How The Pieces Fit Together
What Makes NFX Different?
Consistent ReturnsConsistent Returns Excellent Track RecordExcellent Track Record
– Proven Plan – Diversified Asset BaseProven Plan – Diversified Asset Base– Consistency: Deliver on Growth, Earnings ProjectionsConsistency: Deliver on Growth, Earnings Projections– Proven Management Team, Deep BenchProven Management Team, Deep Bench
Quality “Bread and Butter” AssetsQuality “Bread and Butter” Assets Exploration Option Value (30% of Cap-Ex)Exploration Option Value (30% of Cap-Ex)
– We Still Explore!We Still Explore!– Deepwater MalaysiaDeepwater Malaysia– Deepwater GOMDeepwater GOM– Treasure Island / Treasure BayTreasure Island / Treasure Bay– BrazilBrazil
Visible Organic Growth From Large, In-Hand Visible Organic Growth From Large, In-Hand Development ProjectsDevelopment Projects
Financial DisciplineFinancial Discipline– Strong Balance SheetStrong Balance Sheet– Liquidity, CapacityLiquidity, Capacity
Our Strategy: Stay the Course!
Focus on Organic GrowthFocus on Organic Growth– Inventory in PlaceInventory in Place
Maintain a Balanced PortfolioMaintain a Balanced Portfolio– Balance Risk / RewardBalance Risk / Reward– Balance Onshore / Offshore / InternationalBalance Onshore / Offshore / International– ““Take a Few Swings for the Fence”Take a Few Swings for the Fence”
Take Advantage of Diversified Asset BaseTake Advantage of Diversified Asset Base– Diversification Worked!Diversification Worked!– Flexibility to Invest in Highest Return ProjectsFlexibility to Invest in Highest Return Projects
Motivate WorkforceMotivate Workforce– Attract, Maintain the Best EmployeesAttract, Maintain the Best Employees
Manage for “The Long Haul”Manage for “The Long Haul”
Maintain Financial DisciplineMaintain Financial Discipline
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1999 2000 2001 2002 2003 2004
NFX Proved Reserves
RockiesMid ConInt'lOnshore GCGOM
Balanced Assets
2003 2004 2005e 2006e 2007e
244
OilGas
221
Visible Growth - Expected Production (Bcfe)
262-286
310-350
FACTS:FACTS: 2005 Hurricanes Defer 18-20 2005 Hurricanes Defer 18-20
BCFEBCFE Major Growth Projects on TrackMajor Growth Projects on Track Organic Growth!Organic Growth!
245-248
Domestic Development Opportunities Quality Assets, Growth Potential
T E X A S
N E W M E X I C O
O K L A H O M A
U T A H
VAL VERDE BASINVAL VERDE BASINVAL VERDE BASINVAL VERDE BASIN 100,000 Gross Acres100,000 Gross Acres Low-risk TargetsLow-risk Targets 20 – 30 Wells/Year20 – 30 Wells/Year Active Field Active Field
DevelopmentsDevelopments High WIHigh WI
100,000 Gross Acres100,000 Gross Acres Low-risk TargetsLow-risk Targets 20 – 30 Wells/Year20 – 30 Wells/Year Active Field Active Field
DevelopmentsDevelopments High WIHigh WI
SOUTH TEXASSOUTH TEXASSOUTH TEXASSOUTH TEXAS 200,000 Acres200,000 Acres 60 – 70 Wells/Year60 – 70 Wells/Year Recent XOM JVRecent XOM JV
−52,000 Acres52,000 Acres−Around NFX Core AreasAround NFX Core Areas−3-Rig Program, 3-Year 3-Rig Program, 3-Year
JVJV
200,000 Acres200,000 Acres 60 – 70 Wells/Year60 – 70 Wells/Year Recent XOM JVRecent XOM JV
−52,000 Acres52,000 Acres−Around NFX Core AreasAround NFX Core Areas−3-Rig Program, 3-Year 3-Rig Program, 3-Year
JVJV
MONUMENT BUTTEMONUMENT BUTTEMONUMENT BUTTEMONUMENT BUTTE 3,000+ Locations, 3,000+ Locations,
110,000 acres110,000 acres Decade-long Decade-long
InventoryInventory 200+ Wells/Year200+ Wells/Year 4 Active Rigs4 Active Rigs Low-risk, RepeatableLow-risk, Repeatable Recent Deals Expand Recent Deals Expand
ProgramProgram
3,000+ Locations, 3,000+ Locations, 110,000 acres110,000 acres
