Actual production for the 4th quarter was 150,543 BOE per day, compared to my forecast of 146,500 BOE per day. Realized liquids prices (including the impact of hedges) were higher than my forecast and realized natural gas prices were lower. Revenues of $430.2 million including cash settlements on hedges topped First Call's estimate of $394.0 million. Cash flow from operations was $229 million for Q4 and $810 million for the year. - Dan
THE WOODLANDS, Texas, Feb. 21, 2017 /PRNewswire/ -- Newfield Exploration Company (NFX) today reported its fourth quarter 2016 financial results, as well as 2016 year-end proved reserves. Additional operational details can be found in the Company's @NFX publication, located on its website. Newfield today issued a separate news release outlining its planned 2017 capital investment program and full-year production expectations. In addition, the Company provided a multi-year outlook for domestic total production, domestic oil production and Anadarko Basin production.
Newfield will host a conference call at 10 a.m. CST, February 22, 2017. To listen to the call, please visit Newfield's website at http://www.newfield.com. To participate in the call, dial 785-830-1924 and enter conference code 5209429 at least 10 minutes prior to the scheduled start time.
Fourth Quarter Financial Summary
For the fourth quarter, the Company recorded net income of $13 million, or $0.07 per diluted share (all per share amounts are on a diluted basis). After adjusting for the effect of unrealized derivative losses, net income would have been $98 million, or $0.49 per share.
Revenues for the fourth quarter were $415 million. Net cash provided by operating activities was $239 million. Discretionary cash flow from operations was $229 million.
Fourth Quarter and Full-Year 2016 Production Summary
Newfield's total net production in the fourth quarter of 2016 was 13.9 MMBOE, comprised of 44% oil, 18% natural gas liquids and 38% natural gas. Domestic net production in the fourth quarter was 12.7 MMBOE, comprised of 39% oil, 20% natural gas liquids and 41% natural gas.
For the full-year 2016, Newfield's net production was 59.6 MMBOE, of which 5.4 MMBOE was from offshore China.
Proved Reserves and Costs Incurred
Newfield's year-end 2016 proved reserves were up 1% year-over-year to 513 MMBOE (99% domestic) despite the impact of lower crude oil and natural gas prices used in year-end reserve calculations. Crude oil and natural gas prices used in this calculation were $42.82 per barrel (down 15%) and $2.48 per MMbtu (down 4%), respectively. As a result, pre-tax present value of reserves (discounted at 10%) at year-end 2016 was approximately $2.7 billion, down 9% over the prior year-end.
The increase in our proved reserves of 4 MMBOE resulted from positive revisions of 36 MMBOE and cost structure improvement revisions of 7 MMBOE which were partially offset by negative revisions of 22 MMBOE resulting from commodity price decreases. During 2016, we added proved reserves of 77 MMBOE, which included 35 MMBOE of reserves purchased and 42 MMBOE added through extensions, discoveries and other additions. During 2016, we sold non-strategic assets with reserves of 35 MMBOE.
Approximately 56% of proved reserves are liquids and 61% are proved developed. The largest source of reserve additions during 2016 came from the Anadarko Basin, which now total 330 MMBOE and comprise nearly two-thirds of Newfield's total proved reserves. The proved reserve life index for the Company is approximately nine years.
Newfield engaged the consulting firms DeGolyer and MacNaughton and Ryder Scott Company to perform an audit of the internally prepared reserve estimates on certain fields covering 93% of year-end 2016 proved reserve quantities on a barrel of oil equivalent basis. The purpose of these audits was to provide additional assurance on the reasonableness of internally prepared reserve estimates. Newfield's proved reserves are, in aggregate, reasonable and within the established audit tolerance guidelines of 10 percent.
Newfield Exploration (NFX)
Newfield Exploration (NFX)
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Newfield Exploration (NFX)
The Sweet 16 is all about GROWTH.
"We are excited about the future of our Company and the profitable oil growth trajectory that we are disclosing today," said Lee K. Boothby, Newfield Chairman, President and CEO. "Our focus has now shifted to development as we plan to aggressively attack our SCOOP and STACK plays to accelerate value creation for our stockholders.
"Our confidence in the Anadarko Basin has allowed us to outline a 2017 – 19 forecast with industry leading liquids growth. Our oil growth will largely be driven by the rapid development of our legacy STACK acreage in the heart of the play's oil window. Our production outlook includes a relatively static rig count of about 10 operated rigs. As oil prices improve, we have the organizational capacity and the financial resources to further accelerate our activity levels in the future."
The highlights of our plan are outlined below and additional slides can be found in the @NFX publication:
Plan Highlights:
> Newfield's capital budget for 2017 is approximately $1.0 billion, excluding about $120 million in capitalized interest and internal costs. Substantially all of the budget is allocated to domestic operations and approximately 85% is earmarked for SCOOP and STACK. Newfield expects to drill 85 – 90 wells in STACK and up to 50 wells in SCOOP.
