Record oil output of 58,600 barrels per day
- 2Q oil output grew 27% vs. 1Q 2017
- Raising 2017 outlook for oil growth
from 30% to 40%
- Delaware resource assessment continues
to show strong results
- Signed Delaware crude transport deal
with Oryx; includes equity interest
- Permian midstream JV agreement creating
new platform for value creation
- 6-well Etstatis pad in Williston Basin
boasts 30-day cumulative oil of ~258,000 barrels
- Begins process to market San Juan Basin
legacy natural gas position
WPX Energy’s (NYSE:WPX) second-quarter 2017 results mark an
all-time high for the company’s liquids production and reflect
unaudited net income attributable to common shareholders of $72
million, or income of $0.18 per share on a diluted basis.
Total liquids production (oil and NGL) surpassed 70,000 barrels
per day for the first time in a quarter, averaging 72,400 barrels
per day in second-quarter 2017. This was 17 percent higher than
WPX’s prior best for liquids production (62,000 barrels per day in
fourth-quarter 2015) when its portfolio included Piceance Basin
operations that have since been divested.
Liquids growth was driven by WPX’s third consecutive quarterly
high for oil output. Second-quarter 2017 oil production of 58,600
barrels per day was 27 percent higher than the most recent quarter
and up 43 percent vs. the same period a year ago.
All three of WPX’s operating areas posted double-digit oil
growth vs. the most recent quarter, led by a 49 percent increase in
the Delaware Basin following a full-quarter benefit from volumes
associated with the Panther acquisition in March.
“Since my first quarterly webcast at WPX three years ago, we’ve
undertaken more than $7 billion of transactions, transformed the
company’s portfolio and doubled our oil production,” said Rick
Muncrief, chairman, president and chief executive officer.
“Without question, we’re reaping attractive results from our
long-term strategy. Most importantly, we remain intensely focused
on reaching our deleveraging goals by year-end 2018,” Muncrief
added.
WELL PERFORMANCE
WPX believes that data from its spacing test on its CBR-22 pad
in the Delaware Basin validates 330-foot wine-racked spacing for
Wolfcamp A laterals in the Stateline area at current market
pricing. Interference tests thus far continue to show only minimal
downhole pressure communication between wells.
Initial flowback on nine wells started at the end of the first
quarter when WPX completed these wells in the upper and lower
Wolfcamp A landing zones, testing 15 wells per section. All nine
wells in the spacing test are still free-flowing, with 90-day
average cumulative production of 106,000 Boe per well (51%
oil).
Also in the Delaware, WPX’s easternmost Wolfcamp A well to date
– the Blue 34-1H well – had 30-day production averaging 1,560 Boe/d
(69% oil). A Second Bone Spring Sand well had 30-day production
averaging 1,215 Boe/d (56% oil). A Third Bone Spring well had
30-day production averaging 1,647 Boe/d (50% oil). In the Wolfcamp
D interval, the East Pecos 22-9H had 30-day production averaging
2,051 Boe/d (31% oil).
In the Williston Basin, six wells on the Etstatis pad posted a
24-hour peak IP average of 2,809 Boe/d (81% oil) and 30-day
cumulative production averaging 53,303 Boe per well. The highest IP
occurred on the Etstatis 32-29HA well which posted a 24-hour high
of 3,532 Boe/d. The same well had cumulative 30-day production of
64,779 Boe.
Results were comparably strong on the two-well Wolf Chief pad in
the Williston, which posted a 24-hour peak IP average of 2,743
Boe/d per well (81% oil) and 30-day cumulative production averaging
56,181 Boe per well.
“I’m very pleased with the strong execution from our Bakken
team,” Muncrief said. “We’ve continued to challenge the status quo
and delivered some outstanding results, including a 51 percent jump
in our Bakken oil production since second-quarter 2016.”
RECENT EVENTS
As previously announced, during the second quarter WPX signed an
agreement with Howard Energy Partners to jointly develop oil
gathering and natural gas processing infrastructure in the
Stateline area of the Delaware Basin. Upon closing, WPX is slated
to receive $300 million upfront representing its strategic
partner’s contribution per the terms of the JV agreement, along
with a $132 million capital carry.
Subsequent to the close of the second quarter, WPX signed a
long-term agreement with Oryx Midstream Services which provides WPX
with 100,000 barrels per day of firm crude oil capacity from the
Stateline area to Midland and Crane and a minority equity position
in the related pipeline project.
