HOUSTON, Feb. 7 /PRNewswire-FirstCall/ -- Newfield Exploration Company
(NYSE: NFX) today announced financial and operating results for the fourth
quarter and full-year 2006. A conference call to discuss the results is
planned for 8:30 a.m. (CST), Thursday, February 8. To participate in the
call, dial 719-457-2625. A listen-only broadcast also will be provided over
the Internet. Simply go to the Investor Relations section at
http://www.newfield.com .
Today, Newfield's Board of Directors established March 5, 2007 as the
record date for the Company's 2007 annual meeting of stockholders. The
annual meeting will be held at 11 a.m., Central Daylight Time, on Thursday,
May 3, 2007, in the Joe B. Foster Employee Communications Room, fourth
floor, 363 N. Sam Houston Parkway E., Houston, Texas.
Highlights:
* Proved reserves increased 14% to 2.3 trillion cubic feet equivalent.
Reserves by focus area: 35% in the Mid-Continent, 20% Onshore Gulf
Coast, 20% Rocky Mountains, 15% Gulf of Mexico and 10% International.
* Approximately 55% of reserves at year-end 2006 are in long-lived
resource plays -- Mid-Continent and Rocky Mountains. Mid-Continent and
Rockies reserves increased 37% and 11%, respectively, over 2005.
* Achieved reserve replacement ratio of 250%. Added 603 Bcfe of proved
reserves, virtually all through the drillbit. No significant
acquisitions were completed in 2006.
* Drilled 665 wells in 2006, most active year in Company's 18-year
history. Of the wells, 531 (80%) were associated with longer-lived
onshore plays, 78 were onshore Texas, 25 were in the traditional shelf,
2 were in the deepwater Gulf of Mexico and 29 were international.
* Spudded 57 horizontal wells in the Woodford Shale Play since late 2005.
Expanded position in the play to approximately 130,000 net acres.
Expect to drill about 150 horizontal wells in 2007.
* Added significant reserves in the Monument Butte Field, reflecting
ongoing drilling success and recent results from 20-acre infill pilot
programs. Nearly doubled net acreage position in the region in 2006
through joint ventures and alliances.
* Commenced production from two oil fields in China's Bohai Bay that are
producing about 11,000 BOPD (gross).
* Preparing for first production from our deepwater Gulf of Mexico
Wrigley Field. Well tested at 62 MMcf/d in early January. Well
completion and pipeline work accomplished in January, awaiting hook-up
to outside operated host platform.
* Preparing to turn Grove Field (U.K. North Sea) to sales. Operations
have been delayed due to adverse weather conditions. Newfield's working
interest is 85%.
* Drilled 12 successful wells to date in South Texas under multi-year JV
with Exxon-Mobil. Currently running three drilling rigs and have a
ready-to-drill inventory of 20 locations.
* 2007 Malaysian production expected to double over 2006 volumes with
first sales from the Abu Field. Platform in place and awaiting operator
to commission production facility. Development of three additional
shallow water fields is underway.
2007 Capital Budget
Newfield's Board of Directors today approved a 2007 capital budget of
approximately $1.8 billion. The Company's investment plan reflects the
large development projects underway. Approximately $290 million of the
budget is dedicated to exploration. The balance of the program is for
exploitation drilling, development projects and maintenance of the property
base. The budget includes about $50 million in continuing hurricane repairs
in the Gulf of Mexico and excludes approximately $99 million of capitalized
interest and overhead.
Fourth Quarter 2006
For the fourth quarter of 2006, Newfield reported net income of $82
million, or $0.64 per diluted share (all per share amounts are on a diluted
basis). Earnings for the quarter reflect the impact of the following items:
* Commodity derivative income of $28 million ($18 million after-tax), or
$0.14 per share, associated with unrealized changes in the fair market
value of open derivative contracts that are not designated for hedge
accounting.
