<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
Commission file number 1-12534
NEWFIELD EXPLORATION COMPANY
(Exact name of registrant as specified in its charter)
Delaware 72-1133047
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
363 N. Sam Houston Parkway E.
Suite 2020
Houston, Texas 77060
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (713)
847-6000
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports, and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
As of November 1, 1996, there were 17,533,308 shares of the
Registrant's Common Stock, par value $.01 per share, outstanding.
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TABLE OF CONTENTS
<TABLE>
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Page
PART I
<S> <C> <C>
Item 1. Financial Statements:
Balance Sheet as of September 30, 1996
and December 31, 1995. . . . . . . . . . . . 1
Statement of Income for the three months
ended September 30, 1996 and 1995 and
for the nine months ended
September 30, 1996 and 1995. . . . . . . . . 3
Statement of Cash Flows for the nine months
ended September 30, 1996 and 1995. . . . . . 4
Notes to Financial Statements . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . 7
PART II
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . 14
</TABLE>
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NEWFIELD EXPLORATION COMPANY
BALANCE SHEET
(In thousands of dollars, except share data)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . $ 41,957 $ 12,533
Accounts receivable, oil and gas. . . . 24,652 25,332
Other . . . . . . . . . . . . . . . . . 2,363 4,952
------------ ------------
Total current assets. . . . . . . . . 68,972 42,817
------------ ------------
Oil and gas properties (full cost method,
of which $47,922 at September 30, 1996
and $19,517 at December 31, 1995 were
excluded from amortization) . . . . . . 483,669 362,857
Furniture, fixtures and equipment . . . . 2,212 1,806
Less-accumulated depreciation,
depletion and amortization. . . . . . . (180,672) (135,148)
------------ ------------
305,209 229,515
------------ ------------
Other assets . . . . . . . . . . . . . . 4,852 5,074
------------ ------------
Total assets . . . . . . . . . . . . $ 379,033 $ 277,406
=========== ============
</TABLE>
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NEWFIELD EXPLORATION COMPANY
BALANCE SHEET
(In thousands of dollars, except share data)
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------ ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities. . . . . . . . . . . . . $ 48,523 $ 24,487
Advances from joint owners . . . . . . 10,866 1,673
Current maturities of capital
lease obligations. . . . . . . . . . 215 422
Current maturities of long-term debt . --- 5,000
----------- -----------
Total current liabilities. . . . . . 59,604 31,582
----------- -----------
Other liabilities. . . . . . . . . . . . 2,115 1,060
Long-term capital lease obligations. . . --- 152
Long-term debt . . . . . . . . . . . . . 56,000 25,000
Deferred taxes . . . . . . . . . . . . . 37,773 26,041
----------- -----------
Total long-term liabilities. . . . . 95,888 52,253
----------- -----------
Commitments and contingencies (Note 2) . --- ---
Stockholders' equity (Note 1):
Preferred stock ($.01 par value,
5,000,000 share authorized,
no shares issued). . . . . . . . . . --- ---
Common stock ($.01 par value,
50,000,000 shares authorized;
17,533,308 and 17,177,422
shares issued and outstanding at
September 30, 1996 and December 31,
1995, respectively). . . . . . . . . 175 171
Additional paid-in capital . . . . . . . 145,577 138,002
Unearned compensation . . . . . . . . . (3,273) (1,113)
Retained earnings . . . . . . . . . . . 81,062 56,511
----------- -----------
Total stockholders' equity . . . . . 223,541 193,571
----------- -----------
Total liabilities and
stockholders' equity . . . . . . . $ 379,033 $ 277,406
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
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NEWFIELD EXPLORATION COMPANY
STATEMENT OF INCOME
(In thousands of dollars, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Oil and gas revenues. . . . $ 35,799 $ 24,622 $ 101,774 $ 68,462
---------- ---------- ---------- ----------
Operating expenses:
Lease operating . . . . . 4,696 3,702 12,094 10,047
Depreciation, depletion
and amortization. . . . 16,189 13,531 45,535 36,485
General and
administrative, net . . 1,265 1,577 5,338 4,183
Stock compensation. . . . 571 197 1,444 587
---------- ---------- ---------- ----------
Total operating
expenses. . . . . . . 22,721 19,007 64,411 51,302
---------- ---------- ---------- ----------
Income from operations. . . 13,078 5,615 37,363 17,160
Other income (expense):
Interest income . . . . . 305 208 588 820
Interest expense, net . . (53) (10) (197) (140)
---------- ---------- ---------- ----------
252 198 391 680
---------- ---------- ---------- ----------
Income before income taxes . 13,330 5,813 37,754 17,840
Income tax provision . . . . 4,657 2,044 13,203 6,251
---------- ---------- ---------- ----------
