Exhibit 99.3
@NFX is periodically published to keep shareholders aware of current operating activities at Newfield. It may include estimates of expected production volumes, costs and expenses, recent changes to hedging positions and commodity pricing.
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August 9, 2004
We have recently added oil hedges in conjunction with our intent to acquire Inland Resources. Please see below for a complete update on all of our hedge positions.
Call me with questions.
Steve Campbell
Natural Gas Hedge Positions
The following hedge positions for the third quarter of 2004 and beyond are as of August 8, 2004:
Third Quarter 2004
| | | | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 21,429 MMMBtus | | $ | 5.06 | | | | — | | | — | | — | | — |
| 11,595 MMMBtus | | | — | | | | — | | | $4.68 — $5.96 | | $3.00 — $5.25 | | $4.16 — $6.67 |
| 2,250 MMMBtus | | | — | | | $ | 4.21 | | | — | | $4.20 — $4.21 | | — |
Fourth Quarter 2004
| | | | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 11,613 MMMBtus | | $ | 5.40 | | | | — | | | — | | — | | — |
| 9,795 MMMBtus | | | — | | | | — | | | $4.90 — $8.24 | | $3.00 — $5.25 | | $4.16 — $10.25 |
| 8,850 MMMBtus | | | — | | | $ | 5.39 | | | — | | $4.20 — $5.50 | | — |
First Quarter 2005
| | | | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 5,807 MMMBtus | | $ | 6.02 | | | | — | | | — | | — | | — |
| 15,495 MMMBtus | | | — | | | | — | | | $5.32 — $9.88 | | $3.50 — $5.77 | | $4.16 — $10.25 |
| 5,400 MMMBtus | | | — | | | $ | 5.49 | | | — | | $5.47 — $5.50 | | — |
Second Quarter 2005
| | | | | | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 4,860 MMMBtus | | $ | 5.53 | | | — | | — | | | — | | | — |
| 345 MMMBtus | | | — | | | — | | $3.50 — $4.16 | | $ | 3.50 | | | $ | 4.16 | |
Third Quarter 2005
| | | | | | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 5,206 MMMBtus | | $ | 5.53 | | | — | | — | | | — | | | — |
| 345 MMMBtus | | | — | | | — | | $3.50 — $4.16 | | $ | 3.50 | | | $ | 4.16 | |
Fourth Quarter 2005
| | | | | | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 5,025 MMMBtus | | $ | 5.64 | | | — | | — | | | — | | | — |
| 345 MMMBtus | | | — | | | — | | $3.50 — $4.16 | | $ | 3.50 | | | $ | 4.16 | |
Natural Gas 3-Way Collars
| | | | | | | | | |
| | | Floors
| | Collars
|
Third Quarter 2004 | | | | | | | | |
| 1,350 MMMBtus | | $ | 3.50 | | | $ | 4.50 - $6.08 | |
| 900 MMMBtus | | $ | 3.50 | | | $ | 4.50 - $6.10 | |
| 1,800 MMMBtus | | $ | 3.76 | | | $ | 4.76 - $5.20 | |
| 900 MMMBtus | | $ | 3.61 | | | $ | 4.61 - $5.20 | |
| 1,800 MMMBtus | | $ | 3.62 | | | $ | 4.62 - $5.20 | |
| |
Fourth Quarter 2004 | | | | | | | | |
| 450 MMMBtus | | $ | 3.50 | | | $ | 4.50 - $6.08 | |
| 300 MMMBtus | | $ | 3.50 | | | $ | 4.50 - $6.10 | |
| 600 MMMBtus | | $ | 3.76 | | | $ | 4.76 - $5.20 | |
| 300 MMMBtus | | $ | 3.61 | | | $ | 4.61 - $5.20 | |
| 600 MMMBtus | | $ | 3.62 | | | $ | 4.62 - $5.20 | |
These 3-way collar contracts are standard natural gas collar contracts with respect to the periods, volumes and prices stated above. The collar contracts have floor and ceiling prices per MMMBtu as per the table above until the market price drops below the floor price above. Below the floor price, these contracts effectively result in realized prices that are on average $1.00 per MMMBtu higher than the cash price that otherwise would have been realized.
