Newfield Cuts Production Guidance

The company cites production downtime in Malaysia, among other issues.
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Oil and gas exploration and production company

Newfield Exploration

(NFX)

said it lowered its 2006 production guidance to a range of 242 billion to 244 billion cubic feet equivalent from its previous production estimate of 250 Bcfe. The lower guidance primarily relates to marketing issues in the Rocky Mountains, production downtime offshore Malaysia and continued production deferrals in the Gulf of Mexico, the Houston-based company said.

The company expects 2007 production to be in line with previous estimates of 295 bcfe to 320 bcfe, adjusting for the sale of a 15% interest in the Grove development. The company's Grove development in the North Sea, the deepwater Wrigley Field in the Gulf of Mexico, and the Abu Field development off Malaysia, are estimated to account for nearly half of the total production growth in 2007.

Due to lower-than-anticipated demand from Salt Lake City-area refiners, the company currently has 165 wells shut-in. In addition, more than 400,000 barrels of oil have been produced, but remain in inventory in the field.

The company said it elected not to sell the oil at extraordinarily wide differentials. This inventory was created during a time of refinery turn-arounds earlier in the year, together with normal seasonal demand and an increase in oil volumes entering the basin from Canada.

Newfield's production for the third quarter of 2006 was 62.6 Bcfe, in line with previous estimates.

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