Newfield Exploration (NFX)
Posted: Sat Jan 14, 2017 4:45 pm
I have updated my forecast model for NFX and it will be posted to the EPG website later today.
Newfield is one of our Elite Eight. I have followed this company closely for more than ten years. When Hess moved me from Tulsa to Houston in 1994, I actually tried to get a job at Newfield. Things worked out and I love living in Sugar Land, Texas ("Life is Sweet in Sugar Land") and I love my job.
I am increasing my valuation of NFX by $5.00/share to $68.00. It compares to First Call's price target of $53.21. I think First Call's price target will increase when Newfield provides production guidance for 2017. They definitely have the cash flow and access to capital for an aggressive development drilling program in Central Oklahoma.
I have talked to Newfield's investor relations people numerous times trying to get them to host EPG luncheons in Dallas and Houston. For a company of this quality, it trades at a very low multiple of operating cash flow per share and I think their IR staff needs to do a better job of telling the "Newfield Story". They used to have a lot of international and offshore assets, but it has evolved into a near pure play onshore U.S. company with HUGE UPSIDE in SCOOP/STACK. Newfield has one of the top leasehold positions in STACK where they continue to report fantastic results.
Cash flow from operations will top $750 million in 2016 and ramp up to over $1 Billion in 2017 ($5.36 per share based on my forecast). A company of this quality s/b trading near 12X operating cash flow per share.
I like Newfield's production mix, approximately 46% crude oil, 37% natural gas and 17% NGLs. < If NGL prices head back to around 50% of WTI, it will give Newfield's revenues a big boost.
They have 17,000 BOPD hedged at $45.43/Bbl which dampens the impact of rising oil price a bit.
Newfield is one of our Elite Eight. I have followed this company closely for more than ten years. When Hess moved me from Tulsa to Houston in 1994, I actually tried to get a job at Newfield. Things worked out and I love living in Sugar Land, Texas ("Life is Sweet in Sugar Land") and I love my job.
I am increasing my valuation of NFX by $5.00/share to $68.00. It compares to First Call's price target of $53.21. I think First Call's price target will increase when Newfield provides production guidance for 2017. They definitely have the cash flow and access to capital for an aggressive development drilling program in Central Oklahoma.
I have talked to Newfield's investor relations people numerous times trying to get them to host EPG luncheons in Dallas and Houston. For a company of this quality, it trades at a very low multiple of operating cash flow per share and I think their IR staff needs to do a better job of telling the "Newfield Story". They used to have a lot of international and offshore assets, but it has evolved into a near pure play onshore U.S. company with HUGE UPSIDE in SCOOP/STACK. Newfield has one of the top leasehold positions in STACK where they continue to report fantastic results.
Cash flow from operations will top $750 million in 2016 and ramp up to over $1 Billion in 2017 ($5.36 per share based on my forecast). A company of this quality s/b trading near 12X operating cash flow per share.
I like Newfield's production mix, approximately 46% crude oil, 37% natural gas and 17% NGLs. < If NGL prices head back to around 50% of WTI, it will give Newfield's revenues a big boost.
They have 17,000 BOPD hedged at $45.43/Bbl which dampens the impact of rising oil price a bit.