Newfield Exploration Co. (NFX:US), the U.S. oil producer with properties from Utah to Malaysia, plunged after saying international production may drop as much as 25 percent next year.
Newfield, based in The Woodlands, Texas, declined (NFX:US) 18 percent to $27.46 at the close in New York, the largest decrease since Nov. 20, 2008.
Net output is affected by the terms of production-sharing contracts with partners on some projects, Chairman and Chief Executive Officer Lee Boothby said during a conference call with analysts and investors today. Growing production in Malaysia and higher oil prices mean there will be declines in Newfield’s net share occurring earlier than expected, he said.
“The stock is getting hammered because they talked about how the international oil volumes could be down up to 25 percent in 2013, which hit these guys pretty hard,” said Leo Mariani, an analyst at RBC Capital Markets in Austin, Texas, who has an outperform rating on Newfield shares and owns none.
Net production from operations outside the U.S. is about 36,000 barrels of oil equivalent a day, Newfield said in a statement yesterday.
Malaysia has been one of the keys to recent oil growth, and volumes from that country are expected to rise 50 percent this year, Boothby said. Output outside the U.S. is expected to rise in 2014 and beyond, helped by a new project offshore China, he said.
The outlook from Newfield may be a “worst-case scenario,” Mariani said.
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