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Newfield hikes spending Fast tracks Gulf of Mexico development; boosts production forecast Petroleum News Houston staff
Exploration and production independent Newfield Exploration said it plans to boost 2003 capital spending to $475-to $480 million, up 5.5-to-6.6 percent from the company’s original $450 million budget.
“It’s an excellent time to invest because of (commodity) prices and costs,” David Trice, Newfield’s chief executive officer, said in a July 24 call on second-quarter earnings.
He said Newfield also increased 2003 production targets to 220-to 225 billion cubic feet of natural gas equivalent, up from an earlier company forecast of 215-to 220 bcf of gas equivalent. Fast tracking GOM development In the Gulf of Mexico, where Newfield is a major independent natural gas producer, “we are fast tracking development to take advantage of gas prices,” Trice said.
However, the acquisition of financially troubled independent EEX has helped establish Newfield as an onshore player as well, the company said.
“Newfield is much more of a diversified company than it was,” Trice said, adding that about half of Newfield’s total production now comes from the onshore.
David Schaible, Newfield’s vice-president of acquisitions and development, called the EEX acquisition an apparent “home run” for the company, noting that in the short time since the deal closed Newfield has boosted daily production from former EEX onshore properties to 130,000 million cubic feet from 110,000 million cubic feet. He said Newfield’s net gas production onshore Gulf Coast is approaching 200,000 million cubic feet per day.
“We’ve also had significant (drilling) successes that will provide new production for the rest of the year,” he said. “The early returns from EEX look outstanding.”
Overall, Newfield posted 2003 second-quarter production of 56.2 billion cubic feet of gas equivalent, up 18 percent from year-earlier production of 47.5 bcf, and up nearly 2 percent from first-quarter output of 55.2 billion cubic feet of equivalent.
Newfield reported 2003 second-quarter net income of $45.8 million or 82 cents per share, compared to net income of $64.1 million or $1.17 per share in the prior quarter and $16.3 million or 36 cents per share in the year-ago period.
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