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Newfield's Third Quarter Profits More Than Triple on 28% Gain in Production And Strong Prices

HOUSTON, Oct. 26 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today announced financial and operating results for the third quarter and first nine months of 2000.

"Our record third quarter results reflect the continued strength of commodity prices and our 28% increase in production. It's a powerful combination," said David A. Trice, Newfield President and CEO. "We are on target to grow our production more than 20% this year and our drill bit success and significant prospect inventory should lead to another year of growth in 2001."

Third Quarter 2000

For the third quarter of 2000, Newfield reported net income of $44.3 million, or $0.97 per share (all per share amounts are on a diluted basis), on revenues of $151.3 million. This compares to net income of $12.4 million, or $0.29 per share, on revenues of $78.6 million for the third quarter of 1999. Operating cash flow before changes in working capital increased almost 90% for the third quarter of 2000 to $110 million, or $2.35 per share, compared to $58.2 million, or $1.37 per share in the same period of 1999.

For the third quarter of 2000, net income and cash flow per share reflect the dilutive impact of the Company's quarterly income convertible preferred securities (QUIPS) under SFAS 128. Stated without the dilutive effect of the QUIPS, net income for the third quarter would have been $1.02 per share and cash flow would have been $2.53 per share.

Stated on a billion cubic feet equivalent (Bcfe) basis, Newfield's total production for the third quarter of 2000 increased 28% over the same period of 1999 to 37.7 Bcfe, or 409 million cubic feet equivalent per day (MMcfe/d).

For the third quarter of 2000, Newfield's natural gas production increased 29% to 27.9 billion cubic feet (Bcf), or 304 million cubic feet per day (MMcf/d) of gas. The Company's average realized price for natural gas in the third quarter of 2000 was $3.86 per Mcf. For the same period in 1999, gas production totaled 21.7 Bcf, or 236 MMcf/d, sold at an average realized price of $2.42 per Mcf.

Crude oil production in the third quarter of 2000 increased 25% to 1.6 million barrels (MMBbls), or about 17,600 barrels of oil per day (BOPD). The Company's average realized crude oil price for the third quarter of 2000 was $26.86 per barrel. This compares to third quarter 1999 oil production of 1.3 MMBbls, or about 15,000 BOPD, sold for an average realized price of $20.09. Third quarter 2000 oil volumes from the Company's Australian venture were 431,000 barrels, or nearly 4,700 BOPD, generating revenue at an average price of $31.68 per barrel.

Bill Schneider, Newfield's Vice President - International, said, "Gross oil production from the wells in our Jabiru and Challis fields in Australia is running about 1,500 barrels per day ahead of our pre-acquisition analysis. Since our acquisition of these fields in mid-1999, we have continued to improve field operations. Our work should lead to lower operating costs and help decrease production downtime."

For the third quarter of 2000, the Company's lease operating expense was $0.48 per thousand cubic feet equivalent (Mcfe) compared to $0.41 per Mcfe in the third quarter of 1999. DD&A expense for the third quarter of 2000 was $1.36 per Mcfe compared to $1.30 per Mcfe in the same period of 1999. Newfield's G&A expense in the third quarter of 2000 also increased, reflecting the impact of performance-based pay and the Company's growing workforce. The Company's G&A expense for the third quarter of 2000 averaged $0.21 per Mcfe compared to $0.14 per Mcfe in the third quarter of 1999.

Year-to-Date 2000

For the first nine months of 2000, Newfield recorded net income of $91 million, or $2.03 per share, on revenues of $365.2 million. This compares to net income of $16.6 million, or $0.39 per share, on revenues of $191.7 million for the same period of 1999. Operating cash flow before changes in working capital increased more than 80% for the first nine months of 2000 to $255.4 million, or $5.51 per share, compared to $139.8 million, or $3.31 per share, in the first nine months of 1999.

The Company's net income and cash flow per share calculations were impacted by the dilutive effect of the Company's QUIPS in the second and third quarters of 2000. Stated without the dilutive effect of the QUIPS, net income for the first nine months of 2000 would have been $2.11 per share and cash flow would have been $5.91 per share.

Year-to-date 2000, oil and gas production has increased 24% to 103.2 Bcfe. This compares to production in the first nine months of 1999 of 83.1 Bcfe. Year-over-year, natural gas production increased nearly 20% to 77.5 Bcf, or 283 MMcf/d. Crude oil volumes year-to-date increased more than 40% over the same period of 1999 to 4.3 MMBbls, or an average of about 15,650 BOPD.

