Newfield Exploration Announces Production Guidance and Capital Investment Plans for 2013-15

THE WOODLANDS, Texas, Feb. 13, 2013 /PRNewswire/ -- Newfield Exploration Company (NYSE: NFX) today announced that its Board of Directors has approved a three-year plan and outlined the Company's production growth outlook and planned capital investment ranges for 2013-15. Informational slides related to planned capital investments, production by geographic area and expected costs and expenses have been posted to the Company's website at www.newfield.com.

"We are excited about our significant domestic production growth forecast," said Lee K. Boothby, Newfield Chairman, President and CEO. "Since 2009, we have transformed our asset base toward liquids, improved our organizational focus and aligned our people around value creation in our domestic resource plays. We are now realizing the tangible benefits of these efforts, as we transition to development drilling in our key onshore plays. Today's outlook spotlights the strength of our portfolio and, given the greater certainty in outcomes from our drilling programs, confidence in our ability to execute in 2013 and beyond to deliver these results for the benefit of our stockholders."

For 2013, the Company plans to invest $1.7 – $1.9 billion (excludes capitalized interest and overhead), with the entire budget substantially allocated to liquids plays. Total company production is expected to range from 44 – 47 million BOE. This compares to 2012 production, adjusted for asset sales, of approximately 47 million BOE. Adjusted for asset sales in 2012, Newfield expects that its 2013 domestic liquids production will increase more than 35%. Natural gas volumes are expected to decline about 14% from 2012 levels due to a continued lack of investment and natural field declines.

The Company's four domestic oil resource plays will receive a capital allocation of $1.4 – $1.5 billion. These areas include the Cana Woodford, Uinta basin, Williston basin and the Eagle Ford. In its international operations, the Company plans to invest $300 – $400 million. A significant component of this investment includes the ongoing development of the Pearl oil field, offshore China. First oil sales from the Pearl development are expected in early 2014.

Boothby continued, "We believe that our 2013 investments will result in substantial gains in Newfield's liquids production growth and significant increases in our cash flow into 2014-15. Over the last several years, we have been disciplined in our levels of capital investment by funding our liquids growth plan with existing cash flows and the sale of non-strategic assets, and we will continue to do so going forward."

2013 Investment Highlights:

• Approximately $360 million will be invested in the Cana Woodford. Newfield has fast-tracked more than 45,000 acres into development and an additional 100,000 acres continue to be assessed. The Company expects to run up to six operated rigs in the play throughout the year. Net production from the Cana is expected to grow more than 200% in 2013.
• Active drilling in vertical and horizontal plays in the Uinta basin and the development of the Greater Monument Butte (GMBU) waterflood calls for the investment of approximately $380 million. In early 2013, the Company will spud the first of four multi-well pads in the Central basin to test the Uteland Butte with super-extended laterals (approximately 9,800'). Horizontal drilling is underway in the Wasatch and Uteland Butte formations, with an active campaign planned for both vertical and horizontal wells. More than 200 wells are planned for the ongoing GMBU development and water injection levels will increase by approximately 30%. Uinta basin oil production is expected to grow approximately 10% in 2013 and 20% in 2014. Refinery agreements are in place to match this expected growth trajectory.
• Approximately $275 million is planned for investment in the Eagle Ford. The development program includes the drilling of about 35 wells. Drilling efficiencies in the region now allow for a 7,500' lateral well to be drilled in about 10 days. Development drilling in 2013 will focus on an approximate 25,000-acre footprint in the West Asherton and Fashing fields. Net production from the region in 2013 is expected to increase approximately 75% over 2012 levels.
• Activity levels in the Williston basin will increase, with a planned investment of $230 million in 2013. A fourth operated rig will begin work in early March. The Company's drilling program has transitioned to development with super-extended laterals (more than 7,500') being drilled from common pad locations. In development mode, Newfield is realizing lower completed well costs and improved returns. Newfield expects to drill approximately 45 wells in the Bakken and Three Forks formations in 2013. Net production from the Williston basin in 2013 is expected to grow approximately 15% year-over-year.
• The Company also today announced that it will pursue strategic alternatives for its international assets. Newfield will continue to make investments to maintain the significant value in these assets. The 2013 investments will focus primarily on ongoing oil developments and are expected to range from $300 – $400 million. Approximately $150 million of the total is related to the Pearl development located offshore China, with first production scheduled for early 2014 as infrastructure is completed. International liftings in 2013 are expected to decline 25-30% compared to 2012 annual liftings. The decrease relates to natural field declines, limited investments toward new exploration and exploitation opportunities and changes in the economic sharing of production under the Company's production sharing agreements.

"Over the next three years, we expect to see continued strong growth in our domestic resource plays," said Boothby. "In fact, we expect to more than double our 2012 liquids volumes by 2015, which highlights the value of our robust inventory."

Newfield expects to update its total company prospect inventory and economic expectations by play on February 19, 2013 in conjunction with its earnings release for the fourth quarter and full year 2012. Additional slides related to inventory will be posted to the website at that time.

Production Guidance and Cost and Expense Expectations:

Fourth Quarter / Full Year 2012 Conference Call:

As previously announced, Newfield will report its fourth quarter and full year 2012 financial and operating results after market close on February 19 and will host a conference call with analysts and investors at 8:30 a.m., February 20, 2013.

Newfield Exploration Company is an independent energy company engaged in the exploration, development and production of crude oil, natural gas and natural gas liquids. We are focused on North American resource plays of scale. Our principal domestic areas of operation include the Mid-Continent, the Rocky Mountains and onshore Texas. Internationally, we have oil developments located offshore Malaysia and China.

**This release contains forward-looking information. All information other than historical facts included in this release, such as information regarding estimated or anticipated drilling plans and planned capital expenditures, is forward-looking information. Although Newfield believes that these expectations are reasonable, this information is based upon assumptions and anticipated results that are subject to numerous uncertainties and risks. 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, the availability of refining capacity for the crude oil Newfield produces in the Uinta basin, the availability and cost of capital resources, new regulations or changes in tax legislation, labor conditions and severe weather conditions (such as hurricanes). In addition, the drilling of oil and natural gas wells and the production of hydrocarbons are subject to numerous governmental regulations and operating risks. Other factors that could impact forward-looking statements are described in "Risk Factors" in Newfield's 2011 Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other subsequent public filings with the Securities and Exchange Commission, which can be found at www.sec.gov. Unpredictable or unknown factors not discussed in this press release could also have material adverse effects on forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Unless legally required, Newfield undertakes no obligation to publicly update or revise any forward-looking statements.

For additional information, please contact Newfield's Investor Relations department.
Phone: 281-210-5201
Email: [email protected]

SOURCE Newfield Exploration Company