An overnight energy success? Definitely not
Groundwork laid over five years for surge in earnings per share
THE foundation for Newfield Exploration Co.’s success in 2014 was laid over the course of five years.
“I’d love to tell you that it was a product of something magic that we did,” said its president and CEO, Lee K. Boothby. Rather, he added, “We made decisions back in ’09, ’10, ’11, in terms of repositioning the portfolio.”
Those decisions paid off last year, when a more than 1,100 percent surge in earnings per share helped vault Newfield to a No. 6 ranking on the annual Chronicle 100 list of top public companies. The Woodlandsbased energy company ranked No. 54 the year prior. Revenue for 2014 was reported at $2.3 billion, up 23.2 percent. Shareholders saw a 10.1 percent return.
Boothby called 2014 “an exclamation point.”
“Yes, this is working,” he said. “In 2015, we are carrying that forward.”
The prolonged financial crisis that began in 2008 prompted some corporate soulsearching at Newfield, which was founded in 1988 from a sell-off by Tenneco.
“In 2009, we looked at the strategy and assets and business environment, postfinancial crisis, and decided we needed to make a bunch of changes,” Boothby said. “We challenged the organization to embrace the future. It’s the thing I’m proudest of.”
Over the next five years the company shed about $2.5 billion in “non-strategic assets” and used profits from the sales to move assertively into North American resource plays. It refocused its drilling and explo- ration priorities from natural gas to oil. It bet on shale.
The business today is almost all North American onshore, with a smaller presence in China. The employee force is about 1,320, with 55 of those in China. Newfield has 344 employees in Houston, but that will jump to almost 700 by year-end, when a Denver office is mostly relocated here.
“It’s the talented people who comprise the Houston workforce, the work ethic of folks here in Texas,” Boothby said. “We think Houston is a great place to be.”
He expects oil prices to remain around $60 a barrel through this year and into the next, and the company has moved aggressively to prepare.