Newfield Exploration Company (NFX) held a conference call to discuss earnings for the third quarter of 2010, and made comments on its activities in the Woodford Shale, where the company has approximately 172,000 net acres under lease.
Newfield Exploration Company has been shifting capital out of the Woodford Shale to areas with a higher return, and the company has flexibility to continue this since most of the acreage is held by production.
“We started the year in the Woodford at nine rigs. And we’ve had added some acreage over the course of the last year in the Woodford. Our total acreage counts up from a 172,000, so we do have a small component of non-HBP acreage.”
“We can handle the non-HBP acreage with about one rig. We’ve been trying to balance out. We feel it responsibility on our main operating areas to work with their service providers and the other people that are all part of a development activities, we’ll try to balance the needs of a healthy service environment with our desire to shift towards oil. And we’re rapidly accelerating in that regard. But we’ve gone from nine rigs to four rigs today.”
“The statement was made that if gas prices continue to stay very soft or deteriorate further, we’ll continue to rotate rigs out of the dry gas portion of our portfolio into the oil components.”
“The four rigs, the four dry gas rigs that we have running are drilling super extended lateral wells in the Woodford. And we’ve told you guys we’ve got a good strong core position there in those SXL wells work. And we’ve got a portfolio, but we prefer the margins that we see in oil and we’re going to continue to monitor that situation and be nimble with regard to our responses.”