* $50 million ($32 million after-tax), or $0.25 per share, of hurricane
related repair expenses included in lease operating expense (LOE). The
proceeds from the settlement of all remaining insurance claims related
to Hurricanes Katrina and Rita were received and credited to LOE in the
third quarter of 2006.
* A $15 million charge, or $0.12 per share, related to a valuation
allowance on U.K. net operating loss carryforwards because of a
substantial decrease in estimated future taxable income as a result of
the disappointing results of the recent #7 development well in the
Grove Field. The well resulted in a 17 Bcfe downward revision to proved
reserves.
Without the effects of the above items, net income for the quarter
would have been $112 million, or $0.86 per share.
Revenues in the fourth quarter of 2006 were $427 million. Net cash
provided by operating activities before changes in operating assets and
liabilities was $308 million. See "Explanation and Reconciliation of
Non-GAAP Financial Measures" found after the financial statements in this
release.
By comparison, Newfield's net income for the fourth quarter of 2005 was
$184 million, or $1.43 per share. Net income in this period was affected by
the following items:
* Commodity derivative income of $147 million ($95 million after-tax), or
$0.74 per share, associated with unrealized changes in the fair market
value of open derivative contracts that are not designated for hedge
accounting and with hedge ineffectiveness.
* Recognition of a $22 million ($14 million after-tax), or $0.11 per
share, benefit associated with business interruption insurance proceeds
related to the 2005 hurricanes.
* A ceiling test writedown of $10 million, or $0.07 per share, associated
with decreased emphasis on Brazil and other non-core international
exploration efforts.
Without the effects of these items, net income for the fourth quarter
of 2005 would have been $85 million, or $0.66 per share. Revenues for the
fourth quarter of 2005 were $443 million. Net cash provided by operating
activities before changes in operating assets and liabilities was $282
million in the fourth quarter of 2005. See "Explanation and Reconciliation
of Non-GAAP Financial Measures."
Newfield's production in the fourth quarter of 2006 was 67.9 Bcfe. The
following tables detail production and average realized prices for the
fourth quarters of 2006 and 2005. Domestic production in the fourth quarter
of 2005 was negatively impacted by an estimated 16 Bcfe of deferred
production related to the 2005 hurricanes.
Quarterly Production (A) 4Q06 4Q05* % Change
United States
Natural gas (Bcf) 55.2 39.5 40%
Oil and condensate (MMBbls) 1.6 1.3 23%
International
Natural gas (Bcf) --- --- ---
Oil and condensate (MMBbls) 0.5 0.5 ---
Total
Natural gas (Bcf) 55.2 39.5 40%
Oil and condensate (MMBbls) 2.1 1.8 17%
Total (Bcfe) 67.9 50.3 35%
Average Realized Prices (B) 4Q06 4Q05 % Change
United States
Natural gas (per Mcf) $7.08 $7.16 (1%)
Oil and condensate (per Bbl) $45.01 $41.35 9%
International
Natural gas (per Mcf) --- --- ---
Oil and condensate (per Bbl) $46.90 $59.37 (21%)
Total
Natural gas (per Mcf) $7.08 $7.16 (1%)
Oil and condensate (per Bbl) $45.46 $46.27 (2%)
Total (per Mcfe) $7.18 $7.28 (1%)
(A) Represents volumes sold regardless of when produced.
(B) Average realized prices include the effects of hedging contracts,
including hedging contracts that are not designated for hedge
accounting. If the effects of hedging contracts that are not
designated for hedge accounting had not been included, the average
realized price for total gas would have been $5.92 and $8.94 per Mcf
for the fourth quarter of 2006 and 2005, respectively, and the
average realized price for total oil and condensate would have been
$46.37 and $49.15 per Bbl for the fourth quarter of 2006 and 2005,
respectively. Without the effects of any hedging contracts, the
average realized price for the fourth quarter of 2006 would have
been $5.87 per Mcf for gas and $50.35 per Bbl for oil and
condensate.
