An Update on NFX. September 2017

Transcription

1 An Update on NFX September 2017

2 Newfield key messages Anadarko Basin focused Moving to full-field development in STACK Catalyst-rich future (SCORE) 2

3 Mboepd Mmboe Newfield: Anadarko Basin focused 2017 Capex $1.1 B (85% Anadarko) Operated rigs running Anadarko Reserves Gas Liquids % 12 (10 in Anadarko) 35 Current Domestic Production >150,000 BOEPD (65% Anadarko) Anadarko Daily Production Year-end 2016 Proved Reserves 513 MMBOE (65% Anadarko) 2016 #1 OK Oil Producer NFX Anadarko Basin Resource: ~2.4 Billion barrels (net unrisked) ~8,000 gross drilling locations % Liquids

4 How it all started 2008 DVN Cana Hz Gas Disc NFX State 1H-16 STACK MRMC Hz Oil Disc. Meramec Woodford 4 NFX - Rock Island 1 lithology & oil shows STACK NFX Rock Island 1H-14 STACK STACK WDFD Hz Oil Disc. & Core Arkoma SCOOP NFX Faith 1H-12 1 st NFX SCOOP Hz 2011 CLR Lambakis 1-11H SCOOP Hz Gas Disc. 5 3 Oper Well Name IP 1 st Prod. Formation NFX Blevins 3H MCFED 2005 Woodford Arkoma Hz Gas Disc. NFX Norfleet 1H-4W 1,018 MBOED 2009 Woodford Arkoma Hz Oil Disc. CLR Lambakis 1-11H 5.1 MMCFED 2011 Woodford SCOOP Hz Gas Disc. NFX Rock Island 1H BOED 2011 Woodford STACK Hz Oil Disc. NFX Faith 1H MMCFED 2012 Woodford 1 st NFX SCOOP Hz NFX State 1H BOED 2012 Meramec STACK Hz Oil Disc NFX Blevins 3H-9 Arkoma Hz Gas Disc NFX Northfleet 1H-4W Arkoma Hz Oil Disc. Anadarko Basin Net Acreage (000 s)

5 ORDOVICIAN SILURO-DEV. GEOLOGIC AGE MISSISSIPPIAN PENNSYLVANIAN World-class Anadarko Basin resource FORMATION Oswego/Big Lime Atoka Morrow / Springer Sands Newfield has >350,000 net acres in Anadarko Basin Multiple liquids-rich geologic horizons Robust source rock Largest and deepest onshore U.S. basin 10 to 15% TOC Springer Shale Chester Slow and steady burial in generating window over 100 mm years Stacked resource (2,000 to 3,000 ) Meramec / Caney / Sycamore Osage Woodford Shale Geologic targets within STACK continue to be expanded vertically and across the basin Silica-rich (50% - 65%), low clay content, brittle (Meramec, Woodford) Highly productive across all phase windows Hunton Excellent regional seals Abundant natural fractures Viola Simpson 5

6 Top tier economics Single-Well Breakeven Prices ($ / Bbl) $55 $40 $25 Note: Assumes 10% IRR, based on flat oil price of $50/bbl and gas price of $3/mmbtu Source: Evercore ISI 6

7 have sustained basin activity and production growth thru-cycle Horizontal SCOOP / STACK Production Mboe/d 400 Price stability Assessment Production Oil Price Drop WTI Price Lower commodity prices Investment ramp-up WTI Price $/Bbl $ $ $ $ $ $20 Avg annual HZ wells ~ 140 Avg annual HZ wells ~ $ Source: IHS Enerdeq Note: January 2011 December 2016, includes all WDFD,MRMC,OSAGE, excludes Cana Proper WDFD 7

