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Measuring Newfield Exploration’s Stock Perform Last Year

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Newfield Exploration’s stock performance

Newfield Exploration’s (NFX) stock was mostly in a falling trend in the second half of 2015. However, since the start of 2016, NFX has been mostly on an uptrend, mirroring the rally in crude oil prices (USO).

Year-over-year, Newfield Exploration stock has risen by ~32%. Meanwhile, crude oil prices have fallen by ~11% in the same period. The broader energy ETF—the Energy Select Sector SPDER ETF (XLE)has fallen by 3.6% in the same period.

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NFX’s recent acquisition

In May 2016, NFX agreed to acquire 42,000 net acres in the Anadarko Basin STACK play from Chesapeake Energy (CHK). Several upstream companies have recently turned their attention to the STACK play, due to its strong drilling returns even amid weak crude oil (USO) prices.

Marathon Oil (MRO) also made STACK acquisitions recently. These companies make up ~1% of the iShares Global Energy ETF (IXC).

Steps taken by NFX to persist through volatile energy prices

In March 2016, NFX raised ~$700 million through equity offerings. NFX has also reduced its 2016 capex by ~50% compared to 2015 levels.

Additionally, the company has hedged a significant portion of its production into 2017. For 2016, NFX expects hedges to contribute cash flows of ~$270 million.

Chesapeake Energy (CHK) and Cabot Oil & Gas (COG) are other upstream companies that are hedged in 2016 amid low energy prices (USO) (UNG).

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