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Newfield Announces First Quarter Results

HOUSTON, April 24 /PRNewswire-FirstCall/ -- Newfield Exploration Company (NYSE: NFX) today announced its financial and operating results for the first quarter of 2002. A conference call to discuss the results is planned for 8 a.m. (CDT), Thursday, April 25. To participate in the call, dial 719-457-2657. A listen-only broadcast will also be provided over the Internet. Simply go to the Investor Relations section at www.newfld.com .

For the first quarter of 2002, net income was $20.0 million, or $0.44 per share (all per share amounts are on a diluted basis), stated before the effect of a non-cash charge related to FAS 133. Stated after the effect of the non- cash charge, net income for the first quarter of 2002 was $16.3 million, or $0.37 per share. Revenues in the first quarter of 2002 were $148.0 million. This compares to net income in the first quarter of 2001 of $64.2 million, or $1.34 per share, stated before the effect of a non-cash charge related to FAS 133. Stated after the effect of the non-cash charge, net income for the first quarter of 2001 was $58.4 million, or $1.22 per share. Revenues in the first quarter of 2001 were $209.3 million. Operating cash flow before changes in working capital was $96.7 million, or $2.01 per share, in the first quarter of 2002 compared to $141.0 million, or $2.91 per share, in the same period of 2001.

The Company's production in the first quarter of 2002, when stated on a natural gas equivalent basis, increased 10% over the first quarter of 2001. Newfield's production was 43.8 billion cubic feet equivalent (Bcfe), or an average of 487 million cubic feet equivalent per day, during the first quarter of 2002. Production volumes were lower during the quarter because of the Company's decision to curtail nearly one Bcfe of unhedged production (approximately 30 MMcf/d) in February in response to low natural gas prices. Without the curtailment, volumes would have increased 13% over the prior period. The following tables detail quarterly production and average realized prices:

     Production
                                          1Q02           1Q01      % Change
    United States
      Natural gas (Bcf)                   33.9           30.8         10%
        Natural gas (MMcf/d)               377            342         10%
      Oil and condensate
       production (MMBbls)                1.35           1.24          9%
        Oil and condensate
         production (BOPD)              14,994         13,791          9%
    Australia
      Oil and condensate
       liftings (MBbls)                  298.3          239.6         25%
        Oil and condensate
         liftings (BOPD)                 3,315          2,662         25%
    Total
      Natural gas (Bcf)                   33.9           30.8         10%
      Oil and condensate
       liftings (MMBbls)                  1.65           1.48         11%
      Total Production (Bcfe)             43.8           39.6         10%


     Average Realized Prices
                                          1Q02           1Q01     % Change
    United States
      Natural gas (per Mcf)              $3.26          $5.56        (42%)
      Oil and condensate
       (per Bbl)                        $22.03         $24.69        (11%)
    Australia
      Oil and condensate
       liftings (per Bbl)               $22.01         $26.28        (16%)
    Total
      Natural gas (per Mcf)              $3.26          $5.56        (42%)
      Oil and condensate
       (per Bbl)                        $22.03         $24.95        (12%)
      Total per Mcfe                     $3.35          $5.25        (36%)

Prices shown are net of transportation expense and after hedging. The Company has not entered into hedging transactions specifically relating to Australian production.

Stated on a unit of production basis, Newfield's lease operating expense in the first quarter of 2002 was $0.53 per thousand cubic feet equivalent (Mcfe), which was equal to per unit LOE expense in the same period of 2001. Due primarily to significantly lower commodity prices, production taxes in the first quarter of 2002 (including resource rent tax in Australia) decreased to $0.08 per Mcfe compared to $0.18 per Mcfe in the first quarter of 2001. DD&A expense in the first quarter of 2002 increased to $1.63 per Mcfe compared to $1.54 per Mcfe in the first quarter of 2001. General and administrative expense for the first quarter of 2002 was $0.27 per Mcfe, equal to per unit G&A expense in the first quarter of 2001. Net interest expense in the first quarter of 2002 was $0.13 per Mcfe compared to $0.18 per Mcfe in the same period of last year. Capitalized interest in the first quarter of 2002 was $2.1 million compared to $1.3 million in the same period last year.

Capital expenditures in the first quarter of 2002 were about $81 million.

Second Quarter 2002 Estimates

Below are estimates of certain significant operating and financial data for the second quarter of 2002. Although the Company believes the expectations reflected in this forward-looking information are reasonable, such expectations are based upon assumptions and anticipated results that are subject to numerous uncertainties. Please see the discussion regarding forward-looking information at the end of this release.

Natural gas production and pricing Newfield's natural gas production in the second quarter of 2002 is expected to be 34 - 38 Bcf (380 - 420 MMcf/d). The price received by the Company for its natural gas production from the Gulf of Mexico and onshore Gulf Coast has typically tracked the Henry Hub Index. Gas from the Company's Mid-Continent properties has typically sold at a discount of $0.12 - $0.15 per Mcfe to Henry Hub. Hedging gains or losses will affect price realizations.