Stated on a unit of production basis, Newfield's LOE in the fourth
quarter of 2006 was $1.80 per Mcfe, compared to $1.09 per Mcfe in the
fourth quarter of 2005. LOE was impacted by $0.73 per Mcfe due to the
timing of expenditures related to hurricane repairs. A $34 million credit
was recorded to LOE in the third quarter of 2006 related to the difference
between the insurance proceeds received from the settlement of insurance
claims related to the 2005 hurricanes and actual repair costs to date.
Production and other taxes in the fourth quarter of 2006 were $0.27 per
Mcfe compared to $0.45 per Mcfe in the same period of 2005. DD&A expense in
the fourth quarter of 2006 was $2.80 per Mcfe compared to $2.34 per Mcfe in
the same period of 2005. G&A expense in the fourth quarter of 2006 was
$0.45 per Mcfe compared to $0.56 per Mcfe in the same period of 2005. G&A
expense in the fourth quarter of 2006 is net of capitalized direct internal
costs of $16 million. Capitalized direct internal costs were $11 million in
the fourth quarter of 2005.
Capital expenditures in the fourth quarter of 2006 were $557 million.
Full-Year 2006
For 2006, Newfield posted net income of $591 million, or $4.58 per
share, on revenues of $1.7 billion. Earnings for the year reflect the
impact of the following items:
* Commodity derivate income of $254 million ($165 million after-tax), or
$1.28 per share, associated with unrealized changes in the fair market
value of open derivative contracts that are not designated for hedge
accounting;
* A $17 million charge to LOE ($11 million after-tax), or $0.09 per
share, related to the difference between insurance proceeds received
from the settlement of all remaining claims related to the 2005
hurricanes and actual repair expenditures;
* A $37 million benefit ($24 million after-tax), or $0.19 per share,
associated with business interruption insurance proceeds related to the
2005 hurricanes;
* A $27 million ($17 million after-tax), or $0.14 per share, charge
associated with the early redemption of our 8 3/8% Senior Subordinated
Notes due 2012 (principal amount of $250 million);
* A $6 million ceiling test writedown, or $0.05 per share, associated
with ceasing our exploration efforts in Brazil; and
* A $15 million charge, or $0.12 per share, related to a valuation
allowance on U.K. net operating loss carryforwards because of a
substantial decrease in estimated future taxable income.
Without the effect of the above items, net income for 2006 would have
been $452 million, or $3.50 per share. Net cash provided by operating
activities before changes in operating assets and liabilities was $1.3
billion. See "Explanation and Reconciliation of Non-GAAP Financial
Measures."
As a comparison, Newfield posted net income for 2005 of $348 million,
or $2.73 per share, on revenues of $1.8 billion. Earnings for 2005 reflect
the impact of the following items:
* A $210 million charge ($137 million after-tax), or $1.07 per share,
associated with unrealized changes in the fair market value of open
derivative contracts that are not designated for hedge accounting and
with hedge ineffectiveness.
* A $22 million benefit ($14 million after-tax), or $0.11 per share,
associated with business interruption insurance proceeds related to
hurricanes Katrina and Rita.
* A $7 million gain ($5 million after-tax), or $0.04 per share, on the
sale of the Enserch Garden Banks floating production facility (EGB).
* A $10 million ceiling test writedown, or $0.07 per share, associated
with decreased emphasis on Brazil and other non-core international
exploration efforts.
* An $8 million benefit, or $0.06 per share, related to a reversal of the
valuation allowance on U.K. net operating loss carryforwards because of
a substantial increase in estimated future taxable income as a result
of the Grove discovery in the U.K. North Sea.
Without the effect of these items, net income for 2005 would have been
$468 million, or $3.66 per share. "See Explanation and Reconciliation of
Non- GAAP Financial Measures."
