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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 25, 2002
NEWFIELD EXPLORATION COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 1-12534 72-1133047
(STATE OR OTHER JURISDICTION (COMMISSION FILE (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) NUMBER) IDENTIFICATION NUMBER)
363 N. SAM HOUSTON PARKWAY E.
SUITE 2020
HOUSTON, TEXAS 77060
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES, INCLUDING ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (281) 847-6000
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ITEM 5. OTHER EVENTS
SEE THE FOLLOWING PRESS RELEASE BY NEWFIELD EXPLORATION COMPANY
ANNOUNCING EARNINGS RESULTS FOR THE FIRST QUARTER OF 2002.
NEWFIELD ANNOUNCES FIRST QUARTER RESULTS
HOUSTON - (APRIL 24, 2002)-- NEWFIELD EXPLORATION COMPANY (NYSE:NFX)
announced its financial and operating results for the first quarter of 2002. A
conference call to discuss the results is planned for 8 a.m. (CDT), Thursday,
April 25. To participate in the call, dial 719-457-2657. A listen-only broadcast
will also be provided over the Internet. Simply go to the Investor Relations
section at www.newfld.com.
For the first quarter of 2002, net income was $20.0 million, or $0.44
per share (all per share amounts are on a diluted basis), stated before the
effect of a non-cash charge related to FAS 133. Stated after the effect of the
non-cash charge, net income for the first quarter of 2002 was $16.3 million, or
$0.37 per share. Revenues in the first quarter of 2002 were $148.0 million. This
compares to net income in the first quarter of 2001 of $64.2 million, or $1.34
per share, stated before the effect of a non-cash charge related to FAS 133.
Stated after the effect of the non-cash charge, net income for the first quarter
of 2001 was $58.4 million, or $1.22 per share. Revenues in the first quarter of
2001 were $209.3 million. Operating cash flow before changes in working capital
was $96.7 million, or $2.01 per share, in the first quarter of 2002 compared to
$141.0 million, or $2.91 per share, in the same period of 2001.
The Company's production in the first quarter of 2002, when stated on a
natural gas equivalent basis, increased 10% over the first quarter of 2001.
Newfield's production was 43.8 billion cubic feet equivalent (Bcfe), or an
average of 487 million cubic feet equivalent per day, during the first quarter
of 2002. Production volumes were lower during the quarter because of the
Company's decision to curtail nearly one Bcfe of unhedged production
(approximately 30 MMcf/d) in February in response to low natural gas prices.
Without the curtailment, volumes would have increased 13% over the prior period.
The following tables detail quarterly production and average realized prices:
PRODUCTION
1Q02 1Q01 % CHANGE
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United States
Natural gas (Bcf) 33.9 30.8 10%
Natural gas (MMcf/d) 377 342 10%
Oil and condensate production (MMBbls) 1.35 1.24 9%
Oil and condensate production (BOPD) 14,994 13,791 9%
Australia
Oil and condensate liftings (MBbls) 298.3 239.6 25%
Oil and condensate liftings (BOPD) 3,315 2,662 25%
Total
Natural gas (Bcf) 33.9 30.8 10%
Oil and condensate liftings (MMBbls) 1.65 1.48 11%
Total Production (Bcfe) 43.8 39.6 10%
AVERAGE REALIZED PRICES
1Q02 1Q01 % CHANGE
--------------------------------------------
United States
Natural gas (per Mcf) $3.26 $5.56 (42%)
Oil and condensate (per Bbl) $22.03 $24.69 (11%)
Australia
Oil and condensate liftings (per Bbl) $22.01 $26.28 (16%)
Total
Natural gas (per Mcf) $3.26 $5.56 (42%)
Oil and condensate (per Bbl) $22.03 $24.95 (12%)
Total per Mcfe $3.35 $5.25 (36%)
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Prices shown are net of transportation expense and after hedging. The Company
has not entered into hedging transactions specifically relating to Australian
production.
