 3.9 |
|||
| NGLs (MMBbls) |
5.2 |
7.8 – 8.3 |
1.5 – 1.7 |
|||
| Natural Gas (BCF) |
124 |
119 - 129 |
28.5 – 29.0 |
|||
| Total (MMBOE) |
40.1 |
44.0 – 48.0 |
10.1 – 10.4 |
|||
| Costs and Expenses:*
|
||||||
| Total LOE ($MM) |
$413 |
$421 |
$105 |
|||
| Production & Other Taxes ($MM)** |
$67 |
$118 |
$29 |
|||
| DD&A Expense ($MM) |
$668 |
$844 |
$188 |
|||
| General & Administration (G&A), net ($MM) |
$219 |
$207 |
$52 |
|||
| Capitalized Internal Costs ($MM) |
($107) |
($118) |
($30) |
|||
| Interest Expense ($MM) |
$205 |
$200 |
$50 |
|||
| Capitalized Interest ($MM) |
($53) |
($43) |
($12) |
|||
| Effective Tax Rate |
37% |
36 – 38% |
36 – 38% |
| *Production, Costs and Expenses are based on continuing operations and Costs and Expenses are expected to be within 7% of the estimates above. **Assumptions are based on strip pricing of $91.55/Bbl and $4.18/Mmbtu as of January 15, 2014. |
Newfield Exploration Company is an independent energy company engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. We are focused on North American resource plays and our principal areas of operation include the Mid-Continent, the Rocky Mountains and onshore Texas.
**This release contains forward-looking information. All information other than historical facts included in this release, such as information regarding estimated or anticipated drilling plans, planned capital expenditures, and estimated production, is forward-looking information. Although Newfield believes that these expectations are reasonable, this information is based upon assumptions and anticipated results that are subject to numerous uncertainties and risks. Actual results may vary significantly from those anticipated due to many factors, including drilling results, oil and gas prices, industry conditions, the prices of goods and services, the availability of drilling rigs and other support services, the availability of refining capacity for the crude oil Newfield produces in the Uinta Basin, the availability and cost of capital resources, new regulations or changes in tax legislation, labor conditions and severe weather conditions. In addition, the drilling of oil and natural gas wells and the production of hydrocarbons are subject to numerous governmental regulations and operating risks. Other factors that could impact forward-looking statements are described in "Risk Factors" in Newfield's 2012 and 2013 Annual Reports on Form 10-K and other subsequent public filings with the Securities and Exchange Commission, which can be found at www.sec.gov. Unpredictable or unknown factors, not discussed in this press release, could also have material adverse effects on forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Unless legally required, Newfield undertakes no obligation to publicly update or revise any forward-looking statements.
For additional information, please contact Newfield's Investor Relations department.
Phone: 281-210-5201
Email: [email protected]
| 4Q13 Actual |
||||||||||||
| 4Q13 Actual Results |
Domestic (Continuing Operations) |
Int'l (Discontinued Operations) |
Total |
|||||||||
| Production/LiftingsNote 1 |
||||||||||||
| Crude oil and condensate - MMBbls |
4.1 |
2.2 |
6.3 |
|||||||||
| Natural gas - Bcf |
29.7 |
0.2 |
29.9 |
|||||||||
| NGLs - MMBbls |
1.5 |
— |
1.5 |
|||||||||
| Total MMBOE |
10.6 |
2.2 |
12.8 |
|||||||||
