Original Source: FD (FAIR DISCLOSURE) WIRE
SHANNON NOME, ANALYST, DEUTSCHE BANK: All right, we're going to move on with our next presenter. Here today from Newfield Exploration is David Trice, Chairman, President, and CEO with a lot of new things going on at Newfield, and we're glad to have you; thanks, David.
DAVID TRICE, CHAIRMAN, PRESIDENT, CEO, NEWFIELD EXPLORATION COMPANY: I can't see any of you out there but I do see that there's a couple of people out there. Good morning, and it's great to be here; thanks Shannon. I know there is a lot to talk about and I want to catch us back up on schedule so we'll get gong here pretty quickly.
I'd like to start with the acquisition that we recently did in the Rocky Mountains, and I'm going to really talk more about that in slide 2 as to why we did the deal and what it does for us in the future. But just the basics of the transactions; it's a $575 million deal expected to close by the end of June. It puts us in a number of basins in the Rockies, which I'll describe in a minute. And I'll talk about why we think it's a great acquisition and what we'll do with that acquisition.
If you just look at the numbers, so what we did was buy about 200 Bs of proved reserves; those are our Scott numbers; 150 that we can see today after 30 days of work on the transaction and probables and possibles, it's really looking beyond what we see in the deal that really excites us about the deal. So about 40 million a day of net production, with a reserve life index of about 14 years. So very different than a lot of assets we have, but it does a lot for our Rocky Mountain position.
We're going to pay with it; we've gotten a lot of attention, probably more attention among what we're sell to finance this transaction than the transaction, but I'll, trust me, the transaction is significantly more important. But we did not want to issue equity to pay for this deal, so we looked around our portfolio and decided what we could sell that would be attractive, and what was essentially less material or less strategic to Newfield going forward.
We are just in the process of bringing online our Grove Field in the UK. It actually started up in late April. This had a number of startup problems like a lot of fields in the North Sea does; most of those are worked out today. We are currently producing the G2 well at 35 million a day, and we're not really trying to produce that well very hard. We'll bring on the G1 well next week; we'll shut in the G2 well; we'll bring the G1 up and se what it'll do. Probably just kind of line it out 25 million a day, and then we'll put both wells on and test them at 60 to 70 million a day. And then, unless gas prices spike up, we'll cut that back to about 15 million a day.
We picked the North Sea to sell because we have an attractive asset in the Grove Field, very high rates; we've got some exploration inventory to see, and we are currently drilling at 7 Cs in undeveloped discovery. So we think we have a nice package to sell; the North Sea is a very buoyant market. Current gas prices are not very good, but if you look at the future prices, the Winter Strip is over $9 and the next Summer Strip is over $6.50, so certainly going forward, you have some very robust prices in the North Sea. So it's something we think will be very saleable that we can receive attractive prices for.
The way taxes work in the UK, you really need to do a complete exit and sell your whole company, and that's what we'll be doing in the UK. The IM goes out today; we expect to open Management [inaudible]; the virtual data room will be open and then we'll do Management Presentations in June; expect bids not his package by late July with hopefully a closing in August.
In China, we have a number of active exploration projects underway, and we have some production in Bohai Bay, which is relatively small and not strategic to us in the unit. We have a 12% non-operating interest, so that was an asset that was easy to put on our list. This field is making 13,000 to 14,000 barrels a day. There is a lot of oil in place in this field. It's oil; it's in Asia, and it's attracting a lot of interest. That data room will open in mid-June with bids expected by the end of July, and again closing in August assuming all goes well.
In the US, we're going to sell some modest reserves on our Gulf Coast, the Onshore Gulf Coast Division; really pretty nominal and all non-strategic. Similar in the mid-Continent, but it will be a little bit more in the way of reserves. And then we're looking in the Gulf of Mexico to I guess right-size our portfolio and keep the play and sell off the blanks of our position in the Gulf of Mexico. And so the package and the teaser is out on that when including all of our fields east of the delta, all of our fields offshore Texas, and most of our fields in the southern addition. So we would be keeping basically from East Cameron over to Grand Isle, which is the play, and if you look at our activity and what we've done over the last 2 or 3 years in terms of our emphasis in the Gulf of Mexico, that's where most of our drilling has been, and we've had phenomenal success rates in that area over the last couple of years, 75% to 80% on our drilling.
So those are the properties that will be out. Those properties, if we got our expected prices, would more than finance the Stone acquisition, so basically we're in a situation we've put together a larger packets of properties than we need to finance this acquisition, and I'll tell you that we're prepared not to sell some of those properties if the prices aren't right. But I do expect in any even that we'll sell enough to finance the acquisition.
Let's talk more about the acquisition because I think it's really much more significant. We're excited about it. Think about the Rocky Mountains, which really run from the San Juan Basin all the way up to the Williston Basin on the Canadian border. There are 13 basins in this area, all relatively prolific; some of these newer than others. We entered the Rockies in …