Newfield Exploration to retain China assets

Newfield Exploration to retain China assets

THE WOODLANDS, Texas -- Newfield Exploration has concluded its marketing process for its China business and now plans to retain the assets. For financial purposes, the China business will be reclassified as "continuing operations" in the fourth quarter of 2014. 

"The recent and significant pull back in global oil prices created headwinds for our China sales process," said Larry Massaro, Newfield's executive V.P. and CFO. "Our China oil fields are expected to generate significant free cash flows over the next several years. Although our intent was to monetize the asset, it was not a sale at any price. We will remain disciplined in our capital investments and intend to use the cash flows from our China business to manage short-term borrowing levels and ensure that we manage our overall debt and liquidity positions during a period of weak oil prices."

Newfield has monetized more than $2.6 billion in non-strategic assets over the last three years and has used proceeds to fund its domestic businesses. The recent sale of the Granite Wash allowed for the repayment of $600 million in long-term debt. Newfield's credit facility expires in 2018 and the company has no long-term bond maturities prior to 2020. Newfield currently has more than $1 billion of liquidity under its credit facility and other money market lines.

Net liftings from China in the fourth quarter of 2014 were approximately 0.3 MMbbl of oil. Newfield will provide 2015 guidance for its China business along with total company guidance in February.

The Pearl facility, located in the South China Sea, is currently producing oil and development drilling is ongoing. Net capital investments in China for 2015 are estimated at less than $50 million. The Pearl facility is expected to reach a peak rate in mid-2015.