Net income . . . . . . . . . $ 8,673 $ 3,769 $ 24,551 $ 11,589
========== ========== ========== ==========
Earnings per common share. . $ 0.46 $ 0.21 $ 1.32 $ 0.64
========== ========== ========== ==========
Weighted average number
of shares and common
stock equivalents
outstanding. . . . . . . . 18,775 18,299 18,566 18,005
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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NEWFIELD EXPLORATION COMPANY
STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . $ 24,551 $ 11,589
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion
and amortization . . . . . . . . 45,535 36,485
Deferred taxes . . . . . . . . . . 13,511 6,242
Stock compensation . . . . . . . . 1,444 587
Realized loss on sale of
investment securities. . . . . . --- 32
------------- ------------
85,041 54,935
Changes in operating assets and
liabilities:
Decrease in accounts receivable,
oil and gas. . . . . . . . . . . 744 2,426
Decrease (increase) in other
current assets . . . . . . . . . 2,589 (838)
Decrease (increase) in other
assets . . . . . . . . . . . . . 231 (49)
Increase (decrease) in accounts
payable and accrued
liabilities. . . . . . . . . . . 9,778 (2,610)
Increase in advance from
joint owners . . . . . . . . . . 9,193 739
Increase in other liabilities. . . 1,055 829
------------ ------------
Net cash provided by
operating activities . . . . . 108,631 55,432
------------ ------------
</TABLE>
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NEWFIELD EXPLORATION COMPANY
STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from investing activities:
Additions to oil
and gas properties . . . . . . . (106,627) (69,364)
Additions to furniture,
fixtures and equipment . . . . . (417) (501)
Sales of investment securities . . --- 8,227
------------ ------------
Net cash used in
investing activities . . . . . (107,044) (61,638)
------------ ------------
Cash flows from financing activities:
Proceeds from borrowings . . . . . 190,000 43,000
Repayments of borrowings . . . . . (164,000) (43,000)
Proceeds from issuance of
common stock, net. . . . . . . . 2,194 4,082
Payments on capital
lease obligations. . . . . . . . (357) (405)
------------ ------------
Net cash provided by (used in)
financing activities . . . . . 27,837 3,677
------------ ------------
Increase (decrease) in cash and
cash equivalents . . . . . . . . . 29,424 (2,529)
Cash and cash equivalents,
beginning of period. . . . . . . . 12,533 10,412
------------ ------------
Cash and cash equivalents,
end of period. . . . . . . . . . . $ 41,957 $ 7,883
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
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<PAGE> 8
NEWFIELD EXPLORATION COMPANY
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(1) Accounting Policies
The unaudited financial statements of Newfield Exploration Company (the
"Company") reflect, in the opinion of management, all adjustments, consisting
only of normal and recurring adjustments, necessary to present fairly the
Company's financial position at September 30, 1996 and the Company's results
of operations for the three- and nine-month periods ended September 30, 1996
and 1995 and cash flows for the nine-month periods ended September 30, 1996
and 1995. The financial statements have been prepared in accordance with
the instructions to Form 10-Q and therefore do not include all disclosures
required of financial statements prepared in conformity with generally
accepted accounting principles. Interim period results are not necessarily
indicative of results of operations or cash flows for a full-year period.
These financial statements and the notes thereto should be read in
conjunction with the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, including those financial statements and notes thereto
incorporated by reference from the Company's 1995 Annual Report to
Stockholders.
(2) Contingencies
The Company has been named as a defendant in certain lawsuits arising
in the ordinary course of business. While the outcome of these lawsuits
cannot be predicted with certainty, management does not expect these matters
to have a material adverse effect on the financial position, results of
operations or cashflows of the Company.
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<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
As an independent oil and gas producer, the Company's revenue,
profitability and future rate of growth are substantially dependent upon
prevailing prices for natural gas, oil and condensate, which are dependent
upon numerous factors beyond the Company's control, such as economic,
political and regulatory developments and competition from other sources of
energy. The energy markets have historically been very volatile and there
can be no assurance that oil and gas prices will not be subject to wide
fluctuations in the future. A substantial or extended decline in oil and
gas prices could have a material adverse effect on the Company's financial
position, results of operations, quantities of oil and gas reserves that may
be economically produced and access to capital.
