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Newfield Announces Second Quarter Results**

HOUSTON, July 22 /PRNewswire-FirstCall/ -- Newfield Exploration Company (NYSE: NFX) today announced its financial and operating results for the second quarter and year-to-date 2002.

Second Quarter 2002

For the second quarter of 2002, Newfield reported net income of $20.1 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 second quarter of 2002 was $16.3 million, or $0.36 per share. Revenues in the second quarter of 2002 were $161.6 million. This compares to net income in the second quarter of 2001 of $53.0 million, or $1.11 per share, stated before the effect of a non-cash gain related to FAS 133. Stated after the effect of the non-cash gain, earnings for the second quarter of 2001 were $56.7 million, or $1.18 per share. Revenues in the second quarter of 2001 were $200.7 million. For the second quarter of 2002, operating cash flow before changes in working capital was $99.7 million, or $2.07 per share, compared to $144.7 million, or $2.97 per share, in the same period of 2001.

Newfield's second quarter 2002 production, when stated on an energy equivalent basis, increased 4% over the same period of 2001 and 8.5% over the first quarter of 2002. Newfield's second quarter 2002 production was 47.5 billion cubic feet equivalent (Bcfe), or an average of 522 million cubic feet equivalent per day. Newfield is on target to meet its 2002 production goal of 180-185 Bcfe, excluding the impact of closing the previously announced agreement to acquire EEX Corporation, which is expected to close in late September 2002. The following tables detail quarterly production and average realized prices:

     Second Quarter Production

                                       2Q02            2Q01      % Change

    United States
      Natural gas (Bcf)*               37.9            35.5            7%
        Natural gas (MMcf/d)            416             390            7%
      Oil and condensate
        production (MMBbls)            1.33            1.37          (3%)
        Oil and condensate
          production (BOPD)          14,602          15,101          (3%)
    Australia
      Oil and condensate liftings
        (MMBbls)                       .278            .342         (19%)
        Oil and condensate
          liftings (BOPD)             3,049           3,757         (19%)
    Total
      Natural gas (Bcf)                37.9            35.5            7%
      Oil and condensate (MMBbls)      1.61            1.72          (6%)
      Total Production (Bcfe)          47.5            45.8            4%

* During the second quarter of 2002, the Company resolved several open accounting matters relating to prior periods. The matters included such things as the calculation of royalties due to the Minerals Management Service and accounting for production from a recent acquisition. As a result of the resolution of these matters, the Company recorded an additional 1.9 Bcf of gas production and related revenue, DD&A and income tax in the second quarter of 2002.

    Average Realized Prices

                                       2Q02            2Q01      % Change

    United States
      Natural gas (per Mcf)           $3.21           $4.39         (27%)
      Oil and condensate
        (per Bbl)                    $23.84          $24.45          (2%)
    Australia
      Oil and condensate (per Bbl)   $25.72          $28.02          (8%)
    Total
      Natural gas (per Mcf)           $3.21           $4.39         (27%)
      Oil and condensate (per Bbl)   $24.17          $25.16          (4%)
      Total per Mcfe                  $3.37           $4.35         (23%)

Newfield's lease operating expense (LOE) in the second quarter of 2002, stated on a unit of production basis, was $0.54 per thousand cubic feet equivalent (Mcfe) compared to $0.50 per Mcfe in the same period last year. Newfield's DD&A expense in the second quarter of 2002 was $1.64 per Mcfe compared to $1.56 per Mcfe in the second quarter of 2001. The Company's general and administrative (G&A) expense for the second quarter of 2002 was $0.27 per Mcfe compared to $0.26 per Mcfe in the same period of 2001. Net interest expense and dividends were $0.15 per Mcfe in the second quarter of 2002 compared to $0.12 per Mcfe in the second quarter of 2001. Capitalized interest in the second quarter of 2002 was $2.1 million compared to $2.8 million in the same period last year.

Capital expenditures in the second quarter of 2002 were about $80 million.

