Newfield Exploration Reports Third Quarter 2015 Results

3Q15 Actual

3Q15 Actual Results

Domestic

China

Total

Production/Liftings¹

Crude oil and condensate (MMBbls)

5.3

1.4

6.7

Natural gas (Bcf)

32.1

—

32.1

NGLs (MMBbls)

2.3

—

2.3

      Total (MMBOE)

12.9

1.4

14.3

Average Realized Prices^{2, 3}

Crude oil and condensate (per Bbl)

$

57.45

$

42.78

$

54.31

Natural gas (per Mcf)

3.54

—

3.54

NGLs (per Bbl)

16.79

—

16.79

      Crude oil equivalent (per BOE)

$

35.51

$

42.78

$

36.25

Operating Expenses:³

Lease operating (in millions)

Recurring

$

51.5

$

13.6

$

65.1

Major (workovers, etc.)

$

5.8

$

0.4

$

6.2

Lease operating (per BOE)

Recurring

$

4.09

$

9.52

$

4.64

Major (workovers, etc.)

$

0.46

$

0.25

$

0.44

Transportation and processing (in millions)

$

52.4

$

—

$

52.4

per BOE

$

4.20

$

—

$

3.77

Production and other taxes (in millions)

$

12.7

$

0.2

$

12.9

per BOE

$

1.01

$

0.15

$

0.92

General and administrative (G&A), net (in millions)

$

64.1

$

1.5

$

65.6

per BOE

$

5.09

$

1.03

$

4.68

   Capitalized direct internal costs (in millions)

$

(14.1)

per BOE

$

(0.99)

Other operating expenses, net (in millions)

$

0.9

per BOE

$

0.06

Interest expense (in millions)

$

37.2

per BOE

$

2.66

Capitalized interest (in millions)

$

(8.4)

per BOE

$

(0.60)

Other non-operating (income) expense (in millions)

$

(1.2)

per BOE

$

(0.09)

____

Note 1: Represents volumes lifted and sold regardless of when produced. Includes natural gas produced and consumed in operations of 1.9 Bcf during the three months ended September 30, 2015.

Note 2: Average realized prices include the effects of derivative contracts. Excluding these effects, the average realized price for domestic and total natural gas would have been $2.51 per Mcf and the average realized price for our domestic and total crude oil and condensate would have been $38.41 per barrel and $39.34 per barrel, respectively. We did not have any derivative contracts associated with our NGL or China production as of September 30, 2015.

Note 3: All per unit pricing and expenses exclude natural gas produced and consumed in operations.

  Domestic

  China

  Total

Production:

  Oil (Mmbls)

21.3

5.3

26.6

  NGLs (Mmbls)

8.5

–

8.5

  Natural gas (Bcf)

123

–

123

Total (MMboe)

50.0 – 50.5

5.3

55.3 – 55.8

Expenses ($ mm)¹

  LOE²

$250

$58

$308

  Transportation

$209

–

$209

  Production & other taxes

$57

$1

$58

  General & administrative (G&A), net³

$202

$7

$209

  Interest expense

$164

–

$164

Capitalized interest and direct internal costs

($111)

–

($111)

Tax rate⁴

37%

60%

40%

4Q15e Production, Cost and Expense Guidance

  Domestic

  China

  Total

Production:

  Oil (Mmbls)

5.5

1.3

6.8

  NGLs (Mmbls)

2.3

–

2.3

  Natural gas (Bcf)

32

–

32

Total (Mmboe)

  13.0 – 13.4

1.3

14.3 – 14.7

Expenses ($ mm)¹

  LOE²

$65

$16

$81

  Transportation

$55

–

$55

  Production & other taxes

$14

–

$14

  General & administrative (G&A), net³

$63

$2

$65

  Interest expense

$36

–

$36

Capitalized interest and direct internal costs

($31)

–

($31)

Tax rate

37%

60%⁴

43%

CONSOLIDATED STATEMENT OF OPERATIONS

(Unaudited, in millions, except per share data)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2015

2014

2015

2014

Oil, gas and NGL revenues

$

377

$

610

$

1,195

$

1,793

Operating expenses:

   Lease operating

71

74

219

228

   Transportation and processing

52

51

153

125

   Production and other taxes

13

32

43

90

   Depreciation, depletion and amortization

236

228

721

633

   General and administrative

66

48

180

172

   Ceiling test and other impairments

1,889

—

4,202

—

   Other

1

10

8

15

      Total operating expenses

2,328

443

5,526

1,263

Income (loss) from operations

(1,951)

167

(4,331)

530

Other income (expense):

   Interest expense

(37)

(51)

