Newfield Exploration

Capex

Newfield Exploration Company announced a $1.6 billion capital investment program for 2008. More than 80% of the 2008 budget is allocated to development activities.

The 2008 capital program will be substantially funded through cash flow and cash on hand. Following the sale of $1.8 billion in assets in 2007, Newfield exited the year with approximately $370 million in cash. Approximately 75% of Newfield's 2008 natural gas production is hedged at a NYMEX floor price of approximately $8 per MMBtu. Newfield's debt-to-book capitalization ratio at year-end 2007 was approximately 23% and the Company's $1.25 billion revolver is undrawn.

Woodford Shale Update
The Mid-Continent region is now Newfield's largest division in terms of proved reserves - representing 1.1 Tcfe at year-end 2007, or about 45% of the Company's proved reserves. Planned investments in the region approximate 40% of Newfield's total 2008 budget, or $620 million. The largest portion of spending will be in the Woodford Shale, located in southeastern Oklahoma's Arkoma Basin.

Rocky Mountains
Investment in the Rocky Mountain region is expected to total $310 million in 2008, or approximately 20% of the total budget. The most significant investment area will be the Monument Butte Field, located in northeast Utah's Uinta Basin. Newfield expects to drill about 200 wells at Monument Butte in 2008.

Onshore Texas
Newfield will invest approximately $245 million, or 15% of the total budget, on projects located in Texas.

Under an existing South Texas joint venture with Exxon-Mobil, Newfield expects to drill 10-12 additional wells in 2008 in the Sarita Field area of Kenedy County. Newfield has drilled 21 successful wells under the agreement to date and current gross production is more than 75 MMcfe/d.

In the Val Verde Basin of West Texas, Newfield is planning to drill 12-15 wells targeting primarily the Ellenberger, Canyon and Strawn formations. Current production from the region is approximately 80 MMcfe/d (NFX interest is predominately 100%).

In East Texas, the Company is planning to drill at least three wells under a joint venture with a private company. The JV covers 11,000 acres in Shelby and St. Augustine Counties. Potential targets are James Lime and Pettit formations.

Gulf of Mexico
Approximately $240 million, or 15% of the budget, is allocated to the Gulf of Mexico. This includes 4-5 deepwater wells, new seismic and a significant allocation for 2008 Federal lease sales. Approximately $60 million is related to the development of the PowerPlay (Anadarko operated) and Fastball (Newfield operated) fields.

International
Approximately 10% of the budget, or $155 million, is allocated to international activities. The largest area of investment will be Malaysia where Newfield has four active field developments underway. The Puteri and East Belumut/Chermingat fields are expected to commence production in mid-2008 and ramp to a combined rate of more than 22,000 BOPD (gross). Newfield will also drill an exploration well on Block 2C in the third quarter of 2008. The well is located in deepwater offshore Sarawak.

The 2008 budget excludes estimated capitalized interest and overhead of $113 million.

Future Plans

Woodford Shale Update
Now in the early stages of the development phase, Newfield continues to be encouraged with the results of its extended lateral wells in the Woodford. To date, the Company has drilled 14 wells with lateral lengths greater than 3,000'. The 10 most recent extended lateral completions were drilled and completed for an average of $7.0 million gross and are expected to have an average EUR of at least 4.5 Bcfe gross. The net revenue interest averages about 81%.

Newfield already has processed 3-D seismic coverage on more than 60% of its net acreage. By the end of 2008, approximately 95% of Newfield's acreage will have 3-D seismic coverage. The 3-D data is instrumental in selecting well locations and planning extended laterals.

Newfield has approximately 165,000 net acres in the Woodford Shale. The Company's average investment in its position is approximately $500 per acre.

Production recently hit a new high of 97 MMcf/d in the Company's Stiles Ranch Field, located in the Texas Panhandle. The 2008 budget has a 2-4 rig program in 2008. Newfield's working interest is predominately 100%. Newfield has approximately 50,000 net acres in its Granite Wash Play area.

