HOUSTON, Feb. 11 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today announced that proved oil and gas reserves reached 513 billion cubic feet of natural gas equivalent (Bcfe) by year-end 1998, an increase of 18% over the prior year's level of 435 Bcfe. Approximately 82% of Newfield's proved reserves are natural gas. Additions to the proved reserve base totaled 167 Bcfe in 1998, representing 188% replacement of production. Newfield's 1998 production was 88.5 Bcfe, a 20% increase over the 1997 level of 74 Bcfe.
Oil and gas revenues during 1998 decreased 2% from $199 million in the prior year to $196 million. For the year ended December 31, 1998, earnings from operations were $10.4 million, or $0.26 per share (all per share amounts are on a diluted basis). However, after including a $68 million after-tax ceiling test writedown, a net loss of $57.7 million, or $1.55 per share, was recorded in 1998, versus earnings of $41 million, or $1.07 per share in 1997. The ceiling test writedown, a requirement of full cost accounting, reduced the carrying value of Newfield's oil and gas properties, and was caused primarily by the lower oil and gas prices existing at the end of 1998. Operating cash flow before changes in working capital was $142 million in 1998, or $3.60 per share, as compared to the 1997 level of $162 million, or $4.26 per share.
The decline in oil and natural gas prices during 1998 had a significant impact on Newfield's operating results. Before hedging activities, the average prices received during 1998 decreased 24% to $2.11 per Mcfe as compared to $2.77 per Mcfe in the prior year. During 1998, oil and gas hedging added $9 million in revenues or $0.10 per Mcfe. Newfield enters 1999 with approximately 55% of first half gas production hedged at a price not less than $2.20 per Mcf.
"Newfield enters 1999 with an outlook for growth. We expect to meet our production target of 106 Bcfe, a 20% increase over 1998," stated Joe B. Foster, Newfield's Chairman and CEO. "Lower oilfield service costs plus our high operating cash flow per unit of production, our relatively low debt level, and our strong presence in the Gulf of Mexico and Gulf Coast should permit us to take advantage of what we perceive to be a year of opportunity."
For the fourth quarter of 1998, prior to the ceiling test charge, Newfield reported a net loss of $0.9 million, or $0.02 per share. After the effect of the writedown, a net loss of $69 million, or $1.71 per share, was reported in the 1998 period, as compared to earnings of $12.2 million, or $0.32 per share, during 1997. Operating cash flow before changes in working capital was $35.6 million, or $0.84 per share, in the fourth quarter 1998 versus $49.7 million, or $1.30 per share, for the fourth quarter 1997.
Newfield explores, develops and acquires oil and gas properties, primarily in the Gulf of Mexico.
NEWFIELD EXPLORATION COMPANY YEAR-END RESULTS (In Thousands Except Per Share Amounts) (Unaudited) Three Months Ended Year Ended December 31, December 31, 1998 1997 1998 1997 Revenues $ 50,505 $ 60,264 $ 195,685 $199,399 Net Cash Provided by Operating Activities Before Changes in Operating Assets and Liabilities $ 35,630 $ 49,742 $ 141,948 $161,852 Income (Loss) Before Taxes $(105,971) $ 18,754 $ (88,376) $ 62,421 Net Income (Loss) $ (69,033) $ 12,228 $ (57,699) $ 40,603 Basic Earnings (Loss) Per Share $ (1.71) $ 0.34 $ (1.55) $ 1.14 Diluted Earnings (Loss) Per Share $ (1.71) $ 0.32 $ (1.55) $ 1.07 Weighted Average Basic Common Shares Outstanding 40,301 35,936 37,312 35,612 Weighted Average Diluted Common Shares Outstanding 40,301(a) 38,290 37,312(a) 38,017 (a) Absent a loss in this period, the outstanding shares would have been 42,412 and 39,455 for the three months and year ended December 31, 1998, respectively.
Certain of the statements set forth in this press release regarding
production targets, oil and gas reserves, planned capital expenditures and
operating expenses and activities are forward looking and are based upon
assumptions and anticipated results that are subject to numerous
uncertainties. 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 and the availability of capital resources. In
addition, the drilling of oil and gas wells and the production of hydrocarbons
are subject to governmental regulations and operating risks.
SOURCE Newfield Exploration Company
Web site: http: //www.newfld.com
CONTACT: James P. Ulm, II of Newfield Exploration Company, 281-847-6000