Newfield Exploration explores for new fields of oil and natural gas reserves but is happy with old reserves too. The independent oil and gas exploration and production company drills in the Mid-Continent (Anadarko and Arkoma Basins), the Rockies (Uinta and Williston Basins), and the Gulf Coast region of Texas. The company seeks to hedge its exploration and production bets by exploiting assets outside of the US, primarily in China and Malaysia. In 2014 Newfield Exploration reported proved reserves In 2014 Newfield Exploration reported proved reserves of 645 million barrels of oil equivalent (47% oil, 12% NGLs, and 41% natural gas).
Newfield Exploration has oil and gas assets in the US (Mid-Continent, the Rocky Mountains and onshore Texas), and China. US operations accounted for 98% of the company's revenues in 2014.
While Newfield Exploration only has operations in the oil and gas exploration and production industry, it is organizationally structured in geographic operating segments: the US and China.
Sales and Marketing
Oil, natural gas and NGLs are sold at market-based prices to a variety of purchasers, primarily under short-term contracts and long-term contracts in the Uinta Basin at market-based prices. Tesoro accounted for 12% of total revenues in 2014; Sunoco Logistics Partners, 10%.
In 2014 Newfield Exploration's net revenues rose by 28% primarily due an increase in liquids production. Increased oil production generated 81% of the revenue increase due to production increases in Mid-Continent, onshore Gulf Coast and Rocky Mountains regions of 51%, 26%, and 26%, respectively. The higher oil production was partially offset by lower oil prices, which reduced the overall oil volume and price impact to 58% of the total revenue growth. Increased NGL production in the Mid-Continent, onshore Gulf Coast and Rocky Mountains regions of 67%, 44%, and 35%, respectively, generated 20% of the total revenue increase. About 18% of the revenue increase was due to higher natural gas prices.
Revenues from China decreased due to the temporary shut-in of production in Bohai Bay for scheduled repair and maintenance activities, along with a 24% decrease in oil price during 2014.
In 2014, net income increased by 512% due to higher commodity derivative income. This was comprised of unrealized gains of $649 million related to the change in value of derivative contracts due to changes in commodity prices, offset by $39 million of realized losses associated with derivative contract settlements.
Newfield Exploration's cash from operating activities in 2014 decreased by 4% due to the changes in accounts receivable, absence of inventories, and changes in other current assets.
Despite a reduced capital budget in 2015 that is reflective of the current price environment, the company's primary, long-term goal continues to be delivering stockholder value through consistent growth of cash flow, production and reserves. Over the past several years, it has focused its investments on oil and liquids-rich resource plays in the US. It operates in several US basins with the primary growth area being the Anadarko Basin. Key components of Newfield Exploration's business strategy includes: focusing on organic opportunities through disciplined capital investment; continuously improving operations and returns; preserving a strong and flexible capital structure; maintaining a diverse asset base with ongoing portfolio management; and executing select, strategic acquisitions and divestitures.
In the US, Newfield Exploration has steadily shifted its exploration and production focus from the Gulf Coast and Gulf of Mexico to the Mid-Continent and Rocky Mountain regions. In particular, it is targeting unconventional oil shale plays, where due to recent improvements in drilling technology it can access a higher return on investment. It is also developing its international assets, including its holdings in the Pearl field in the offshore China.
To raise cash in order to pay down debt and fund capital expenditures, in 2014 the company sold it Granite Wash assets, located primarily in Texas, for $588 million, and its Malaysia business to SapuraKencana Petroleum Berhad for $898 million.
During 2014, it continued to market its China business. Due to the precipitous decline in oil prices, the company was unable to sell the China business at an acceptable price and determined it was in Newfield Exploration's best interest to retain the cash flow from the China business. Accordingly, it reclassified this business as continuing operations.
In 2013 the company announced a major natural gas discovery on the Block SK 310 Production Sharing Contract (PSC) area, located 50 miles offshore Sarawak (Malaysia). Newfield Exploration, which operates Block SK 310 with a 30% interest, estimated that the discovery had gas reserves of 1.5 – 3 trillion cu. ft. That year the company also announced that it was evaluating strategic alternatives for the company's international businesses.
In 2012 it sold its remaining Gulf of Mexico assets (78 federal offshore lease blocks on 432,700 gross acres) to W&T Offshore for $228 million.
In 2011 Newfield Exploration bought oil and gas assets in Utah's Uinta Basin from Harvest Natural Resources for $215 million.
The company was incorporated in 1988.