The project is expected to be in service during the latter half
of 2018 and will initially provide approximately 400,000 barrels
per day of capacity.
WPX also has initiated a process to market its legacy natural
gas position in the northern end of the San Juan Basin comprising
both its operated and non-operated properties. WPX’s oil operations
in the San Juan Basin’s Gallup oil play are not included in the
sales process. If the marketing effort is successful, WPX would
work to complete a transaction by year-end.
2Q FINANCIAL RESULTS
Oil and NGL sales of $249 million accounted for 86 percent of
WPX’s second-quarter 2017 total product revenues of $289 million.
Quarterly oil sales grew by 59 percent vs. the same period a year
ago driven by higher production volumes and higher average
prices.
Total product revenues of $542 million during the first half of
2017 were 79 percent higher than $303 million in the first half of
2016. Oil revenues of $414 million during the first half of 2017
were 73 percent higher than the same period a year ago.
WPX’s second-quarter 2017 net income of $72 million included
$116 million of net gains associated with its hedge book. For the
first half of the year, WPX posted net income of $160 million,
compared with a net loss of $221 million in the first half of
2016.
The adjusted net loss from continuing operations (a non-GAAP
financial measure that excludes certain items typically excluded
from published analyst estimates) in the second quarter was $57
million, or a loss of $0.14 per share. Adjusted EBITDAX (a non-GAAP
financial measure) for the second quarter was $152 million.
Reconciliations for non-GAAP financial measures are available in
the tables that accompany this press release.
For the first half of 2017, the adjusted net loss from
continuing operations was $117 million, or a loss of $0.30 per
share. For the first half of 2017, adjusted EBITDAX was $267
million, or 19 percent higher than $225 million in the first half
of 2016. The improvement in adjusted EBITDAX is driven by higher
production volumes and higher prices, partially offset by lower
realizations on derivatives.
The weighted average gross sales price – prior to revenue
deductions – was $43.60 per barrel for oil, $2.65 for natural gas
and $18.98 per barrel for NGL during second-quarter 2017.
WPX’s total liquidity at the close of business on June 30, 2017,
was approximately $1.1 billion, including its available revolver
capacity. Cash flow from operations in the second quarter was $120
million.
Capital expenditures of $596 million during the first half of
2017 include $32 million for Delaware infrastructure, $63 million
for land purchases and $8 million for other items not associated
with D&C activity. The Delaware infrastructure expenses are
reimbursable to WPX under the terms of its midstream JV
agreement.
2Q PRODUCTION AND HEDGING UPDATE
Total company production volumes of 106.2 Mboe/d in
second-quarter 2017 were up 18 percent vs. first-quarter 2017 and
25 percent higher than the same period a year ago. Liquids volumes
accounted for 68 percent of second-quarter 2017 production.
Second-quarter 2017 natural gas volumes reflect the impact of
divesting non-core operations in the Marcellus Shale and the Green
River Basin. The absence of these volumes impacted second-quarter
gas production by 13 MMcf/d.
WPX completed 39 gross operated wells (36.83 net) in its three
basins during second-quarter 2017 and participated in another six
gross (1.06 net) non-operated wells in the Delaware Basin.
Average Daily Production 2Q
1Q Sequential 2017 2016 Change
2017 Change
Oil (Mbbl/d)
Delaware Basin 20.2 13.8 46 % 13.6 49 % Williston Basin 30.1 20 51
% 25.3 19 % San Juan Basin 8.3 7 20 % 7.2
15 % Subtotal (Mbbl/d) 58.6 40.9 43 % 46.1 27 %
NGLs (Mbbl/d) Delaware Basin 8 4.1 95 % 5.7 40 % Williston
Basin 2.5 2.1 19 % 2.1 19 % San Juan Basin 3.2 3.7 -14 % 3.4 -6 %
Other 0.1 0.1 0 % 0.1 0 % Subtotal
(Mbbl/d) 13.8 10 38 % 11.3 22 %
Natural gas (MMcf/d)
Delaware Basin 75 49 53 % 58 29 % Williston Basin 14 12 17 % 12 17
% San Juan Basin 111 127 -13 % 110 1 % Other 3 18
-83 % 16 -81 % Subtotal (MMcf/d) 203 206 -1 % 196 4 %
Total Production (Mboe/d) 106.2 85.2 25 % 90
18 %
For the remainder of 2017, WPX now has 50,750 barrels per day of
oil hedged at a weighted average price of $50.26 per barrel. As
previously disclosed, WPX also has 170,000 MMBtu per day of natural
gas hedged at a weighted average price of $3.02 per MMBtu.
