HOUSTON, Oct. 17 /PRNewswire-FirstCall/ -- Newfield Exploration Company
(NYSE: NFX) today lowered its full-year 2006 production guidance to 242-244
billion cubic feet equivalent (Bcfe). The lower guidance primarily relates
to marketing issues in the Rocky Mountains, production downtime offshore
Malaysia and continued production deferrals in the Gulf of Mexico. The
Company's previous estimate for 2006 production was 250 Bcfe.
Newfield's significant growth projects remain on track for 2007.
Adjusting for the recent sale of a 15% interest in the Grove development,
production for 2007 is expected to be in-line with previous estimates of
295- 320 Bcfe -- an increase of more than 20% over 2006. The Company's
Grove development in the North Sea, the deepwater Wrigley Field in the Gulf
of Mexico and the Abu Field development offshore Malaysia are estimated to
account for nearly half of the total production growth in 2007. A complete
update on all of the Company's growth projects will be provided on the
third quarter conference call, scheduled for 8:30 a.m. (CST), Thursday,
October 26.
Approximately 3 Bcfe of the production shortfall in the second half of
2006 reflects lower crude oil sales from the Company's Monument Butte Field
in the Uinta Basin of northeastern Utah. Due to lower than anticipated
demand from Salt Lake City-area refiners, the Company currently has 165
wells shut- in. In addition, more than 400,000 barrels of oil has been
produced but remains in inventory in the field. The Company elected not to
sell the oil at extraordinarily wide differentials. This inventory was
created during a time of refinery turn-arounds earlier in the year,
together with normal seasonal demand and an increase in oil volumes
entering the basin from Canada.
Newfield has a long-term crude oil sales agreement allowing for the
delivery of approximately 75% of the Company's anticipated volumes for the
remainder of 2006. Other refiners are expected to purchase the remaining
production.
Approximately 2 Bcfe of the production shortfall in the second half of
2006 relates to lower than expected crude oil liftings from the outside-
operated Penara and North Lukut Fields, located on PM 318 offshore
Malaysia. The floating production, storage and offloading vessel has
experienced significant downtime recently due to compressor problems. One
of the two compressors has been repaired and the second is being repaired
at this time. The fields are expected to resume normal production levels by
year-end 2006.
Approximately 2 Bcfe of the production shortfall in the second half of
2006 relates to continued production deferrals and delays in work programs
in the Gulf of Mexico following hurricanes in 2005. Approximately 20
MMcfe/d net is off-line at this time. In addition, ongoing equipment and
manpower delays from service companies are impacting the start-up of
several significant new developments in late 2006. All of these
developments are expected to be on- line by year-end.
David A. Trice, Newfield Chairman, President and CEO, said, "2006 was a
very challenging year for us and our production estimates now reflect the
deferral of about 16 Bcfe. These include nearly 4 Bcfe related to service
provider delays of our Grove Field start-up in the North Sea, 3 Bcfe in the
Rockies related to refining and marketing issues, 3 Bcfe related to delays
in first production from our Wrigley Field in the deepwater Gulf and more
than 6 Bcfe of deferrals related to last year's storms in the Gulf of
Mexico. We believe that these issues are largely behind us and that we will
meet our fourth quarter 2006 and full-year 2007 production estimates."
Newfield's production for the third quarter of 2006 was 62.6 Bcfe,
in-line with previous estimates. The remainder of the Company's third
quarter financial and operating results will be provided on the third
quarter conference call.
Newfield Exploration Company is an independent crude oil and natural
gas exploration and production company. The Company relies on a proven
growth strategy 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 exploration and development
projects underway in Malaysia, the U.K. North Sea and China.
**The statements set forth in this release regarding estimated or
anticipated 2006 and 2007 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. Newfield's ability to produce oil and gas from the
Gulf of Mexico is dependent on infrastructure (such as host platforms,
pipelines and onshore processing facilities) owned by third parties. Much
of this infrastructure was damaged by Hurricanes Katrina and Rita. As a
result, it is difficult to predict when production will return to pre-storm
levels. 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
SOURCE Newfield Exploration Company
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Related links:
http://www.newfield.com
CONTACT:
investor relations, Steve Campbell,
+1-281-847-6081, or media relations, Keith Schmidt,
+1-281-674-2650, both of Newfield Exploration Company,
info@newfield.com
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