Decade-long Decade-long InventoryInventory
200+ Wells/Year200+ Wells/Year 4 Active Rigs4 Active Rigs Low-risk, RepeatableLow-risk, Repeatable Recent Deals Expand Recent Deals Expand
ProgramProgram
GULF OF MEXICOGULF OF MEXICOGULF OF MEXICOGULF OF MEXICO 2,000,000 Acres2,000,000 Acres 413 Shelf Blocks413 Shelf Blocks 80 Deepwater 80 Deepwater
BlocksBlocks Maintain 3-Rig Shelf Maintain 3-Rig Shelf
ProgramProgram
2,000,000 Acres2,000,000 Acres 413 Shelf Blocks413 Shelf Blocks 80 Deepwater 80 Deepwater
BlocksBlocks Maintain 3-Rig Shelf Maintain 3-Rig Shelf
ProgramProgram
MID-CONTINENTMID-CONTINENTMID-CONTINENTMID-CONTINENT Gas-MiningGas-Mining 250-300 Wells/Year250-300 Wells/Year Double Digit GrowthDouble Digit Growth Significant UpsideSignificant Upside Valuable AcreageValuable Acreage
− > 700,000 Gross > 700,000 Gross AcresAcres
− ~ 500,000 Net ~ 500,000 Net AcresAcres
Gas-MiningGas-Mining 250-300 Wells/Year250-300 Wells/Year Double Digit GrowthDouble Digit Growth Significant UpsideSignificant Upside Valuable AcreageValuable Acreage
− > 700,000 Gross > 700,000 Gross AcresAcres
− ~ 500,000 Net ~ 500,000 Net AcresAcres
Domestic Resource Plays - Multi-year Inventory
PlayPlay Net AcresNet AcresPotential # Potential # LocationsLocations
Gross Gross BCFE / WellBCFE / Well
Net BCFE Net BCFE PotentialPotential
NFX MC “Mining”NFX MC “Mining” 106,000106,000 1,0301,030 1 – 21 – 2 420420
NFX MC “Assessment”NFX MC “Assessment” 109,000109,000 2,8002,800 1 – 21 – 2 1,5001,500
Rocky MountainsRocky Mountains 120,000120,000 3,5003,500 0.50.5 1,150 1,150
International Developments - Significant International Growth 2005-08
CHINA (Bohai Bay)CHINA (Bohai Bay)• CFD 12-1, 12-1SCFD 12-1, 12-1S
• 50-100 MMBbls50-100 MMBbls• Development UnderwayDevelopment Underway• IP: Late 2006IP: Late 2006• 3,500 BOPD Net3,500 BOPD Net• NFX WI: 12% of UnitNFX WI: 12% of Unit
CHINA (Bohai Bay)CHINA (Bohai Bay)• CFD 12-1, 12-1SCFD 12-1, 12-1S
• 50-100 MMBbls50-100 MMBbls• Development UnderwayDevelopment Underway• IP: Late 2006IP: Late 2006• 3,500 BOPD Net3,500 BOPD Net• NFX WI: 12% of UnitNFX WI: 12% of Unit
NORTH SEANORTH SEA• Grove FieldGrove Field
• 75 – 100 BCFE + Upside75 – 100 BCFE + Upside• Development UnderwayDevelopment Underway• IP: Oct. 2006IP: Oct. 2006• 60 MMCF/D60 MMCF/D• NFX WI: 100%NFX WI: 100%
NORTH SEANORTH SEA• Grove FieldGrove Field
• 75 – 100 BCFE + Upside75 – 100 BCFE + Upside• Development UnderwayDevelopment Underway• IP: Oct. 2006IP: Oct. 2006• 60 MMCF/D60 MMCF/D• NFX WI: 100%NFX WI: 100%
MALAYSIAMALAYSIA• 2 Shallow Water Blocks: PM 318, 3232 Shallow Water Blocks: PM 318, 323
• Multiple DiscoveriesMultiple Discoveries• Developments UnderwayDevelopments Underway• 13,000 BOPD (Gross) ’0513,000 BOPD (Gross) ’05• 40,000 BOPD (Gross) ’0840,000 BOPD (Gross) ’08• Exploitation UpsideExploitation Upside• NFX WI: 50 – 60%NFX WI: 50 – 60%
MALAYSIAMALAYSIA• 2 Shallow Water Blocks: PM 318, 3232 Shallow Water Blocks: PM 318, 323
• Multiple DiscoveriesMultiple Discoveries• Developments UnderwayDevelopments Underway• 13,000 BOPD (Gross) ’0513,000 BOPD (Gross) ’05• 40,000 BOPD (Gross) ’0840,000 BOPD (Gross) ’08• Exploitation UpsideExploitation Upside• NFX WI: 50 – 60%NFX WI: 50 – 60%
2005 Significant Exploratory Success
• Grove
• Puteri
• Wrigley
• Anduin
• La Femme
• Val Verde
• Grove
• Puteri
• Wrigley
• Anduin
• La Femme
• Val Verde
UKNS
Malaysia
US Deepwater
US Deepwater
US Deepwater
Gulf Coast
UKNS
Malaysia
US Deepwater
US Deepwater
US Deepwater
Gulf Coast
75-100
90-180
55-85
75-90
50-80
60-100
75-100
90-180
55-85
75-90
50-80
