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Newfield Announces Third Quarter Results**

Production Increases Nearly 30% Over Year-Ago Period

HOUSTON, Oct. 29 /PRNewswire-FirstCall/ -- Newfield Exploration Company (NYSE: NFX) today announced its financial and operating results for the third quarter and year-to-date 2003. The Company also issued estimates of certain significant operating and financial data for the fourth quarter of 2003. A conference call to discuss the results is planned for 8:30 a.m. (CST), Thursday, October 30. To participate in the call, dial 719-457-2727. A listen-only broadcast will also be provided over the Internet. Simply go to the Investor Relations section at www.newfld.com . An audio replay will be posted to the Company's website as soon as it becomes available following the call. To hear the replay, dial 719-457-0820 and enter conference code 577012.

Third Quarter 2003

For the third quarter of 2003, Newfield reported net income from continuing operations of $58.4 million, or $1.04 per share (all per share amounts are on a diluted basis). Including the loss from discontinued operations for Newfield Exploration Australia Ltd. (see "Australia Discussion"), which was sold on September 5, 2003, net income was $49.4 million, or $0.88 per share. The loss from discontinued operations was $9.0 million, or about $0.16 per share. Revenues in the third quarter of 2003 were $248.7 million. Net cash provided by continuing operating activities before changes in operating assets and liabilities* was $185.6 million in the third quarter of 2003.

This compares to earnings from continuing operations in the third quarter of 2002 of $7.6 million, or $0.17 per share on revenues of $142.0 million. Including income from discontinued operations, net income was $9.4 million, or $0.21 per share for the third quarter of 2002. Net cash provided by continuing operating activities before changes in operating assets and liabilities in the third quarter of 2002 was $81.4 million.

Newfield's total production for the third quarter of 2003, including production from its discontinued operations, was 57 Bcfe, or 619 million cubic feet equivalent per day (MMcfe/d). Production in the third quarter of 2003 increased nearly 30% over the same period of 2002 due primarily to the acquisition of EEX Corporation in late 2002 and the impact of production associated with drilling activity in all of the Company's U.S. focus areas. The following tables detail quarterly production and average realized prices:

     Production
     For the three months ended September 30
                                                         2003   2002  % Change
     United States
        Natural gas (Bcf)                                47.4   34.8     36%
        Oil and condensate production (MMBbls)           1.46   1.18     24%
     Australia -- Discontinued Operations
        Oil and condensate liftings (MMBbls)            0.135  0.388    (65%)
     Total Production (Bcfe)                             57.0   44.2     29%

     Average Realized Prices from Continuing Operations+
                                                        2003    2002  % Change
     United States
        Natural gas (per Mcf)                          $4.40   $3.19     38%
        Oil and condensate (per Bbl)                  $26.52  $24.84      7%
        Total (per Mcfe)                               $4.40   $3.35     31%

     +Prices shown are net of transportation expense and after hedging.


Stated on a unit of production basis, Newfield's lease operating expense (LOE) from continuing operations in the third quarter of 2003 was $0.55 per Mcfe, compared to $0.48 per Mcfe in the same period of 2002. LOE in the third quarter of 2003 includes increased well workover activity. Production taxes from continuing operations in the third quarter of 2003 were $0.13 per Mcfe compared to $0.09 per Mcfe in the same period of 2002. Higher production taxes primarily are a result of significantly higher natural gas prices and more onshore production. DD&A expense from continuing operations, stated on a unit of production basis, in the third quarter of 2003 was $1.80 per Mcfe compared to $1.67 per Mcfe in the third quarter of 2002. Most of the increase in DD&A expense relates to higher cost reserve additions. G&A expense from continuing operations (including stock compensation) in the third quarter of 2003 was $0.24 per Mcfe compared to $0.32 per Mcfe in the same period of 2002. G&A expense in the third quarter of 2003 is net of capitalized direct internal costs of $6.2 million compared to $2.3 million in the third quarter of 2002.

Capital expenditures in the third quarter of 2003 were $251.6 million.

Australia Discussion

During the third quarter of 2003, the Company sold Newfield Exploration Australia Ltd., which owned all of Newfield's properties in Australia. Newfield purchased the stock and working capital of the Australian business for $27 million in mid-1999. During Newfield's ownership, the Company received proceeds from dividends and the sale of the business totaling $46 million. In addition to making a good return, the venture provided the Company with exposure to high-risk, high-potential exploration wells and allowed Newfield to learn about remote international operations and the operation of floating production storage and offloading vessels, or FPSOs.