In 2006, Newfield produced 242.6 Bcfe. Production in 2005 totaled 241.6
Bcfe. Domestic production in 2006 and 2005 reflects the deferral of
approximately 16 Bcfe and 22 Bcfe, respectively, related to the 2005
hurricanes and associated on-going repairs. The following tables detail
production and average realized prices for 2006 and 2005:
Production (A) 2006 2005 % Change
United States
Natural gas (Bcf) 198.7 190.9 4%
Oil and condensate (MMBbls) 6.2 7.1 (13%)
International
Natural gas (Bcf) --- 0.1 ---
Oil and condensate (MMBbls) 1.1 1.3 (15%)
Total
Natural gas (Bcf) 198.7 191.0 4%
Oil and condensate (MMBbls) 7.3 8.4 (13%)
Total (Bcfe) 242.6 241.6 ---
Average Realized Prices (B) 2006 2005 % Change
United States
Natural gas (per Mcf) $7.22 $6.65 9%
Oil and condensate (per Bbl) $49.13 $42.31 16%
International
Natural gas (per Mcf) --- $4.71 ---
Oil and condensate (per Bbl) $56.58 $55.68 2%
Total
Natural gas (per Mcf) $7.22 $6.65 9%
Oil and condensate (per Bbl) $50.25 $44.36 13%
Total (per Mcfe) $7.43 $6.81 9%
(A) Represents volumes sold regardless of when produced.
(B) Average realized prices include the effects of hedging contracts,
including hedging contracts that are not designated for hedge
accounting. If the effects of hedging contracts that are not
designated for hedge accounting had not been included, the average
realized price for total gas would have been $6.47 and $7.17 per Mcf
for 2006 and 2005, respectively, and the average realized price for
total oil and condensate would have been $52.18 and $45.84 per Bbl
for 2006 and 2005, respectively. Without the effects of any hedging
contracts, the average realized price for 2006 would have been $6.42
per Mcf for gas and $59.13 per Bbl for oil and condensate.
LOE in 2006 averaged $1.14 per Mcfe compared to $0.85 per Mcfe in 2005.
LOE was negatively impacted in 2006 by continuing hurricane repairs.
Newfield's actual hurricane related repair expenses for 2006 exceeded the
proceeds from the settlement of insurance claims related to the 2005
hurricanes by $17 million, or $0.07 per Mcfe. Production taxes in 2006 were
$0.25 per Mcfe compared to $0.26 per Mcfe in 2005. DD&A expense in 2006 was
$2.57 per Mcfe compared to $2.15 per Mcfe in 2005. G&A expense in 2006 was
$0.51 per Mcfe compared to $0.43 per Mcfe in the prior year. G&A expense in
2006 is net of capitalized direct internal costs of $58 million compared to
$46 million in 2005.
Proved Reserves and Capital Activity
Newfield's total reserves at year-end 2006 were 2.3 Tcfe, an increase
of 14% over year-end 2005 reserves. Reserve additions from all sources were
603 Bcfe with only 1 Bcfe of the total coming from purchases of properties.
Reserves associated with properties sold in 2006 totaled 13 Bcfe.
Oil and Gas Reserves*
MMBbls Bcf Bcfe
December 31, 2005 102 1,391 2,001
Extensions, discoveries and
other additions 20 481 602
Purchases of properties --- 1 1
Reserve additions 20 482 603
Sales of properties --- (12) (13)
Revisions of previous estimates 2 (86) (76)
Production (9) (189) (243)
December 31, 2006 115 1,586 2,272
* These estimates were prepared by Newfield. As a requirement of
Newfield's credit facility, independent reserve engineers prepare
separate reserve reports with respect to properties holding at least 70%
of the present value of Newfield's proved reserves. For December 31,
2006, the independent reserve engineers' reports covered properties
representing 83% of Newfield's proved reserves, and for such properties
the reserves were within 4% of the reserves Newfield reported for such
properties.
Capital Expenditures
(In millions) 2006
Property acquisitions:
Unproved $73
Proved 15
Exploration 366
Development & Exploitation (1) 1,392
Asset retirement cost 16
Capitalized interest 44
Total costs incurred (2) $1,906
(1) Includes $1,150 million of exploitation costs. For SEC reporting
purposes, these costs are classified as exploration capital
expenditures.