Year-to-Date 2002

Stated without the effect of a non-cash charge related to FAS 133, Newfield posted net income of $40.1 million, or $0.88 per share in the first half of 2002. Stated with the impact of the non-cash charge, net income for the first half of 2002 was $32.6 million, or $0.73 per share. Revenues for the first half of 2002 were $309.7 million. Stated without the impact of a non-cash gain related to FAS 133, net income for the first half of 2001 was $117.2 million, or $2.45 per share. Stated with the impact of the non-cash gain, income in the first half of 2001 was $115.1 million, or $2.41 per share. Revenues for the first six months of 2001 were $410.1 million. Operating cash flow before changes in working capital was $196.4 million, or $4.08 per share, in the first half of 2002 compared to $285.7 million, or $5.88 per share, in the first half of 2001.

Production volumes for the first half of 2002 were 7% above the same period last year. The Company produced 91.3 Bcfe in the first six months of 2002 compared to 85.4 Bcfe in the first six months of the prior year. The following tables detail production and average realized prices for the first half of 2002:

     Year-to-Date Production

                                       1H02            1H01      % Change

    United States
      Natural gas (Bcf)*               71.8            66.3            8%
        Natural gas (MMcf/d)            397             366            8%
      Oil and condensate
        production (MMBbls)            2.68            2.62            2%
      Oil and condensate
        production (BOPD)            14,797          14,450            2%
    Australia
      Oil and condensate liftings
        (MMBbls)                       .576            .581          (1%)
        Oil and condensate
          liftings (BOPD)             3,181           3,212          (1%)
    Total
      Natural gas (Bcf)                71.8            66.3            8%
      Oil and condensate (MMBbls)      3.25            3.20            2%
      Total Production (Bcfe)          91.3            85.4            7%

* During the second quarter of 2002, the Company resolved several open accounting matters relating to prior periods. The matters included such things as the calculation of royalties due to the Minerals Management Service and accounting for production from a recent acquisition. As a result of the resolution of these matters, the Company recorded an additional 1.9 Bcf of gas production and related revenue, DD&A and income tax in the second quarter of 2002.

    Average Realized Prices

                                       1H02            1H01      % Change
    United States
      Natural gas (per Mcf)           $3.23           $4.94         (35%)
      Oil and condensate (per Bbl)   $22.93          $24.56          (7%)
    Australia
      Oil and condensate
        liftings (per Bbl)           $23.80          $27.30         (13%)
    Total
      Natural gas (per Mcf)           $3.23           $4.94         (35%)
      Oil and condensate (per Bbl)   $23.08          $25.06          (8%)
      Total per Mcfe                  $3.36           $4.77         (30%)

In the first half of 2002, LOE, stated on a unit of production basis, averaged $0.53 per Mcfe compared $0.51 per Mcfe in the first half of 2001. DD&A expense in the first half of 2002 was $1.63 per Mcfe compared to $1.55 per Mcfe in the same period of the prior year. G&A expense in the first half of 2002 was $0.28 per Mcfe, up slightly when compared to the prior year expense of $0.27 per Mcfe.

Capital spending in the first half of 2002 totaled $161 million.

Third Quarter 2002 Estimates

Below are estimates of certain significant operating and financial data for the third 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 third quarter of 2002 is expected to be 34 - 37 Bcf (370 - 410 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 third quarter of 2002 is expected to be 1.4 - 1.6 million barrels (16,000 - 18,000 BOPD). Australian oil production during the third quarter is expected to be 260 - 285 thousand barrels (2,800 - 3,100 BOPD). The oil volume estimates for the Company's Australian production in the third quarter reflect production downtime associated with annual maintenance on the production facilities. 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. This production estimate excludes the impact of the previously announced agreement to acquire EEX Corporation, which is expected to close in late September 2002. The Company may, however, elect to voluntarily curtail production in response to low oil and gas prices. Any curtailments 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 $31 - $35 million in the third quarter of 2002 ($0.70 - $0.78 per Mcfe). The Company's domestic LOE, including taxes, is expected to be $0.60 - $0.66 per Mcfe in the third quarter of 2002. This estimate includes severance taxes of $0.08 - $0.10 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 third 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 third 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 $56 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 third 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 third 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 http://www.newfld.com. Through the web page, stockholders 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 third 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
     http://www.newfld.com                        info@newfld.com