For 2018, WPX now has 55,500 barrels per day of oil hedged at a
weighted average price of $52.69 per barrel. As previously
disclosed, WPX also has 185,000 MMBtu per day of natural gas hedged
at a weighted average price of $2.98 per MMBtu.
WPX has extended its hedging program into 2019. For 2019, WPX
has 17,000 barrels per day of oil hedged at a weighted average
price of $50.95 per barrel.
DELAWARE BASIN SUMMARY
WPX operates in the core of the Permian’s world-class Delaware
Basin where the company has more than 6,400 gross drillable
locations. WPX has seven rigs in the basin.
WPX’s total Delaware production averaged 40.7 Mboe/d in the
second quarter, up 41 percent vs. first-quarter 2017 and 56 percent
vs. a year ago. Second-quarter Delaware oil production jumped 49
percent vs. the most recent quarter.
Notably, second-quarter 2017 marked the first time for WPX’s
Delaware Basin operations to post the highest production among
WPX’s three operating areas. WPX entered the play in the second
half of 2015.
WPX brought 16 wells to first sales in the basin during the
second quarter, including nine Wolfcamp A laterals, three Wolfcamp
D laterals, and the previously mentioned laterals in the Second
Bone Springs Sand and the Third Bone Springs.
Additionally, WPX has installed 30 miles of the planned 50-mile
crude oil gathering system in the basin. The trunkline is designed
to have a capacity of approximately 125,000 barrels of oil per day.
The system will be part of the 50/50 midstream joint venture with
Howard Energy Partners.
WILLISTON BASIN SUMMARY
WPX’s Williston Basin production comes from the Bakken and Three
Forks formations. Approximately 85 percent of the production stream
is oil. WPX has two rigs deployed in the basin.
Williston Basin production averaged 34.9 Mboe/d in the second
quarter, up 19 percent vs. 29.4 Mboe/d in first-quarter 2017 and 45
percent above results from a year ago. Second-quarter 2017 oil
production in the basin was 51 percent higher vs. a year ago.
The company completed 14 wells in the second quarter, including
six Bakken wells and eight Three Forks wells. All of WPX’s
second-quarter 2017 completions in the Williston were two-mile
laterals, averaging 9,875 feet per lateral.
The 24-hour peak IP for the 14 wells averaged 2,516 Boe/d (81%
oil). Eleven of the 14 wells had 30-day cumulative production at
the time of this announcement, which were averaging 49,095 Boe per
well.
Recent well results in the basin reflect a favorable impact from
completions trials to test the number of frac stages, tighter
cluster spacing and increased proppant intensity.
SAN JUAN BASIN SUMMARY
WPX produces oil in the southern end of the San Juan Basin from
the Gallup Sandstone and has a legacy natural gas position in the
northern end of the basin. WPX has one rig deployed in the
basin.
San Juan Basin production averaged 30.1 Mboe/d in the second
quarter, up 5 percent vs. 28.8 Mboe/d in first-quarter 2017. Oil
production increased 15 percent vs. first-quarter 2017.
WPX has completed 11 Gallup oil wells so far this year,
including nine in the second quarter. This included four 1-mile
laterals and seven 1.5-mile laterals. The 24-hour peak IP for the
11 wells averaged 1,336 Boe/d (70% oil), with 30-day cumulative
production averaging 23,775 Boe per well.
The highest IP occurred on the 714H well with a 1.5-mile lateral
in the West Lybrook unit, which posted a 24-hour high of 1,712
Boe/d (65% oil). The highest 30-day average also occurred on the
714H well, which had cumulative production of 39,904 Boe.
WPX has a 12-month permit inventory in the San Juan Basin and
already has completed the vast majority of its pad and facilities
construction for its planned development through early 2018.
UPDATED 2017 GUIDANCE
WPX is raising its full-year oil production guidance for 2017 to
an average of 57 to 60 Mbbl per day, up 8 percent from previous
guidance of 52 to 56 Mbbl per day. Guidance for total equivalent
production in 2017 is now 105 to 116 Mboe per day, up from 103 to
113 Mboe per day.
Projections for natural gas production were adjusted following
the divestiture of WPX’s remaining properties in the Marcellus
Shale and its non-operated interests in the Green River Basin
during the first half of the year.
Full-year 2017 capital spending is now estimated at $990 million
to $1,070 million, up from $905 million to $985 million.
