HOUSTON, July 27 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today announced its financial and operating results for the second quarter and year-to-date 2000. Higher production volumes and commodity prices led to record earnings, revenues and cash flow.
"Our earnings per share through mid-year 2000 far exceeded full-year 1999 earnings and are within a penny of our highest all-time annual earnings," said David A. Trice, Newfield's President and CEO. "Although these results are bolstered by strong commodity prices, our operating results are also excellent. Our production is on track to grow more than 20% to 139 Bcfe and in the first half of 2000 we more than replaced our full-year production estimate with new reserves. Our timely acquisition of three South Texas gas fields earlier this year and the drilling successes we've had both onshore, offshore and internationally are leading toward the best year in our history."
Second Quarter 2000
For the second quarter of 2000, Newfield reported net income of $29.6 million, or $0.66 per share (all per share amounts are on a diluted basis), on revenues of $118.9 million. By comparison, Newfield's second quarter 1999 net income was $4.4 million, or $0.10 per share, on revenues of $60.2 million. For the second quarter of 2000, operating cash flow before changes in working capital increased 83% to $81.1 million compared to $44.4 million in the same period of 1999.
For the second quarter of 2000, net income and cash flow per share reflect the dilutive impact of the Company's quarterly income convertible preferred securities (QUIPS) under SFAS 128. Including the dilutive effect of the QUIPS, cash flow per share in the second quarter was $1.75, up 24% from the comparable rate of $1.41 per share ($1.50 per share without the dilutive effect of the QUIPS) in the first quarter of 2000. Stated without the dilutive effect of the QUIPS, net income for the second quarter would have been $0.68 per share and cash flow would have been $1.87 per share.
Newfield's second quarter 2000 natural gas production increased 21% over the second quarter of 1999 to 26.8 billion cubic feet (Bcf), an average of 295 million cubic feet per day (MMcf/d). Newfield's average realized gas price for the second quarter of 2000 was $3.21 per Mcf. This compares to a realized price of $2.17 per Mcf in the same period of 1999.
The Company's oil production in the second quarter of 2000 was 1.3 million barrels (MMBbls), or an average of 14,330 barrels of oil per day (BOPD). The Company's average realized oil price during the second quarter of 2000 was $25.09 per barrel, an increase of 67% over the $15.02 per barrel received in the second quarter of 1999. In Australia, Newfield produced 342,856 barrels, or about 3,768 BOPD, sold for an average lifting price of $28.69 per barrel. Downtime associated with the Company's infill drilling program and annual maintenance on the field's production vessels reduced Australian oil production from the first quarter of 2000. Australian volumes are expected to average about 4,300 BOPD for the remainder of 2000.
Newfield's lease operating expense (LOE) in the second quarter of 2000, stated on a unit of production basis, was $0.46 per thousand cubic feet equivalent (Mcfe) compared to $0.35 per Mcfe in the same period of 1999. The increase relates primarily to the acquisition of higher-cost producing properties in mid-1999. When compared to the first quarter of 2000, LOE is down 6% from $0.49 per Mcfe. Newfield's DD&A expense in the second quarter of 2000 was $1.35 per Mcfe, down slightly from $1.37 per Mcfe in the same period of 1999. The increase in general and administrative expense for the second quarter of 2000 is a result of the Company's growing workforce and performance based pay and was $0.18 per Mcfe compared to $0.12 per Mcfe in the second quarter of 1999. Interest expense was $0.14 per Mcfe in the second quarter of 2000 compared to $0.11 per Mcfe in the same period of 1999.
Newfield's capital expenditures in the second quarter of 2000 were $52.3 million.
For the first half of 2000, Newfield posted net income of $46.7 million, or $1.06 per share, on revenues of $213.9 million. This compares to net income of $4.2 million, or $0.10 per share, in the first half of last year. First half 2000 earnings exceeded full-year 1999 earnings by $13.5 million. The significant increase is due primarily to significantly higher production volumes and commodity prices. Operating cash flow before changes in working capital increased nearly 80% to $145.4 million in the first six months of 2000. This compares to operating cash flow before changes in working capital of $81.6 million in the same period of 1999.
Production volumes for the first half of 2000 were 22% above the same period last year. The Company produced 65.5 Bcfe in the first half of 2000 and is on track to meet its full-year goal of 139 Bcfe. Natural gas production in the first half of this year totaled 49.5 Bcf, or an average of 272 MMcf/d. In the same period of 1999, natural gas production averaged 239 MMcf/d. Crude oil and condensate production in the first six months of 2000 totaled 2.7 MMBbls, or an average of 14,650 BOPD, compared to an average of 9,448 BOPD in the first half of last year.