Rocky Mountains
Newfield recently signed an agreement with a third party to test deep gas targets below the shallow oil producing zones in its Monument Butte Field. Targets include the Wasatch, Mesa Verde, Blackhawk and Mancos Shale. Drilling is planned for the first half of 2008. The agreement allows for promoted exploratory drilling and progressive earning in approximately 71,000 net acres in which Newfield will retain a majority of the interest. Approximately 10,000 net acres in the immediate vicinity of recent deep gas tests were excluded from the agreement. Several Newfield operated wells are planned on this acreage in 2008.

In the Williston Basin, Newfield now has an interest in approximately 170,000 acres. The Company plans to drill at least 10 wells in 2008 to test Bakken oil structures, as well as targets in the Madison, Red River and Duperow formations. Planned investments total about $50 million in 2008 on drilling and new seismic data.

In the Wyoming's Green River Basin, Newfield remains active in the Pinedale and Jonah Fields. At Pinedale, Newfield is planning to drill approximately 10 wells in 2008. Through an agreement reached in 2007, Newfield will operate the 2008 program with an 85% interest. Five wells are planned in the Jonah Field.

Onshore Texas
Under an existing South Texas joint venture with Exxon-Mobil, Newfield expects to drill 10-12 additional wells in 2008 in the Sarita Field area of Kenedy County. Newfield has drilled 21 successful wells under the agreement to date and current gross production is more than 75 MMcfe/d.

In the Val Verde Basin of West Texas, Newfield is planning to drill 12-15 wells targeting primarily the Ellenberger, Canyon and Strawn formations. Current production from the region is approximately 80 MMcfe/d (NFX interest is predominately 100%).

In East Texas, the Company is planning to drill at least three wells under a joint venture with a private company. The JV covers 11,000 acres in Shelby and St. Augustine Counties. Potential targets are James Lime and Pettit formations.

Gulf of Mexico

Activity in the Gulf of Mexico includes 4-5 deepwater wells, new seismic and a significant allocation for 2008 Federal lease sales. Approximately $60 million is related to the development of the PowerPlay (Anadarko operated) and Fastball (Newfield operated) fields.

International

Approximately 10% of the 2008 CapEx budget is allocated to international activities. The largest area of investment will be Malaysia where Newfield has four active field developments underway. The Puteri and East Belumut/Chermingat fields are expected to commence production in mid-2008 and ramp to a combined rate of more than 22,000 BOPD (gross). Newfield will also drill an exploration well on Block 2C in the third quarter of 2008. The well is located in deepwater offshore Sarawak.

Production

The Company exited 2007 producing 165 MMcfe/d. The Company expects to exit 2008 at approximately 250 MMcfe/d, a 50% increase over year-end 2007 levels.

In 2006, Newfield produced 242.6 Bcfe. Production in 2005 totaled 241.6 Bcfe. Domestic production in 2006 and 2005 reflects the deferral of approximately 16 Bcfe and 22 Bcfe, respectively, related to the 2005 hurricanes and associated on-going repairs. Newfield's production in the fourth quarter of 2006 was 67.9 Bcfe.

Reserves

Proved reserves increased 10% to 2.5 Tcfe at Year-End 2007 - Newfield added 660 Bcfe through the drillbit and 221 Bcfe through acquisitions. Reserve Life Index increased to 13 years.

More than 70% of total year-end 2007 reserves in "Resource Plays" - The Mid-Continent and Rocky Mountain divisions now account for more than 70% of proved reserves. Significant increase reflects success of growing Woodford Shale Play, 2007 Rocky Mountain acquisition and ongoing development of giant Monument Butte oil field in northeast Utah.

In 2006, proved reserves increased 14% to 2.3 trillion cubic feet equivalent. Reserves by focus area: 35% in the Mid-Continent, 20% Onshore Gulf Coast, 20% Rocky Mountains, 15% Gulf of Mexico and 10% International.

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