Newfield Exploration Co.’s Midcontinent operations, which cut across a generous swath of the Woodford Shale from Oklahoma into the Texas Panhandle, reached “new highs” in 3Q2009, with production jumping almost a third from a year ago, the Houston-based independent said last week.

The producer, whose operations extend onshore and in the deepwater of the United States as well as overseas, reported that its oil and gas output jumped 7% to 65.5 Bcfe in 3Q2009 from the same period a year ago. Gas production totaled 42.5 Bcfe, averaging 462 MMcf/d, excluding 2.6 Bcfe of voluntary natural gas curtailments because of low natural gas prices.

Most impressive were the quarterly results from the Midcontinent operations, which now comprises close to 50% of Newfield’s proven reserves. Current output in the Woodford Shale is 460 MMcfe/d gross (323 MMcfe/d net). Even though Newfield voluntarily shut in some of the play’s gas wells in 3Q2009, output still climbed sequentially to 308 MMcfe/d from 240 MMcfe/d in 2Q2009.

Earlier this month Newfield began to tap some of the shut-in wells, and 30 more uncompleted wells in the Woodford play are scheduled to be finished by early next year, the producer said. Newfield has 10 operated rigs running under term contracts there, “with three of the remaining rigs rolling off of term” before the end of the year.

Production gains also were reported in the Granite Wash play, which is in the Texas Panhandle. Newfield’s first seven horizontal wells at Stiles Ranch, in which it has an 80% stake, in July reported an average gross initial production (IP) rate of 22 MMcfe/d. Based on its early drilling rates, the company added a fourth operated rig to the play this month. Recent well completions have been deferred, Newfield said, but the company expects to have production results from up to eight additional completions in early 2010.

Some of the increased output in the Woodford play came from “efficiency gains,” said Newfield. For example, the average lateral length of the play’s gas wells this year “will exceed 5,000 feet,” and by year’s end, eight “super extended lateral” wells with horizontal lengths of more than 8,000 feet — two deeper than 10,000 feet — are to be drilled. IP results from the first super extended laterals are expected in December.

Besides the longer laterals, Newfield also credited more efficient fracture (frac) stimulations in the Woodford operations, where the average number of fracs per day has rise to more than five on recent pad completions, compared with three fracs a day in 2008.

Based on increased demand, narrowing price differentials and a “shift to oil investments,” Newfield recently added a fourth operated rig to its Monument Butte oilfield in the Uinta Basin of Utah, where gross output is about 16,000 b/d. A fifth rig is expected “in the near future.” Up to two more rigs also are to be added to the Williston Basin development area, where Newfield holds close to 400,000 net acres.

In addition to the onshore plays, seven deepwater developments in the Gulf of Mexico continued in 3Q2009, “which are expected to provide significant future production growth,” said the company. The Fastball development at Viosca Knoll Block 1003 ramped up operations earlier this month; gross production is to be 40 MMcf/d of gas and 3,200 b/d of oil. Newfield operates Fastball and holds two-thirds interest in the project.

Development also has begun at the Pyrenees prospect, discovered earlier this year in 2,100 feet of water at Garden Banks Block 293. According to Newfield, a recent sidetrack well indicated three proven pay sands “and provided encouragement for the exploration potential of both the shallow and deep sand sections on the feature.” Additional drilling is planned for 2010; Newfield operates the development with a 40% stake.

Newfield’s 3Q2009 net income reached $78 million (58 cents/share), while net cash from operating activities was $451 million on revenue of $375 million. Without a $243 million net loss recorded on hedges and a $24 million tax benefit on overseas assets, Newfield said its net income for the period would have been $209 million ($1.58/share). Capital spending for the quarter was $285 million.

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