> Although the Company's 2017 drilling campaign is weighted toward multi-well pad developments in SCOOP and STACK, capital will be directed to test other prospective, stacked horizons on Newfield's existing acreage positions. The net unrisked resource potential associated with this program is more than 1.0 billion barrels of oil equivalent (see note 1). In addition, investments are planned for infrastructure and land.
> Domestic net production for 2017 is expected to average 142,500 – 145,500 BOEPD, or an increase of 3 – 5% (adjusted for 2016 asset sales). The Company's growth profile in 2017 is expected to be "back-end" weighted due to the timing of completions of multi-well development pads in STACK. All of the Company's operated rigs in STACK today are drilling on multi-well pads. The 2017 fourth quarter net domestic production average is expected to be 150,000 – 160,000 BOEPD.
> Newfield expects to run about 10 operated rigs in the Anadarko Basin in 2017 – 19. Fourth quarter 2017 net production from the Anadarko Basin is expected to increase to approximately 105,000 – 115,000 BOEPD, an approximate 25% increase over fourth quarter 2016 levels. Looking forward, SCOOP and STACK volumes are expected to average 150,000 – 170,000 BOEPD in the fourth quarter of 2019.
> The Company plans to continue operating a single rig in the Williston Basin throughout 2017 where recent SXL wells are being drilled and completed (including facilities) for about $5 million gross. In addition, drilling will continue in the Uinta Basin with a single rig operating under a joint venture in the Central Basin. Recent results have delivered significantly lower total well costs.
> No additional capital is planned for investment in China and the Pearl field is on natural decline. The Company recently reached an agreement to sell its interest in non-operated producing oil fields in Bohai Bay China for approximately $39 million. The sale is expected to close around mid-year 2017. Including the impact of the Bohai Bay sale at mid-year 2017, the Company's 2017 net production in China is expected to average nearly 6,000 BOEPD.
> Newfield provided estimated compound annual growth rates for its net domestic oil production at $50 - $60 NYMEX WTI over the period 2017 – 19 of 15% to 20%
"We are excited about the future of our Company and the profitable oil growth trajectory that we are disclosing today," said Lee K. Boothby, Newfield Chairman, President and CEO. "Our focus has now shifted to development as we plan to aggressively attack our SCOOP and STACK plays to accelerate value creation for our stockholders.
"Our confidence in the Anadarko Basin has allowed us to outline a 2017 – 19 forecast with industry leading liquids growth. Our oil growth will largely be driven by the rapid development of our legacy STACK acreage in the heart of the play's oil window. Our production outlook includes a relatively static rig count of about 10 operated rigs. As oil prices improve, we have the organizational capacity and the financial resources to further accelerate our activity levels in the future."
The highlights of our plan are outlined below and additional slides can be found in the @NFX publication:
Plan Highlights:
> Newfield's capital budget for 2017 is approximately $1.0 billion, excluding about $120 million in capitalized interest and internal costs. Substantially all of the budget is allocated to domestic operations and approximately 85% is earmarked for SCOOP and STACK. Newfield expects to drill 85 – 90 wells in STACK and up to 50 wells in SCOOP.
> Although the Company's 2017 drilling campaign is weighted toward multi-well pad developments in SCOOP and STACK, capital will be directed to test other prospective, stacked horizons on Newfield's existing acreage positions. The net unrisked resource potential associated with this program is more than 1.0 billion barrels of oil equivalent (see note 1). In addition, investments are planned for infrastructure and land.
> Domestic net production for 2017 is expected to average 142,500 – 145,500 BOEPD, or an increase of 3 – 5% (adjusted for 2016 asset sales). The Company's growth profile in 2017 is expected to be "back-end" weighted due to the timing of completions of multi-well development pads in STACK. All of the Company's operated rigs in STACK today are drilling on multi-well pads. The 2017 fourth quarter net domestic production average is expected to be 150,000 – 160,000 BOEPD.
> Newfield expects to run about 10 operated rigs in the Anadarko Basin in 2017 – 19. Fourth quarter 2017 net production from the Anadarko Basin is expected to increase to approximately 105,000 – 115,000 BOEPD, an approximate 25% increase over fourth quarter 2016 levels. Looking forward, SCOOP and STACK volumes are expected to average 150,000 – 170,000 BOEPD in the fourth quarter of 2019.
> The Company plans to continue operating a single rig in the Williston Basin throughout 2017 where recent SXL wells are being drilled and completed (including facilities) for about $5 million gross. In addition, drilling will continue in the Uinta Basin with a single rig operating under a joint venture in the Central Basin. Recent results have delivered significantly lower total well costs.
> No additional capital is planned for investment in China and the Pearl field is on natural decline. The Company recently reached an agreement to sell its interest in non-operated producing oil fields in Bohai Bay China for approximately $39 million. The sale is expected to close around mid-year 2017. Including the impact of the Bohai Bay sale at mid-year 2017, the Company's 2017 net production in China is expected to average nearly 6,000 BOEPD.
