Agreement value exceeds $200 Million
$170 million carry on nearly 400 wells
TULSA, Okla.--(BUSINESS WIRE)--
WPX Energy (NYSE:WPX) announced today that it closed an agreement to
jointly develop its Trail Ridge properties with TRDC LLC, a subsidiary
of Houston-based G2X Energy.
The Trail Ridge development is part of WPX’s position in western
Colorado’s Piceance Basin Highlands. WPX will remain as operator.
“We’re bringing value forward by accelerating the development of what
has been a quiet part of our Piceance holdings,” said
Rick Muncrief
, WPX
president and chief executive officer.
“This is a creative way to generate returns that are among the best in
our portfolio,” Muncrief added.
WPX received approximately $40 million cash for 49 percent of its
working interest in approximately 100 proved developed producing (PDP)
Trail Ridge wells.
The working interest sold represents 27 billion cubic feet of proved
developed reserves and 46 billion cubic feet of proved undeveloped
reserves.
TRDC also has committed to a $170 million drilling carry on nearly 400
future wells and will make additional investments for its 49 percent
working interest.
WPX will pay 28 percent of the Trail Ridge development and receive 51
percent of the production and reserves until TRDC has completed its $170
million funding commitment. This structure will generate returns for WPX
comparable to its oil plays during the carry period.
Currently, the parties plan to jointly develop eight wells in 2014; 25
wells in 2015, 50 wells in 2016 and 100 wells per year in 2017 and
beyond. WPX has approximately 1,300 remaining Trail Ridge drilling
locations.
The joint development agreement is for the Williams Fork and Iles
formations and does not include deeper opportunities in the Mancos and
Niobrara shales.
About WPX Energy, Inc.
WPX Energy is an independent exploration and production company formed
during a spinoff two years ago. Overall, WPX has more than 30 years of
experience in its sector along with more than 40 local, state and
federal awards for efficiency, innovation and corporate social
responsibility.
This press release includes “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.All
statements, other than statements of historical facts, included in this
press release that address activities, events or developments that the
company expects, believes or anticipates will or may occur in the future
are forward-looking statements.Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are beyond
the control of the company.Statements regarding future drilling
and production are subject to all of the risks and uncertainties
normally incident to the exploration for and development and production
of oil and gas.These risks include, but are not limited to, the
volatility of oil, natural gas and NGL prices; uncertainties inherent in
estimating oil, natural gas and NGL reserves; drilling risks;
environmental risks; and political or regulatory changes.Investors
are cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ
materially from those projected in the forward-looking statements.The
forward-looking statements in this press release are made as of the date
of this press release, even if subsequently made available by WPX Energy
on its website or otherwise. WPX Energy does not undertake and expressly
disclaims any obligation to update the forward-looking statements as a
result of new information, future events or otherwise. Investors are
urged to consider carefully the disclosure in our filings with the
Securities and Exchange Commission, available from us at WPX Energy,
Attn:Investor Relations, P.O. Box 21810, Tulsa, Okla., 74102, or
from the SEC’s website at www.sec.gov.
Additionally, the SEC requires oil and gas companies, in filings made
with the SEC, to disclose proved reserves, which are those quantities of
oil and gas, which, by analysis of geoscience and engineering data, can
be estimated with reasonable certainty to be economically producible –
from a given date forward, from known reservoirs, under existing
economic conditions, operating methods, and governmental regulations.
The SEC permits the optional disclosure of probable and possible
reserves. From time to time, we elect to use “probable” reserves and
“possible” reserves, excluding their valuation. The SEC defines
“probable” reserves as “those additional reserves that are less certain
to be recovered than proved reserves but which, together with proved
reserves, are as likely as not to be recovered.” The SEC defines
“possible” reserves as “those additional reserves that are less certain
to be recovered than probable reserves.” The Company has applied these
definitions in estimating probable and possible reserves. Statements of
reserves are only estimates and may not correspond to the ultimate
quantities of oil and gas recovered. Any reserve estimates provided in
this presentation that are not specifically designated as being
estimates of proved reserves may include estimated reserves not
necessarily calculated in accordance with, or contemplated by, the SEC‘s
reserves reporting guidelines. Investors are urged to consider closely
the disclosure in our SEC filings that may be accessed through the SEC’s
website at www.sec.gov.
The SEC’s rules prohibit us from filing resource estimates. Our
resource estimations include estimates of hydrocarbon quantities for (i)
new areas for which we do not have sufficient information to date to
classify as proved, probable or even possible reserves, (ii) other areas
to take into account the low level of certainty of recovery of the
resources and (iii) uneconomic proved, probable or possible reserves.
Resource estimates do not take into account the certainty of resource
recovery and are therefore not indicative of the expected future
recovery and should not be relied upon. Resource estimates might never
be recovered and are contingent on exploration success, technical
improvements in drilling access, commerciality and other factors.
Source: WPX Energy