Incremental capital for the Delaware Basin addresses the
development of higher working interest wells, greater participation
in non-operated wells, inflationary pressure for oilfield services
and additional funding for infrastructure.
Further details and information about WPX’s updated 2017
guidance are available in the second-quarter slide presentation at
www.wpxenergy.com.
JOIN THURSDAY’S WEBCAST
The company’s next webcast takes place on Aug. 3 beginning at 10
a.m. Eastern. Investors are encouraged to access the event and the
corresponding slides at www.wpxenergy.com.
A limited number of phone lines also will be available at (844)
215-3288. International callers should dial (615) 247-5915. The
conference identification code is 33280314.
UPCOMING CONFERENCE PRESENTATIONS
WPX Chief Operating Officer Clay Gaspar is scheduled to speak at
the Enercom Oil and Gas Conference on Tuesday, Aug. 15, at 10 a.m.
Eastern.
WPX CEO Rick Muncrief is scheduled to present at Barclays
Capital CEO Energy-Power Conference on Wednesday, Sept. 6, at 1:05
p.m. Eastern.
Please visit www.wpxenergy.com on the day of each event to
confirm the time, see the slides and listen to the
presentations.
FORM 10-Q
WPX plans to file its second-quarter 2017 Form 10-Q with the
Securities and Exchange Commission this week. Once filed, the
document will be available on the SEC and WPX websites.
ABOUT WPX ENERGY, INC.
WPX has posted double-digit oil volume growth each of the past
five years. The company is active in the Delaware, Williston
and San Juan basins. The Delaware Basin is the western
portion of the greater Permian Basin.
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.
WPX Energy, Inc. Consolidated (GAAP) (UNAUDITED)
2016 2017 (Dollars in
millions) 1st Qtr 2nd Qtr 3rd Qtr 4th
Qtr YTD 1st Qtr 2nd Qtr YTD
Revenues: Product revenues: Oil sales $ 97 $ 142 $ 139 $ 173
$ 551 $ 188 $ 226 $ 414 Natural gas sales 25 24 37 39 125 44 40 84
Natural gas liquid sales 5 10
12 19 46
21 23 44
Total product revenues 127 176 188 231 722 253 289 542 Net
gain (loss) on derivatives 57 (154 ) 38 (148 ) (207 ) 203 116 319
Gas management 31 116 25 5 177 5 8 13 Other 1
- - -
1 - -
- Total revenues 216 138 251 88 693 461 413
874 Costs and expenses: Depreciation, depletion and
amortization 152 163 150 158 623 147 171 318 Lease and facility
operating 42 41 40 40 163 48 53 101 Gathering, processing and
transportation 16 20 19 21 76 21 21 42 Taxes other than income 11
16 14 19 60 19 23 42 Exploration 9 12 10 11 42 39 21 60 General and
administrative 53 55 51 55 214 43 46 89 Gas management 39 132 31 6
208 5 8 13 Net (gain) loss on sales of assets and divestment of
transportation contracts (198 ) (4 ) 227 (3 ) 22 (35 ) (7 ) (42 )
Other-net 2 2 10
2 16 4
8 12 Total costs
and expenses 126 437 552 309 1,424 291 344 635
Operating
income (loss) 90 (299 ) (301
) (221 ) (731 ) 170
69 239 Interest expense (57 ) (53 ) (49 ) (48
) (207 ) (47 ) (46 ) (93 ) Investment income and other 2
(1 ) - -
1 2 -
2 Income (loss) from continuing
operations before income taxes $ 35 $ (353 ) $ (350 ) $ (269 ) $
(937 ) $ 125 $ 23 $ 148 Provision (benefit) for income taxes
35 (130 ) (132 )
(98 ) (325 ) 31 (53 )
(22 )
Income (loss) from continuing operations
$ - $ (223 ) $
(218 ) $ (171 ) $
(612 ) $ 94 $ 76 $
170 Income (loss) from discontinued operations (12 )
25 (1 ) (1 )
11 (2 ) -
(2 )
Net income (loss) $ (12 )
$ (198 ) $ (219 )
$ (172 ) $ (601 )
$ 92 $ 76 $ 168 Less:
Dividends on preferred stock 5 6 4 3 18 4 4 8 Less: Loss on induced
conversion of preferred stock - -
22 -
22 - - -
Net income (loss) available to WPX Energy, Inc. common
stockholders $ (17 ) $
(204 ) $ (245 )
$ (175 ) $ (641 )
$ 88 $ 72
$ 160 Amounts available to WPX Energy, Inc.