(2) Total costs incurred have not been reduced by $71 million in proceeds
from property sales during the year and insurance proceeds associated
with property damage resulting from the 2005 hurricanes.
First Quarter 2007 Estimates
Natural Gas Production and Pricing The Company's natural gas production
in the first quarter of 2007 is expected to be 48 - 53 Bcf (533 - 588
MMcf/d). Based on current prices, Newfield estimates that its realized
price for natural gas production from the Gulf of Mexico and onshore Gulf
Coast, after basis differentials, transportation and handling charges, will
average $0.40 - $0.60 less per MMBtu than the Henry Hub Index. Realized gas
prices for the Company's Mid-Continent properties, after basis
differentials, transportation and handing charges, typically average $0.70
- $0.80 less per MMBtu than the Henry Hub Index. Hedging gains or losses
will affect price realizations.
Crude Oil Production and Pricing The Company's oil production,
including international liftings, in the first quarter of 2007 is expected
to be 1.9 - 2.2 million barrels (21,000 - 24,000 BOPD). Newfield expects to
produce approximately 2,200 BOPD from its Malaysian operations. The timing
of liftings in Malaysia may affect total reported production. The price the
Company receives for Gulf Coast production typically averages about $2 per
barrel below the NYMEX West Texas Intermediate (WTI) price. The price the
Company receives for its production in the Rocky Mountains averages about
$13 - 15 per barrel below WTI. Oil production from the Mid-Continent
typically sells at a $1.00 - $1.50 per barrel discount to WTI. Oil
production from Malaysia typically sells at Tapis, or about even with WTI.
Hedging gains or losses will affect price realizations.
Lease Operating Expense and Production Taxes LOE is expected to be $58
- $64 million ($0.90 - $0.99 per Mcfe) in the first quarter of 2007.
Production taxes in the first quarter of 2007 are expected to be $19 - $21
million ($0.29 - $0.33 per Mcfe). These expenses vary and are subject to
impact from, among other things, production volumes and commodity pricing,
tax rates, service costs, the costs of goods and materials and workover
activities.
General and Administrative Expense G&A expense for the first quarter of
2007 is expected to be $34 - $38 million ($0.53 - $0.59 per Mcfe), net of
capitalized direct internal costs. Capitalized direct internal costs are
expected to be $13.6 - $15 million. G&A expense includes incentive
compensation expense. Incentive compensation expense depends largely on
adjusted net income (as defined in the Company's incentive compensation
plan), which excludes unrealized gains and losses on commodity derivatives.
Interest Expense The non-capitalized portion of the Company's interest
expense for the first quarter of 2007 is expected to be $14.5 - $16.5
million ($0.23 - $0.26 per Mcfe). As of February 1, 2007, Newfield had no
outstanding borrowings under its credit arrangements. The remainder of debt
consists of four separate issuances of notes that in the aggregate total
$1,175 million in principal amount. Capitalized interest for the first
quarter of 2007 is expected to be about $10 - $11 million.
Income Taxes Including both current and deferred taxes, the Company
expects its consolidated income tax rate in the first quarter of 2007 to be
about 35 - 38%. About 76-84% of the tax provision is expected to be
deferred.
The Company provides information regarding its outstanding hedging
positions in its annual and quarterly reports filed with the SEC and in its
electronic publication -- @NFX. This publication can be found on Newfield's
web page at http://www.newfield.com . Through the web page, you may elect
to receive @NFX through e-mail distribution.
Newfield Exploration Company is an independent crude oil and natural
gas exploration and production company. The Company relies on a proven
growth strategy of growing reserves through the drilling of a balanced
risk/reward portfolio and select acquisitions. Newfield's domestic areas of
operation include the U.S. onshore Gulf Coast, the Anadarko and Arkoma
Basins of the Mid-Continent, the Uinta Basin of the Rocky Mountains and the
Gulf of Mexico. The Company has international operations in Malaysia, the
U.K. North Sea and China.
