2009-10-26-2009-10-14-2009-10-14

JV to explore 140,000 gross acres in Marcellus shale in Susquehanna & Wayne counties, PA.

Newfield Exploration Co., Houston, (NYSE: NFX) has entered the Marcellus shale play in Pennsylvania through a joint exploration agreement on 140,000 gross acres with New York-based Hess Corp. (NYSE: HES) for an undisclosed price. The acreage covered in the agreement is primarily in Susquehanna and Wayne counties in northeastern Pennsylvania. Newfield will operate the new venture with each company holding a 50% interest. "Today marks our entry into the Marcellus shale, likely to become one of our nation's largest natural gas resource plays," says Newfield president and chief executive Lee K. Boothby. "Today, with substantially all of our acreage held-by-production in the Woodford shale, it's a great time for us to enter an important new focus area and apply our expertise to a similar play of scale. We expect to build a business here, just as we have done in the Midcontinent and the Rocky Mountains." Newfield entered the Woodford shale in 2003 and assembled 165,000 net acres. The company has drilled approximately 300 horizontal wells and has current gross operated production capacity of nearly 300 million cubic feet equivalent per day. The 2009 portion of Newfield's Marcellus shale activities will be funded within the company's existing $1.45-billion capital budget. Drilling is expected to begin in 2010. Hess president of worldwide exploration and production Greg Hill says, "Entering the Marcellus shale builds on the unconventional expertise Hess has in North Dakota's Bakken play. Hess has an established technical capability in horizontal, multi-stage fractured wells and we have a reputation for sound environmental operating practices. We are pleased to partner with Newfield in this venture and look forward to a project that may bring economic development to the area and natural gas to the larger East Coast market." The terms will be finalized over the next few weeks.