| Average Realized PricesNote 2 |
||||||||||||
| Crude oil and condensate - $/Bbl |
$ |
84.48 |
$ |
106.79 |
$ |
92.15 |
||||||
| Natural gas - $/Mcf |
$ |
3.99 |
$ |
3.57 |
$ |
3.98 |
||||||
| NGLs - $/Bbl |
$ |
33.48 |
$ |
— |
$ |
33.48 |
||||||
| Bbl equivalent - $/BOE |
$ |
49.57 |
$ |
105.35 |
$ |
59.39 |
||||||
| Operating Expenses: |
||||||||||||
| Lease operating ($MM) |
||||||||||||
| Recurring |
$ |
62.8 |
$ |
28.5 |
$ |
91.3 |
||||||
| Major (workovers, etc.) |
$ |
15.7 |
$ |
1.7 |
$ |
17.4 |
||||||
| Transportation |
$ |
35.6 |
$ |
— |
$ |
35.6 |
||||||
| Lease operating (per BOE) |
||||||||||||
| Recurring |
$ |
6.08 |
$ |
12.94 |
$ |
7.29 |
||||||
| Major (workovers, etc.) |
$ |
1.52 |
$ |
0.75 |
$ |
1.39 |
||||||
| Transportation |
$ |
3.45 |
$ |
— |
$ |
2.84 |
||||||
| Production and other taxes ($MM) |
$ |
15.4 |
$ |
70.2 |
$ |
85.6 |
||||||
| per BOE |
$ |
1.49 |
$ |
31.85 |
$ |
6.83 |
||||||
| General and administrative (G&A), net ($MM) |
$ |
59.3 |
$ |
7.4 |
$ |
66.7 |
||||||
| per BOE |
$ |
5.74 |
$ |
3.38 |
$ |
5.33 |
||||||
| Capitalized internal costs ($MM) |
$ |
(36.8) |
||||||||||
| per BOE |
$ |
(2.94) |
||||||||||
| Interest expense ($MM) |
$ |
52.4 |
||||||||||
| per BOE |
$ |
4.20 |
||||||||||
| Capitalized interest ($MM) |
$ |
(13.4) |
||||||||||
| per BOE |
$ |
(1.07) |
||||||||||
| Note 1: Represents volumes lifted and sold regardless of when produced. Includes natural gas produced and consumed in our operations of 1.5 Bcf during the three months ended December 31, 2013. |
||||||
| Note 2: Average realized prices include the effects of hedging contracts. If the effects of these contracts were excluded, the average realized price for domestic natural gas would have been $3.46 per Mcf and the domestic and total crude oil and condensate average realized prices would have been $83.87 and $91.75 per barrel, respectively. We did not have any hedging contracts associated with NGL production as of December 31, 2013. |
||||||
| CONSOLIDATED STATEMENT OF OPERATIONS |
||||||||||||
| (Unaudited, in millions, except per share data) |
||||||||||||
| For the Three Months Ended December 31, |
For the Twelve Months Ended December 31, |
|||||||||||
| 2013 |
2012 |
2013 |
2012 |
|||||||||
| Oil, gas and NGL revenues |
$ |
498 |
$ |
352 |
$ |
1,789 |
$ |
1,476 |
||||
| Operating expenses: |
||||||||||||
| Lease operating |
114 |
101 |
413 |
406 |
||||||||
| Production and other taxes |
15 |
14 |
67 |
67 |
||||||||
| Depreciation, depletion and amortization |
186 |
173 |
668 |
683 |
||||||||
| General and administrative |
59 |
50 |
219 |
211 |
||||||||
| Ceiling test impairment |
— |
1,488 |
— |
1,488 |
||||||||
| Other |
3 |
9 |
3 |
15 |
||||||||
| Total operating expenses |
377 |
1,835 |
1,370 |
2,870 |
||||||||
| Income (loss) from operations |
121 |
(1,483) |
419 |
(1,394) |
||||||||
| Other income (expense): |
||||||||||||
| Interest expense |
(52) |
(52) |
(205) |
(205) |
||||||||
| Capitalized interest |
13 |
15 |
53 |
68 |
||||||||
| Commodity derivative income (expense) |
(31) |
59 |
(97) |
120 |
||||||||
| Other, net |
(5) |
13 |
— |
(2) |
||||||||
| Total other income (expense) |
(75) |
35 |
(249) |
(19) |
||||||||
| Income (loss) from continuing operations before income taxes |
46 |
(1,448) |
170 |
(1,413) |
||||||||
| Income tax provision (benefit) |
15 |
(525) |
62 |
(511) |
||||||||
| Income (loss) from continuing operations |
