Newfield Exploration Has Multiple Positive Catalysts Ahead

Analysts at Goldman Sachs upgrade Newfield Exploration NFX from "buy" to "conviction buy." The target price for NFX is set to $72. Goldman believes that there are five catalysts, largely “associated with oil/liquids resource,” that can drive further outperformance in NFX for the next six months “Bakken (ND/MT)- In recent conversations, management has appeared increasingly confident in the propectivity of the company’s 161,000 acres currently in development or appraisal… Malaysia- Newfield’s 1Q 2010 production in Malaysia was stronger than expected… Granite Wash- We expect well results in 4Q 2010 at the latest that will likely show a much greater liquids content relative to earlier drilling… Southern Alberta Basin (MT) - We believe Newfield will likely wait to announce results until data from multiple wells is available, likely in 4Q 2010. Given this is an exploratory play, we believe there is little value in Newfield shares for the company’s 224,000 acre position. In the interim, well results from other operators could be a potential positive catalyst… Maverick Basin/Eagle Ford Shale (TX)- We believe there is similarly limited value in Newfield stock for the Eagle Ford, in part because there have been few wells announced in the westerly Maverick Basin,” the analysts say. The analysts mention, “The greatest impact from the 6-month moratorium on drilling activity in the Gulf of Mexico will be on the startups of the Gladden and Dalmatian projects (technically only a pipeline permit is needed for Gladden as wells are already completed). Together at full capacity (which was never expected in 2010) these projects would represent about 4% of 2010 production. We have delayed startup by six months and now expect 11% total company production growth in 2011 versus 13% previously. Ultimately, however, we believe management will allocate additional capital to the onshore in lieu of the GOM and will remain committed to double-digit production growth while spending within cash flow.” More Analyst Ratings here