Stated on a unit of production basis, Newfield's lease operating
expense in the first quarter of 2002 was $0.53 per thousand cubic feet
equivalent (Mcfe), which was equal to per unit LOE expense in the same period of
2001. Due primarily to significantly lower commodity prices, production taxes in
the first quarter of 2002 (including resource rent tax in Australia) decreased
to $0.08 per Mcfe compared to $0.18 per Mcfe in the first quarter of 2001. DD&A
expense in the first quarter of 2002 increased to $1.63 per Mcfe compared to
$1.54 per Mcfe in the first quarter of 2001. General and administrative expense
for the first quarter of 2002 was $0.27 per Mcfe, equal to per unit G&A expense
in the first quarter of 2001. Net interest expense in the first quarter of 2002
was $0.13 per Mcfe compared to $0.18 per Mcfe in the same period of last year.
Capitalized interest in the first quarter of 2002 was $2.1 million compared to
$1.3 million in the same period last year.
Capital expenditures in the first quarter of 2002 were about $81
million.
SECOND QUARTER 2002 ESTIMATES
Below are estimates of certain significant operating and financial data
for the second quarter of 2002. Although the Company believes the expectations
reflected in this forward-looking information are reasonable, such expectations
are based upon assumptions and anticipated results that are subject to numerous
uncertainties. Please see the discussion regarding forward-looking information
at the end of this release.
NATURAL GAS PRODUCTION AND PRICING Newfield's natural gas production in
the second quarter of 2002 is expected to be 34 - 38 Bcf (380 - 420 MMcf/d). The
price received by the Company for its natural gas production from the Gulf of
Mexico and onshore Gulf Coast has typically tracked the Henry Hub Index. Gas
from the Company's Mid-Continent properties has typically sold at a discount of
$0.12 - $0.15 per Mcfe to Henry Hub. Hedging gains or losses will affect price
realizations.
CRUDE OIL PRODUCTION AND PRICING Consolidated oil production in the
second quarter of 2002 is expected to be 1.5 - 1.7 million barrels (17,000 -
19,000 BOPD). Australian oil production during the second quarter is expected to
be 300 - 335 thousand barrels (3,300 - 3,700 BOPD).
The timing of liftings in Australia will impact reported production and
revenues. The price the Company receives from its Gulf Coast production has
typically averaged about $2 below the NYMEX WTI price. Oil production from the
Mid-Continent has typically sold for a $1.00 - $1.50 per barrel discount to WTI.
Australian crude oil sales are based on the Tapis Benchmark, which has
historically been comparable to WTI. Hedging gains or losses will affect price
realizations.
For the full-year 2002, the Company expects to produce 180-185 Bcfe, an
increase of 3-6% over 2001 production volumes. The Company may, however, curtail
production in response to low oil and gas prices could adversely impact the
Company's growth projections.
LEASE OPERATING EXPENSE Newfield's LOE, including domestic production
and severance taxes and resource rent tax in Australia, is expected to be $30 -
$33 million in the second quarter of 2002 ($0.66 - $0.72 per Mcfe). The
Company's domestic LOE, including taxes, is expected to be $0.59 - $0.65 per
Mcfe in the second quarter of 2002. This estimate includes severance taxes of
$0.08 - $0.09 per Mcfe. LOE varies and is subject to impact from, among other
things, production volumes and commodity pricing, tax rates, service costs, the
costs of goods and materials and workover activities.
GENERAL AND ADMINISTRATIVE EXPENSE Newfield's G&A expense for the
second quarter of 2002 is expected to be $12 - $13 million ($0.26 - $0.29 per
Mcfe). This estimate includes accrual of performance-based pay.
INTEREST EXPENSE The non-capitalized portion of the Company's interest
expense for the second quarter of 2002 is expected to be $6 - $7 million ($0.14
- $0.16 per Mcfe), including a $2.3 million payment on its convertible trust
preferred securities. Current borrowings under the Company's bank facilities are
$111 million. The remainder of long-term debt consists of two separate issuances
of senior notes that in the aggregate total $300 million. Capitalized interest
for the second quarter of 2002 is expected to be about $2.2 million.