31 |
(923) |
108 |
(902) |
||||||||
| Income (loss) from discontinued operations, net of tax |
(14) |
(479) |
39 |
(282) |
||||||||
| Net income (loss) |
$ |
17 |
$ |
(1,402) |
$ |
147 |
$ |
(1,184) |
||||
| Earnings (loss) per share: |
||||||||||||
| Basic |
||||||||||||
| Income (loss) from continuing operations |
$ |
0.23 |
$ |
(6.86) |
$ |
0.80 |
$ |
(6.70) |
||||
| Income (loss) from discontinued operations |
(0.10) |
(3.53) |
0.14 |
(2.10) |
||||||||
| Basic earnings (loss) per share |
$ |
0.13 |
$ |
(10.39) |
$ |
0.94 |
$ |
(8.80) |
||||
| Diluted |
||||||||||||
| Income (loss) from continuing operations |
$ |
0.23 |
$ |
(6.86) |
$ |
0.80 |
$ |
(6.70) |
||||
| Income (loss) from discontinued operations |
(0.10) |
(3.53) |
0.14 |
(2.10) |
||||||||
| Diluted earnings (loss) per share |
$ |
0.13 |
$ |
(10.39) |
$ |
0.94 |
$ |
(8.80) |
||||
| Weighted-average number of shares outstanding for basic income (loss) per share |
136 |
135 |
135 |
135 |
||||||||
| Weighted-average number of shares outstanding for diluted income (loss) per share |
137 |
135 |
136 |
135 |
||||||||
| CONDENSED CONSOLIDATED BALANCE SHEET |
||||||
| (Unaudited, in millions) |
||||||
| December 31, |
December 31, |
|||||
| 2013 |
2012 |
|||||
| ASSETS |
||||||
| Current assets: |
||||||
| Cash and cash equivalents |
$ |
95 |
$ |
88 |
||
| Derivative assets |
— |
125 |
||||
| Other current assets |
806 |
653 |
||||
| Total current assets |
901 |
866 |
||||
| Property and equipment, net (full cost method) |
8,275 |
6,902 |
||||
| Derivative assets |
26 |
17 |
||||
| Other assets |
119 |
127 |
||||
| Total assets |
$ |
9,321 |
$ |
7,912 |
||
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||
| Current liabilities: |
||||||
| Derivative liabilities |
$ |
62 |
$ |
6 |
||
| Other current liabilities |
1,228 |
953 |
||||
| Total current liabilities |
1,290 |
959 |
||||
| Other liabilities |
38 |
47 |
||||
| Derivative liabilities |
— |
15 |
||||
| Long-term debt |
3,694 |
3,045 |
||||
| Asset retirement obligations |
201 |
132 |
||||
| Deferred taxes |
1,142 |
934 |
||||
| Total long-term liabilities |
5,075 |
4,173 |
||||
| STOCKHOLDERS' EQUITY |
||||||
| Common stock and additional paid-in capital |
1,527 |
1,487 |
||||
| Accumulated other comprehensive gain (loss) |
2 |
(7) |
||||
| Retained earnings |
1,427 |
1,300 |
||||
| Total stockholders' equity |
2,956 |
2,780 |
||||
| Total liabilities and stockholders' equity |
$ |
9,321 |
$ |
7,912 |
||
| CONDENSED CONSOLIDATED STATEMENT OF |
||||||||
| (Unaudited, in millions) |
||||||||
| For the Twelve Months Ended December 31, |
||||||||
| 2013 |
2012 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income (loss) |
$ |
147 |
$ |
(1,184) |
||||
| Adjustments to reconcile net income (loss) to net cash |
||||||||
| provided by operating activities: |
||||||||
| Depreciation, depletion and amortization |
930 |
955 |
||||||
| Deferred tax provision |
143 |
1 |
||||||
| Stock-based compensation |
43 |
35 |
||||||
| Commodity derivative (income) expense |
97 |
(120) |
||||||
| Cash receipts on derivative settlements, net |
60 |
135 |
||||||
| Ceiling test impairment |
— |
1,488 |
||||||
| Other non-cash charges |
14 |
19 |
||||||
| 1,434 |
1,329 |
|||||||
| Changes in operating assets and liabilities |
11 |
(182) |
||||||
| Net cash provided by operating activities |
1,445 |
1,147 |