common stockholders: Income (loss) from continuing operations $
(5 ) $ (229 ) $ (244 ) $ (174 ) $ (652 ) $ 90 $ 72 $ 162 Income
(loss) from discontinued operations (12 ) 25
(1 ) (1 ) 11
(2 ) - (2 )
Net
income (loss) $ (17 ) $
(204 ) $ (245 )
$ (175 ) $ (641 )
$ 88 $ 72
$ 160
Summary of Production Volumes (1) Oil (MBbls)
3,774 3,719 3,576 4,108 15,178 4,149 5,331 9,479 Natural gas (MMcf)
16,820 18,764 18,845 18,414 72,842 17,605 18,475 36,080 Natural gas
liquids (MBbls) 708 909 1,047 981 3,645 1,015 1,252 2,267 Combined
equivalent volumes (MBoe)
(2) 7,285 7,755 7,764 8,159 30,963
8,098 9,662 17,759
Per day volumes Oil (MBbls/d) 41.5 40.9
38.9 44.7 41.5 46.1 58.6 52.4 Natural gas (MMcf/d) 185 206 205 200
199 196 203 199 Natural gas liquids (MBbls/d) 7.8 10.0 11.4 10.7
10.0 11.3 13.8 12.5 Combined equivalent volumes (Mboe/d)
(2)
80.1 85.2 84.4 88.7 84.6 90.0 106.2 98.1
(1 )
Excludes activity classified as discontinued operations.
(2
) Mboe is converted using the ratio of one barrel of oil,
condensate or natural gas liquids to six thousand cubic feet of
natural gas.
Realized
average price per unit (1) Oil (per barrel) $ 25.62 $ 38.38 $
38.71 $ 42.18 $ 36.31 $ 45.31 $ 42.46 $ 43.70 Natural gas (per Mcf)
$ 1.52 $ 1.23 $ 1.97 $ 2.13 $ 1.72 $ 2.51 $ 2.13 $ 2.32 Natural gas
liquids (per barrel) $ 7.14 $ 11.21 $ 11.50 $ 18.54 $ 12.48 $ 20.85
$ 18.28 $ 19.43
(1 ) Excludes activity
classified as discontinued operations.
Expenses per Boe (1) Depreciation, depletion and
amortization $ 20.93 $ 21.02 $ 19.30 $ 19.27 $ 20.11 $ 18.11 $
17.78 $ 17.93 Lease and facility operating $ 5.74 $ 5.34 $ 5.07 $
4.93 $ 5.26 $ 5.87 $ 5.55 $ 5.69 Gathering, processing and
transportation $ 2.17 $ 2.57 $ 2.51 $ 2.54 $ 2.45 $ 2.65 $ 2.16 $
2.38 Taxes other than income $ 1.47 $ 2.05 $ 1.84 $ 2.37 $ 1.94 $
2.31 $ 2.43 $ 2.38 General and administrative $ 7.34 $ 7.09 $ 6.50
$ 6.71 $ 6.90 $ 5.27 $ 4.80 $ 5.02 Interest expense $ 7.89 $ 6.72 $
6.40 $ 5.87 $ 6.69 $ 5.75 $ 4.83 $ 5.25
(1 )
Excludes activity classified as discontinued operations.
