Newfield Exploration Co. (NYSE:NFX)

CAPS Rating: 3 out of 5

An independent oil and gas company engaged in the exploration, development and acquisition of crude oil and natural gas properties.

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Player Avatar Geofiz (30.32) Submitted: 6/2/2010 10:50:08 AM : Outperform Start Price: $23.87 NFX Score: -56.07

Newfield has a history of walking the fine line between reserve adds at a reasonable cost (whether by drilling or by acquisition) and debt management. Unlike many of its peers who took on far too much debt only to see the NG price drop out from under them, NFX has said that it will live within cash flow.

The company has a significant position in numerous and varied onshore resource plays, and will be exploring in several other higher risk, higher potential plays in the future. The advantage to the latter is the low cost of initial entry. History has shown that the first player into a new basin almost invariably ends up with the most profitable position, assuming there are hydrocarbons to be had, of course.

Future growth will be obtained in the Gulf of Mexico deepwater, particularly in the subsalt plays. Newfield has a significant position here, and the inventory is growing at a reasonable pace. In addition, the company has had significant success in the international arena, specifically in Malaysia and China.

Disclaimer: I am a Newfield employee.

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