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Newfield Reports Fourth Quarter and Full-Year 2002 Results**

HOUSTON, Feb. 12 /PRNewswire-FirstCall/ -- Newfield Exploration Company (NYSE: NFX) today announced financial and operating results for the fourth quarter and full-year 2002. A 2003 capital spending budget of $450 million (excluding acquisitions) also was announced, as well as financial and operational guidance for the year. The Company will hold a conference call at 8:30 a.m. CST on Thursday, February 13, 2003. To participate in the call, please visit the Company's web site at www.newfld.com .

Newfield also disclosed that it plans to hold an investor conference in Houston from 8 a.m. - 2 p.m. on March 19, 2003. Through the Company's website, slides will be available the day of the conference and a replay will be made available the next day.

    Highlights include:
    --  Replaced 255% of 2002 production.  Year-end proved reserves increased
        nearly 30% to 1.2 trillion cubic feet equivalent (Tcfe).  Asset
        diversification continued, with about 54% of the Company's total
        reserves now located onshore, 44% in the Gulf of Mexico and 2%
        internationally.

    --  Increased 2002 production volumes 5%.  The Company met production
        targets in 2002 despite shutting in 4 Bcfe of production in the second
        half of the year due to storms in the Gulf of Mexico and voluntarily
        curtailing about 1 Bcf of natural gas production in February in
        response to low prices.

    --  Acquired EEX Corporation, significantly increasing acreage and
        production in South Texas.  The Company also gained an acreage base in
        deepwater Gulf of Mexico, a recently added focus area.

    --  Reduced commodity price volatility in 2002 through hedging and
        captured $28.5 million in additional revenue.

    --  Announced 2003 capital spending budget of $450 million, an increase of
        34% over 2002.  The program includes $200 million for exploration -- a
        record level.  Drilling plans include 25-35 wells in Gulf of Mexico
        (including 7-10 deep shelf wells and 2-3 deepwater wells), 45-50 wells
        onshore Gulf Coast, 40-50 wells in the Mid-Continent and one to three
        wells overseas.

    --  Recent recognition:  Newfield was nominated for the 2002 National Safe
        Award for Excellence (SAFE) by the Minerals Management Service for its
        operations in the Gulf of Mexico.  The Company won this award in 1997
        and was a finalist in 1998 and 2000.  Newfield was also recognized in
        2002 as "Best in Class" by the National Association of Petroleum
        Investment Analysts (NAPIA) for its corporate governance and
        disclosure practices.

Newfield President and CEO David A. Trice said, "2002 was a good year for Newfield. We posted solid earnings and revenues, driven by growth in our production and higher than expected commodity prices in the second half of 2002. But more importantly, we enter 2003 a stronger, better company. We continued to diversify our asset base and closed our largest-ever acquisition. Today, more than half of our proved reserves are located onshore in longer- lived basins that offer additional opportunities for growth and consolidation. We built our prospect inventory during the year and took advantage of low rig rates and service costs with an active drilling program. It was a good environment to explore in and our teams delivered good results with the drill bit. We are excited about our 2003 program, which includes a record budget for exploration."

Fourth Quarter 2002 Financial Results

For the fourth quarter of 2002, the Company reported net income of $34.3 million, or $0.69 per (all per share amounts are on a diluted basis), stated without the effect of a non-cash charge related to hedging transactions (SFAS 133) of $3.7 million ($2.4 million after-tax). Stated with the effect of the charge, net income was $31.9 million, or $0.65 per share. Revenues for the fourth quarter of 2002 were $199.5 million. Operating cash flow before changes in working capital in the fourth quarter of 2002 was $130.0 million.

This compares to a net loss in the fourth quarter of 2001 of $39.1 million, or $0.89 per share. The 2001 results include a non-cash impairment charge of $106.0 million ($68.1 million after tax) and a non-cash gain related to SFAS 133 of $9.6 million ($6.2 million after-tax). Without the net effect of these items, net income in the fourth quarter of 2001 was $22.8 million, or $0.50 per share. Revenues for the fourth quarter of 2001 were $156.1 million. Operating cash flow before changes in working capital in the fourth quarter of 2001 was $111.1 million.

Fourth Quarter 2002 Production

Newfield's production in the fourth quarter of 2002 was 48.6 Bcfe, a 10% increase over 2001 production in the same period. Fourth quarter 2002 volumes reflect the shut-in of 2.5 Bcfe due to a storm in the Gulf of Mexico. Newfield closed its acquisition of EEX Corporation on November 26, 2002, which contributed approximately 4 Bcfe to fourth quarter production.

