The Rising Influence of Rising Affluence

[DewDiligence]

HES, NFX Ink Marcellus JV

[This deal is notable insofar as HES hasn’t previously expressed much interest in domestic gas outside of the Bakken field in ND. To the contrary, HES’s business model has been to use cash flow from its domestic refining and marketing operations (including the well-known convenience stores) to fund wildcat exploration in many of the world’s high-profile oil regions. The financial terms of this deal have not yet been disclosed.

Does anyone here follow NFX?]

http://finance.yahoo.com/news/Newfield-Exploration-Joins-prnews-624831050.html/print?x=0

›Source: Newfield Exploration Company
8:30 am EDT, Wednesday October 14, 2009

HOUSTON, Oct. 14 /PRNewswire-FirstCall/ -- Newfield Exploration Company (NYSE: NFX ) and Hess Corporation (NYSE: HES ) today announced the signing of a joint exploration agreement in the Marcellus Shale play. The agreement covers up to 140,000 gross acres primarily in Susquehanna and Wayne Counties, Pennsylvania. Newfield will operate the new venture with each company having a 50 percent interest.

"Today marks our entry into the Marcellus Shale - likely to become one of our nation's largest natural gas resource plays," said Lee K. Boothby, Newfield President and CEO. "Today, with substantially all of our acreage held-by-production in the Woodford Shale, it's a great time for us to enter an important new focus area and apply our expertise to a similar play of scale. We expect to build a business here, just as we have done in the Mid-Continent and the Rocky Mountains. The Newfield family prides itself in being a good corporate citizen in the areas where we operate."

Newfield entered the Woodford Shale in 2003 and assembled 165,000 net acres. The Company has drilled approximately 300 horizontal wells and has current gross operated production capacity of nearly 300 MMcfe/d.

The 2009 portion of Newfield's Marcellus Shale activities will be funded within the Company's existing $1.45 billion capital budget. Drilling operations are not expected to commence until 2010.

"Entering the Marcellus Shale builds on the unconventional expertise Hess has in North Dakota's Bakken play," said Greg Hill, Hess President of Worldwide Exploration and Production. "Hess has an established technical capability in horizontal, multi-stage fractured wells and we have a reputation for sound environmental operating practices. We are pleased to partner with Newfield in this venture and look forward to a project that may bring economic development to the area and natural gas to the larger East Coast market."

The terms of this transaction are dependent upon Newfield and Hess finalizing additional agreements over the next few weeks.

Newfield Exploration Company is an independent crude oil and natural gas exploration and production company. The Company relies on a proven growth strategy of growing reserves through an active drilling program and select acquisitions. Newfield's domestic areas of operation include the Mid-Continent, the Rocky Mountains, onshore Texas and the Gulf of Mexico. The Company has international operations in Malaysia and China.

Hess Corporation, with headquarters in New York, is a global integrated energy company engaged in the exploration, production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum, natural gas and electricity products. More information on Hess Corporation is available at www.hess.com.‹