The Company's results of operations may vary significantly from quarter
to quarter as a result of development operations, commodity prices, the
curtailment of production in association with workover and recompletion
activities and the incurrence of expenses related thereto, the timing and
amount of reimbursement for customary overhead costs received by the Company
and other factors, and, therefore, the results of operations for any one
quarter may not be indicative of results for the full fiscal year.
The Company uses the full cost method of accounting for its oil and gas
properties. Under this method, all acquisition, exploration and development
costs, including certain related employee costs (less any reimbursements for
such costs) incurred for the purpose of acquiring and finding oil and gas
reserves are capitalized in a "full cost pool" as incurred. The Company
records depletion of its full cost pool using the unit of production method
and uses its internal estimates of proved quantities of oil and gas reserves
for financial accounting matters. To the extent that such capitalized costs
in the full cost pool (net of depreciation, depletion and amortization and
related deferred taxes) exceed the present value (using a 10% discount rate)
of estimated future net after-tax cash flows from proved oil and gas
reserves, such excess costs are charged to operations. Once incurred, a
write-down of oil and gas properties is not reversible at a later date even
if oil or gas prices increase.
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<PAGE> 10
Results of Operations
The following table sets forth certain operating information with
respect to the oil and gas operations of the Company:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Production:
Oil and condensate (MBbls) 606 579 1,842 1,486
Gas (MMcf) 10,496 8,970 29,826 25,277
Total production (MMcfe) 14,130 12,443 40,880 34,196
Average Realized Price:
Oil and condensate (per Bbl) $ 21.53 $ 16.82 $ 19.79 $ 17.26
Gas (per Mcf) 2.17 1.66 2.19 1.69
Average Costs (per Mcfe)
Lease operating $ 0.33 $ 0.30 $ 0.30 $ 0.29
Depreciation, depletion
and amortization 1.15 1.09 1.11 1.07
General and
administrative, net 0.09 0.13 0.13 0.12
</TABLE>
Production. Net production increased 20%, from 34.2 billion cubic feet
of natural gas equivalent ("Bcfe") for the nine months ended September 30,
1995, to 40.9 Bcfe for the nine months ended September 30, 1996. Oil and
condensate production for the nine months ended September 30, 1996 increased
356 thousand barrels ("MBbls"), or 24%, compared to the same period of 1995.
Increased oil production for the first nine months of 1996 was due primarily
to production increases at Eugene Island 182, South Timbalier 148 and the
acquisition of Eugene Island 128 in the third quarter of 1995. Gas
production increased by 4.5 billion cubic feet ("Bcf"), or 18%, from 25.3
Bcf for the nine months ended September 30, 1995 to 29.8 Bcf for the
comparable period of 1996. Increased gas production was due to production
increases at Eugene Island 251/262 and production from wells drilled and
placed on production at Vermilion 355 and Vermilion 297 during the fourth
quarter of 1995 and the first quarter of 1996, respectively. These
increases were partially offset by natural production decline on other
properties of the Company.
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<PAGE> 11
Net production increased 14%, from 12.4 Bcfe for the three months ended
September 30, 1995 to 14.1 Bcfe for the three months ended September 30,
1996. Oil and condensate production for the three months ended
September 30, 1996 increased 27 MBbls, or 5%, compared to the same period of
1995. Increased oil production was due primarily to production increases at
Ewing Bank 947 and South Timbalier 148, and the acquisition of Eugene
Island 128 in the third quarter of 1995. Gas production increased by 1.5
Bcf, or 17%, from 9.0 Bcf for the three months ended September 30, 1995
to 10.5 Bcf for the comparable period of 1996. Increased gas production was
due to production increases at Ewing Bank 947 and production from wells
drilled and placed on production at Vermilion 355 and Vermilion 297 during
the fourth quarter of 1995 and the first quarter of 1996, respectively.
Oil and Gas Revenues. Oil and gas revenues for the nine months ended
September 30, 1996 increased by $33.3 million, or 49%, compared to the same
period of 1995, primarily as a result of increased oil and gas production
and increased oil and gas prices. The average realized price of oil and
condensate increased by 15% and the average realized price of natural gas
increased by 30%.