The following tables detail production by country and average realized prices for the fourth quarters of 2002 and 2001.

                                       4Q02            4Q01          % Change

    United States
      Natural gas (Bcf)                  38.2            31.9           20%
      Oil and condensate
       production (MMBbls)               1.37            1.49           (8%)
    Australia
      Oil and condensate
       liftings (MMBbls)                0.376           0.535          (30%)
    Total Production (Bcfe)              48.6            44.0           10%

    Fourth Quarter Average Realized Prices*
                                       4Q02            4Q01          % Change
    United States
      Natural gas (per Mcf)             $3.98           $3.47           15%
      Oil and condensate (per Bbl)     $26.21          $22.54           16%
    Australia
      Oil and condensate
       liftings (per Bbl)              $28.12          $19.34           45%
    Total per Mcfe                      $4.08           $3.51           16%

    * Prices shown are net of transportation expense and after realized gains
      and losses from hedging.  The Company has not entered into hedging
      transactions specifically relating to Australian production.


Stated on a unit of production basis, Newfield's lease operating expense (LOE) in the fourth quarter of 2002 was flat with the same period of 2001 at $0.66 per Mcfe. Higher commodity prices contributed to significantly higher production taxes in the fourth quarter. Production taxes in the fourth quarter of 2002 (including resource rent tax in Australia) increased to $0.09 per Mcfe compared to $0.04 per Mcfe in the same period of 2001. DD&A expense, stated on a unit of production basis, in the fourth quarter of 2002 was $1.68 per Mcfe compared to $1.72 per Mcfe in the fourth quarter of 2001. DD&A during 2002 was slightly lower as a result of the ceiling test writedown in the fourth quarter of 2001. At year-end 2002, the Company's DD&A rate was $1.71 per Mcfe, which includes the effects of the EEX transaction under purchase accounting.

Full-Year 2002 Financial Results

For 2002, Newfield posted net income of $92.8 million, or $1.99 per share, stated before the effect of a non-cash charge related to SFAS 133 of $29.1 million ($18.9 million after-tax). Stated after the effect of the non- cash charge, net income for 2002 was $73.8 million, or $1.61 per share. Revenues in 2002 were $661.8 million, a 12% decrease from 2001 revenues. Operating cash flow before changes in working capital in 2002 was $412.6 million.

For 2001, Newfield earned $119.0 million, or $2.56 per share, after a non- cash impairment charge of $106.0 million ($68.1 million after-tax), a non-cash gain and a cumulative effect of change in accounting principle related to the adoption of SFAS 133 of $20.0 million ($11.3 million after-tax). Without the net effect of these items, net income was $175.7 million, or $3.72 per share. Revenues in 2001 were $749.4 million. Operating cash flow before changes in working capital in 2001 was $526.8 million.

2002 Production

Production volumes in 2002 increased 5% over 2001 and totaled 184.1 Bcfe. Production was negatively impacted by two factors: About 4 Bcfe was shut-in in the second half of 2002 due to storms in the Gulf of Mexico, and, in February 2002, approximately 1 Bcf was curtailed in response to low gas prices.

                                     2002            2001          % Change
    United States
      Natural gas (Bcf)               144.7           133.2            9%
      Oil and condensate
       production (MMBbls)              5.2             5.5           (5%)
    Australia
      Oil and condensate
       liftings (MMBbls)               1.34            1.48           (9%)
    Total Production (Bcfe)           184.1           175.2            5%

    2002 Average Realized Prices*
                                     2002            2001         % Change
    United States
      Natural gas (per Mcf)           $3.42           $4.32          (21%)
      Oil and condensate (per Bbl)   $24.22          $24.01            1%
    Australia
      Oil and condensate
       liftings (per Bbl)            $26.05          $23.96            9%
    Total per Mcfe                    $3.56           $4.25          (16%)

    *  Prices shown net of transportation expense and after realized gains and
       losses from hedging.  The Company has not entered into hedging
       transactions specifically relating to Australian production.


Stated on a unit of production basis, Newfield's LOE in 2002 decreased to $0.57 per Mcfe compared to $0.59 per Mcfe in 2001. Production taxes in 2002, including resource rent tax in Australia, were $0.09 per Mcfe compared to $0.10 per Mcfe in 2001. DD&A expense in 2002 increased on a unit of production basis to $1.65 per Mcfe compared to $1.61 per Mcfe in the prior year. The increase in DD&A expense is primarily related to the cost of reserve additions and the acquisition of EEX in late 2002.

