Upstream energy player, Newfield Exploration Co. (NFX - Free Report) recently closed the divestment of oil and gas producing assets and undeveloped acreage in Texas. The company generated proceeds of roughly $380 million from the sale. The aforesaid asset sale pertains to two separate purchase and sale agreements that Newfield signed this August to sell substantially all its properties in Texas.
The company has executed the asset sale in order to focus only on those resources that have a deep inventory of future drilling opportunities and immense growth prospects.
The assets sold by the company include unconventional resources in the Eagle Ford Shale and its conventional natural gas properties in south and west Texas. The Eagle Ford Shale properties were sold to Protégé Energy III LLC. However, the name of the buyer of conventional natural gas properties remained undisclosed. The combined assets had a daily production capacity of around 12,700 barrels of oil equivalent per day (BOE/D), of which oil made up for 35%.
Newfield believes that this divestment will have negligible impact on its third-quarter production and hence, has kept the third-quarter production guidance unchanged. However, the company intends to revise its full-year 2016 production guidance to include the impact of the asset sale.
Newfield, is an independent energy company based in Woodlands, TX. It is engaged in the exploration and production of crude oil and natural gas. The company is well positioned to benefit from its holding in the Anadarko Basin.
However, most of the companies involved in upstream businesses have been adversely affected by the persistent weakness in oil prices. Companies like Denbury Resources Inc. (DNR - Free Report) , Chesapeake Energy Corporation (CHK - Free Report) and Cabot Oil & Gas Corporation (COG - Free Report) have been reeling under commodity price woes and Newfield is no exception to this trend.
Newfield currently carries a Zacks Rank #3 (Hold), implying that it will perform in line with the broader U.S. equity market over the next one to three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NEWFIELD EXPL Price
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