Energy Prospectus

Newfield Exploration Reports Third Quarter 2015 Results beat my forecast. I was expecting Adjusted loss per share of $-0.07. Production was higher and operating expenses were lower. - Dan

- 3Q15 net domestic production of 12.9 MMBOE exceeded guidance mid-point by 0.4 MMBOE
- Total Company oil production increased 42% year-over-year; domestic oil production up 11% year-over-year adjusted for asset sales
- 3Q15 domestic lease operating expense of $4.51 per BOE was 15% below guidance; full-year 2015 lease operating expense expected to be down nearly 25% year-over-year per BOE
- Adjusted 3Q15 diluted earnings per share of $0.21 topped consensus estimates
- Full-year 2015 net domestic production forecast raised for second time to 50.0 - 50.5 MMBOE (previous forecast: 48.5 - 50.0 MMBOE); 2015 consolidated net production raised to 55.3 - 55.8 (previous forecast: 53.5 - 55.0 MMBOE)
- 3Q15 Anadarko Basin average net production was approximately 68,000 BOEPD; 4Q15 average estimated Anadarko Basin net production increased to 74,000 BOEPD (previous forecast: 71,000 BOEPD)
- Milestone: Anadarko Basin daily net production levels surpassed remainder of Company's combined domestic businesses
- Company reported continued improvements in average production rates from recent STACK wells < This is the best news.
- Newfield sold approximately $77 million in non-strategic assets year-to-date
- Company reiterated 2015 capital investment budget of approximately $1.4 billion

market did not like it! down >5% at this hour. on very high volume.

could you comment, dAN? also, anyone else?

I just got back from our luncheon in Houston. I will update my forecast model on NFX and comment later.

I have updated my forecast model for NFX. My valuation increases by $0.80/share to $54.80, compared to First Call's Price target of $43.00. I got an updated report from Stifel this morning and their price target is $48.00. They rate NFX a BUY.

Ignoring the big impairment charge, 3rd quarter results beat my forecast and they raised production guidance for Q4.

We will send out an updated profile on NFX in a few days.

Today's dip in the share price is probably just a reaction to the dip in oil prices.

<Today's dip in the share price is probably just a reaction to the dip in oil prices.>

I thought that at first, but it ended the day much worse than most.

All I can say is do not over-react to one day moves in any stock. All it takes is one hedge fund manager that wants to harvest a gain and move to something he likes better.

NFX is very well positioned in STACK, where they are getting strong economics even at today's oil price.

Here is another analyst's opinion:

Newfield Exploration Co. (NYSE: NFX; $40.14; Buy; $45.00 PT) Q3 First Look: Stack continues to shine
EPS beat was primarily driven by solid production (3.7%/3.5% above SGS/consensus), and continued cost control (domestic LOEs have declined 22% since Q1, and are on pace to be down 25% YoY). Performance from the Anadarko Basin continues to surprise to the upside – sequential oil growth clocked in at an impressive ~29%, denoting the strength of the program – 22 new Stack wells registered 14% higher 30-day IPs than the previous 23 completions, coming in at 930 boepd (77% oil). Q4 production guidance is 4% higher at the midpoint than consensus estimates while FY15 capex is reiterated at $1.4B, which should be received well in our opinion.
Mike Kelly, CFA (713) 658-6302 mkelly@seaportglobal.com