WPX
Energy, Inc. Reconciliation of NON-GAAP Measures
(UNAUDITED) 2016 2017
(Dollars in millions, except per share amounts) 1st
Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st
Qtr 2nd Qtr YTD
Reconciliation
of adjusted loss from continuing operations available to common
stockholders: Income (loss) from continuing operations
available to WPX Energy, Inc. common stockholders - reported
$ (5 ) $ (229 )
$ (244 ) $ (174
) $ (652 ) $ 90
$ 72 $ 162
Pre-tax adjustments: Impairments reported in
exploration expense $ - $ - $ - $ - $ - $ 23 $ - $ 23 Impairment of
inventory $ - $ - $ 4 $ - $ 4 $ - $ - $ - Net (gain) loss on sales
of assets and divestment of transportation contracts $ (198 ) $ (4
) $ 227 $ (3 ) $ 22 $ (35 ) $ (7 ) $ (42 ) Accrual for Denver
office lease $ - $ - $ 5 $ - $ 5 $ - $ - $ - Costs related to
severance and relocation $ 3 $ 7 $ 3 $ 2 $ 15 $ - $ - $ -
Previously capitalized costs expensed following credit facility
amendment $ 4 $ - $ - $ - $ 4 $ - $ - $ - (Gain) loss on retirement
of debt $ (3 ) $ 3 $ - $ 1 $ 1 $ - $ - $ - Unrealized MTM (gain)
loss $ 76 $ 223 $ 20 $
190 $ 509 $ (208 ) $ (102 ) $
(310 )
Total pre-tax adjustments $ (118 ) $ 229 $ 259 $ 190
$ 560 $ (220 ) $ (109 ) $ (329 ) Less tax effect for above items $
43 $ (85 ) $ (96 ) $ (71 ) $ (208 ) $ 83 $ 40 $ 122 Impact of state
deferred tax rate change $ 14 $ - $ - $ 1 $ 15 $ (6 ) $ - $ (6 )
Impact of state tax valuation allowance (annual effective tax rate
method) $ 8 $ - $ - $ - $ 8 $ (6 ) $ (34 ) $ (40 ) Adjustment for
estimated annual effective tax rate method $ - $ - $ - $ - $ - $ -
$ (26 ) $ (26 ) Loss on induced conversion of preferred stock $ -
$ - $ 22 $ -
$ 22 $ - $ - $ -
Total adjustments, after tax $ (53 ) $ 144
$ 185 $ 120 $ 397 $ (149
) $ (129 ) $ (279 )
Adjusted loss from continuing
operations available to common stockholders $ (58
) $ (85 ) $
(59 ) $ (54 )
$ (255 ) $ (59 )
$ (57 ) $ (117 )
Reconciliation of adjusted diluted loss per common
share: Income (loss) from continuing operations - diluted
earnings per share - reported $ (0.02 )
$ (0.76 ) $ (0.72
) $ (0.51 ) $
(2.08 ) $ 0.22 $
0.18 $ 0.40 Impact of
adjusted diluted weighted-average shares $ - $ - $ - $ - $ - $ 0.01
$ - $ 0.01
Pretax adjustments (1): Impairments reported in
exploration expense $ - $ - $ - $ - $ - $ 0.06 $ - $ 0.06
Impairment of inventory $ - $ - $ 0.01 $ - $ 0.01 $ - $ - $ - Net
(gain) loss on sales of assets and divestment of transportation
contracts $ (0.72 ) $ (0.01 ) $ 0.67 $ (0.01 ) $ 0.07 $ (0.09 ) $
(0.02 ) $ (0.11 ) Accrual for Denver office lease $ - $ - $ 0.01 $
- $ 0.02 $ - $ - $ - Costs related to severance and relocation $
0.01 $ 0.02 $ 0.01 $ 0.01 $ 0.05 $ - $ - $ - Previously capitalized
costs expensed following credit facility amendment $ 0.01 $ - $ - $
- $ 0.01 $ - $ - $ - (Gain) loss on retirement of debt $ (0.01 ) $
0.01 $ - $ - $ - $ - $ - $ - Unrealized MTM (gain) loss $ 0.27
$ 0.74 $ 0.06 $ 0.55
$ 1.62 $ (0.54 ) $ (0.26 ) $
(0.79 )
Total pretax adjustments $ (0.44 ) $ 0.76 $ 0.76 $
0.55 $ 1.78 $ (0.57 ) $ (0.28 ) $ (0.84 ) Less tax effect for above
items $ 0.17 $ (0.28 ) $ (0.27 ) $ (0.20 ) $ (0.67 ) $ 0.22 $ 0.12
$ 0.31 Impact of state tax rate change $ 0.05 $ - $ - $ - $ 0.05 $
(0.01 ) $ - $ (0.01 ) Impact of state valuation allowance (annual
effective tax rate method) $ 0.03 $ - $ - $ - $ 0.03 $ (0.02 ) $
(0.09 ) $ (0.10 ) Adjustment for estimated annual effective tax
rate method $ - $ - $ - $ - $ - $ - $ (0.07 ) $ (0.07 ) Loss on
induced conversion of preferred stock $ - $ -
$ 0.06 $ - $ 0.07 $ -
$ - $ -
Total adjustments,
after-tax $ (0.19 ) $ 0.48 $ 0.55
$ 0.35 $ 1.26 $ (0.38 ) $ (0.32
) $ (0.71 )
Adjusted diluted loss per common share
$ (0.21 ) $ (0.28
) $ (0.17 ) $
(0.16 ) $ (0.82 )
$ (0.15 ) $ (0.14
) $ (0.30 ) Reported diluted
weighted-average shares (millions) 276.1 300.7
341.5 344.6 313.3 410.4 423.2
418.8 Effect of dilutive securities due to adjusted loss
from continuing operations available to common stockholders
- - -
- - (24.1 )
(25.4 ) (26.7 )
Adjusted diluted weighted-average
shares (millions) 276.1
300.7 341.5
344.6 313.3
386.3 397.8
392.1 (1) Per share impact is based on
adjusted diluted weighted-average shares.