                                        ###


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

                                    For the                  For the
                                 Three Months               Six Months
                                    Ended                      Ended
                                   June 30,                   June 30,
                              2002          2001         2002          2001

    Oil and gas revenues  $161,611      $200,747     $309,650      $410,073

    Operating expenses:
      Lease operating       25,706        22,750       48,759        43,574
      Transportation         1,316         1,563        2,647         2,825
      Production and
        other taxes          3,861         5,463        7,271        12,581
    Depreciation,
      depletion and
      amortization          78,027        71,577      149,234       132,723
      General and
        administrative      12,206        11,236       23,973        21,926
      Stock compensation       757           703        1,335         1,298
      Total operating
        expenses           121,873       113,292      233,219       214,927

    Income from operations  39,738        87,455       76,431       195,146

    Other income (expense):
      Interest income and
        other, net         (1,247)           529          569         1,142
      Interest expense     (7,134)       (6,641)     (14,348)      (13,623)
      Capitalized interest   2,130         2,824        4,273         4,154
      Dividends on preferred
        securities of
        Newfield Financial
        Trust I            (2,336)       (2,336)      (4,672)       (4,672)
      Unrealized commodity
        derivative
        expense *          (5,880)         5,719     (11,525)         4,161
                          (14,467)            95     (25,703)       (8,838)

    Income before
      income taxes          25,271        87,550       50,728       186,308

    Income tax provision     9,001        30,813       18,132        66,426
      Income before
        cumulative effect
        of change in
        accounting
        principle           16,270        56,737       32,596       119,882

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

    Net income             $16,270       $56,737      $32,596      $115,088

    Earnings per share:
      Basic
        Income before
          cumulative effect
          of change in
          accounting
          principle          $0.37         $1.27        $0.74         $2.70
        Cumulative effect
          of change in
          accounting
          principle*            --            --           --        (0.11)
        Net income           $0.37         $1.27        $0.74         $2.59
      Diluted
        Income before
          cumulative effect
          of change in
          accounting
          principle          $0.36         $1.18        $0.73         $2.50
        Cumulative effect
          of change in
          accounting
          principle*            --            --           --        (0.09)
        Net income           $0.36         $1.18        $0.73         $2.41

    Weighted average shares
      outstanding for basic
      earnings per share    44,376        44,651       44,295        44,387

    Weighted average shares
      outstanding  for
      diluted earnings
      per share             48,928        49,314       48,838        49,098

     * Associated with SFAS 133.

    PRODUCTION DATA

                                   For the                    For the
                                 Three Months               Six Months
                                    Ended                      Ended
                                   June 30,                   June 30,
                              2002          2001         2002          2001

    Average daily production:
      Oil and condensate
        (Bbls)              17,651        18,858       17,978        17,662
      Gas (Mcf)              416.0         390.2        396.5         366.1

    Average realized price:
      Oil and condensate
        (Bbls)              $24.17        $25.16       $23.08        $25.06
      Gas (Mcf)              $3.21         $4.39        $3.23         $4.94



    CONSOLIDATED BALANCE SHEET
    (Unaudited, in thousands of dollars)

                                                    June 30,   December 31,
                                                        2002           2001

    ASSETS
    Current assets:
      Cash & cash equivalents                         $7,657        $26,610
      Accounts receivable, oil and gas               120,918         92,644
      Inventories                                      9,446          7,332
      Commodity derivatives *                          9,318         79,012
      Other current assets                            22,827         25,006
        Total current assets                         170,166        230,604