Crude Oil Hedge Positions
The following table details the new hedges that were added in conjunction with our intent to acquire Inland Resources:
| | | | | | | | | | | | | |
| | | | | Swaps
| | 3-Way Collars
|
2005
| | Volume
| | Fixed
| | Floor
| | Collars
|
| Swaps | | 1,095 MBO | | $ | 39.00 | | | | — | | | — |
| 3-Way Collars | | 365 MBO | | | — | | | $ | 30.00 | | | $36.00 — $49.00 |
Total Hedged | | 1,460 MBO | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | | | Swaps
| | 3-Way Collars
|
2006
| | Volume
| | Fixed
| | Floor
| | Collars
|
| Swaps | | 730 MBO | | $ | 37.00 | | | | — | | | — |
| 3-Way Collars | | 730 MBO | | | — | | | $ | 30.00 | | | $35.00 — $50.50 |
Total Hedged | | 1,460 MBO | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | Swaps
| | 3-Way Collars
|
2007
| | Volume
| | Fixed
| | Floor
| | Collars
|
| 3-Way Collars | | 1,460 MBO | | — | | $ | 25.00 | | | $32.00 — $51.00 |
Total Hedged | | 1,460 MBO | | | | | | | | |
In addition to the oil hedges outlined above, the following hedges are also current as of August 8, 2004:
Third Quarter 2004
| | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 264,000 Bbls | | $ | 32.18 | | | — | | — | | — | | — |
| 390,000 Bbls | | | — | | | — | | $26.35 — $31.56 | | $22.00 — $27.50 | | $26.35 — $34.50 |
| 379,000 Bbls* | | | — | | | — | | $25.76 — $29.91 | | $25.00 — $26.00 | | $29.70 — $30.05 |
Fourth Quarter 2004
| | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 204,000 Bbls | | $ | 29.85 | | | — | | — | | — | | — |
| 330,000 Bbls | | | — | | | — | | $27.14 — $32.51 | | $27.00 — $27.50 | | $30.65 — $34.50 |
| 379,000 Bbls* | | | — | | | — | | $25.76 — $29.91 | | $25.00 — $26.00 | | $29.70 — $30.05 |
First Quarter 2005
| | | | | | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 141,000 Bbls | | $ | 27.37 | | | — | | — | | | — | | | — |
| 240,000 Bbls | | | — | | | — | | $27.00 — $31.76 | | $ | 27.00 | | | $ | 30.65 — $32.30 | |
| 90,000 Bbls* | | | — | | | — | | $25.00 — $29.70 | | $ | 25.00 | | | $ | 29.70 | |
Second Quarter 2005
| | | | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 51,000 Bbls | | $ | 22.63 | | | — | | — | | | — | | | — |
| 150,000 Bbls | | | — | | | — | | $27.00 — $31.45 | | $ | 27.00 | | | $30.65 — $32.10 |
Third Quarter 2005
| | | | | | | | | | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 51,000 Bbls | | $ | 22.63 | | | | — | | | | — | | | | — | | | | — | |
Fourth Quarter 2005
| | | | | | | | | | | | | | | | | | | | | |
| | | Weighted Average
| | Range
|
Volume
| | Fixed
| | Floors
| | Collars
| | Floor
| | Ceiling
|
| 51,000 Bbls | | $ | 22.63 | | | | — | | | | — | | | | — | | | | — | |
*These 3-way collar contracts are standard crude oil collar contracts with respect to the periods, volumes and prices stated above. The contracts have floor and ceiling prices per barrel as per the table above until the price drops below $21.00 per barrel. Below $21.00 per barrel, these contracts effectively result in realized prices that are on average $4.61 per barrel higher than the cash price that otherwise would have been realized.
Any publicly announced changes to the above estimates, as well as periodic drilling updates, will be available through @NFX. Through our web page at www.newfld.com, stockholders may register to receive @NFX by e-mail distribution.