The Company's average realized natural gas price for the first nine months of 2000 increased 50% from the prior period to $3.29 per Mcf. This compares to $2.20 per Mcf in the first nine months of 1999. Newfield's average crude oil price for the first three quarters of 2000 was up 60% to $25.77 per barrel compared to $16.08 per barrel in the same period of 1999. The Company's average realized price in Australia was $28.95 per barrel in the first nine months of 2000.

For the first nine months of 2000, the Company's lease operating expense averaged $0.48 per Mcfe compared to $0.37 per Mcfe in the first nine months of 1999. DD&A expense was flat, averaging $1.35 per Mcfe in the first three quarters of 2000. Year-to-date, G&A expense per Mcfe is averaging $0.20 compared to $0.12 in the same period of 1999. The increase reflects both performance-based pay and the Company's growing workforce.

Capital expenditures through the end of the third quarter totaled $289.7 million, including the $137 million acquisition of three producing gas fields in South Texas during the first quarter of 2000. Capital expenditures were $156.6 million in the first three quarters of 1999. For the full-year 2000, Newfield expects to invest about $360 million.

Year-to-Date 2000 Drilling Summary

Year-to-date, Newfield has drilled or participated in a total of 40 wells (22 in the Gulf of Mexico, 12 onshore U.S. Gulf Coast and six in international waters). Today, Newfield has seven company-operated rigs running in the Gulf of Mexico and three operated rigs running onshore. In addition, four outside- operated wells are currently active. A summary of the Company's year-to-date drilling results by focus area is outlined below.

Gulf of Mexico To date in 2000, Newfield has drilled or participated in 17 successful wells and five dry holes. Four wells are currently drilling. The wells include:

         Well Name             Status                 Working     Operator
                                                     Interest
    Sabine 18 #B-10            drilling                 65%         NFX
    West Cameron 118 #16       drilling                 90%         NFX
    West Cameron 294 #3        drilling                 33%         outside
    Ship Shoal 27 #7           drilling                 50%         outside
    High Island 561 A-7        successful               47%         NFX
    West Cameron 118 #15       successful               90%         NFX
    East Cameron 38 #8         successful/producing     65%         NFX
    High Island A-521 #1       successful               41%         NFX
    High Island A-521 #2       successful               41%         NFX
    High Island A-521 #3       successful               41%         NFX
    Ship Shoal 139 #1          successful               82%         NFX
    Ship Shoal 139 #2          successful               82%         NFX
    South Timbalier 107 #2     successful               30%         NFX
    Grand Isle 103 #2          successful               48%         NFX
    East Cameron 64 #H-6       successful/producing     18%         NFX
    Grand Isle 103 #3          successful               48%         NFX
    Ship Shoal 76 #2           successful               83%         NFX
    Viosca Knoll 738 #1        successful               48%         NFX
     - tested 2,700 BOPD and 2.7 MMcf/d of gas
    Viosca Knoll 739 #1        successful               25%         outside
     - tested 7.1 MMcf/d of gas and 120 BOPD
    West Cameron 532 #A-12     successful/producing     33%         outside
    Ship Shoal 28 #39          successful/producing     33%         outside
    Vermilion 215 #7           dry hole                 90%         NFX
    Eugene Island 199 #10      dry hole                 75%         NFX
    West Delta 51              dry hole                 50%         NFX
    Grand Isle 106 #2          dry hole                 48.5%       NFX
    Brazos 542                 dry hole                 16%         outside

    The Company plans to drill about 30 wells in the Gulf of Mexico in 2000.

U.S. Onshore Gulf Coast Year-to date, Newfield has drilled or participated in 10 successful onshore wells, one dry hole and one well currently under evaluation. One well is currently drilling. Results follow:

     Prospect             Location         Status            Working  Operator
                                                             Interest
    Cash                   Texas       successful/producing    75%    NFX
    Cash #2                Texas       drilling                100%   NFX
    Real                   Texas       successful/producing    75%    NFX
    Mjerecka               Texas       successful/completing   67%    NFX
    Davis A-5              Texas       dev. well/producing     35%    outside
    Davis A-6              Texas       dev. well/producing     35%    outside
    McCoy                  Texas       testing                 33%    outside
    Wright                 Louisiana   successful/producing    60%    NFX
    Perry Point - Terro    Louisiana   successful/on-line      71%    NFX
    Perry Point - Floyd    Louisiana   successful/producing    22%    outside
    SK East #6             Texas       successful/completing   100%   NFX
    Mouton #4              Louisiana   successful/sold         64%    NFX
    Koehl #1               Texas       dry hole                50%    NFX

Newfield plans to drill about 15 wells in the coastal regions of Texas and Louisiana during 2000.