Crude oil production and pricing Consolidated oil production in the second quarter of 2002 is expected to be 1.5 - 1.7 million barrels (17,000 - 19,000 BOPD). Australian oil production during the second quarter is expected to be 300 - 335 thousand barrels (3,300 - 3,700 BOPD). The timing of liftings in Australia will impact reported production and revenues. The price the Company receives from its Gulf Coast production has typically averaged about $2 below the NYMEX WTI price. Oil production from the Mid- Continent has typically sold for a $1.00 - $1.50 per barrel discount to WTI. Australian crude oil sales are based on the Tapis Benchmark, which has historically been comparable to WTI. Hedging gains or losses will affect price realizations.

For the full-year 2002, the Company expects to produce 180-185 Bcfe, an increase of 3-6% over 2001 production volumes. The Company may, however, curtail production in response to low oil and gas prices could adversely impact the Company's growth projections.

Lease Operating Expense Newfield's LOE, including domestic production and severance taxes and resource rent tax in Australia, is expected to be $30 - $33 million in the second quarter of 2002 ($0.66 - $0.72 per Mcfe). The Company's domestic LOE, including taxes, is expected to be $0.59 - $0.65 per Mcfe in the second quarter of 2002. This estimate includes severance taxes of $0.08 - $0.09 per Mcfe. LOE varies and is subject to impact from, among other things, production volumes and commodity pricing, tax rates, service costs, the costs of goods and materials and workover activities.

General and Administrative Expense Newfield's G&A expense for the second quarter of 2002 is expected to be $12 - $13 million ($0.26 - $0.29 per Mcfe). This estimate includes accrual of performance-based pay.

Interest Expense The non-capitalized portion of the Company's interest expense for the second quarter of 2002 is expected to be $6 - $7 million ($0.14 - $0.16 per Mcfe), including a $2.3 million payment on its convertible trust preferred securities. Current borrowings under the Company's bank facilities are $111 million. The remainder of long-term debt consists of two separate issuances of senior notes that in the aggregate total $300 million. Capitalized interest for the second quarter of 2002 is expected to be about $2.2 million.

Income Taxes Including both current and deferred taxes, the Company expects its consolidated income tax rate in the second quarter of 2002 to be about 35%.

The Company provides information regarding its outstanding hedging positions in its annual report and quarterly reports filed with the SEC and in its electronic publication -- @NFX. This publication can be found on the Company's web page at www.newfld.com . Through the web page, shareholders can elect to receive @NFX through e-mail distribution.

Newfield Exploration is an independent crude oil and natural gas exploration and production company. The Company has a solid asset base of producing properties and exploration and development drilling opportunities in the Gulf of Mexico, along the U.S. Onshore Gulf Coast, in the Anadarko and Permian Basins, offshore Australia and in China's Bohai Bay. Newfield balances its drilling program with acquisitions in select areas in the U.S. and overseas.

** Certain of the statements set forth in this release regarding estimated or anticipated second quarter 2002 results, capital spending and yearly production volumes are forward-looking and 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, labor conditions and other factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2001. In addition, the drilling of oil and gas wells and the production of hydrocarbons are subject to governmental regulations and operating risks.

     Newfield Exploration Company                    For information, contact:
     363 N. Sam Houston Parkway East, Ste. 2020      Steve Campbell
     Houston, TX 77060                               (281) 847-6081
     www.newfld.com                                  info@newfld.com


    CONSOLIDATED STATEMENT OF INCOME
    (Unaudited, in thousands,
     except per share data)

                                                            For the
                                                       Three Months Ended
                                                           March 31,
                                                      2002           2001

    Oil and gas revenues                            $148,039       $209,326

    Operating expenses:
      Lease operating                                 23,053         20,824
      Transportation                                   1,331          1,262
      Production and other taxes                       3,410          7,118
      Depreciation, depletion and amortization        71,207         61,146
      General and administrative                      11,767         10,690
      Stock compensation                                 578            595
        Total operating expenses                     111,346        101,635

    Income from operations                            36,693        107,691

    Other income (expense):
      Interest income and other, net                   1,816            613
      Interest expense                                (7,201)        (6,982)
      Capitalized interest                             2,130          1,330
      Dividends on preferred securities of
       Newfield Financial Trust I                     (2,336)        (2,336)
      Unrealized commodity derivative expense *       (5,645)        (1,558)
                                                     (11,236)        (8,933)

    Income before income taxes                        25,457         98,758

    Income tax provision                               9,131         35,613
    Income before cumulative effect of change in
     accounting principle                             16,326         63,145

    Cumulative effect of change in
     accounting principle *                              ---          4,794

    Net income                                       $16,326        $58,351

    Earnings per share:
     Basic
      Income before cumulative effect of change
       in accounting principle                         $0.37          $1.43
      Cumulative effect of change in accounting
       principle *                                       ---          (0.11)
      Net income                                       $0.37          $1.32

     Diluted
      Income before cumulative effect of change
       in accounting principle                         $0.37          $1.32
      Cumulative effect of change in accounting
       principle *                                       ---          (0.10)
      Net income                                       $0.37          $1.22

    Weighted average shares outstanding
     for basic earnings per share                     44,212         44,125

    Weighted average shares outstanding
     for diluted earnings per share                   48,745         48,882


     PRODUCTION DATA

                                                             For the
                                                        Three Months Ended
                                                            March 31,
                                                      2002           2001
    Average daily production:
      Oil and condensate (Bbls)                       18,309         16,453
      Gas (Mcf)                                        376.8          341.7

    Average realized price:
      Oil and condensate (Bbls)                       $22.03         $24.95
      Gas (Mcf)                                        $3.26          $5.56

     * Associated with SFAS 133.