INCOME TAXES Including both current and deferred taxes, the Company
expects its consolidated income tax rate in the second quarter of 2002 to be
about 35%.
The Company provides information regarding its outstanding hedging
positions in its annual report and quarterly reports filed with the SEC and in
its electronic publication -- @NFX. This publication can be found on the
Company's web page at www.newfld.com. Through the web page, shareholders can
elect to receive @NFX through e-mail distribution.
Newfield Exploration is an independent crude oil and natural gas
exploration and production company. The Company has a solid asset base of
producing properties and exploration and development drilling opportunities in
the Gulf of Mexico, along the U.S. Onshore Gulf Coast, in the Anadarko and
Permian Basins, offshore Australia and in China's Bohai Bay. Newfield balances
its drilling program with acquisitions in select areas in the U.S. and overseas.
**Certain of the statements set forth in this release regarding
estimated or anticipated second quarter 2002 results, capital spending and
yearly production volumes are forward looking and based upon assumptions and
anticipated results that are subject to numerous uncertainties. Actual results
may vary significantly from those anticipated due to many factors, including
drilling results, oil and gas prices, industry conditions, the prices of goods
and services, the availability of drilling rigs and other support services and
the availability of capital resources, labor conditions and other factors set
forth in our Annual Report on Form 10-K for the year ended December 31, 2001. In
addition, the drilling of oil and gas wells and the production of hydrocarbons
are subject to governmental regulations and operating risks.
Newfield Exploration Company For information, contact:
363 N. Sam Houston Parkway East, Ste. 2020 Steve Campbell
Houston, TX 77060 (281) 847-6081
www.newfld.com info@newfld.com
FOR THE
CONSOLIDATED STATEMENT OF INCOME THREE MONTHS ENDED
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE DATA) MARCH 31,
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2002 2001
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OIL AND GAS REVENUES $ 148,039 $ 209,326
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OPERATING EXPENSES:
Lease operating 23,053 20,824
Transportation 1,331 1,262
Production and other taxes 3,410 7,118
Depreciation, depletion and amortization 71,207 61,146
General and administrative 11,767 10,690
Stock compensation 578 595
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TOTAL OPERATING EXPENSES 111,346 101,635
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INCOME FROM OPERATIONS 36,693 107,691
OTHER INCOME (EXPENSE):
Interest income and other, net 1,816 613
Interest expense (7,201) (6,982)
Capitalized interest 2,130 1,330
Dividends on preferred securities of
Newfield Financial Trust I (2,336) (2,336)
Unrealized commodity derivative expense * (5,645) (1,558)
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(11,236) (8,933)
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INCOME BEFORE INCOME TAXES 25,457 98,758
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Income tax provision 9,131 35,613
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Income before cumulative effect of change in
accounting principle 16,326 63,145
Cumulative effect of change in accounting principle* - 4,794
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NET INCOME $ 16,326 $ 58,351
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EARNINGS PER SHARE:
BASIC
Income before cumulative effect of change
in accounting principle $ 0.37 $ 1.43
Cumulative effect of change in accounting
principle* - (0.11)
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Net income $ 0.37 $ 1.32
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DILUTED
Income before cumulative effect of change
in accounting principle $ 0.37 $ 1.32
Cumulative effect of change in accounting
principle* - (0.10)
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Net income $ 0.37 $ 1.22
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WEIGHTED AVERAGE SHARES OUTSTANDING
FOR BASIC EARNINGS PER SHARE 44,212 44,125
WEIGHTED AVERAGE SHARES OUTSTANDING
FOR DILUTED EARNINGS PER SHARE 48,745 48,882
PRODUCTION DATA FOR THE
THREE MONTHS ENDED
MARCH 31,
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2002 2001
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Average daily production:
Oil and condensate (Bbls) 18,309 16,453
Gas (Mcf) 376.8 341.7
Average realized price:
Oil and condensate (Bbls) $ 22.03 $ 24.95
Gas (Mcf) $ 3.26 $ 5.56
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* Associated with SFAS 133.