**The statements set forth in this release regarding estimated or
anticipated 2007 capital spending, first quarter results and production
volumes are forward looking and are based upon assumptions and anticipated
results that are subject to numerous uncertainties. Actual results may vary
significantly from those anticipated due to many factors. Other factors
include 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 capital resources, the availability
of refining capacity for the crude oil Newfield produces from its Monument
Butte Field in Utah and labor conditions. In addition, the drilling of oil
and gas wells and the production of hydrocarbons are subject to
governmental regulations and operating risks.
For information, contact:
Investor Relations: Steve Campbell (281) 847-6081
Media Relations: Keith Schmidt (281) 674-2650
Email: info@newfield.com
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in millions, except per share data)
For the For the
Three Months Ended Twelve Months Ended
December 31, December 31,
2006 2005 2006 2005
Oil and gas revenues $ 427 $ 443 $1,673 $1,762
Operating expenses:
Lease operating 122 55 277 205
Production and other taxes 18 23 61 64
Depreciation, depletion
and amortization 190 118 624 521
General and administrative 32 28 124 104
Ceiling test writedown --- 10 6 10
Other --- (22) (11) (29)
Total operating expenses 362 212 1,081 875
Income from operations 65 231 592 887
Other income (expenses):
Interest expense (22) (18) (87) (72)
Capitalized interest 11 12 44 46
Commodity derivative income
(expense) 90 71 389 (322)
Other 4 1 11 4
83 66 357 (344)
Income before income taxes 148 297 949 543
Income tax provision 66 113 358 195
Net income $ 82 $ 184 $ 591 $ 348
Earnings per share:
Basic $0.65 $1.46 $4.67 $2.78
Diluted $0.64 $1.43 $4.58 $2.73
Weighted average number of shares
outstanding for basic earnings
per share 127 126 127 125
Weighted average number of shares
outstanding for diluted earnings
per share 130 129 129 128
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited, in millions)
December 31, December 31,
2006 2005
ASSETS
Current assets:
Cash and cash equivalents $ 80 $ 39
Other current assets 771 501
Total current assets 851 540
Oil and gas properties, net (full cost method) 5,655 4,410
Other assets 129 131
Total assets $6,635 $5,081
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 999 $ 670
Short-term debt 124 ---
1,123 670
Other liabilities 207 230
Long-term debt 1,048 870
Asset retirement obligation 232 213
Deferred taxes 963 720
Total long-term liabilities 2,450 2,033
Commitments and contingencies --- ---
STOCKHOLDERS' EQUITY
Common stock 1 1
Additional paid-in capital 1,198 1,186
Treasury stock (30) (27)
Unearned compensation --- (34)
Accumulated other comprehensive income (loss) 6 (44)
Retained earnings 1,887 1,296
Total stockholders' equity 3,062 2,378
Total liabilities and stockholders' equity $6,635 $5,081
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions) For the
Twelve Months Ended
December 31,
2006 2005
Cash flows from operating activities:
Net income $ 591 $ 348
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, depletion and amortization 624 521
Deferred taxes 328 125
Stock-based compensation 21 10
Early redemption on senior subordinated notes 8 ---
Ceiling test writedown 6 10
Gain on sale of floating production system --- (7)
Unrealized commodity derivative (income) expense (254) 210
1,324 1,217
Changes in operating assets and liabilities 60 (108)
Net cash provided by operating activities 1,384 1,109
Cash flows from investing activities:
Additions to oil and gas properties and other (1,706) (1,054)
Purchases of short-term investments (714) ---
Redemption of short-term investments 690 ---
Insurance recoveries 45 ---
Proceeds from sale of oil and gas properties 23 11
Proceeds from sale of floating production system --- 7
Net cash used in investing activities (1,662) (1,036)
Cash flows from financing activities:
Net proceeds (repayments) under
credit arrangements --- (120)
Proceeds from issuance of senior subordinated notes 550 ---
Repayment of senior subordinated notes (250) ---
Proceeds from issuances of common stock 15 32
Stock-based compensation excess tax benefit 5 ---
Purchases of treasury stock (3) ---
Net cash provided by (used in) financing activities 317 (88)
Effect of exchange rate changes on cash
and cash equivalents 2 (4)
Increase (decrease) in cash and cash equivalents 41 (19)
Cash and cash equivalents, beginning of period 39 58
Cash and cash equivalents, end of period $ 80 $ 39
Explanation and Reconciliation of Non-GAAP Financial Measures
Earnings stated without the effects of certain items is a non-GAAP
financial measure. Earnings without the effects of these items are
presented because they affect the comparability of operating results from
period to period. In addition, earnings without the effects of these items
are more comparable to earnings estimates provided by securities analysts.
