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Fitch Ratings upgrades Newfield Exploration Company's IDR.

Chicago: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, upgraded Newfield Exploration Company's (NYSE: NFX) long-term Issuer Default Rating (IDR) and unsecured debt ratings to 'BBB-' from 'BB+'.

With Rating Outlook Stable, the upgrade reflects Newfield's continued development of its core STACK position with development project results in-line with or above the three-year plan type curve helping support multi-year production expectations and mitigate operational execution risks. In addition to the forecasted strong production growth, Fitch's base case projects an improving leverage profile with debt/EBITDA metrics in the 1.5x range and positive FCF beginning in the 2019-2020 timeframe. Another consideration is the reduced credit impact and risk of lower production and cash flows from further portfolio optimization activities given the company's Anadarko production growth and solid liquidity position.

Newfield communicated its updated three-year plan in early 2018 targeting returns-driven Anadarko development resulting in 14%-18% annual production growth, while reducing leverage metrics and maintaining a strong liquidity position. Halfway through the year, Newfield has favorably raised its full-year 2018 average production guidance twice in conjunction with the announcement of quarterly results on the back of strong well results and a favorable commodity price environment. Newfield only increased capex modestly, with the increase related to increased working interest and non-operated activity in high-return projects. The company's leverage and liquidity position also compare positively relative to plan.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:Nov 29, 2018
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