    CONSOLIDATED BALANCE SHEET
    (Unaudited, in thousands of dollars)
                                                   March 31,    December 31,
                                                     2002           2001

    ASSETS
    Current assets:
      Cash & cash equivalents                        $25,128        $26,610
      Accounts receivable, oil and gas                87,580         92,644
      Inventories                                      8,125          7,332
      Commodity derivatives *                         24,678         79,012
      Other current assets                            26,392         25,006
        Total current assets                         171,903        230,604

    Oil and gas properties, net
     (full cost method)                            1,417,755      1,408,579
    Furniture, fixtures and equipment, net             6,896          6,807
    Commodity derivatives *                            1,784          7,409
    Other assets                                       9,684          9,972
                                                  $1,608,022     $1,663,371

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Accounts payable and accrued liabilities        $128,035       $160,814
    Commodity derivatives *                           21,692          4,217
        Total current liabilities                    149,727        165,031

    Other liabilities                                  5,918          6,288
    Commodity derivatives *                            2,360          1,813
    Long-term debt                                   410,642        428,631
    Deferred taxes                                   207,349        207,880
        Total long-term liabilities                  626,269        644,612

    Company-obligated, mandatorily redeemable,
     convertible preferred securities of
     Newfield Financial Trust I                      143,750        143,750

    STOCKHOLDERS' EQUITY
      Common stock                                       451            449
      Additional paid-in capital                     370,544        364,734
      Treasury stock                                 (26,012)       (25,794)
      Unearned compensation                           (8,176)        (7,845)
      Accumulated other comprehensive
       income (loss)
        Foreign currency translation
         adjustment                                   (7,158)        (8,918)
        Commodity derivatives *                      (20,113)        24,936
    Retained earnings                                378,740        362,416
        Total stockholders' equity                   688,276        709,978
        Total liabilities and stockholders'
         equity                                   $1,608,022     $1,663,371

     * Associated with SFAS 133.


    CONSOLIDATED STATEMENT OF
    CASH FLOWS
    (Unaudited, in thousands of dollars)
                                                             For the
                                                        Three Months Ended
                                                            March 31,
                                                      2002           2001
    Cash flows from operating activities:
      Net income                                     $16,326        $58,351
      Depreciation, depletion and amortization        71,207         61,146
      Deferred taxes                                   2,904         14,524
      Stock compensation                                 578            595
      Commodity derivatives *                          5,645          1,558
      Cumulative effect of change in
       accounting principle *                            ---          4,794
                                                      96,660        140,968
      Changes in operating assets and liabilities      1,989         60,563
        Net cash provided by operating activities     98,649        201,531
    Cash flows from investing activities:
      Acquisition, net of cash acquired                  ---       (264,089)
      Additions to oil and gas properties            (84,489)      (107,846)
      Additions to furniture,
       fixtures and equipment                           (826)        (1,112)
        Net cash used in investing activities        (85,315)      (373,047)
    Cash flows from financing activities:
      Proceeds from borrowings                       128,000        663,000
      Repayments of borrowings                      (146,000)      (622,000)
      Proceeds from issuance of senior notes             ---        174,879
      Proceeds from issuances of common stock          3,396            530
      Purchases of treasury stock                       (218)          (575)
        Net cash provided by (used in)
         financing activities                        (14,822)       215,834
    Effect of exchange rate changes on cash
     and cash equivalents                                  6            837

    Increase (decrease) in cash and
     cash equivalents                                 (1,482)        45,155
    Cash and cash equivalents,
     beginning of period                              26,610         18,451

    Cash and cash equivalents, end of period         $25,128        $63,606

     * Associated with SFAS 133.

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SOURCE Newfield Exploration Company
Photo: NewsCom: http: //www.newscom.com/cgi-bin/prnh/20010122/NFXLOGO-b AP Archive: http://photoarchive.ap.org PRN Photo Desk, +1-888-776-6555 or +1-212-782-2840
Web site: http: //www.newfld.com
Company News On-Call: http: //www.prnewswire.com/comp/117962.html
CONTACT: Steve Campbell of Newfield Exploration Company, +1-281-847-6081, or info@newfld.com
CAPTION: NFXLOGO-b NEWFIELD EXPLORATION LOGO Newfield Exploration Company. (PRNewsFoto)[AG] HOUSTON, TX USA 01/22/2001

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