In Newfield's (NFX) 2012 third-quarter earnings release, oil and gas revenues totaled $615 million, decreasing $628 million YOY; revenue for nine months ending Sept. 30, 2012, totaled $1.92 billion, increasing from $1.79 billion YOY. Third-quarter operating expenses totaled $509 million, increasing from $450 million YOY. Newfield realized a third-quarter net loss of $33 million, decreasing from a $269 million net income YOY. The decline in net income was partially due to Newfield's $135 million unrealized loss on commodity derivatives. Long-term debt at the end of September totaled $3.19 billion, increasing from $3 billion at the end of 2011. Newfield finished the first nine months 2012 with $125 million in cash and cash equivalents, increasing from $31 million YOY.
Third-quarter liquids production totaled 6.1 mmbbls, averaging over 66 mboe per day; this was a 20% increase YOY. Newfield's third-quarter natural gas production totaled 369 bcf, averaging around 420 mmcf per day. Newfield's third-quarter average realized prices were $3.57 per mcf and $84.50 per barrel of oil or NGL. Domestic production accounted for 3.8 mmbbls of oil and liquids and 38.4 bcf of natural gas. Newfield's consolidated third-quarter production totaled 75 bcfe; oil accounted for 43% and NGL accounted for 6% of this total production. Domestic production accounted for 61.3 bcfe; domestic realized prices averaged $6.82 per mcfe and international realized prices averaged $17.17 per mcfe.
Newfield's 2012 full-year guidance projects total production around 298 bcfe; domestic production is projected to account for 238.5 bcfe. Total 2012 natural gas production projected is around 152.2 bcf, liquids production is projected to teach 24.3 mmbbls. Domestic natural gas is projected to total 151.5 bcf, domestic liquids production is projected to total 14.5 mmbbls. Net production from Newfield's Cana Woodford recently averaged around 9.8 mbpe per day; around 60% was liquid production. Net production from Newfield's Uinta Basin asset reached a high of 27 mboe per day. Newfield continues to focus on furthering the development of this asset. Net production from Newfield's international assets averaged around 36 mboe per day.
ConocoPhillips (COP), Anadarko (APC), Apache (APA) and Devon Energy (DVN) are the independent energy firms most comparable to Newfield Exploration. Newfield's price is 6.3 times earnings, 1.42 times sales, and 0.88 times its book value. These are the lowest price ratios among the aforementioned E&Ps. Only ConocoPhillips' 1.05 price-to-sales ratio is lower than Newfield Exploration. Both Devon and Apache's prices are around 9.8 times earnings and ConocoPhillips' price is around 10.8 times earnings.
Newfield's current ratio is around 1.6, while its 0.86 debt-to-equity ratio is the highest among these E&Ps. Newfield's $3.7 billion market cap and $27 price per share are substantially lower than the aforementioned E&Ps. Newfield's EPS is around $5.96 and has decreased 3.6% in 2012; its 47.1% projected EPS growth in 2013 is the highest among these firms. Anadarko's -$2.72 EPS and 449.6% EPS decline are the worst among these firms. Newfield's sales have increased 8.11% in the past five years.
Newfield's 15.1% ROE and 22.5% profit margin are the highest among the firms; its operating margin is around 25.5%. Newfield's 2.49% float short is the highest among these E&Ps while its 1.66 short ratio is one of the lowest alongside Anadarko. Newfield's beta is around 1.4, its average volume is around 2.01 million; on the day of its recent earnings release, its relative volume reached 10.62. Newfield's stock declined 27.2% YTD, 14% in the past month and decreased 14.7% since its recent earnings release.
Continental Resources' (CLR) September announcement of an oil-shale discovery in Oklahoma expected to yield around 1.8 billion barrels of crude recently caused an uptick for Newfield's stock. This independent E&P spends around a third of its spending in the mid-continental region. In efforts to transition into an E&P focused on increasing liquids production, Newfield intends to allocate $300 million to developing its Cana Woodford asset. Newfield's 135,000 acre Cana Woodford asset is located nearby the Continental Resources recent oil-shale discovery.
More recently, Newfield's stock was negatively impacted by the news that international production may decline up to 25% in the upcoming year. The decline would be based on the terms of various joint-venture agreements on a portion of Newfield's projects. Increasing production and oil prices will translate to an early reduction in Newfield's net share of its Malaysian interests. Newfield's international production averages 36 mboe per day; production volumes in Malaysia are expected in increase by 50% in 2012. International production is projected to increase starting in 2014 on the back of an offshore project in China.
Newfield recently completed its agreement to divest 78 Gulf of Mexico offshore assets to W&T Offshore (WTI) for $208 million. The properties total 432,700 gross acres; 312,000 acres are currently underdeveloped; 91% of the undeveloped assets are deep-water. The primary motivation behind this divesture was to supports Newfield's focus on oil-laden assets in Southeast Asia and the US. Newfield is focused on improving cash flow by increasing liquid production from these assets. Throughout 2012, Newfield has already divested non-core assets for a total of $565 million.
Newfield has 230,000 acres in Eagle Ford and has drilled four SXLs wells YTD in 2012. These wells' initial production averaged up to 1.02 mboe per day; 75% of the production was crude oil. Newfield intends to bring another six wells into production in early 2013. The recent decline in Newfield's stock and downward pressure on commodity prices presents an opportune entry point for interested investors. Current shareholders should continue to hold long-term as Newfield is making effective strides to improve liquid production within its current portfolio. This stock can be ideal candidate for realizing significant capital appreciation and ROI as domestic crude oil prices continue to stabilize, natural gas prices rebound in the mid-term, and prices abroad remain high.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.