HOUSTON, Aug. 24 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today announced it has purchased interests in nine oil and gas fields, comprised of interests in 13 offshore blocks, in the South Marsh Island, West Cameron and High Island areas of the Gulf of Mexico, offshore Louisiana and Texas, for approximately $60 million from an undisclosed seller. The newly acquired fields are in proximity to Newfield's existing acreage position and enhance the Company's operating presence in the Western Gulf of Mexico.
Newfield will operate all of the acquired properties and own working interests ranging from 45% to 100%. Of the nine fields acquired, six are developed and producing and three will be placed on line during the third and fourth quarters of 1998. Because most of these fields are subject to a pre- existing volumetric production payment, their contribution to 1998 production volumes will not be significant. The average net daily production contribution in 1999 is, however, expected to be approximately 30 MMcfe, or in excess of 10% of Newfield's total current net production. All of the acquired reserves are natural gas. Newfield has hedged approximately one-third of estimated natural gas production from the acquired properties under fixed price contracts at average prices ranging from $2.30 to $2.35 per MMBtu for calendar years 1999 and 2000.
Newfield has identified several drilling opportunities that include proved, probable and possible reserve targets and intends to initiate drilling on at least two of those prospects during 1998.
The acquisition was funded with borrowings under the Company's revolving credit facility, which has been increased to a $225 million facility. The additional bank credit capacity may be used for general corporate and working capital purposes including the acquisition, exploration and development of oil and gas properties. Chase Bank of Texas, National Association, serves as agent for the facility.
Newfield Exploration Company was founded in 1989. Its principal operations are in the Gulf of Mexico and Gulf Coast area. In early 1998, Newfield was the 11th leading operator of production and in 1997, it was the 9th most active driller in the Gulf of Mexico.
Certain of the statements set forth in this press release regarding
production targets and planned capital expenditures 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
SOURCE Newfield Exploration Company
Web site: http: //www.newfld.com
CONTACT: James P. Ulm, II, of Newfield Exploration Company, 281-847-6000