International Update Year-to-date, Newfield has drilled or participated in six international wells, four in Australia and two in China.

In Australia, a third non-operated exploratory well is planned for the fourth quarter. The Elasmosaurus Prospect will be drilled on License Area ACP 21 with Newfield holding a 30% working interest. In the first half of 2000, Newfield drilled four unsuccessful wells (two infill wells and two wildcats). A gas lift optimization program has been implemented in the Company's two producing oil fields -- Jabiru and Challis -- and production is expected to average about 4,300 BOPD (net) in the fourth quarter of 2000.

On Block 05/36 in China's Bohai Bay, two successful wells were drilled earlier this year -- the CFD-12-1 #1 wildcat well and the CFD 12-1 #2 appraisal well. Both wells tested more than 2,500 BOPD of 26-34 degree gravity oil. A 1,000-square kilometer 3-D seismic program is nearly complete and data is expected in-house in November. An appraisal program to determine the commerciality of the CFD 12-1 Field should be completed by mid-2001. Newfield owns a 35% interest in Block 05/36, operated by Kerr McGee.

Fourth Quarter 2000 Estimates

Below are Newfield's estimates of certain significant operating and financial data for the fourth quarter of 2000. 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 forward-looking footnote at the end of this news release.

Natural gas production and pricing Newfield's natural gas production in the fourth quarter of 2000 is expected to be 26.5-27.0 Bcf (292-296 MMcf/d). The Company's average realized gas price on unhedged volumes typically tracks the Henry Hub Index. Newfield's natural gas hedge position will be disclosed in its Form 10-Q for the third quarter, which should be filed on October 27.

Crude oil production and pricing Oil production in the fourth quarter of 2000 is expected to be 1.5 - 1.6 million barrels (16,800-17,100 BOPD). Australian oil production is expected to be 0.39 -- 0.40 million barrels (4,250-4,350 BOPD). Newfield's average realized U.S. oil price on unhedged production typically averages about $2 below the NYMEX WTI price. Australian crude trades on the Tapis Benchmark and is comparable to WTI. Newfield's crude oil hedge position will be disclosed in our Form 10-Q for the third quarter, which should be filed on October 27.

For the full-year 2000, Newfield expects to produce 139 Bcfe, an increase of more than 20% over 1999 production volumes.

Lease Operating Expenses Newfield's lease operating expense, including production, severance and resource rent tax in Australia, is expected to be $19.5 -- $22.5 million in the fourth quarter of 2000 ($0.55 - $0.62 per Mcfe). The Company's domestic LOE, including taxes, is expected to be $0.47 -- $0.50 per Mcfe in the fourth quarter of 2000. Lease operating expenses vary and are subject to impact from the following: production volumes and commodity pricing, tax rates, service costs, the costs of goods and materials and workover activities, among others.

General and Administrative Expenses Newfield's G&A expense for the fourth quarter of 2000 is expected to be $7.0 -- $8.0 million ($0.19 -- $0.22 per Mcfe). G&A expense includes the Company's performance-based pay program.

Interest Expense The non-capitalized portion of the Company's interest expense for the fourth quarter of 2000 is expected to be $3.5 -- $4.0 million ($0.10 -- $0.11 per Mcfe), including the Company's $2.3 million payment on the Quarterly Income Preferred Securities (QUIPS). As of October 26, the Company's bank debt decreased to $22 million. The remainder of long-term debt consists of $125 million of Senior Notes due 2007.

Income Taxes Including both current and deferred taxes, the Company expects its consolidated income tax rate in the fourth quarter of 2000 to be 32-34%. Approximately 55 -- 60% of the tax provision will be deferred.

Capital Expenditures Newfield's 2000 capital spending is expected to total $360 million. This estimate includes $70 million for exploration, $126 million for development, $137 million for previously announced acquisitions and $27 million for international work programs.

Any publicly announced changes to these estimates will be done through Newfield's electronic publication -- @NFX. This publication can be found on the Company's web page, at www.newfld.com. Through the web page, shareholders 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 and operations primarily in the Gulf of Mexico, along the U.S. Gulf Coast and offshore Australia. Newfield balances its drilling program with acquisitions in select areas in the U.S. and overseas.