Finding and Development Costs

United States: Excluding the acquisition of EEX, Newfield added 181.2 Bcfe with its core domestic program, replacing 105% of 2002 production (excluding a 4 Bcfe contribution from EEX in late 2002). Total domestic investment was $308.8 million, including other acquisitions made primarily to capture drilling opportunities. U.S. finding and development costs for 2002 were $1.70 per Mcfe.

"Our domestic finding and development costs were in line with our targets and well below last year," said Trice. "I am particularly pleased with the results posted by our Gulf of Mexico teams, which added substantial reserves below their targeted unit costs. Successful results from our deep shelf drilling program contributed to our lower unit costs."

EEX Acquisition: Under purchase accounting, $571.5 million of the acquisition's total consideration was allocated to EEX's oil and gas properties. Of this amount, $88.5 million (16%) has been assigned to unproved properties, undeveloped leasehold (including 59 deepwater blocks and 29 shelf blocks associated with the deep exploratory concept known as Treasure Island) and fee minerals interests. As of closing, Newfield booked 287.8 Bcfe of proved reserves attributable to the EEX properties. During 2002, EEX's onshore drilling program was focused on developing proved undeveloped reserves rather than finding new reserves.

International: Newfield invested $28 million in international operations in 2002, mainly in China and Australia where expenditures were related to appraisal of the 12-1 South Field in Bohai Bay and the Montara Field, offshore Australia. Neither of these projects has yet been sanctioned for development and, accordingly, no reserves have been booked for these properties.

Reserve Replacement and Proved Reserves

During 2002, Newfield's worldwide reserve replacement was 255% of total production of 184.1 Bcfe. The Company's reserve replacement in 2001 was 242% of total production. 2002 marks the 13th consecutive year that Newfield has more than replaced annual production with proved reserves.

At the end of 2002, Newfield had proved reserves of 1.2 Tcfe, which is net of the impact of U.S. property sales of approximately 16 Bcfe. Proved reserves at year-end 2002 increased nearly 30% over 2001 proved reserves of 936 Bcfe. At year-end 2002, Newfield's reserves were 81% natural gas compared to 77% natural gas at year-end 2001. Approximately 83% of the Company's domestic reserves are natural gas and 98% of the Company's total proved reserves are located in the U.S. Only 7% of Newfield's proved reserves are "proved undeveloped," among the lowest percentage in the industry.

2003 Planned Capital Spending

Newfield announced a 2003 capital budget of $450 million. The Company expects that approximately 55 - 60% of the budget will be invested in the Gulf of Mexico (including deepwater), 35 - 40% onshore U.S. and the balance on international projects.

Trice said, "We announced an increased capital budget in 2003, which reflects the quality and depth of our inventory. Despite our higher budget, we estimate that cash flow will exceed the budget by $100 - 150 million, based on our current hedges and today's market prices. We should have the flexibility to pay down bank debt, repurchase some of our common stock or make a meaningful acquisition."

2003 Estimates

Below are production estimates for the full-year 2003 and estimates for significant operating and financial data for the first 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.

2003 Production Newfield expects its 2003 production to be in the range of 215 - 225 Bcfe, an increase of 17 - 22% over 2002 production of 184.1 Bcfe. Newfield's 2003 production forecast does not include any production that may result from exploration success. Approximately 80% of production is expected to be natural gas (166 - 184 Bcfe, or an average of 455 - 504 MMcf/d). Crude oil, including 1.1 - 1.3 MMBbls from Australia, should total 6.7 - 7.4 MMBbls, or an average of 18,400 - 20,400 BOPD in 2003.

About 53% of Newfield's production in 2003 is expected to come from the Gulf of Mexico, its largest focus area. Approximately 32% of its total production in 2003 is expected to come from the onshore Gulf Coast region. The Mid-Continent region accounts for about 12% of expected 2003 production. About 3% of Newfield's production is expected to come from Australia, all of which is crude oil.

First Quarter 2003 Estimates

Natural gas production and pricing Newfield's natural gas production in the first quarter of 2003 is expected to be 42 - 46 Bcf (462 - 510 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 first quarter of 2003 is expected to be 1.7 - 1.9 million barrels (18,600 - 20,600 BOPD). Australian oil production during the first quarter is expected to be 325 - 360 thousand barrels (3,500 - 3,900 BOPD). 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 at a $1.00 - $1.50 per barrel discount to West Texas Intermediate (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.

