Newfield Exploration still planning to sell assets despite terminating acquisition plans

By Jennifer Lanning Drey

Savannah, Ga., Jan. 11 - Newfield Exploration Co. will move forward with plans to enter into asset sales that were announced in connection with its previously planned acquisition of some of EOG Resources' Marcellus shale acreage, despite the termination of the purchase and sale agreement, Gary Packer, Newfield's chief operating officer, said during a Tuesday investor presentation.

"These are properties that you've never heard of. They are not material strategically to the organization, and this will allow us to enjoy building a couple hundred million that we can put on the balance sheet," Packer said at the BMO Capital Markets unconventional resource conference in New York.

The company had previously said it would sell certain non-strategic assets in order to reduce the long-term borrowings it planed to draw on its revolving credit facility to fund the acquisition. However, Newfield and EOG announced on Dec. 22 that they had terminated the agreement.

"I believe a little war chest of a couple hundred million would allow us to be able to act effectively, or at least initially, on a couple of opportunities that could come our way, and certainly, we'd retain the opportunity to accelerate any one of [the company's current] plays once we get the right signal and it feels like we can go ahead and move forward with those," Packer said.

Packer also noted that Newfield would still be interested in building its position in the Marcellus shale in the future.

Newfield will continue to invest in oil but live within its cash flow, he said.

Based in Houston, Newfield is an independent crude oil and natural gas exploration and production company.

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