Newfield announces Uinta Basin crude oil supply agreement

Source: Newfield Exploration Company

Newfield Exploration Company (NYSE: NFX) today announced the signing of a crude oil supply agreement with Tesoro Corporation to provide 18,000 barrels per day of supply capacity at Tesoro's refinery in Salt Lake City, Utah . The new agreement spans a seven-year period, with commitments commencing in 2013, and secures additional supply capacity for Newfield's planned oil growth in the Uinta Basin. The oil price differential associated with this agreement is not materially different than Newfield's current supply contracts in the basin.

"Our centerpiece oil asset is the Uinta Basin and today's agreement is a significant step towards securing the necessary oil refining capacity to support our future growth plans," said Lee K. Boothby , Newfield's Chairman, President and CEO. "We've enjoyed a mutually-beneficial relationship with Tesoro since entering the region and look forward to growing our businesses together into the next decade."

Newfield has been active in the Uinta Basin since 2004. Multiple oil-productive geologic targets exist across the acreage and an active drilling campaign is underway to develop the more than 6,000 potential locations on the acreage.

In mid-2011, Newfield disclosed initial results from two new Central Basin oil developments – the Uteland Butte and the Wastach. Newfield is planning to test multiple horizontal intervals in 2012. The Company has been increasing its rig count and expects to run at least eight rigs in the Uinta Basin in 2012, up from an historic five-rig program.

The Company sells its crude oil from the Uinta Basin to multiple Salt Lake City -area refiners and continues to work with each to secure additional refining capacity to meet future growth plans from the region.

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