Swaps mature coalbed methane for San Juan oil
TULSA, Okla.--(BUSINESS WIRE)--
WPX Energy (NYSE:WPX) announced today that it has executed multiple
agreements to deepen the company’s investment opportunities as it
focuses on margin improvement.
The transactions, which are subject to normal closing conditions, will
enable WPX to divest its mature coalbed methane holdings and bolster
high-growth San Juan oil acreage by more than 50 percent.
“We’re moving quickly to build scale and create additional shareholder
value,” said Rick Muncrief, WPX president and chief executive officer.
“These transactions largely offset and demonstrate our commitment to
deploy capital where we can generate the highest returns.”
POWDER RIVER BASIN DIVESTITURE
WPX has agreed to sell its remaining mature, coalbed methane holdings in
the Powder River Basin for $155 million in cash. As part of the
transaction, WPX also releases firm transportation with $30 million in
future demand obligations.
Mid-year reserves in the basin are 222 Bcfe and second-quarter
production was 154 MMcf per day, which includes operated and
non-operated working interests in approximately 5,000 wells. WPX has not
actively drilled in the basin since 2011.
In 2013, production in the basin represented approximately 14 percent of
the company’s total production, but generated only 5 percent of WPX’s
adjusted EBITDAX results, excluding the impact of unutilized
transportation.
The transaction should improve WPX’s consolidated operating cost
structure for lease operating, gathering and transport expenses.
26,000 MORE ACRES IN THE GALLUP OIL PLAY
WPX has executed multiple transactions and now controls 26,000
additional acres in the heart of the San Juan Basin’s Gallup oil window,
an acreage increase of more than 50 percent since May.
The transactions include approximately 800 barrels of oil equivalent per
day. WPX now has 74,600 net acres exposed to San Juan Gallup oil. The
majority of the acreage is held-by-production.
WPX now has an estimated 425 gross drillable locations for oil in
the area assuming 160-acre spacing. WPX will add a third rig and
possibly a fourth in 2015 to accelerate development.
CONFERENCE PRESENTATION
As previously disclosed, WPX Energy CEO Rick Muncrief is scheduled to
speak at the EnerCom Oil and Gas Conference in Denver on Tuesday, Aug.
19.
Mr. Muncrief’s presentation is scheduled to begin at approximately 12:20
p.m. Mountain. Please visit www.wpxenergy.com
on the day of the event to confirm the time, see the slides and to
listen to the webcast.
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, Inc.