For the nine months ended September 30, 1996, the average realized gas
price was $2.19 per thousand cubic feet ("Mcf"), which, as a result of
hedging activities, was 84% of the $2.60 per Mcf average gas sales price
that would have otherwise been received, resulting in a $12.2 million
decrease in gas revenues. As a result of hedging activities for gas
production for the nine months ended September 30, 1995, the Company
realized an average gas price of $1.69 per Mcf, or 108% of the $1.56 per
Mcf average gas sales price that would have otherwise been received,
resulting in a $3.4 million increase in gas revenues. For the nine months
ended September 30, 1996, the average realized oil and condensate price was
$19.79, which, as a result of hedging activities, was 98% of the $20.15 per
barrel average oil and condensate sales price that would have otherwise been
received, resulting in a $0.7 million decrease in oil and condensate
revenues. Oil hedging activities for the nine months ended September 30,
1995 had a negligible impact on oil and condensate revenues.
Oil and gas revenues for the three months ended September 30, 1996
increased by $11.2 million, or 45%, compared to the same period of 1995,
primarily as a result of increased oil and gas production and increased oil
and gas prices. The average realized price of oil and condensate increased
by 28% and the average realized price of natural gas increased by 31%.
For the three months ended September 30, 1996, the average realized gas
price was $2.17 per Mcf, which, as a result of hedging activities, was 93%
of the $2.33 per Mcf average gas sales price that would have otherwise been
received, resulting in a $1.7 million decrease in gas revenues. As a result
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<PAGE> 12
of hedging activities for gas production for the three months ended
September 30, 1995, the Company realized an average gas price of $1.66 per
Mcf, or 113% of the $1.47 per Mcf average gas sales price that would have
otherwise been received, resulting in a $1.7 million increase in gas
revenues. There were no oil hedging activities for the three months ended
September 30, 1996. Oil hedging activities for the three months ended
September 30, 1995 had a negligible impact on oil and condensate revenues.
Lease Operating Expense. Lease operating expense for the nine months
ended September 30, 1996 increased to $12.1 million from $10.0 million for
the comparable period of 1995. Lease operating expense per Mcf equivalent
("Mcfe") increased from $0.29 for the nine months ended September 30, 1995,
to $0.30 for the comparable period of 1996. These increases are primarily
attributable to higher lease operating costs associated with properties
recently acquired by the Company.
Lease operating expense for the three months ended September 30, 1996
increased to $4.7 million from $3.7 million for the comparable period of
1995. Lease operating expense per Mcfe increased from $0.30 for the three
months ended September 30, 1995, to $0.33 for the comparable period of 1996.
These increases are primarily attributable to increased workover expense
during the third quarter of 1996.
Depletion, Depreciation and Amortization Expense. During the nine and
three months ended September 30, 1996, depletion, depreciation, and
amortization expense increased to $45.5 million and $16.2 million,
respectively, from $36.5 million and $13.5 million, respectively, for the
comparable periods of 1995. The increases were the result of an increased
depletion rate per Mcfe and production increases from acquisitions and
exploratory and development drilling activities during 1995. The depletion
rate per unit for the nine and three month periods ended September 30, 1996
increased to $1.11 and $1.15 per Mcfe, respectively, from $1.07 and $1.09
per Mcfe, respectively, for the comparable periods of 1995. The increases
in the depletion rate per unit are primarily attributable to higher cost
reserve additions associated with proved properties the Company acquired in
1995 and 1996.
General and Administrative Expense, Net. General and administrative
expense, which is net of overhead reimbursements received by the Company
from other working interest owners, increased to $5.3 million, or $0.13
per Mcfe, and $1.3 million, or $0.09 per Mcfe, for the nine and three month
periods ended September 30, 1996, respectively, as compared to $4.2 million,
or $0.12 per Mcfe, and $1.6 million, or $0.13 per Mcfe, for the same periods
of 1995, respectively. Performance based compensation, as a component of
general and administrative expense, increased from $1.7 million, or $0.05 per
Mcfe, and $0.6 million, or $0.05 per Mcfe, for the nine and three month
periods ended September 30, 1995, respectively, to $3.2 million, or $0.08 per
Mcfe, and $1.0 million, or $0.07 per Mcfe, for the nine and three month periods
ended September 30, 1996, respectively. Direct costs associated with staff
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<PAGE> 13
increases during 1995 were offset to a significant extent by program and
joint interest reimbursements. To the extent that the Company continues to
grow and increase its ownership in certain properties, the Company expects
general and administrative expenses to continue to increase.