(127)

(153)

   Capitalized interest

8

13

23

39

   Commodity derivative income (expense)

87

303

230

33

   Other, net

1

1

(13)

4

      Total other income (expense)

59

266

113

(77)

Income (loss) from continuing operations before income taxes

(1,892)

433

(4,218)

453

Income tax provision (benefit)

(665)

155

(1,519)

170

Income (loss) from continuing operations

(1,227)

278

(2,699)

283

Income (loss) from discontinued operations, net of tax

—

—

—

257

      Net income (loss)

$

(1,227)

$

278

$

(2,699)

$

540

Earnings (loss) per share:

    Basic:

     Income (loss) from continuing operations

$

(7.52)

$

2.04

$

(17.17)

$

2.07

     Income (loss) from discontinued operations

—

—

—

1.89

       Basic earnings (loss) per share

$

(7.52)

$

2.04

$

(17.17)

$

3.96

    Diluted:

     Income (loss) from continuing operations

$

(7.52)

$

2.02

$

(17.17)

$

2.05

     Income (loss) from discontinued operations

—

—

—

1.87

       Diluted earnings (loss) per share

$

(7.52)

$

2.02

$

(17.17)

$

3.92

Weighted-average number of shares outstanding for basic earnings (loss) per share

163

137

157

137

Weighted-average number of shares outstanding for diluted earnings (loss) per share

163

138

157

138

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited, in millions)

September 30,

December 31,

2015

2014

ASSETS

Current assets:

   Cash and cash equivalents

$

7

$

14

   Derivative assets

334

431

   Other current assets

322

495

      Total current assets

663

940

Oil and gas properties, net (full cost method)

4,418

8,232

Derivative assets

148

190

Deferred taxes

49

—

Other assets

235

236

      Total assets

$

5,513

$

9,598

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

   Derivative liabilities

$

8

$

8

   Other current liabilities

710

1,093

      Total current liabilities

718

1,101

Other liabilities

47

45

Derivative liabilities

6

—

Long-term debt

2,498

2,892

Asset retirement obligations

192

183

Deferred taxes

21

1,484

      Total long-term liabilities

2,764

4,604

Stockholders' Equity:

Common stock, treasury stock and additional paid-in capital

2,405

1,567

Accumulated other comprehensive gain (loss)

(2)

(1)

Retained earnings (deficit)

(372)

2,327

   Total stockholders' equity

2,031

3,893

   Total liabilities and stockholders' equity

$

5,513

$

9,598

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited, in millions)

Nine Months Ended

September 30,

2015

2014

Cash flows from operating activities:

  Net income (loss)

$

(2,699)

$

540

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

  Depreciation, depletion and amortization

721

665

  Deferred tax provision (benefit)

(1,544)

308

  Stock-based compensation

19

15

  Unrealized (gain) loss on derivative contracts

145

(139)

  Ceiling test and other impairments

4,202

—

  Gain on sale of Malaysia business

—

(388)

  Other, net

38

1

882

1,002

Changes in operating assets and liabilities

7

68

    Net cash provided by (used in) operating activities

889

1,070

Cash flows from investing activities:

  Additions to oil and gas properties and other

(1,428)

(1,578)

  Proceeds from sales of oil and gas properties

86

616

  Proceeds received from sale of Malaysia business, net

—

809

  Redemptions of investments

—

39

  Proceeds from insurance settlement, net

57

—

    Net cash provided by (used in) investing activities

(1,285)

(114)

Cash flows from financing activities:

  Net proceeds (repayments) under credit arrangements

(398)

(649)

  Proceeds from issuance of senior notes

691

—

  Repayment of senior subordinated notes

(700)

—

  Proceeds from issuances of common stock, net

817

4

  Other, net

(21)

(10)

    Net cash provided by (used in) financing activities

389

(655)

Increase (decrease) in cash and cash equivalents

(7)

301

Cash and cash equivalents, beginning of period

14

95

Cash and cash equivalents, end of period

$

7

$

396

3Q15

(in millions)

$

(1,227)

Ceiling test

1,889

Unrealized (gain) loss on derivative contracts⁽¹⁾

44

Restructuring related costs

18

Income tax adjustment for above items 

(690)

Earnings stated without the effect of the above items 

$

34

3Q15

(in millions)

Commodity derivative income (expense)

$

87

Less: Realized gain (loss) on derivative contracts

131

Unrealized loss on derivative contracts

$

(44)

3Q15

(in millions)

Net cash provided by operating activities

$

312

   Net changes in operating assets and liabilities

(32)

Net cash provided by operating activities before changes

in operating assets and liabilities

$

280