Newfield Has ‘Largest’ Success in Gas Discovery off Malaysia

Newfield Exploration Co., the U.S. oil producer exploring the sale of offshore assets, had what it called the “largest conventional exploratory success” in its history with a natural gas discovery off the coast of Malaysia.

The B-14 well encountered 1,585 feet (483 meters) of net natural gas in about 250 feet of water 50 miles (80 kilometers) offshore, The Woodlands, Texas-based company said in a statement today after the close of regular trading. Newfield operates Block SK 310 and has a 30 percent interest. Mitsubishi Corp. owns 30 percent and Petronas Carigali holds 40 percent, Newfield said.

Newfield climbed 7.2 percent to $23.70 at 5:58 p.m. in New York.

Newfield estimates there are 1.5 trillion to 3 trillion cubic feet of gas initially in place after its discovery. The B-14 find is less than three miles from the company’s B-15 discovery, where recoverable reserves are an estimated 265 billion cubic feet and will be developed along with B-14. Newfield plans further drilling in the region, including at another prospect in the third quarter.

On Feb. 13, the company said it was exploring strategic alternatives for international assets, which include offshore holdings in Malaysia and China. Goldman Sachs Group Inc. is leading the process, according to the statement. The company plans to focus on production onshore in North America in such areas as the Uinta, Cana Woodford, Williston and Eagle Ford formations.

A data room for international assets is expected to open in the second quarter, Newfield said today. The company’s full-year 2013 international cash income taxes are expected to be $55 million to $65 million at current oil prices, Newfield said.