As a result of the sale in the third quarter of 2003, Newfield recognized a loss of $9.9 million, or about $0.18 per share. Australia is now considered a "discontinued operation" for reporting purposes. In addition to the loss described above, the loss from discontinued operations during the first nine months of 2003 also included a second quarter 2003 ceiling test writedown of producing assets in Australia of $7.3 million ($5.1 million after-tax).

Year-to-Date 2003

For the first nine months of 2003, Newfield reported net income from continuing operations of $170.8 million, or $3.06 per share, on revenues of $772.1 million. The following items negatively impacted earnings from continuing operations by approximately $0.23 per share during the first nine months of 2003:

     -- a $10.0 million one-time charge in the first quarter ($6.5 million
        after-tax), or $0.11 per share, associated with the unwind of the gas
        forward sales obligation inherited through the acquisition of EEX in
        late 2002; and
     -- the redemption of all of the outstanding 6 1/2% convertible trust
        preferred securities (QUIPS), in the second quarter resulted in a
        $10.5 million charge ($6.8 million after-tax), approximately
        $6.5 million of which was redemption premium paid to the holders and
        the remainder was the write-off of unamortized issuance costs paid at
        the time of the initial offering of the securities in 1999.

Including the loss from discontinued operations and a cumulative effect adjustment for the adoption of SFAS 143, net income was $159.3 million, or $2.86 per share, for the first nine months of 2003. Net cash provided by continuing operating activities before changes in operating assets and liabilities* was $538.9 million.

For the first nine months of 2002, Newfield reported net income from continuing operations of $39.9 million, or $0.89 per share, on revenues of $437.9 million. Including discontinued operations, net income was $42.0 million, or $0.93 per share, for the first nine months of 2002. Net cash provided by continuing operating activities before changes in operating assets and liabilities* was $272.3 million in the first nine months of 2002.

Newfield's production, including production from discontinued operations, for the first nine months of 2003 was about 25% above the same period last year. The Company produced 168.4 Bcfe in the first nine months of 2003 compared to 135.5 Bcfe in the same period of the prior year. The following tables detail production and average realized prices for the first nine months of 2003 and 2002:

     Production
     For the Nine Months Ended September 30
                                                         2003   2002  % Change
     United States
        Natural gas (Bcf)                               138.1  106.5     30%
        Oil and condensate production (MMBbls)           4.56   3.86     18%
     Australia -- Discontinued Operations
        Oil and condensate liftings (MMBbls)            0.492  0.964    (49%)
     Total Production (Bcfe)                            168.4  135.5     24%

     Average Realized Prices from Continuing Operations+
                                                         2003   2002  % Change
     United States
        Natural gas (per Mcf)                           $4.64  $3.22     44%
        Oil and condensate (per Bbl)                   $27.71 $23.52     18%
        Total (per Mcfe)                                $4.64  $3.34     39%

     +Prices shown are net of transportation expense and after hedging.


For the first nine months of 2003, LOE from continuing operations averaged $0.52 per Mcfe, as compared to $0.49 per Mcfe in the same period of 2002. Production taxes from continuing operations in the first nine months of 2003 were $0.15 per Mcfe compared to $0.08 per Mcfe in the same period of 2002. Higher production taxes primarily are the result of significantly higher commodity prices and more onshore production. DD&A expense from continuing operations in the first three quarters of 2003 increased to $1.77 per Mcfe from $1.66 per Mcfe in the first nine months of 2002. The increase in DD&A expense relates primarily to higher cost reserve additions. Year-to-date, G&A expense from continuing operations (including stock compensation) averaged $0.28 per Mcfe compared to $0.30 per Mcfe in the same period of last year. G&A expense in the first nine months of 2003 is net of capitalized direct internal costs of $20.4 million compared to $6.4 million in the same period of 2002.

Capital expenditures through the end of the third quarter were $482.4 million. For the full-year 2003, Newfield expects to invest about $640 million, including capitalized interest and overhead. Included in the $640 million estimate is about $150 million of acquisitions that have been closed year-to-date. Newfield estimates that net cash provided by continuing operating activities before changes in operating assets and liabilities in 2003 will exceed $700 million.

