Independent oil and gas company Newfield Exploration Company (NFX) provided insights into its 2011 capital investment program and production growth profile. The company also came out with findings from initial drilling at the Woodford Shale play in the Arkoma Basin of Oklahoma.
Newfield has allotted $1.7 billion for capital spending for 2011, marginally lower than the 2010 level of $1.83 billion. The 2011 spend on capital is more skewed toward oil, as 67% of the planned expenses are for oil projects with the balance in the liquid rich gas business.
Newfield expects 2011 production to outstrip levels achieved in 2010 riding on a high of a 50% increase in domestic oil production in the current fiscal. The company expects production in 2011 to range from 312–323 billion cubic feet equivalent (Bcfe), exceeding 2010 levels by 8-10%.
Till date the company has drilled six wells in its oil resource located in Arkoma Basin’s Woodford Shale. The peak gross production (24-hour) from five of the six wells averaged 1,410 barrels of oil equivalents per day (BOEPD). The company has earmarked more than 100 drilling locations in this area and has plans to drill 12 to 18 wells in 2011.
Newfield Exploration’s earnings per share in the third quarter of 2010 exceeded the Zacks Consensus Estimate. The Zacks Consensus Estimates for fourth quarter 2010, fiscal year 2010 and fiscal year 2011 currently stand at $1.24 per share, $4.59 per share and $4.97 per share, respectively.
Newfield Exploration at present retains a Zacks #3 Rank (short-term Hold rating). We also maintain a long-term Neutral rating on the sock. The company competes with Cabot Oil & Gas Corporation (COG) and Forest Oil Corp. (FST).
Based in Houston, Texas, Newfield Exploration Company is engaged in the exploration, development, and acquisition of natural gas and crude oil properties. The proved reserves of the company at the end of December 31, 2010 were 3.7 trillion cubic feet equivalents (Tcfe), exceeding 2009 year end levels by 3%.
CABOT OIL & GAS (COG): Free Stock Analysis Report
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NEWFIELD EXPL (NFX): Free Stock Analysis Report
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