Industry must unite for

 He calls it the great gift—a gift to the industry, the nation and the world.

 Speaking of unconventional hydrocarbons, Newfield Exploration President and CEO Lee Boothby says that the game has truly changed.

 “We’re in a different world today—one that we couldn’t conceive even a few years ago,” he says. “When you think that we have a chance to solve some the problems that we’re confronted with as a nation, it’s exciting. The opportunity is immense, it’s real, it’s here, and we have a 100 year-plus supply.”

 But, he says it’s important for the entire industry to get on the same page and make sure that unconventionals are recognized.

 “This gift will fuel our future. It will win in the marketplace, but we’ve all got to do our part to ensure the message is out there.”

More Oily Plays

 Newfield’s portfolio is heavily weighted toward natural gas with 70 percent gas and 30 percent oil. The company is now, however, aggressively seeking “oily plays.” The company’s current oil projects are in Monument Butte in Utah, Williston Basin in North Dakota, and international projects in Malaysia and China.

 “We produce 40,000 barrels per day, but get 60 percent of our revenue from oil assets,” says Boothby. “Over 90 percent of our reserves are onshore North America. We’ve added 500,000 acres in oily plays in the past 6 months in Southern Alberta Basin in Montana, the Eagle Ford, and Deepwater Gulf of Mexico.”

 The Woodford shale is Newfield’s foundational gas asset. They’ve drilled 300 wells in the play, starting in 2006.

 “Six years ago, there was less that 10 mcf coming out of the basin, and last week we averaged 350,000 mcf per day,” he says. “Most acreage is held by production, which means as an operator we have the ability to speed up, slow down, or stop depending on conditions in the market.”

 Last year, despite the financial meltdown, Newfield chose to continue operating—a decision supported by their hedge position.

 “We felt it was important to remember the crews and service providers and folks in the field making these plays work,” he says. “We’ll monitor the market, and we have a strong hedge
position through 2011, but because of the oil economic advantage we’re going to continue our push toward oil.”

 The Uinta Basin is Newfield’s foundational oil asset. The company’s 180,000 acres are held by production with 4,700 remaining locations. Production has increased from 7,000 barrels about 6 years ago, to 20,000 barrels today.

 “This is an asset that will continue to grow,” he says. “A little over a year ago we were laying oil rigs down in the Rockies for preference of gas rigs in the mid-continent. This year, it’s flipped. We’re adding rigs to the Rockies, accelerating oil projects in Southeast Asia, and backing off the accelerator on our gas projects.”

Seek Win-Win

 Unconventional plays are operations driven, but it takes all players from every part of the industry to make them successful.

 “It takes every single person in an organization to make these work—they’re not just capital intensive, they’re people intensive,” he says. “There is and will be a focused demand for quality crews and services with reliable performance and equipment.”

 Boothby says that unconventional plays have a long life cycle and relationships lead to improved performance.

 “The first thing is to sit down and help me understand your situation, and I’ll help you understand mine. We can find that win-win,” he says. “The views of the past—the heads I win, tails you lose mentality—are gone. We can find that place, and we won’t turn our back on relationships with those who have supported us.”

 By working together, he says the industry can shave off the tops and bottoms of the boom and bust cycle, improve budget forecasting, and hone the industry’s ability to issue
performance guidance.  But the public needs to be educated about the abundance and true nature of unconventional resources.

 “We have this great gift—natural gas is the real bridge fuel—and it’s 50 percent cleaner than coal is today,” he says. “The great news is that it’s abundant. We all have a part to play in getting the country educated, though not by fifteen-second sound bytes, and not by politicians—we need to get out there and educate in person and while we’re at it, ensure that young people understand there are great careers in energy.”