Newfield Exploration projects more acquisitions, maintaining investment-grade rating

By Aleesia Forni

Columbus, Ohio, Nov. 15 - Newfield Exploration Co. chief financial officer Terry Rathert said he expects the company to continue to be a buyer of assets in the future and may use the company's liquidity under its revolver in order to do so.

During the company's presentation at the Citi 2011 North American Credit Conference on Tuesday, Rathert said Newfield continues "to think about where we can increase the total return" and looks for assets that can enable it to increase that total return in Newfield's investment portfolio.

As of Sept. 30, the company had raised $200 million in proceeds from non-strategic asset sales during the year and expected to reach between $400 million and $550 million for the full year.

Rathert reiterated this estimate and said the company plans to put this "pretty good size chunk of turnover" to work in higher-return assets.

"We'll continue to be actively looking at opportunities to add onto the portfolio," Rathert said.

However, Rathert continued that being "mindful" of the balance sheet is "the real key" in these possible acquisitions.

"We've spent a long time getting to an investment-grade rating from S&P. It will be a longer time getting there from Moody's based on experience," Rathert said.

"The way I think about where we've gotten to with our balance sheet is if we're investment grade [is] like this: I've got my nose above water; I'd like to get my head above water."

"So rather than destroying the credit to take advantage of those opportunities, we'll look at ways we can enhance the credit if there were a large opportunity," Rathert said.

In September, the company priced its public offering of $750 million of 5¾% senior notes due 2022 in order to increase liquidity.

"I think the last 12 [to] 18 months have been pretty unsettling in terms of having confidence in what was going to happen and where we were going, so we have been very keen on trying to maintain a high degree of liquidity to be able to face uncertainties as [they] come around," Rathert said.

Rathert reported that the company has full access to its revolver and "well in excess of" $1 billion of liquidity.

"I don't have any immediate plans to change that by calling bonds that are callable," Rathert said.

"If we get some stability, and we have a little more clarity in terms of the future, then that may be something we would consider but have no intentions to do that at this time, because it is a use of liquidity and going into election cycles and heading into the next year, it's not certain where things are going."

The crude oil and natural gas exploration and production company is based in the Woodlands, Texas.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.