Tables with third quarter and year-to-date 2003 and comparative 2002 financial information follow this release.

* Net cash provided by operating activities before changes in operating assets and liabilities is presented because of its acceptance as an indicator of an oil and gas exploration and production company's ability to internally fund exploration and development activities and to service or incur additional debt. This measure should not be considered as an alternative to net cash provided by operating activities as defined by generally accepted accounting principles. A reconciliation of net cash provided by operating activities from continuing operations before changes in operating assets and liabilities to net cash provided by operating activities from continuing operations is shown below:

                                                              3Q03     3Q02
     Net cash provided by operating activities
      from continuing operations                           $ 191.1  $  87.0
      LESS: (Increase) decrease in operating
       assets and liabilities                                  5.5      5.6
     Net cash provided by operating activities
      from continuing operations before changes
      in operating assets and liabilities                  $ 185.6  $  81.4

                                                             YTD03    YTD02
     Net cash provided by operating activities
      from continuing operations                           $ 467.9  $ 276.9
      LESS: (Increase) decrease in operating
       assets and liabilities                                (71.0)     4.6
     Net cash provided by operating activities
      from continuing operations before changes
      in operating assets and liabilities                  $ 538.9  $ 272.3


    Fourth Quarter 2003 Estimates

Below are estimates of production and significant operating and financial data for the fourth quarter of 2003. 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 fourth quarter of 2003 is expected to be 43 - 47 Bcf (468 - 518 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 Oil production in the fourth quarter of 2003 is expected to be 1.3 - 1.5 million barrels (15,000 - 16,000 BOPD). The price the Company receives for its Gulf Coast production has typically averaged about $2 below the NYMEX West Texas Intermediate (WTI) price. Oil production from the Mid-Continent has typically sold at a $1.00 - $1.50 per barrel discount to WTI. Hedging gains or losses will affect price realizations.

Lease Operating and Other Expenses Newfield's LOE is expected to be $29 - $32 million ($0.54 - $0.59 per Mcfe) in the fourth quarter of 2003. Production taxes in the fourth quarter of 2003 are expected to be $9 - $10 million ($0.16 - $0.18 per Mcfe). These expenses vary and are 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 fourth quarter of 2003 is expected to be $13 - $15 million ($0.25 - $0.28 per Mcfe), net of capitalized direct internal costs. Capitalized G&A expense is expected to be $6 - $8 million. G&A expense includes stock and incentive compensation expense. Incentive compensation expense depends largely on Newfield's net income.

Interest Expense The non-capitalized portion of the Company's interest expense for the fourth quarter of 2003 is expected to be $8 - $9 million ($0.15 - $0.16 per Mcfe). Current borrowings under the Company's bank facilities are $140 million. The remainder of long-term debt consists of three separate issuances of notes that in the aggregate total $550 million in principal amount. Capitalized interest for the fourth quarter of 2003 is expected to be about $3 - $4 million.

Income Taxes Including both current and deferred taxes, the Company expects its consolidated income tax rate in the fourth quarter of 2003 to be about 35 - 38%. About 50% of the tax provision is expected to be deferred.

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, interested persons may elect to receive @NFX through e-mail distribution.

Newfield Exploration is an independent crude oil and natural gas exploration and production company. The Company relies on a proven growth strategy that includes balancing acquisitions with drill bit opportunities. Newfield's areas of operation include the Gulf of Mexico, the onshore U.S. Gulf Coast, the Anadarko and Arkoma Basins and select international ventures.

**Certain of the statements set forth in this release regarding planned capital expenditures and estimated or anticipated fourth quarter results 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, 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, 2002. 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                For the
                                  Three Months Ended     Nine Months Ended
                                    September 30,           September 30,
                                   2003        2002        2003        2002

    Oil and gas revenues         $248,664    $141,978    $772,107    $437,926

    Operating expenses:
      Lease operating              31,083      20,309      85,807      63,298
      Production and other taxes    7,488       3,738      25,159      11,009
      Transportation                1,624       1,730       5,046       4,377
      Depreciation, depletion
       and amortization           100,897      69,910     293,407     215,937
      General and administrative   13,186      12,656      43,893      35,700
      Gas sales obligation and
       redemption of securities       ---         ---      20,475         ---
      Stock compensation              629         731       2,115       2,066
          Total operating
           expenses               154,907     109,074     475,902     332,387