Net Income. As a result of the foregoing, the Company had net income
of $24.6 million and $8.7 million, or $1.32 and $0.46 per share, for the
nine and three month periods ended September 30, 1996, respectively, as
compared to $11.6 million and $3.8 million, or $0.64 per share and $0.21 per
share, for the comparable period of 1995. The increase in earnings per
share is primarily due to an increase in oil and gas revenues for the nine
and three month periods ended September 30, 1996 as compared to the
comparable periods of 1995.
Liquidity and Capital Resources
The Company had $9.4 million of working capital at September 30, 1996
compared to $11.2 million at December 31, 1995. The $1.8 million decrease
in working capital is primarily due to increased drilling activity during
the first nine months of 1996 offset by the impact of increased revenues
during the period. Historically, the Company has funded its oil and gas
activities through cash flow from operations, equity capital from private
and public sources and bank borrowings.
From time to time, the Company has utilized hedging transactions with
respect to a portion of its oil and gas production to achieve a more
predictable cash flow, as well as to reduce its exposure to price
fluctuations. While the use of these hedging arrangements limits the
downside risk of adverse price movements, they may also limit future
revenues from favorable price movements. The use of hedging transactions
also involves the risk that the counterparties will be unable to meet the
financial terms of such transactions. All of the Company's hedging
transactions to date were carried out in the over-the-counter market and the
obligations of the counterparties have been guaranteed by entities with at
least an investment grade rating or secured by letters of credit. The
Company accounts for these transactions as hedging activities and,
accordingly, gains or losses are included in oil and gas revenues when the
hedged production is delivered. As of September 30, 1996, the Company had
entered into commodity price swap contracts effectively fixing the price of
3.6 Bcf of natural gas for October through December 1996 at a volume
weighted average price of $2.26 per one million British thermal units
("MMBtu") (or approximately $2.42 per Mcf based upon the average energy
content of the Company's gas production for the twelve months ended
December 31, 1995). Additionally, the Company has entered into a collar for
0.6 Bcf of natural gas for October through December 1996 with a floor price
of $2.60 per MMBtu and a ceiling price of $3.08 per MMBtu (or approximately
$2.78 and $3.29 per Mcf, respectively). Subsequent to September 30, 1996,
the Company entered into commodity price swap contracts effectively fixing
the price of an additional 1.7 Bcf of natural gas for December 1996 at a
volume weighted average price of $2.62 per MMBtu (or approximately $2.80 per
Mcf). During September and October 1996, the Company entered into commodity
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<PAGE> 14
price swap contracts effectively fixing the price of 6.3 Bcf of natural gas
for January through June 1997 at a volume weighted average price of $2.08
per MMBtu (or approximately $2.23 per Mcf). Additionally, during October
1996, the Company entered into a collar for 3.75 Bcf of natural gas for
January through March 1997 with a floor price of $2.05 per MMBtu and a
ceiling price of $2.47 per MMBtu (or approximately $2.19 and $2.64 per Mcf,
respectively). These gas hedging transactions are settled based on reported
sales prices of natural gas delivered into those pipelines at the physical
locations where the Company sells its production, (the "Sales Point Price").
Because substantially all of the Company's natural gas production is sold
under spot contracts that reference to the Sales Point Price, the Company
has no basis risk with respect to these transactions.
The Company maintains a $125 million reserve-based revolving credit
facility with The Chase Manhattan Bank, N.A., as agent. As of September 30,
1996, $56 million was outstanding under this credit facility and the borrowing
base was $125 million.
The Company's net cash flow from operations for the first nine months
of 1996 was $108.6 million compared to $55.4 million for the same period of
1995. The increase is primarily due to increases in oil and gas production
and average realized oil and gas prices and working capital changes. Net
cash flow from operations before changes in operating assets and liabilities
for the first nine months of 1996 was $85.0 million compared to $54.9
million for the same period of 1995. The increase in net cash flow from
operations before changes in operating assets and liabilities is primarily
attributable to increases in oil and gas production and average realized oil
and gas prices.
The Company had capital expenditures of $120.8 million for the nine
months ended September 30, 1996 compared to $74.8 million for the same
period of 1995.
As a result of a successful exploration and development drilling
program and access to additional opportunities, the 1996 capital budget has
been increased from $135 million to $162 million. The Company's exploration
capital expenditures for the first nine months of 1996 were $43.4 million of
the total of approximately $55.8 million budgeted for 1996. Development
drilling and construction expenditures for platforms, facilities and
pipelines were $50.0 million for the first nine months of 1996 of the total
of approximately $78.8 million budgeted for 1996. Expenditures for proved
property acquisitions for the first nine months of 1996 were $27.4 million.