A table with third quarter and year-to-date 2000 summary financial information is attached.

**Certain of the statements set forth in this news release regarding estimated or anticipated fourth quarter operating and financial data, daily, quarterly and yearly production volumes, capital expenditures, drilling plans and prospects and operational improvements in Australia 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, labor conditions and other factors set forth in our Annual Report on Form 10-K for the year ended December 31, 1999. 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                                sccampbell@newfld.com


    NEWFIELD EXPLORATION COMPANY
    Supplemental Information(Unaudited)

    Financial Data
    ($ in 000's,                         Quarter Ended     Nine Months Ended
    except per share amounts)            September 30,       September 30,
                                       2000      1999      2000       1999
    Revenues:
      Oil and gas                    $151,263   $78,648  $365,180  $191,725
    Operating expenses:
      Lease operating                  18,067    12,016    49,092    30,783
      Production and other taxes        2,530       963     4,015     1,054
      Depreciation, depletion
       and amortization                51,183    38,382   139,140   112,232
      Ceiling test write-down             503       ---       503       ---
      General and administrative, net   8,036     4,094    20,639    10,350
      Stock compensation                  767       494     2,262     1,485
        Total operating expenses       81,086    55,949   215,651   155,904

    Income from operations             70,177    22,699   149,529    35,821

    Other income (expenses)
    Other income (expense), net        (1,861)   (2,248)   (6,112)   (8,609)
    Dividends on preferred securities  (2,336)   (1,168)   (7,008)   (1,168)
                                       (4,197)   (3,416)  (13,120)   (9,777)

    Income before income tax           65,980    19,283   136,409    26,044
    Income tax provision               21,642     6,878    45,387     9,434
    Net income                        $44,338   $12,405   $91,022   $16,610
    Basic earnings per share            $1.04     $0.30     $2.15     $0.40
    Diluted earnings per share (A)      $0.97     $0.29     $2.03     $0.39
    Weighted average
     basic shares outstanding          42,493    41,517    42,260    41,039
    Weighted average
     diluted shares outstanding (A)    47,366    42,590    47,158    42,192

    Discretionary Cash Flow:
      Net income                      $44,338   $12,405   $91,022   $16,610
      DD&A                             51,183    38,382   139,140   112,232
      Deferred taxes                   13,195     6,878    22,493     9,434
      Stock compensation                  767       494     2,262     1,485
      Ceiling test write-down             503       ---       503       ---
        Total                        $109,986   $58,159  $255,420  $139,761

    Diluted discretionary
     cash flow per share (A)            $2.35     $1.37     $5.51     $3.31

    (A)Stated without the dilutive effect of the convertible preferred
        securities, net income and cash flow per share would have been $1.02
        and $2.53, respectively, for the quarter ended September 30, 2000 and
        $2.11 and $5.91, respectively, for the nine months ended
        September 30, 2000.


    NEWFIELD EXPLORATION COMPANY
    Supplemental Information(Unaudited)

    Operating Data                      Quarter Ended      Nine Months Ended
                                         September 30,       September 30,
                                       2000      1999     2000        1999

    Net Natural Gas Production
     (Mcf/day)                        303,742   235,768   282,735   238,063
    Average Gas Price ($/Mcf)           $3.86     $2.42     $3.29     $2.20
    Net Crude/Condensate Production
     (Bbl/day)                         17,616    15,034    15,646    14,938
    Average Crude/Condensate Price
     ($/Bbl)                           $26.86    $20.09    $25.77    $16.08


    Selected Balance Sheet Data                     September 30, December 31,
    ($ in 000's)                                          2000      1999

    Current Assets                                       $161,560  $125,929
    Oil and Gas Properties, net                           795,549   644,842
    Furniture, Fixtures & Equipment and Other Assets       10,627    10,790
    Total Assets                                          967,736   781,561
    Current Liabilities                                   127,571    90,727
    Long-Term Liabilities (excluding Long-Term Debt)       57,639    47,387
    Long-Term Debt                                        162,703   124,679
    Convertible Preferred Securities                      143,750   143,750
    Stockholders' Equity                                  476,073   375,018
    Total Liabilities and Stockholders' Equity            967,736   781,561

SOURCE Newfield Exploration Company
Web site: http: //www.newfld.com
CONTACT: Steve Campbell of Newfield Exploration Company, 281-847-6081, or sccampbell@newfld.com

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