    Income from operations         93,757      32,904     296,205     105,539

    Other income (expenses):
      Interest expense            (13,357)     (7,049)    (45,025)    (21,397)
      Capitalized interest          4,010       2,280      11,728       6,553
      Dividends on preferred
       securities of Newfield
       Financial Trust I              ---      (2,336)     (4,581)     (7,008)
      Unrealized derivative
       income (expense)*            3,569     (13,952)        723     (25,477)
      Other                           444         137         956       4,004
                                   (5,334)    (20,920)    (36,199)    (43,325)
    Income from continuing
     operations before
     income taxes                  88,423      11,984     260,006      62,214

    Income tax provision           30,072       4,344      89,254      22,265
    Income from continuing
     operations                    58,351       7,640     170,752      39,949
    Income (loss) from discontinued
     operations, net of tax        (8,972)      1,731     (16,992)      2,018
    Income before cumulative effect
     of change in accounting
     principle                     49,379       9,371     153,760      41,967

    Cumulative effect of change
     in accounting principle**        ---         ---       5,575         ---

    Net income                    $49,379      $9,371    $159,335     $41,967

    Earnings per share:
      Basic
        Income from continuing
         operations                 $1.04       $0.17       $3.17       $0.90
        Discontinued operations     (0.16)       0.04       (0.31)       0.05
        Cumulative effect of change
         in accounting principle**    ---         ---        0.10         ---
        Net income                  $0.88       $0.21       $2.96       $0.95
      Diluted
        Income from continuing
         operations                 $1.04       $0.17       $3.06       $0.89
        Discontinued operations     (0.16)       0.04       (0.30)       0.04
        Cumulative effect of change
         in accounting principle**    ---         ---        0.10         ---
        Net income                  $0.88       $0.21       $2.86       $0.93

    Weighted average shares
     outstanding for basic earnings
     per share                     55,887      44,420      53,785      44,337
    Weighted average shares
     outstanding for diluted earnings
     per share                     56,347      44,905      56,778      44,910

     * Associated with SFAS 133.
     ** Associated with the adoption of SFAS 143.


     PRODUCTION DATA FROM
     CONTINUING OPERATIONS
                                         For the                For the
                                    Three Months Ended     Nine Months Ended
                                      September 30,           September 30,
                                    2003        2002        2003        2002
    Average daily production:
        Oil and condensate (Bbls)  15,923      12,877      16,706      14,150
        Gas (Mcf)                   514.8       378.0       505.9       390.3
    Average realized price:
        Oil and condensate (Bbls)  $26.52      $24.84      $27.71      $23.52
        Gas (Mcf)                  $ 4.40      $ 3.19      $ 4.64      $ 3.22


     CONSOLIDATED BALANCE SHEET
     (Unaudited, in thousands of dollars)
                                              September 30,  December 31,
                                                  2003          2002

    ASSETS
    Current assets:
      Cash & cash equivalents                    $24,970       $48,898
      Accounts receivable, oil and gas           145,966       130,489
      Inventories                                    567         7,910
      Derivative assets *                         35,430         2,655
      Deferred taxes                                 ---        12,801
      Other current assets                        39,019        36,074
          Total current assets                   245,952       238,827

    Oil and gas properties, net
     (full cost method)                        2,333,292     2,010,005
    Assets held for sale                          35,000        35,000
    Furniture, fixtures and equipment, net         6,485         8,096
    Derivative assets *                            7,401         4,439
    Other assets                                  33,486        19,386
          Total assets                        $2,661,616    $2,315,753

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities                         $235,091      $246,197
    Derivatives liabilities*                      24,198        49,610
          Total current liabilities              259,289       295,807

    Other liabilities                             13,323        16,976
    Derivatives liabilities *                     15,160        10,610
    Long-term debt                               692,230       709,615
    Asset retirement obligation **               137,797           ---
    Deferred taxes                               197,293       129,309
          Total long-term liabilities          1,055,803       866,510

    Company-obligated, mandatorily redeemable,
     convertible preferred securities of
     Newfield  Financial Trust I                     ---       143,750
    Minority interest                                ---           455