60-100
Q4 2006
Q1 2008
Q2 2006
-
-
Q2 2005
Q4 2006
Q1 2008
Q2 2006
-
-
Q2 2005
ProjectProject AreaArea BCFEBCFE DOFPDOFP CommentsComments
Needs AppraisalNeeds Appraisal
Needs AppraisalNeeds Appraisal
3 RecentDiscoveries3 Recent
Discoveries
2007 - BEYOND2007 - BEYONDFollow-upProjects
Follow-upProjects
Follow-up(BCFE)
Follow-up(BCFE) RiskRisk
1414
55
1313
3131
6363
4,6704,670
1,0771,077
445445
158158
6,3506,350
Very HighVery High
High – Very High
High – Very High
MediumMedium
MediumLow
MediumLow
20062006Net Unrisked
(BCFE)Net Unrisked
(BCFE)Risk
CapexRisk
Capex#
Wells#
Wells
389389
504504
112112
242242
1,2471,247
88
1212
7070
137137
227227
11
11
55
5151
5858
TI/TB
Sarawak/Sarawak/BrazilBrazil
US GOM DeepwaterUS GOM Deepwater
US GOM DW SubsaltUS GOM DW Subsalt
Southern North SeaSouthern North Sea
US GOM ShelfUS GOM Shelf
US Onshore Gulf CoastUS Onshore Gulf Coast
Shallow Malay BasinShallow Malay Basin
Monument Butte, Mid ContinentMonument Butte, Mid Continent
Gulf Coast, etc.Gulf Coast, etc.
(2-10 years of inventory)(2-10 years of inventory)
What we “count on”What we
“count on”
“option value”±10% of exploration
budget each year
Growth Pyramid - Balanced Exploration Portfolio
J F M A M J J A S O N DJ F M A M J J A S O N D
International Drilling Calendar
MALAYSIAMALAYSIA
PM 318PM 318
PM 323PM 323
Block 2CBlock 2C
Block 05/36Block 05/36(Phase I)(Phase I)
Cleaver Cleaver Bank Area Bank Area
West Sole West Sole AreaArea
Kansas Granby
Newark
Grove West GroveGrove Central Fault Block
Paus
12-1 South12-1 East
Penara Puteri devel.
W. Belumut LerekExpl.Expl. E. Belumut Phase I Chermin.
Abu FldAbu K.A. SW
20052005 20062006 20072007
Korbu Diwan
J F M A M J J A S O N D
PuteriAbu FldBubuLuzkut Pad. Putera
CHINACHINA
UK UK NORTH NORTH
SEASEA
CFD 12-1 Core Area
Grove CFB
Auburn Newsham
DevelopmentDevelopment AppraisalAppraisal ExplorationExploration
International Production Profile
International Production Forecast: Proved + RiskProbable
84.7
63.8
7.15.4
15.8
0
10
20
30
40
50
60
70
80
90
100
2004 2005 2006 2007 2008
Year
An
nu
al (
bcf
e)
0
20
40
60
80
100
120
140
160
180
200
Cu
mu
lati
ve (
bcf
e)
China 2PChinaUK New shamUK WCutterUK AuburnUK W. GroveUK GrovePM323 W. BelumetPM323 E. BelumetPM323 ChermingatPM318 2PPM318 PuteriPM318 AbuPM318 PNL2P Cumulative1P CumulativeTotal
International Production Forecast: Proved + RiskProbable
84.7
63.8
7.15.4
15.8
0
10
20
30
40
50
60
70
80
90
100
2004 2005 2006 2007 2008
Year
An
nu
al (
bcf
e)
0
20
40
60
80
100
120
140
160
180
200
Cu
mu
lati
ve (
bcf
e)
China 2PChinaUK New shamUK WCutterUK AuburnUK W. GroveUK GrovePM323 W. BelumetPM323 E. BelumetPM323 ChermingatPM318 2PPM318 PuteriPM318 AbuPM318 PNL2P Cumulative1P CumulativeTotal
2004 Operating Margin (after hedge)
4.764.67 4.59
4.39 4.34 4.15 4.15 4.11 4.10 4.07
3.96 3.90
3.61
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
NFX PPP THX KMG APA BR EOG APC NBL XTO DVN FST PXD
Mar
gin
($/m
cfe)
Margin Defined As:Upstream Revenues-LOE-Transp.-Prod. Taxes
Average=$4.21/mcfeAverage=$4.21/mcfe
Improving Margins
2.09
3.23
3.8
4.56
0.60.540.49 0.690
1
2
3
4
5
6
7
2002 2003 2004 2005
$/M
CF
E
Cash Margin
Cash Tax
Interest
G&A
Prod Tax / Xport
LOE2.09
3.23
3.8
4.56
0.60.540.49 0.690
1
2
3
4
5
6
7
2002 2003 2004 2005
$/M
CF
E
Cash Margin
Cash Tax
Interest
G&A
Prod Tax / Xport
LOE
Key Take-Aways
In-hand, Organic GrowthIn-hand, Organic Growth
Significant Exploration Exposure – Not Found in Significant Exploration Exposure – Not Found in Peer GroupPeer Group
Return-Driven Decision MakingReturn-Driven Decision Making
– Returns Do Matter!Returns Do Matter!
