HOUSTON, Aug. 27 /PRNewswire-FirstCall/ -- Newfield Exploration Company (NYSE: NFX) today announced the closing of its previously announced $575 million acquisition of Inland Resources. The acquisition establishes a new Rocky Mountain focus area for Newfield.
The purchase price was funded through recent concurrent offerings of Newfield common stock and debt. Newfield issued 5.4 million shares at a price to the public of $52.85 per share and $325 million of 6 5/8% senior subordinated notes due September 1, 2014.
Inland Resources is a privately held company based in Denver, Colorado. Inland's major asset is the 110,000-acre Monument Butte Field, located in the Uinta Basin of Northeast Utah. Inland operates the Monument Butte Field and has an average working interest of about 80%. Newfield estimates that the giant Monument Butte Field has oil in place of more than two billion barrels. Through this transaction, Newfield acquired an internally estimated 326 billion cubic feet equivalent (Bcfe) of proved reserves and 439 Bcfe of probable reserves. The reserves are 85% oil and are 70% proved undeveloped. Current net production is approximately 7,000 barrels of oil equivalent per day (BOEPD). Newfield expects to double production by the end of 2006. Production is expected to be 10,500 BOEPD in 2005 and 14,000 BOEPD in 2006. Three rigs are currently drilling in the field.
Newfield's proved reserves are now approximately 1.7 trillion cubic feet equivalent (Tcfe), of which 77% are proved developed and 70% are natural gas. The transaction lengthens Newfield's reserve life by nearly 20% to approximately seven years.
In conjunction with the acquisition of Inland Resources, Newfield has hedged a significant portion of the expected crude production from 2005 through 2010. The table below details the new hedges that have been added to date and volume weighted average prices of the positions. Newfield continues to hedge production associated with this transaction. A complete listing of all of Newfield's hedges can be found in @NFX, an electronic publication on Newfield's web site (http://www.newfld.com ).
Swaps 3-Way Collars Volume Short Long Short 2005 (BOPD) Fixed Floor Floor Ceiling Swaps 3,000 $39.00 3-Way Collars 1,000 $30.00 $36.00 $49.00 Total Hedged 4,000 2006 Swaps 2,000 $37.00 3-Way Collars 2,750 $30.00 $35.27 $51.73 Total Hedged 4,750 2007 3-Way Collars 7,000 $26.29 $32.86 $50.97 Total Hedged 7,000 2008 - 2010 2008 3-Way Collars 7,000 $26.29 $32.86 $50.38 2009 3-Way Collars 6,000 $26.33 $32.83 $50.93 2010 3-Way Collars 4,000 $25.75 $32.50 $50.25
Newfield Exploration Company 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 U.S. onshore Gulf Coast, the Anadarko and Arkoma Basins, the Uinta Basin of the Rocky Mountains and select international ventures.
**The statements set forth in this release regarding estimated or anticipated oil and gas reserves 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 the Company's Annual Report on Form 10-K for the year ended December 31, 2003. 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 firstname.lastname@example.org
SOURCE Newfield Exploration Company -0- 08/27/2004 /CONTACT: Steve Campbell of Newfield Exploration Company, +1-281-847-6081, or email@example.com / /Web site: http://www.newfld.com / (NFX) CO: Newfield Exploration Company; Inland Resources ST: Texas, Colorado IN: OIL SU: TNM CJ-CD -- DAF017 -- 6703 08/27/2004 16:53 EDT http://www.prnewswire.com