8 Top tier NFX results distributed across entire position Scheffler 1H-9X IP30: 1,843 boepd Cum Oil To Date: 418 MBO John 1H-5X IP60: 1,055 boepd Cum Oil To Date: 193 MBO Gill 1H-4X IP30: 1,443 boepd Cum 100 days: 55 MBO Bilderback 1H-4X IP24: 1,149 boepd IP90: 842 boepd Gruntmeir 1H-18X IP30: 1,202 boepd Cum 100 days: 57 MBO J R Barton 1H-28X IP24: 1,935 boepd Cum 1 YR : 197 MBO Calvin H IP120: 1,305 boepd Cum 1 YR : 164 MBO Ken 1H-4X IP24: 2,139 boepd Cum 200 days: 215 MBO Indominus Rex H IP30: 1,483 boepd Cum 1 YR : 216 MBO Harrison 1H-29X IP60: 1,417 boepd Cum 1 YR : 169 MBO Castonguay H IP24: 1,843 boepd Cum 1 YR : 217 MBO H&W 1H-28X IP24: 1,993 boepd IP90: 1,530 boepd Wittrock H IP30: 2,240 boepd Cum 1 YR : 243 MBO Wheeler 1H-6X IP30: 1,390 boepd IP60: 1,275 boepd Dorothy 1H-32* IP90: 1,805 boepd Cum 1 YR : 379 MBO Maybel 1H-13X IP30: 1,668 boepd Cum 1 YR : 187 MBO Stangl H IP60: 1,384 boepd Cum 1 YR : 261 MBO Apache 1H-30X IP30: 1,751 boepd Cum 200 days: 164 MBO Rodenburg 1H-6X IP90: 1,476 boepd Cum Oil To Date: 296 MBO Vickie 1H-5X IP24: 1,236 boepd IP30: 928 boepd Judy 1H-17* IP90: 1,994 boepd Cum 1 YR : 215 MBO Alphons 1H-29X IP24: 1,178 boepd Cum 1 YR : 236 MBO Stangl 1H-12X IP60: 1,337 boepd Cum Oil To Date: 238 MBO RPM 1H-16X IP30: 1,506 boepd Cum 1 YR : 119 MBO Stroud 1H-29* IP24: 2,335 boepd IP180: 1,761 boepd Okarche 1H-12X IP90: 1,057 boepd Cum Oil To Date: 347 MBO Enhanced Completions Previous Completions Note: All IPs assume 120 bb/ mmcf & 21% Shrink * Represents ~5000 lateral normalized to 10,000 lateral James 1H-2X IP60: 1,946 boepd Cum 1 YR : 210 MBO Franklin 1H-1X IP30: 2,045 boepd Cum 1 YR : 174 MBO Burgess 1H-18* IP180: 3,037 boepd Cum 200 days: 341 MBO 9

9 Newfield is moving to full-field development in STACK Executing a comprehensive Meramec pilot program Multiple vertical and horizontal spacing configurations being tested Selective placement across oil and volatile oil fluid windows Improving our rates of return Optimizing completions design (frac intensity, stage spacing, proppant type etc.) Pad development costs and operational efficiencies Identifying and mitigating potential risks Ensuring access to premium markets Comprehensive water infrastructure investments Preparing to accelerate in the appropriate price environment 9

10 MBO MBOE Stark infill pilot 200 Stark Infill Wells (9), Total Production vs. Type Curve STACK 10-well spacing configuration in Meramec Production to-date projecting above 1.1 MMBOE TC Oil production projecting above TC Controlled flowback maximizing oil recovery Months Stark Infill Wells (9), Oil Production vs. Type Curve 40% of 1.1 MMBOE TC EUR is oil BOEPD % OIL % LIQ IP 24 1,500 71% 85% IP 30 1,211 65% 82% IP 60 1,202 65% 82% Avgs above for 9 infill wells Months 10

11 Velta June infill pilot STACK 12-well spacing pilot in Meramec 4Q17e date of first production Play-leading, advanced technology development pilot: Fiber optics Borehole micro-seismic High resolution pressure monitoring Formation DNA rock sequencing Trial variation in proppant and fluid Fracture geometry imaging and identification Planned learnings: Cluster efficiency, intra-well communication, diverter applications & fracture geometry Velta June Pilot 11

