Newfield updates production, capital outlook for 2014-2016

Newfield Exploration Co.

Newfield Exploration Co. (NYSE: NFX) has updated its production and capital investment outlook for 2014-2016, which is expected to yield more than a 20% compound annual growth rate (CAGR) in liquids production and a 25% CAGR in cash flow.

Net production from continuing operations in 2014 is expected to range from 44 million to 48 million boe, or 10–20% higher than 2013 estimated net production from continuing operations of approximately 40 million boe. Domestic liquids production in 2014 is expected to increase 30% over the previous year. Newfield plans to invest approximately $1.6 billion in 2014 in its continuing operations (excludes capitalized interest and overhead).

With a planned 2014 investment of $700 million, the Anadarko Basin will be the company's single-largest investment region. The company plans to run eight operated drilling rigs in its SCOOP and STACK plays. Newfield has more than 225,000 net acres in the region and expects its 2014 production to double over 2013 levels. Net production from the Anadarko Basin is expected to exit 2014 at nearly 50,000 boepd.

Planned 2014 capital investments in the Uinta Basin are $400 million. Near-term activity levels in the basin have been adjusted to match timing expectations for refinery expansions in the Salt Lake City region. Newfield plans to run three operated rigs in the Greater Monument Butte unit and one to two rigs in the Central Basin. About 200 wells are planned for the ongoing Monument Butte waterflood development. In the Central Basin's Uteland Butte and Wasatch plays, up to 10 horizontal wells are planned. Uinta Basin production in 2014 is expected to grow approximately 5% over 2013 levels.

Newfield expects to maintain its current four-rig program in the Williston Basin in 2014. A planned investment of $330 million is expected to allow for the drilling of 45–50 wells. Its Williston Basin program is in development mode, with 2013 average well costs decreasing about 20% over 2012 averages. The program is focused on drilling super extended laterals (more than 7,500 feet) from common pad locations. Net production in 2014 from the Williston Basin is expected to grow nearly 40% year-over-year.

Approximately $170 million is planned for investment in the Eagle Ford play, where Newfield expects to drill about 20 development wells in 2014. Well costs in 2013 have averaged about $7.3 million for SXL wells, reflecting continued efficiency gains in development. Net production from the region is expected to increase more than 30% over 2013 levels.


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