Costs and expenses for the first half of 2000 were higher than the same period last year primarily due to the acquisition of higher-cost producing properties in mid-1999. In the first half of 2000, lease operating expense averaged $0.47 per Mcfe compared to $0.35 per Mcfe in the same period of 1999. DD&A expense in the first half of 2000 was $1.34 per Mcfe, slightly lower than 1999's first half average of $1.37 per Mcfe. On a unit of production basis, G&A expense increased to $0.19 per Mcfe in the first half of 2000 compared to $0.12 per Mcfe in the first half of 1999 as a result of a growing workforce and performance-based pay.
Newfield's capital expenditures in the first half of 2000 totaled $235.5 million. The Company increased its 2000 capital budget from $350 million to $360 million. The largest component of this year's capital spending is the $140 million acquisition of three producing gas fields in South Texas which closed in the first quarter of 2000.
Year-to-Date 2000 Drilling Summary
Year-to-date, Newfield has drilled or participated in a total of 32 wells (17 in the Gulf of Mexico, 10 onshore U.S. Gulf Coast and five international). Today, Newfield has six company-operated rigs running in the Gulf of Mexico and four operated rigs running onshore. In addition, six outside-operated wells are currently active, including one in China's Bohai Bay. A summary of the Company's year-to-date drilling results by focus area is outlined below.
Gulf of Mexico
To date in 2000, Newfield has drilled or participated in 12 successful wells and two dry holes. In addition, the Company deepened one well drilled by another operator as a cost effective method to test a deep prospect that extended onto Newfield's operated South Timbalier 138. The operation did not result in a discovery. Two exploration wells are currently drilling. The wells include:
Well name status working interest Operator East Cameron 38 #8 successful* 65% NFX High Island A-521 successful* 41% NFX Ship Shoal 139 #1 successful* 82% NFX Ship Shoal 139 #2 successful* 82% NFX South Timbalier 107 #2 successful* 30% NFX Grand Isle 103 #2 successful 48% NFX East Cameron 64 #H-6 successful/producing 18% NFX West Cameron 532 #A-12 successful/producing 33% outside Ship Shoal 28 #39 successful/producing 33% outside Grand Isle 103 #3 successful 48% NFX Ship Shoal 76 #2 successful 83% NFX Viosca Knoll 738 #1 drilling 48% NFX Brazos 542 drilling 16% outside Viosca Knoll 739 #1 successful 25% outside Vermilion 215 #7 dry hole 90% NFX Eugene Island 199 #10 dry hole 75% NFX * Under development
The Company plans to drill at least 25 wells in the Gulf of Mexico in 2000.
U.S. Onshore Gulf Coast
Year-to-date, Newfield has drilled or participated in four successful onshore wells, one dry hole and one well currently under evaluation for a fracture stimulation program. This includes two development wells on two of the fields acquired in the first quarter acquisition of three producing fields in South Texas. Four wells are currently drilling. Results follow:
Prospect Location Status Working Interest Operator Cash Texas successful 75% NFX Real Texas successful/producing 75% NFX Davis A-5 Texas dev. well/producing 35% outside McCoy Texas evaluating 33% outside Wright Louisiana successful 60% NFX Davis A-6 Texas dev. well/drilling 35% outside Perry Point Louisiana drilling 22% outside Perry Point Louisiana drilling 71% NFX SK East #6 Texas dev. well/drilling 100% NFX Koehl #1 Texas dry hole 50% NFX
Newfield plans to drill 12-15 wells in the coastal regions of Texas and Louisiana during 2000.
Year-to-date, Newfield has drilled or participated in six international wells, four in Australia and two in China.
In Australia, the Company has drilled four unsuccessful wells (two infill wells and two wildcats) in the first half of the year. A third non-operated exploratory well may be drilled late this year. A gas lift optimization program has been implemented in the Company's two producing oil fields -- Jabiru and Challis -- and production is expected to average about 4,300 BOPD (net) in the second half of 2000.
On Block 05/36 in China's Bohai Bay, the CFD-12-1 #1 wildcat well was a discovery, testing more than 2,500 BOPD of 34-degree gravity crude from two intervals in the Guantao section. The discovery is located in 70 feet of water. The CFD 12-1 #2 appraisal well, located about 2.5 kilometers northwest of the discovery, was spud on July 12 and has recently reached total depth. Additional information will be made available in two to three weeks. A 3-D seismic program is expected to begin in mid-August. The results of the 3-D seismic data and future appraisal drilling will be used to help determine commerciality. Newfield owns a 35% interest in Block 05/36, which is operated by Kerr McGee.
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 and operations primarily in the Gulf of Mexico, along the U.S. Gulf Coast and offshore Australia. Newfield balances its drilling program with acquisitions in select areas in the U.S. and overseas.
**Certain of the statements set forth in this news release regarding capital expenditures, activities and production volumes 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.
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 email@example.com
SOURCE Newfield Exploration Company
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CONTACT: Steve Campbell of Newfield Exploration Company, 281-847-6081, or firstname.lastname@example.org