Execution of Diversification StrategyExecution of Diversification Strategy
– We Have Multiple Growth AreasWe Have Multiple Growth Areas
Proven OperatorProven Operator
– Low Cost Leader in Most Core AreasLow Cost Leader in Most Core Areas
– Excellent MarginsExcellent Margins
Strong Balance Sheet, Financial Fire PowerStrong Balance Sheet, Financial Fire Power
Today’s presentations by the management of Newfield Exploration Company include forward-Today’s presentations by the management of Newfield Exploration Company include forward-looking information. All information other than historical facts included in this presentation, looking information. All information other than historical facts included in this presentation, including information regarding estimated proved reserves, production targets, anticipated including information regarding estimated proved reserves, production targets, anticipated production rates, planned capital expenditures, the number of wells planned to be drilled in the production rates, planned capital expenditures, the number of wells planned to be drilled in the future, the relative risks and potential of planned exploratory wells, the availability of capital future, the relative risks and potential of planned exploratory wells, the availability of capital resources to fund capital expenditures and business strategy and other plans and objectives resources to fund capital expenditures and business strategy and other plans and objectives for future operations, is forward-looking information. Although the Company believes that the for future operations, is forward-looking information. Although the Company believes that the expectations reflected in such forward-looking information are reasonable, such expectations expectations reflected in such forward-looking information are reasonable, such expectations are based upon assumptions and anticipated results that are subject to numerous are based upon assumptions and anticipated results that are subject to numerous uncertainties. Actual results may vary significantly from those anticipated due to many factors, uncertainties. Actual results may vary significantly from those anticipated due to many factors, including drilling results, oil and gas prices, industry conditions, the prices of goods and including drilling results, oil and gas prices, industry conditions, the prices of goods and services, the availability of drilling rigs and other support services and the availability of capital services, the availability of drilling rigs and other support services and the availability of capital resources. In addition, the drilling of oil and gas wells and the production of hydrocarbons are resources. In addition, the drilling of oil and gas wells and the production of hydrocarbons are subject to governmental regulations and operating risks.subject to governmental regulations and operating risks.
There are numerous additional uncertainties inherent in estimating quantities of proved oil and There are numerous additional uncertainties inherent in estimating quantities of proved oil and natural gas reserves, including many factors beyond the control of the Company. Reserve natural gas reserves, including many factors beyond the control of the Company. Reserve engineering is a subjective process of estimating underground accumulations of oil and natural engineering is a subjective process of estimating underground accumulations of oil and natural gas that cannot be measured in an exact way, and the accuracy of any reserve estimate is a gas that cannot be measured in an exact way, and the accuracy of any reserve estimate is a function of the quality of available data and of engineering and geological interpretation and function of the quality of available data and of engineering and geological interpretation and judgment. As a result, estimates made by different engineers often vary from one another. In judgment. As a result, estimates made by different engineers often vary from one another. In addition, results of drilling, testing and production subsequent to the date of an estimate may addition, results of drilling, testing and production subsequent to the date of an estimate may necessitate revisions of such estimates. Accordingly, reserve estimates are generally different necessitate revisions of such estimates. Accordingly, reserve estimates are generally different from quantities of oil and natural gas that are recovered.from quantities of oil and natural gas that are recovered.
Forward-Looking Statements