The Company continues to pursue attractive acquisition opportunities. The
timing and size of any acquisition and the associated capital commitments
are unpredictable. No significant abandonment or dismantlement costs are
anticipated during 1996.
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<PAGE> 15
Actual levels of capital expenditures may vary significantly due to
many factors, including drilling results, oil and gas prices, industry
conditions, the prices of goods and services and the extent to which proved
properties are acquired. The Company anticipates that these capital
expenditures will be funded principally from cash flow from operations,
working capital, and bank borrowings. During the first nine months of 1996,
the Company borrowed $190 million and repaid $164 million under the credit
facility. The Company anticipates additional borrowings under this facility
during the remainder of 1996.
To cover the various obligations of lessees on the Outer Continental
Shelf (the "OCS"), the United States Department of the Interior Minerals
Management Service (the "MMS") generally requires that lessees post
substantial bonds or other acceptable assurances that such obligations will
be met. The cost of such bonds or other surety can be substantial and there
is no assurance that bonds or other surety can be obtained in all cases.
Additionally, the MMS may require operators in the OCS to post supplemental
bonds in excess of lease and area wide bonds to assure that abandonment
obligations on specific properties will be met. The Company is currently
exempt from the supplemental bonding requirements of the MMS. Under certain
circumstances, the MMS may require any Company operations on federal leases
to be suspended or terminated. Any such suspension or termination could
materially and adversely affect the Company's financial condition and
operations.
The Company's operations are subject to various federal, state and
local laws and regulations relating to the protection of the environment.
The Company believes its current operations are in material compliance with
current environmental laws and regulations. There can be no assurance,
however, that current regulatory requirements will not change, currently
unforseen environmental incidents will not occur or past non- compliance
with environment laws will not be discovered.
The Company has been named as a defendant in certain lawsuits arising
in the ordinary course of business. While the outcome of these lawsuits
cannot be predicted with certainty, management does not expect these matters
to have a material adverse effect on the financial position, liquidity or
results of operations of the Company.
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<PAGE> 16
Part II
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
11.1 Computation of Earnings per Share
27 Financial Data Schedule (included only in the electronic
filing of this document)
(b) Reports on Form 8-K:
None
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<PAGE> 17
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEWFIELD EXPLORATION COMPANY
Date: November 8, 1996 By: /s/ Terry W. Rathert
Terry W. Rathert
Vice President and
Chief Financial Officer
(Authorized Officer and Principal
Financial Officer)
-15-
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
--------- ------------------------
<S> <C>
11.1 Computation of Earnings per Share
27 Financial Data Schedule (included only in
the electronic filing of this document)
</TABLE>
-16-
<PAGE> 1
Exhibit 11.1
NEWFIELD EXPLORATION COMPANY
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands of dollars, except share and per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net income for earnings
per share $ 8,673 $ 3,769 $ 24,551 $ 11,589
========= ========= ========= =========
Earnings per share $ 0.46 $ 0.21 $ 1.32 $ 0.64
========= ========= ========= =========
Calculation of weighted
average shares
outstanding:
Common stock,
weighted average 17,495,538 17,116,130 17,392,702 16,903,584
Common stock
equivalents 1,279,135 1,183,294 1,173,213 1,101,347
----------- ----------- ----------- ------------
Total common stock
and equivalents
outstanding for
earnings per share 18,774,673 18,299,424 18,565,915 18,004,931
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NEWFIELD
EXPLORATION COMPANY'S BALANCE SHEET AT SEPTEMBER 30, 1996 AND STATEMENT OF
INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996, THAT ARE CONTAINED IN
ITS FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996. THE
SCHEDULE IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 41,957
<SECURITIES> 0
<RECEIVABLES> 24,652
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 68,972
<PP&E> 485,881
<DEPRECIATION> 180,672
<TOTAL-ASSETS> 379,033
<CURRENT-LIABILITIES> 59,604
<BONDS> 56,000
<COMMON> 145,752
0
0
<OTHER-SE> 77,789
<TOTAL-LIABILITY-AND-EQUITY> 379,033
<SALES> 101,774
<TOTAL-REVENUES> 101,774
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 57,629
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 197
<INCOME-PRETAX> 37,754
<INCOME-TAX> 13,203
<INCOME-CONTINUING> 24,551
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,551
<EPS-PRIMARY> 1.32
<EPS-DILUTED> 0
</TABLE>
