Newfield's Largest Malaysian Find - Analyst Blog
03 Aprile 2013 - 5:40PM
Zacks
U.S. oil producer Newfield
Exploration Co. (NFX) has made the largest conventional
exploratory success in its history with a natural gas find off
Sarawak, Malaysia. This success comes at a time when the company is
planning divestments of its international business.
Located 50 miles offshore Sarawak in about 250 feet of water, the
B-14 well rests on the Block SK 310 production sharing contract
area. The probe encountered 1,800 feet of gross column and 1,585
feet of net natural gas pay in the main carbonate objective. The
viability of the reservoir was established by a drill stem
test.
Newfield, the operator of Block SK 310 holds an interest of 30%.
Other partners Mitsubishi Corp. and Petronas Carigali possess 30%
and 40%, respectively.
Newfield has estimated the discovery to hold 1.5 trillion to 3
trillion cubic feet of gas initially in place. The B-14 find
lies adjacent to the company’s B-15 discovery with a distance of
less than 3 miles between them. The B-15 discovery is estimated to
hold recoverable reserves of about 265 billion cubic feet. Both the
finds will be developed simultaneously. Newfield intends to
continue drilling in the region along with another prospect during
the third quarter.
In Feb 2013, the company announced that it received board approval
for exploring strategic alternatives for businesses that include
offshore developments and related holdings in Malaysia and China.
Newfield aims to concentrate on domestic areas including Uinta,
Cana Woodford, Williston and Eagle Ford formations.
Newfield is looking to opening a data room for international
operations in the second quarter. Based on the current oil prices,
the company’s full-year 2013 international cash income taxes are
anticipated in the range of $55 million to $65 million.
Newfield holds a Zacks Rank #3 (short-term Hold rating). However,
there are other stocks in the sector that appear more rewarding.
Among these, NGL Energy Partners LP (NGL),
Range Resources Corporation (RRC) and EPL
Oil & Gas, Inc. (EPL) carry a Zacks Rank #1 (Strong
Buy).
EPL OIL&GAS INC (EPL): Free Stock Analysis Report
NEWFIELD EXPL (NFX): Free Stock Analysis Report
NGL ENERGY PART (NGL): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis Report
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