CONSOLIDATED BALANCE SHEET MARCH 31, DECEMBER 31,
(UNAUDITED, IN THOUSANDS OF DOLLARS) 2002 2001
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ASSETS
Current assets:
Cash & cash equivalents $ 25,128 $ 26,610
Accounts receivable, oil and gas 87,580 92,644
Inventories 8,125 7,332
Commodity derivatives * 24,678 79,012
Other current assets 26,392 25,006
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Total current assets 171,903 230,604
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Oil and gas properties, net (full cost method) 1,417,755 1,408,579
Furniture, fixtures and equipment, net 6,896 6,807
Commodity derivatives * 1,784 7,409
Other assets 9,684 9,972
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$ 1,608,022 $ 1,663,371
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $ 128,035 $ 160,814
Commodity derivatives * 21,692 4,217
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Total current liabilities 149,727 165,031
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Other liabilities 5,918 6,288
Commodity derivatives * 2,360 1,813
Long-term debt 410,642 428,631
Deferred taxes 207,349 207,880
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Total long-term liabilities 626,269 644,612
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Company-obligated, mandatorily redeemable,
convertible preferred securities of Newfield
Financial Trust I 143,750 143,750
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STOCKHOLDERS' EQUITY
Common stock 451 449
Additional paid-in capital 370,544 364,734
Treasury stock (26,012) (25,794)
Unearned compensation (8,176) (7,845)
Accumulated other comprehensive income (loss)
Foreign currency translation adjustment (7,158) (8,918)
Commodity derivatives * (20,113) 24,936
Retained earnings 378,740 362,416
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Total stockholders' equity 688,276 709,978
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Total liabilities and stockholders' equity $ 1,608,022 $ 1,663,371
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* Associated with SFAS 133.
CONSOLIDATED STATEMENT OF FOR THE
CASH FLOWS THREE MONTHS ENDED
(UNAUDITED, IN THOUSANDS OF DOLLARS) MARCH 31,
-----------------------------------
2002 2001
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 16,326 $ 58,351
Depreciation, depletion and amortization 71,207 61,146
Deferred taxes 2,904 14,524
Stock compensation 578 595
Commodity derivatives * 5,645 1,558
Cumulative effect of change in
accounting principle* - 4,794
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96,660 140,968
Changes in operating assets and liabilities 1,989 60,563
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NET CASH PROVIDED BY OPERATING ACTIVITIES 98,649 201,531
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CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition, net of cash acquired - (264,089)
Additions to oil and gas properties (84,489) (107,846)
Additions to furniture, fixtures and equipment (826) (1,112)
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NET CASH USED IN INVESTING ACTIVITIES (85,315) (373,047)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 128,000 663,000
Repayments of borrowings (146,000) (622,000)
Proceeds from issuance of senior notes - 174,879
Proceeds from issuances of common stock 3,396 530
Purchases of treasury stock (218) (575)
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NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES (14,822) 215,834
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Effect of exchange rate changes on cash
and cash equivalents 6 837
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Increase (decrease) in cash and cash equivalents (1,482) 45,155
Cash and cash equivalents, beginning of period 26,610 18,451
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Cash and cash equivalents, end of period $ 25,128 $ 63,606
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* Associated with SFAS 133.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Form 8-K to be signed on its behalf by the
undersigned thereunto duly authorized.
NEWFIELD EXPLORATION COMPANY
Date: April 25, 2002 By: /s/ TERRY W. RATHERT
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Terry W. Rathert
Vice President and Chief Financial Officer
(Authorized Officer and Principal
Financial Officer)