Reconciliation of Adjusted EBITDAX Net income (loss) -
reported
$ (12 ) $ (198 )
$ (219 ) $ (172 )
$ (601 ) $ 92 $ 76
$ 168 Interest expense 57 53 49 48 207 47 46 93
Provision (benefit) for income taxes 35 (130 ) (132 ) (98 ) (325 )
31 (53 ) (22 ) Depreciation, depletion and amortization 152 163 150
158 623 147 171 318 Exploration expenses 9
12 10 11
42 39 21
60
EBITDAX 241 (100
) (142 ) (53 ) (54
) 356 261 617 Accrual for Denver office
lease - - 5 - 5 - - - Net (gain) loss on sales of assets and
divestment of transportation contracts (198 ) (4 ) 227 (3 ) 22 (35
) (7 ) (42 ) Impairment of inventory - - 4 - 4 - - - Net (gain)
loss on derivatives (57 ) 154 (38 ) 148 207 (203 ) (116 ) (319 )
Net cash received (paid) related to settlement of derivatives 133
69 58 42 302 (5 ) 14 9 (Income) loss from discontinued operations
12 (25 ) 1
1 (11 ) 2 -
2
Adjusted EBITDAX $
131 $ 94 $
115 $ 135 $
475 $ 115 $
152 $ 267 WPX
Energy, Inc. Consolidated Statements of Operations
(Unaudited) Three months
ended June 30, Six months ended June 30,
2017 2016 2017
2016 (Millions, except per share
amounts) Revenues: Product revenues: Oil sales $ 226 $ 142 $
414 $ 239 Natural gas sales 40 24 84 49 Natural gas liquid sales
23 10 44 15
Total product revenues 289 176 542 303 Net gain (loss) on
derivatives 116 (154 ) 319 (97 ) Gas management 8 116 13 147 Other
- - - 1
Total revenues 413 138 874
354 Costs and expenses: Depreciation,
depletion and amortization 171 163 318 315 Lease and facility
operating 53 41 101 83 Gathering, processing and transportation 21
20 42 36 Taxes other than income 23 16 42 27 Exploration 21 12 60
21 General and administrative (including equity-based compensation
of $9 million, $9 million, $16 million and $15 million for the
respective periods) 46 55 89 108 Gas management 8 132 13 171 Net
gain on sales of assets (7 ) (4 ) (42 ) (202 ) Other - net 8
2 12 4 Total costs
and expenses 344 437 635
563 Operating income (loss) 69 (299 ) 239 (209
) Interest expense (46 ) (53 ) (93 ) (110 ) Investment income and
other - (1 ) 2 1
Income (loss) from continuing operations before income taxes 23
(353 ) 148 (318 ) Provision (benefit) for income taxes (53 )
(130 ) (22 ) (95 ) Income (loss) from
continuing operations 76 (223 ) 170 (223 ) Income (loss) from
discontinued operations - 25 (2
) 13 Net income (loss) 76 (198 ) 168 (210 ) Less:
Dividends on preferred stock 4 6
8 11 Net income (loss) available to WPX
Energy, Inc. common stockholders $ 72 $ (204 ) $ 160
$ (221 )
Amounts available to WPX Energy, Inc. common
stockholders: Income (loss) from continuing operations $ 72 $
(229 ) $ 162 $ (234 ) Income (loss) from discontinued operations
- 25 (2 ) 13 Net
income (loss) $ 72 $ (204 ) $ 160 $ (221 )
Basic earnings (loss) per common share: Income (loss) from
continuing operations $ 0.18 $ (0.76 ) $ 0.41 $ (0.81 ) Income
(loss) from discontinued operations - 0.08
- 0.04 Net income (loss) $ 0.18
$ (0.68 ) $ 0.41 $ (0.77 ) Basic
weighted-average shares (millions) 397.8 300.7 392.1 288.2
Diluted earnings (loss) per common share: Income (loss) from
continuing operations $ 0.18 $ (0.76 ) $ 0.40 $ (0.81 ) Income
(loss) from discontinued operations - 0.08
- 0.04 Net income (loss) $ 0.18
$ (0.68 ) $ 0.40 $ (0.77 ) Diluted
weighted-average shares (millions) 423.2 300.7 418.8 288.2
WPX Energy, Inc. Consolidated Balance Sheets
(Unaudited)
June 30,2017
December 31,2016
ASSETS (Millions) Current assets: Cash and cash
equivalents $ 8 $ 496 Accounts receivable, net of allowance of $1
million as of June 30, 2017 and $3 million as of December 31, 2016
205 168 Derivative assets 110 26 Inventories 41 36 Other 29
