Newfield Exploration Company (NFX:NYSE) Reports on Southern Alberta Basin
"To date, Newfield has drilled seven vertical wells, completed and placed on production two horizontal wells, and is preparing to drill an eighth vertical well. All of the wells to date have encountered oil. Newfield has 280,000 net acres in the play, located in Glacier County, Montana. Multiple prospective geologic formations throughout the acreage are planned for evaluation."
Rosetta Resources (ROSE) has a large acreage block just to the west of NFX and they plan on keeping one rig drilling up their all year.
NFX
Re: NFX
I just sent my updated Net Income and Cash Flow Forecast for Newfield to Kim for posting to the website. You will be able to find it under the Sweet 16 tab. Just click on the NFX logo.
NFX's goal is to increase their oil production by 50% this year. They should have a significant increase in oil production during the second half of this year. Monument Butte will be the primary driver of production growth with more oil coming from their Bakken, Eagle Ford and Granite Wash development drilling.
NFX announced they have built a significant acreage position in an "undisclosed resource play" that will be announced later this year.
NFX's goal is to increase their oil production by 50% this year. They should have a significant increase in oil production during the second half of this year. Monument Butte will be the primary driver of production growth with more oil coming from their Bakken, Eagle Ford and Granite Wash development drilling.
NFX announced they have built a significant acreage position in an "undisclosed resource play" that will be announced later this year.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: NFX
There is not going to be a new "Sweet 16 Detailed Update" on Monday because there is not much to report until we get more first quarter results.
Newfield Exploration (NFX) did report first quarter results that were in-line with my forecast model. My Fair Value estimate for NFX remains at $86/share. Yes, I was expecting the large mark-to-market adjustment on their hedges since commodity prices were up at the end of the quarter. IMO the accounting rules for derivatives in the "Post Enron" era are ridiculous, distortive and do not help investors one bit.
Newfield reported $2.38 cash flow per share and they are on-track to generate over $12.00 CFPS this year. They have increased their capital budget to $1.9 million. It will be covered by cash flow from operations plus the sale of some non-core assets. The increased budget will be used to accelerate their oil production. NFX production will be up just slightly in the 2nd quarter then it is going to take off. They should report a 9% to 11% overall increase in production this year and, more importantly, a 40% to 45% increase in oil production.
NFX has over 65% of their 2011 natural gas production hedged at over $6/mcf. Hence, the large mark-to-market adjustment on their derivative - confusing right?
Newfield Exploration (NFX) did report first quarter results that were in-line with my forecast model. My Fair Value estimate for NFX remains at $86/share. Yes, I was expecting the large mark-to-market adjustment on their hedges since commodity prices were up at the end of the quarter. IMO the accounting rules for derivatives in the "Post Enron" era are ridiculous, distortive and do not help investors one bit.
Newfield reported $2.38 cash flow per share and they are on-track to generate over $12.00 CFPS this year. They have increased their capital budget to $1.9 million. It will be covered by cash flow from operations plus the sale of some non-core assets. The increased budget will be used to accelerate their oil production. NFX production will be up just slightly in the 2nd quarter then it is going to take off. They should report a 9% to 11% overall increase in production this year and, more importantly, a 40% to 45% increase in oil production.
NFX has over 65% of their 2011 natural gas production hedged at over $6/mcf. Hence, the large mark-to-market adjustment on their derivative - confusing right?
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group