12 ORDOVICIAN SILURO-DEV. GEOLOGIC AGE MISSISSIPPIAN PENNSYLVANIAN A catalyst-rich future Sycamore Caney Osage Resource Expansion FORMATION Oswego/Big Lime Atoka sometimes the best place to look for a deal is on your own acreage! Morrow / Springer Sands Springer Shale Dedicated $100 MM in 2017 to assess other prospective horizons across vast acreage footprint Chester Meramec / Caney / Sycamore Osage Program to test ~ 1 Billion barrels of gross unrisked prospective resource Multiple stacked resource (2,000 to 3,000 ) Woodford Shale SCORE the Sycamore, Caney, Osage, Resource Expansion Hunton Expect to have results on up to 10 assessment wells by YE17 Viola Simpson 12

13 Newfield key messages Anadarko Basin focused Moving to full-field development in STACK Catalyst-rich future (SCORE) 13

14 Forward looking statements and related matters This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words may, believe, expect, anticipate, intend, estimate, project, target, goal, plan, should, will, predict, guidance, potential or other similar expressions are intended to identify forward-looking statements. Other than historical facts included in this presentation, all information and statements, including but not limited to information regarding planned capital expenditures, estimated reserves, estimated production targets, drilling and development plans, the timing of production, planned capital expenditures, and other plans and objectives for future operations, are forward-looking statements. Although, as of the date of this presentation, Newfield believes that these expectations are reasonable, this information is based upon assumptions and anticipated results that are subject to numerous uncertainties and risks. Actual results may vary significantly from those anticipated due to many factors, including but not limited to commodity prices, drilling results, our liquidity and the availability of capital resources, operating risks, industry conditions, China and U.S. governmental regulations, financial counterparty risks, the prices of goods and services, the availability of drilling rigs and other support services, our ability to monetize assets and repay or refinance our existing indebtedness, labor conditions, severe weather conditions, and other operating risks. Please see Newfield s 2015 Annual Report on Form 10-K and subsequent public filings, all filed with the U.S. Securities and Exchange Commission (SEC), for a discussion of other factors that may cause actual results to vary. Unpredictable or unknown factors not discussed herein or in Newfield s SEC filings could also have material adverse effects on actual results. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only asof the date of this presentation. Unless legally required, Newfield undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. This presentation has been prepared by Newfield and includes market data and other statistical information from sources believed by Newfield to be reliable, including independent industry publications, government publications or other published independent sources. Some data are also based on Newfield s good faith estimates, which are derived from its review of internal sources as well as the independent sources described above. Although Newfield believes these sources are reliable, it has not independently verified the information and cannot guarantee its accuracy and completeness. Actual quantities that may be ultimately recovered from Newfield s interests may differ substantially from the estimates in this presentation. Factors affecting ultimate recovery include the scope of Newfield s ongoing drilling program, which will be directly affected by commodity prices, the availability of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and other factors, and actual drilling results, including geological and mechanical factors affecting recovery rates. Newfield may use terms in this presentation, such as EURs, upside potential, net unrisked resource, gross EURs, and similar terms that the SEC s guidelines strictly prohibit in SEC filings. These terms include reserves with substantially less certainty than proved reserves, and no discount or other adjustment is included in the presentation of such reserve numbers. Investors are urged to consider closely the oil and gas disclosures in Newfield s 2015 Annual Report on Form 10-K and subsequent public filings, available at or bywriting Newfield at4 Waterway Square Place, Suite 100, The Woodlands, Texas Attn: Investor Relations. In addition, this presentation contains non-gaap financial measures, which include, but are not limited to, Adjusted EBITDA. Newfield defines EBITDA as net (loss) income before income tax (benefit) expense, interest expense and depreciation, depletion and amortization. Adjusted EBITDA, as presented herein, is EBITDA before ceiling test impairments, gains on asset sales, non-cash compensation expense and net unrealized (gains) / losses on commodity derivatives. Adjusted EBITDA is not a recognized term under GAAP and does not represent net income as defined under GAAP, and should not be considered an alternatives to net income as an indicator of operating performance or to cash flows as a measure of liquidity. Adjusted EBITDA is a supplemental financial measure used by Newfield s management and by securities analysts, lenders, ratings agencies and others who follow the industry as an indicator of Newfield s ability to internally fund exploration and development activities. 14