28 Total current assets 393 754 Properties and
equipment (successful efforts method of accounting) 10,244 8,929
Less: Accumulated depreciation, depletion and amortization
(2,759 ) (2,455 ) Properties and equipment, net 7,485 6,474
Derivative assets 58 12 Other noncurrent assets 26 24
Total assets $ 7,962 $ 7,264
LIABILITIES
AND EQUITY Current liabilities: Accounts payable $ 348 $ 222
Accrued and other current liabilities 244 303 Derivative
liabilities 27 152 Total current liabilities
619 677 Deferred income taxes 226 251 Long-term debt, net 2,601
2,575 Derivative liabilities 8 63 Asset retirement obligations 98
100 Other noncurrent liabilities 106 132 Equity:
Stockholders' equity: Preferred stock (100 million shares
authorized at $0.01 par value; 4.8 million shares outstanding at
June 30, 2017 and December 31, 2016) 232 232 Common stock (2
billion shares authorized at $0.01 par value; 398.0 million shares
and 344.7 million shares issued and outstanding at June 30, 2017
and December 31, 2016) 4 3 Additional paid-in-capital 7,472 6,803
Accumulated deficit (3,404 ) (3,572 ) Total
stockholders' equity 4,304 3,466 Total
liabilities and equity $ 7,962 $ 7,264
WPX
Energy, Inc. Consolidated Statements of Cash Flows
(Unaudited) Six months ended June 30,
2017 2016 (Millions)
Operating Activities(a) Net income (loss) $ 168 $ (210 )
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation, depletion and amortization 318
324 Deferred income tax provision (benefit) (24 ) (82 ) Provision
for impairment of properties and equipment (including certain
exploration expenses) 58 19 Net (gain) loss on derivatives in
continuing operations (319 ) 97 Net settlements related to
derivatives in continuing operations 9 202 Net loss on derivatives
included in discontinued operations - 46 Amortization of
stock-based awards 17 17 Net gain on sales of assets (41 ) (254 )
Cash provided (used) by operating assets and liabilities:
Accounts receivable (49 ) 102 Inventories (3 ) 9 Other current
assets (5 ) 3 Accounts payable 72 (28 ) Federal income taxes
receivable (payable) 12 (33 ) Accrued and other current liabilities
(45 ) (99 ) Payments on liabilities accrued in 2015 for retained
transportation and gathering contracts related to discontinued
operations (29 ) (30 ) Other, including changes in other noncurrent
assets and liabilities 3 6 Net cash
provided by operating activities (a) 142 89
Investing Activities(a) Capital
expenditures(b) (542 ) (291 ) Proceeds from sales of assets 38
1,139 Purchase of business (798 ) - Purchase of investment (3 ) -
Other (3 ) (4 ) Net cash provided by (used in)
investing activities (a) (1,308 ) 844
Financing Activities Proceeds from common stock 671 540
Dividends paid on preferred stock (7 ) (11 ) Borrowings on credit
facility 85 380 Payments on credit facility (60 ) (645 ) Taxes paid
for shares withheld (10 ) (4 ) Payments for retirement of long-term
debt - (196 ) Payments for credit facility amendment fees - (3 )
Other (1 ) (1 ) Net cash provided by financing
activities 678 60 Net increase
(decrease) in cash and cash equivalents (488 ) 993 Cash and cash
equivalents at beginning of period 496 38
Cash and cash equivalents at end of period $ 8 $
1,031 (a) Amounts reflect continuing
and discontinued operations unless otherwise noted. (b) Increase to
properties and equipment $ (596 ) $ (264 ) Changes in related
accounts payable and accounts receivable 54
(27 ) Capital expenditures $ (542 ) $ (291 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170802006206/en/
WPX EnergyMedia Contact:Kelly Swan,
539-573-4944orInvestor Contact:David Sullivan,
539-573-9360
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