||||||
| Cash flows from investing activities: |
||||||||
| Additions to oil and gas properties and other |
(2,023) |
(1,780) |
||||||
| Acquisitions of oil and gas properties |
(72) |
(9) |
||||||
| Proceeds from sales of oil and gas properties |
36 |
630 |
||||||
| Redemptions of investments |
1 |
— |
||||||
| Net cash used in investing activities |
(2,058) |
(1,159) |
||||||
| Cash flows from financing activities: |
||||||||
| Net proceeds under credit arrangements |
649 |
(86) |
||||||
| Proceeds from issuance of senior notes |
— |
1,000 |
||||||
| Repayment of senior subordinated notes |
— |
(875) |
||||||
| Other |
(29) |
(15) |
||||||
| Net cash provided by financing activities |
620 |
24 |
||||||
| Increase in cash and cash equivalents |
7 |
12 |
||||||
| Cash and cash equivalents, beginning of period |
88 |
76 |
||||||
| Cash and cash equivalents, end of period |
$ |
95 |
$ |
88 |
||||
Explanation and Reconciliation of Non-GAAP Financial Measures
Earnings Stated Without the Effect of Certain Items
Earnings stated without the effect of certain items is a non-GAAP financial measure. Earnings without the effect of these items are presented because they affect the comparability of operating results from period to period. In addition, earnings without the effect of these items are more comparable to earnings estimates provided by securities analysts.
A reconciliation of earnings for the fourth quarter and full year of 2013 for our continuing operations stated without the effect of certain items to net income is shown below:
| 4Q13 |
2013 |
|||||
| (in millions) |
||||||
| Net income from continuing operations |
$ |
31 |
$ |
108 |
||
| Net unrealized loss on commodity derivatives(1) |
48 |
157 |
||||
| Unrealized loss on auction rate securities |
6 |
6 |
||||
| Income tax adjustment for above items |
(19) |
(58) |
||||
| Earnings stated without the effect of the above items |
$ |
66 |
$ |
213 |
||
| (1) The determination of "Net unrealized loss on commodity derivatives" for the fourth quarter and full year of 2013 is as follows: |
||||||
| 4Q13 |
2013 |
|||||
| (in millions) |
||||||
| Commodity derivative expense |
$ |
(31) |
$ |
(97) |
||
| Cash receipts on derivative settlements, net |
(17) |
(60) |
||||
| Net unrealized loss on commodity derivatives |
$ |
(48) |
$ |
(157) |
||
Net Cash Provided by Operating Activities Before Changes in Operating Assets and Liabilities
Net cash provided by operating activities before changes in operating assets and liabilities is presented because of its acceptance as an indicator of an oil and gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. This measure should not be considered as an alternative to net cash provided by operating activities as defined by generally accepted accounting principles.
A reconciliation of net cash provided by operating activities before changes in operating assets and liabilities to net cash provided by operating activities is shown below:
| 4Q13 |
2013 |
||||||
| (in millions) |
|||||||
| Net cash provided by operating activities |
$ |
350 |
$ |
1,445 |
|||
| Net change in operating assets and liabilities |
48 |
(11) |
|||||
| Net cash provided by operating activities before changes in operating assets and liabilities |
$ |
398 |
$ |
1,434 |
|||
SOURCE Newfield Exploration Company
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article