Newfield Reports Second Quarter 2007 Financial and Operating Results Company Updates Production Guidance

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July 25th 2007

Newfield Exploration Company (NYSE: NFX) today reported second quarter financial and operating results along with updated production guidance for 2007 and 2008. Newfield will be hosting its second quarter results conference call at 8:30 a.m. (CDST) on July 26. To participate in the call dial 719-457-2617 or listen through the website at http://www.newfield.com.

For the second quarter of 2007, Newfield reported net income of $150 million, or $1.15 per diluted share (all per share amounts are on a diluted basis). The results reflect the impact of commodity derivative income of $55 million ($36 million after tax), or $0.28 per share, associated with unrealized changes in the fair market value of open derivative contracts that are not designated for hedge accounting.

Without the effect of unrealized commodity derivative income, net income for the quarter would have been $114 million, or $0.87 per share. Revenues in the second quarter of 2007 were $528 million. Net cash provided by operating activities before changes in operating assets and liabilities was $380 million. See "Explanation and Reconciliation of Non-GAAP Financial Measures" found after the financial statements in this release.

Newfield's production in the second quarter of 2007 was 71 Bcfe, an increase of 10% over first quarter 2007 production and 22% above the second quarter of 2006.

Operational Highlights

  • Seven Seas Prospect Successful — In early July, Newfield drilled a successful appraisal well on its Seven Seas prospect on License Area 48-7C in the U.K. North Sea. The well, located approximately 14 kilometers east of the West Sole Fields, was drilled to appraise a 1990s discovery. The Seven Seas well was drilled horizontally within the reservoir for 3,500 feet and tested at an equipment-limited rate of 47 MMcfe/d. Newfield operates with an 80% interest in this undeveloped field.
  • Grove Field Commences Production — On April 25, the Grove Field in the U.K. North Sea commenced production. The G-1 and G-2 wells have produced as high as 37 MMcfe/d and 38 MMcfe/d, respectively. The field is currently producing 36 MMcfe/d (gross). Newfield operates the field with an 85% interest. Newfield plans to sell all its subsidiaries which do business in the U.K.
  • Wrigley Field On-Line — In early July, first production commenced from Newfield's Wrigley development in the deepwater Gulf of Mexico. Gross production is currently 40 MMcfe/d and continues to ramp up to an expected rate of about 60 MMcfe/d. The field is operated by Newfield with the Company holding a 50% working interest.
  • Abu Field Commences Production — In May, the Abu Field offshore Malaysia commenced production. The field is currently producing 10,000 BOPD and is ramping to an expected run rate of 15,000 BOPD (gross). Due to the timing of oil liftings, reported second quarter 2007 production includes no Abu volumes. Newfield has a 50% interest in Abu.
  • Stiles/Britt Ranch Reaches Record Production — In the second quarter, production from the Stiles/Britt Ranch Field in the Texas Panhandle reached a record production rate of 74 MMcfe/d (gross). There are five operated rigs running in the field today. Newfield operates this growing development with a 95-100% working interest across the field.
  • Val Verde Production Surpasses 100 MMcfe/d — In the second quarter, production from the Val Verde Basin of West Texas reached a new high rate of more than 100 MMcfe/d (gross). Newfield's working interest across the Val Verde Basin averages approximately 70%.
  • South Texas JV Production Reaches 82 MMcfe/d — In the second quarter, production from Newfield's joint venture with Exxon-Mobil in South Texas reached a new high of 82 MMcfe/d (gross). Newfield's interest in this joint venture is approximately 50%. Newfield has an inventory of 20 ready-to-drill prospects under this venture and is currently operating two drilling rigs.
  • Fastball Tests at 60 MMcfe/d — During the second quarter, Newfield tested its recent Fastball Prospect, located at Viosca Knoll 1003 in the deepwater Gulf of Mexico, at 43 MMcf/d and 3,000 BCPD (gross). The field will be developed as a tie back to existing infrastructure with first production expected in the first half of 2009. Newfield operates Fastball with a 66% working interest.
  • Woodford Shale Production at 115 MMcfe/d — Newfield is currently completing its first 40-acre pilot with four wells expected to commence production in August. Newfield has now spud 110 operated horizontal wells and has an interest in 175 horizontal wells, or 60% of the industry's 291 horizontal wells drilled in the play to date.

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