Lease Operating and Other Expenses Newfield's LOE is expected to be $32 - $35 million ($0.59 - $0.65 per Mcfe) in the first quarter of 2003. The Company's domestic LOE is expected to be $28 - $31 million ($0.52 - $0.58 per Mcfe). Production taxes in the first quarter of 2003 (including resource rent tax in Australia) is expected to be $14 - $16 million ($0.26 - $0.28 per Mcfe). Higher LOE in the first quarter relates to non-recurring expenses, primarily workovers, scheduled for the first quarter. 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 first quarter of 2003 is expected to be $14 - $18 million ($0.25 - $0.32 per Mcfe) including stock and incentive compensation, which depends largely on Newfield's net income.

Interest Expense The non-capitalized portion of the Company's interest expense for the first quarter of 2003 is expected to be $12 - $13 million ($0.22 - $0.24 per Mcfe), including a $2.3 million payment on its convertible trust preferred securities. Current borrowings under the Company's bank facilities are $36 million. The remainder of long-term debt consists of three separate issuances of senior notes that in the aggregate total $575 million. Capitalized interest for the first quarter of 2003 is expected to be about $2 - $3 million.

Income Taxes Including both current and deferred taxes, the Company expects its consolidated income tax rate in the first quarter of 2003 to be about 35 - 38%. About 40% 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 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. 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 2003 results, capital spending and activity
        levels and production forecasts 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
     www.newfld.com                                info@newfld.com


     CONSOLIDATED STATEMENT OF INCOME
     (Unaudited, in 000's, except per share data)

                                       For the                 For the
                                 Three Months Ended     Twelve Months Ended
                                     December 31,            December 31,
                                   2002        2001        2002        2001

    Oil and gas revenues       $ 199,490   $ 156,073   $ 661,750   $ 749,405

    Operating expenses:
      Lease operating             32,036      29,103     105,860     102,922
      Production
       and other taxes             4,380       1,631      17,286      17,523
      Transportation               1,331       1,419       5,708       5,569
      Depreciation, depletion
       and amortization           81,746      75,585     303,274     282,567
      Ceiling test write-down        ---     106,011         ---     106,011
      General and administrative  16,298       7,872      53,316      41,204
      Stock compensation             735         724       2,801       2,751
        Total operating
         expenses                136,526     222,345     488,245     558,547

    Income (loss)
     from operations              62,964     (66,272)    173,505     190,858

    Other income (expenses):
      Interest expense           (13,158)     (7,339)    (34,555)    (27,859)
      Capitalized interest         2,286       2,383       8,839       8,891
      Dividends on preferred
       securities of Newfield
        Financial Trust I         (2,336)     (2,336)     (9,344)     (9,344)
      Unrealized commodity
       derivative income
        (expense)*                (3,670)      9,559     (29,147)     24,821
      Other                         (328)      2,535       1,587       3,993
                                 (17,206)      4,802     (62,620)        502

    Income (loss) before
     income taxes                 45,758     (61,470)    110,885     191,360

    Income tax provision
     (benefit)                    13,878     (22,360)     37,038      67,612

    Cumulative effect
     of change in accounting
      principles*                    ---         ---         ---      (4,794)

    Net income (loss)          $  31,880   $ (39,110)  $  73,847   $ 118,954

    Earnings (loss)
     per share:
        Basic                  $    0.68   $   (0.89)  $    1.64   $    2.69
        Diluted                $    0.65   $   (0.89)  $    1.61   $    2.56

    Weighted average shares
     outstanding for basic
      earnings (loss)
       per share                  47,227      44,018      45,096      44,258

    Weighted average shares
     outstanding for diluted
      earnings (loss) per share   51,713      44,018**    49,589      48,894


    PRODUCTION DATA
                                              For the              For the
                                           Three Months        Twelve Months
                                               Ended               Ended
                                            December 31,        December 31,
                                           2002      2001      2002      2001
    Average daily production:
      Oil and condensate (Bbls)          18,935    21,996    17,997    19,173
      Gas (Mcf)                           414.7     346.5     396.4     364.8

    Average realized price:
      Oil and condensate (Bbls)        $  26.63  $  21.70  $  24.60  $  24.00
      Gas (Mcf)                        $   3.98  $   3.47  $   3.42  $   4.32


    * Associated with SFAS 133.
    ** Absent a loss in this period, the outstanding shares would have
       been 48,552.


