While Newfield Exploration Co. (NFX) has historically focused on the exploration and production of crude oil and natural gas, the company is moving its focus from natural gas to more liquid gases, such as LNG and oil. This transition has investors and analysts nervous, as it is important that Newfield control costs to increase revenue during this fluctuating time. Newfield is behind its competition, as many other companies have already made this switch. Due to this lag, it might not be until 2013 or 2014 that investors see a substantial increase in the price of the stock.
While in theory it would be a good time to invest in Newfield, there are much more favorable options out there in the E&P market (i.e., companies who have already switched their focus of exploration and development). Newfield’s competitors that are doing much better in the market right now are EOG Resources (EOG), Anadarko Petroleum (APC), Plains Exploration (PXP), and Whiting Petroleum (WLL).
Plains Exploration and Whiting Petroleum have higher market caps and significantly lower production. Plains Exploration had a strong first quarter and is seeing a rise in prices. One exceptionally outstanding part of Plains’ results this year so far is the amount of oil it has been able to produce given the market. The numbers increased from 9,123 BOE/day in Q4 2011 to 13,908 BOE/day in Q1 2012. Whiting is off to a similar start, with a 14% increase in production from Q4 2011 to Q1 2012. This is a prime example of the dangers Newfield now faces from lagging behind its competitors.To continue reading, click here.