Newfield Exploration provided an update on its ongoing sale of non-strategic assets. The program to date will generate estimated proceeds of approximately $735 million. This includes approximately $400 million of sales closed in 2011 and an additional $335 million in sales that are expected to close in early 2012.
In 2011, Newfield grew its oil and liquids production more than 20%. Natural gas volumes declined approximately 5% in 2011 due to reduced capital investments in gas assets and natural field declines. For the full year 2011, the Company produced approximately 300 Bcfe. On a pro forma basis, excluding the production associated with assets sold in 2011 and the anticipated closings in early 2012, full year 2011 production would have been approximately 290 Bcfe.
“Our focus over the last several years has been on oil,” said Lee K. Boothby, Newfield Chairman, President and CEO. “We are re-allocating our people and using proceeds from recent asset sales to drive strong oil growth. For 2012, we will direct substantially our entire budget to oil and liquids-rich opportunities. As a result, we expect to again generate more than 20% growth in our 2012 oil and liquids volumes. With a lack of investment and natural declines, our natural gas volumes will continue to fall. In the second half of 2012, we anticipate that approximately 50% of our production will be from oil and liquids assets… this compares to just one-third of production just three years ago. With today’s weak natural gas prices, investing in oil growth is clearly the right economic choice to create the most value for our shareholders.”
He continued: “As evidenced through our asset sales program, we are committed to living within our internal resources. We will continue to monetize assets over time that are non-strategic to our future and use the proceeds to high-grade our investment inventory.”
With the continued emphasis on oil growth and its focus on developing long-lived onshore resource plays, Newfield now considers its Gulf of Mexico assets to be “non-strategic.” Newfield is not planning to drill any additional exploratory wells in the Gulf of Mexico and will explore all options in 2012 to create value from these assets.
