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Newfield finds new gas offshore Sarawak

Offshore staff

THE WOODLANDS, Texas – Newfield Exploration Co. (NYSE: NFX) has a natural gas discovery in the block SK 310 production sharing contract 50 mi (80 km) offshore Sarawak in approximately 250 ft (76 m) of water.

The B-14 well encountered 1,800 ft (549 m) of gross column and 1,585 ft (483 m) of net natural gas pay in the main carbonate objective. A drillstem test has confirmed commerciality of the reservoir. Newfield estimates that gas initially in place (GIIP) ranges from 1.5 – 3.0 tcf.

This is Newfield's second pinnacle reef natural gas discovery in the region and is less than 3 mi (4.8 km) from the first pinnacle reef gas discovery, B-15, also on block SK 310. Recoverable reserves here are estimated at approximately 265 bcf and will be developed in conjunction with the B-14 discovery.

Newfield operates block SK 310 with a 30% interest. Partners Diamond Energy Sarawak, a wholly owned subsidiary of Mitsubishi Corp. and Petronas Carigali, have 30% and 40% interests, respectively.

“This is the largest conventional exploratory success that Newfield has made in its 25-year history,” said Lee K. Boothby, Newfield chairman, president and CEO. “Recent amendments to gas terms in Malaysia make natural gas developments economically competitive with oil developments. We have multiple ‘reef’ prospects to test along trend, and additional drilling is expected to resume in the third quarter with the drilling of our B-17 prospect.

“In December 2012, we signed a new PSC for block SK 408 and completed farming into block SK 319. Both PSCs are in offshore Sarawak. These areas provide a combined 1.7 million acres (6,880 sq km) and nearly double our acreage position offshore Malaysia. These blocks extend our successful pinnacle reef trend providing dozens of high-potential exploration targets, located in and around producing fields with existing infrastructure and pipelines in place.”

Block SK 408 covers 1.1 million acres (4,452 sq km) in water depths ranging from 200 – 400 ft (61 – 1122 m). The company has a 10-well commitment on the block over a three-year initial exploration period.

Newfield will operate the block with a 40% interest. Other partners include Shell (30%) and PETRONAS Carigali (30%).

Block SK 319 is adjacent to block SK 408. Water depths are 300 ft (94 m) or less. Newfield has identified several exploration prospects in the block and has a five-well commitment over an initial three-year exploration period. Block SK 319 is operated by Shell (50%). Newfield and Petronas Carigali each hold a 25% interest

4/04/13

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