    Oil and gas properties, net
      (full cost method)                           1,419,746      1,408,579
    Furniture, fixtures and equipment, net             6,868          6,807
    Commodity derivatives *                              743          7,409
    Other assets                                       9,396          9,972
                                                  $1,606,919     $1,663,371

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Accounts payable and accrued liabilities        $148,538       $160,814
    Commodity derivatives *                            8,133          4,217
        Total current liabilities                    156,671        165,031

    Other liabilities                                  8,959          6,288
    Commodity derivatives *                            3,119          1,813
    Long-term debt                                   375,653        428,631
    Deferred taxes                                   205,472        207,880
        Total long-term liabilities                  593,203        644,612

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

    STOCKHOLDERS' EQUITY
      Common stock                                       453            449
      Additional paid-in capital                     372,242        364,734
      Treasury stock                                (26,130)       (25,794)
      Unearned compensation                          (7,659)        (7,845)
      Accumulated other comprehensive income (loss)
        Foreign currency translation adjustment      (4,056)        (8,918)
        Commodity derivatives *                     (16,567)         24,936
      Retained earnings                              395,012        362,416
        Total stockholders' equity                   713,295        709,978
        Total liabilities and stockholders'
          equity                                  $1,606,919     $1,663,371

    * Associated with SFAS 133.


    CONSOLIDATED STATEMENT OF
    CASH FLOWS
    (Unaudited, in thousands of dollars)
                                    For the                  For the
                                  Three Months              Six Months
                                     Ended                     Ended
                                   June 30,                   June 30,
                              2002          2001         2002          2001

    Cash flows from operating activities:
      Net income           $16,270       $56,737      $32,596      $115,088
      Depreciation,
        depletion and
        amortization        78,027        71,577      149,234       132,723
      Deferred taxes       (1,194)        21,414        1,710        35,938
      Stock compensation       757           703        1,335         1,298
      Commodity
        derivatives *        5,880       (5,719)       11,525       (4,161)
      Cumulative effect of
        change in accounting
        principle*              --            --           --         4,794
                            99,740       144,712      196,400       285,680
      Changes in operating
        assets and
        liabilities        (1,961)         6,299           28        66,862
      Net cash provided
        by operating
        activities          97,779       151,011      196,428       352,542
    Cash flows from investing activities:
      Acquisition,
       net of cash acquired     --            --           --     (264,089)
      Additions to
        oil and gas
        properties        (80,494)     (147,992)    (164,983)     (255,838)
      Additions to
        furniture, fixtures
        and equipment        (731)         (924)      (1,557)       (2,036)
      Net cash used in
        investing
        activities        (81,225)     (148,916)    (166,540)     (521,963)
    Cash flows from financing activities:
      Proceeds from
        borrowings         133,000       189,000      261,000       852,000
      Repayments of
        borrowings       (168,000)     (187,000)    (314,000)     (809,000)
      Proceeds from
        issuance of
        senior notes            --            --           --       174,879
      Proceeds from issuances
        of common stock      1,433           823        4,829         1,353
      Purchases of treasury
        stock                (118)      (16,461)        (336)      (17,036)
        Net cash provided by
          (used in) financing
          activities      (33,685)      (13,638)     (48,507)       202,196
      Effect of exchange
        rate changes on
        cash and
        cash equivalents     (340)         (274)        (334)           563

    Increase (decrease)
      in cash and
      cash equivalents    (17,471)      (11,817)     (18,953)        33,338
    Cash and
      cash equivalents,
      beginning of period   25,128        63,606       26,610        18,451

    Cash and
      cash equivalents,
      end of period         $7,657       $51,789       $7,657       $51,789

    * 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, 888-776-6555 or 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
CAPTION: NFXLOGO-b NEWFIELD EXPLORATION LOGO Newfield Exploration Company. (PRNewsFoto)[AG] HOUSTON, TX USA 01/22/2001

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