A reconciliation of earnings for the fourth quarters of 2006 and 2005
stated without the effect of certain items to net income is shown below:
4Q06 4Q05
(in millions)
Net income $ 82 $184
Unrealized commodity derivative income (1) (28) (147)
Actual hurricane repair related expenses 50 ---
Business interruption insurance benefit --- (22)
Ceiling test writedown --- 10
Income tax adjustment for above items (7) 60
U.K. net operating loss carryforward
valuation allowance 15 ---
Earnings stated without the effect of the above items $112 $ 85
(1) The components of Commodity Derivative Income (Expense) as included
in Newfield's Consolidated Statement of Income for the fourth
quarters of 2006 and 2005 are as follows:
4Q06 4Q05
(in millions)
Unrealized gain due to changes in fair
market value and hedge ineffectiveness $ 28 $147
Realized gain (loss) on settlement 62 (76)
Total Commodity Derivative Income (Expense) $ 90 $ 71
A reconciliation of earnings for 2006 and 2005 stated without the
effect of certain items to net income is shown below:
2006 2005
(in millions)
Net income $591 $348
Unrealized commodity derivative (income) expense (1) (254) 210
Difference between insurance proceeds and actual
hurricane repair related expenses 17 ---
Business interruption insurance benefit (37) (22)
Early redemption premium 27 ---
Gain on sale of the EGB --- (7)
Ceiling test writedown 6 10
Income tax adjustment for above items 87 (63)
U.K. net operating loss carryforward valuation
allowance (benefit) charge 15 (8)
Earnings stated without the effects of the above items $452 $468
(1) The components of Commodity Derivative Income (Expense) for 2006 and
2005 as included in Newfield's Consolidated Statement of Income are
as follows:
2006 2005
(in millions)
Unrealized gain (loss) due to changes in fair
market value and hedge ineffectiveness $254 $(210)
Realized gain (loss) on settlement 135 (112)
Total Commodity Derivative Income (Expense) $389 $(322)
Net cash provided by operating activities before changes in operating
assets and liabilities is presented because of its acceptance as an
indicator of an oil and gas exploration and production company's ability to
internally fund exploration and development activities and to service or
incur additional debt. This measure should not be considered as an
alternative to net cash provided by operating activities as defined by
generally accepted accounting principles. A reconciliation of net cash
provided by operating activities before changes in operating assets and
liabilities to net cash provided by operating activities is shown below:
4Q06 4Q05
(in millions)
Net cash provided by operating activities $240 $222
Net change in operating assets and liabilities 68 60
Net cash provided by operating activities
before changes in operating assets and liabilities $308 $282
2006 2005
(in millions)
Net cash provided by operating activities $1,384 $1,109
Net change in operating assets and liabilities (60) 108
Net cash provided by operating activities
before changes in operating assets and liabilities $1,324 $1,217
SOURCE Newfield Exploration Company
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Related links:
http://www.newfield.com
CONTACT:
Steve Campbell, Investor Relations,
+1-281-847-6081, or Keith Schmidt, Media Relations,
+1-281-674-2650, both of Newfield Exploration Company,
info@newfield.com
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