    STOCKHOLDERS' EQUITY
    Common stock                                     569           526
    Additional paid-in capital                   787,689       636,317
    Treasury stock                               (26,616)      (26,213)
    Unearned compensation                        (11,857)       (6,479)
    Accumulated other comprehensive income (loss)
      Foreign currency translation adjustment        294        (3,888)
      Commodity derivatives *                        847       (27,295)
    Retained earnings                            595,598       436,263
      Total stockholders' equity               1,346,524     1,009,231
      Total liabilities and stockholders'
       equity                                 $2,661,616    $2,315,753


     * Associated with SFAS 133.
     ** Associated with the adoption of SFAS 143.


     CONSOLIDATED STATEMENT OF
     CASH FLOWS
     (Unaudited, in thousands of dollars)
                                          For the               For the
                                     Three Months Ended    Nine Months Ended
                                        September 30,        September 30,
                                       2003      2002       2003       2002
    Cash flows from operating
     activities:
      Net income                     $49,379    $9,371    $159,335    $41,967
      (Income) loss from
       discontinued operations,
       net of tax                      8,972    (1,731)     16,992     (2,018)
      Depreciation, depletion and
       amortization                  100,897    69,910     293,407    215,937
      Gas sales obligation and
       redemption of securities          ---       ---      20,475        ---
      Stock compensation                 629       731       2,115      2,066
      Unrealized derivative (income)
       expense *                      (3,569)   13,952        (723)    25,477
      Deferred taxes                  29,312   (10,851)     52,913    (11,178)
      Cumulative effect of change in
       accounting principle **           ---       ---      (5,575)       ---
                                     185,620    81,382     538,939    272,251
      Changes in operating assets
       and liabilities                 5,488     5,657     (70,983)     4,607
         Net cash provided by
          continuing activities      191,108    87,039     467,956    276,858
         Net cash provided by
          discontinued activities        236    11,896         898     18,507
         Net cash provided by
          operating activities       191,344    98,935     468,854    295,365

    Cash flows from investing
     activities:
      Purchase of business, net
       of cash acquired              (91,742)      ---     (91,742)       ---
      Additions to oil and gas
       properties                   (130,123)  (64,057)   (358,642)  (217,576)
      Additions to furniture,
       fixtures and equipment           (433)     (578)     (2,738)    (2,027)
         Net cash used in continuing
          activities                (222,298)  (64,635)   (453,122)  (219,603)
         Net cash provided by
          (used in) discontinued
          activities                   9,745    (4,660)      6,593    (16,232)
         Net cash used in investing
          activities                (212,553)  (69,295)   (446,529)  (235,835)

    Cash flows from financing
     activities:
      Proceeds from borrowings under
       credit arrangements           266,500   229,000   1,285,500    490,000
      Repayments of borrowings under
       credit arrangements          (265,500) (244,000) (1,180,500)  (558,000)
      Proceeds from issuances
       of common stock                 4,464     1,001     142,147      5,830
      Purchases of treasury stock        (41)      (30)       (403)      (366)
      Repurchase of secured notes     (3,474)      ---     (63,068)       ---
      Repayments of secured notes        ---       ---     (11,215)       ---
      Deliveries under the gas
       sales obligation                  ---       ---      (8,442)       ---
      Gas sales obligation settlement    ---       ---     (62,017)       ---
      Redemption of trust preferred
       securities                        ---       ---    (148,449)       ---
        Net cash provided by (used in)
         continuing activities         1,949   (14,029)    (46,447)   (62,536)
        Net cash provided by (used in)
         discontinued activities         ---       ---         ---        ---
        Net cash provided by (used in)
         financing activities          1,949   (14,029)    (46,447)   (62,536)
    Effect of exchange rate changes
     on cash and cash equivalents       (193)      426         194         90

    Increase (decrease) in cash
     and cash equivalents            (19,453)   16,037     (23,928)    (2,916)
    Cash and cash equivalents,
     beginning of period              44,423     7,657      48,898     26,610

    Cash and cash equivalents,
     end of period                   $24,970   $23,694     $24,970    $23,694


     * Associated with SFAS 133.
     ** Associated with the adoption of SFAS 143.

SOURCE Newfield Exploration Company

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