> Newfield provided estimated compound annual growth rates for its net domestic oil production at $50 - $60 NYMEX WTI over the period 2017 – 19 of 15% to 20%
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
-
wilmawatts
- Posts: 685
- Joined: Fri Apr 01, 2011 10:12 am
Re: Newfield Exploration (NFX)
Thanks, I know they have really upped their game with efficiencies and it looks like growth will be on track. Stock appears down after hours but hey, who knows.
Re: Newfield Exploration (NFX)
I have updated my forecast model for NFX and it will be available on the EPG website later tonight.
My valuation increases by $2.00 to $70.00/share, which compares to First Call's price target of $53.24.
I've actually reduced my forecast for 2017, but with much more confidence in their growth plans now I believe a higher multiple of operating cash flow per share is justified. Plus, Newfield has a habit of low-balling their production guidance. Yes, it is good to "under-promise and then over-deliver".
Based on my forecast model, cash flow from operations should be $850 to $900 million this year, which will cover ~90% of their capex budget.
Newfield did report a 27.6% increase in their realized NGL prices, which is consistent with the other Sweet 16 companies that have reported so far. A much improved U.S. NGL market should offset the soft natural gas market for the next few quarters.
Newfield holds an extremely valuable block of acreage in SCOOP/STACK, which makes it a prime takeover target (IMHO of course).
My valuation increases by $2.00 to $70.00/share, which compares to First Call's price target of $53.24.
I've actually reduced my forecast for 2017, but with much more confidence in their growth plans now I believe a higher multiple of operating cash flow per share is justified. Plus, Newfield has a habit of low-balling their production guidance. Yes, it is good to "under-promise and then over-deliver".
Based on my forecast model, cash flow from operations should be $850 to $900 million this year, which will cover ~90% of their capex budget.
Newfield did report a 27.6% increase in their realized NGL prices, which is consistent with the other Sweet 16 companies that have reported so far. A much improved U.S. NGL market should offset the soft natural gas market for the next few quarters.
Newfield holds an extremely valuable block of acreage in SCOOP/STACK, which makes it a prime takeover target (IMHO of course).
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
-
wilmawatts
- Posts: 685
- Joined: Fri Apr 01, 2011 10:12 am
Re: Newfield Exploration (NFX)
* My valuation increases by $2.00 to $70.00/share, which compares to First Call's price target of $53.24. *
wow, I will drink a beer to that Dan. In fact a couple.
I thought your valuation was $58 not $68, this puppy might run sometime in the future
of course the call in the morning might be telling - management is pretty good here but I wish they would come to EPG and tell their story
at $42 a share $70 is a 67% gain to fair value, on as you note some very hot leases with really impressive IRR's at current prices getting better with each gain in efficiency.
yeah, I feel a lot better. of course Mr Market can be irrational also
wow, I will drink a beer to that Dan. In fact a couple.
I thought your valuation was $58 not $68, this puppy might run sometime in the future
of course the call in the morning might be telling - management is pretty good here but I wish they would come to EPG and tell their story
at $42 a share $70 is a 67% gain to fair value, on as you note some very hot leases with really impressive IRR's at current prices getting better with each gain in efficiency.
yeah, I feel a lot better. of course Mr Market can be irrational also
Re: Newfield Exploration (NFX)
I like their focus on STACK/SCOOP. Well results get better each quarter. STACK is extremely valuable real estate. At the current share price NFX is a Screaming Takeover Target. All of the large-caps have teams looking for stuff like this. I worked on a Takeover Team at Hess for 3 years.
From NFX press release: "The net unrisked resource potential associated with this program (STACK/SCOOP) is more than 1.0 billion barrels of oil equivalent."
What is a BILLION BOE worth to Chevron, Shell, Total, Exxon, etc. these days?
From NFX press release: "The net unrisked resource potential associated with this program (STACK/SCOOP) is more than 1.0 billion barrels of oil equivalent."
What is a BILLION BOE worth to Chevron, Shell, Total, Exxon, etc. these days?
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Newfield Exploration (NFX)
the drop at the open was a surprise!!!!!
Re: Newfield Exploration (NFX)
All red today with oil price down.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
-
wilmawatts
- Posts: 685
- Joined: Fri Apr 01, 2011 10:12 am
Re: Newfield Exploration (NFX)
Yeah NFX was really pounded along with many others. DNR took a pounding but looks to open green today.
NFX investor relations folks need to get off their big red couch and present to the EPG meetings to raise investor visibility, great story hid under their hat.
I talked with a lease records NFX employees at NAPE, interesting woman but clueless as to the potential. I guess they send the pleasant folks to the NAPE show, not the office grouch.
They need to tell their story. Maybe I will call and suggest a EPG presentation.
NFX investor relations folks need to get off their big red couch and present to the EPG meetings to raise investor visibility, great story hid under their hat.
I talked with a lease records NFX employees at NAPE, interesting woman but clueless as to the potential. I guess they send the pleasant folks to the NAPE show, not the office grouch.
They need to tell their story. Maybe I will call and suggest a EPG presentation.