     CONSOLIDATED BALANCE SHEET                  December 31      December 31
     (Unaudited, in thousands of dollars)            2002             2001

    ASSETS
    Current assets:
      Cash & cash equivalents                       $48,898          $26,610
      Accounts receivable, oil and gas              130,489           92,644
      Inventories                                     7,910            7,332
      Commodity derivatives *                         2,464           79,012
      Deferred taxes                                 12,801              ---
      Other current assets                           36,074           25,006
        Total current assets                        238,636          230,604

    Oil and gas properties, net
     (full cost method)                           2,010,005        1,408,579
    Assets held for sale                             35,000              ---
    Furniture, fixtures and equipment, net            8,030            6,807
    Commodity derivatives *                           4,439            7,409
    Other assets                                     19,452            9,972
                                                 $2,315,562       $1,663,371

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities                          $  256,099       $  160,814
    Commodity derivatives *                          39,517            4,217
        Total current liabilities                   295,616          165,031

    Other liabilities                                16,976            6,288
    Commodity derivatives *                          10,610            1,813
    Long-term debt                                  709,615          428,631
    Deferred taxes                                  129,309          207,880
        Total long-term liabilities                 866,510          644,612

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

    STOCKHOLDERS' EQUITY
      Common stock                                      526              449
      Additional paid-in capital                    636,317          364,734
      Treasury stock                                (26,213)         (25,794)
      Unearned compensation                          (6,479)          (7,845)
      Accumulated other comprehensive income (loss)
        Foreign currency translation adjustment      (3,888)          (8,918)
        Commodity derivatives *                     (27,295)          24,936
      Retained earnings                             436,263          362,416
        Total stockholders' equity                1,009,231          709,978
        Total liabilities and
          stockholders' equity                   $2,315,562      $ 1,663,371

    * Associated with SFAS 133.


     CONSOLIDATED STATEMENT OF           For the               For the
      CASH FLOWS                     Three Months Ended   Twelve Months Ended
     (Unaudited, in thousands of        December 31,          December 31,
      dollars)
                                    2002       2001        2002        2001
    Cash flows from operating
     activities:
      Net income (loss)         $  31,880  $ (39,110)   $  73,847   $ 118,954
      Depreciation, depletion
       and amortization            81,746     75,585      303,274     282,567
      Deferred taxes               11,927    (22,506)       3,515      36,505
      Stock compensation              735        724        2,801       2,751
      Unrealized commodity
       derivative *                 3,670     (9,559)      29,147     (24,821)
      Cumulative effect of change
       in accounting principle        ---        ---          ---       4,794
      Ceiling test write-down         ---    106,011          ---     106,011
                                  129,958    111,145      412,584     526,761
      Changes in operating
       assets and liabilities     (21,862)   (71,864)      (9,125)    (24,389)
        Net cash provided by
         operating activities     108,096     39,281      403,459     502,372
    Cash flows from investing
     activities:
      Acquisition, net of cash
       acquired                   (204,411)      ---     (204,411)   (264,089)
      Additions to oil and gas
       properties                  (77,459)  (79,804)    (311,045)   (497,610)
      Additions to furniture,
       fixtures and equipment         (408)     (655)      (2,657)     (4,123)
        Net cash used in
         investing activities     (282,278)  (80,459)    (518,113)   (765,822)
    Cash flows from financing
     activities:
      Proceeds from borrowings     164,700   378,000      654,700   1,488,000
      Repayments of borrowings    (189,700) (343,000)    (747,700) (1,368,000)
      Deliveries under the gas
       sales obligation             (1,672)      ---       (1,672)        ---
      Proceeds from issuance of
       senior notes                247,920       ---      247,920     174,879
      Proceeds from issuances of
       common stock, net             1,957     1,848        7,787       3,643
      Purchase of secured notes
       payable                     (23,586)      ---      (23,586)        ---
      Purchases of treasury stock      (53)      (43)        (419)    (25,395)
        Net cash provided by
         financing activities      199,566    36,805      137,030     273,127
    Effect of exchange rate
     changes on cash
      and cash equivalents            (180)   (2,211)         (88)     (1,518)
    Increase (decrease) in cash
     and cash equivalents           25,204    (6,584)      22,288       8,159
    Cash and cash equivalents,
     beginning of period            23,694    33,194       26,610      18,451

    Cash and cash equivalents,
     end of period                 $48,898   $26,610      $48,898     $26,610

    * Associated with SFAS 133.

SOURCE Newfield Exploration Company

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