• Joins the 100,000-acre club in the Delaware Basin
• Raises estimate for net resource potential in Delaware to 2.4
billion boe
• Increases gross drilling locations in Delaware to 5,500+
• 2Q Delaware oil volumes jump 15 percent vs. 1Q 2016
• Completions to resume in Williston Basin this month
WPX reported an unaudited second-quarter 2016 net loss
attributable to common shareholders of $204 million, or a loss of
$0.68 per share on a diluted basis.
Second-quarter 2016 financial results were impacted by
unrealized non-cash net losses on WPX’s hedge portfolio; higher
depreciation, depletion and amortization related to higher than
expected Williston Basin production; severance and relocation
costs; and managing transportation arrangements associated with
selling the Piceance Basin subsidiary.
“We continue to work through the final aspects of our
transformation. We’re executing very well, reporting higher
volumes, reducing debt and building a cash position that can
support an acceleration of activity in 2017 and 2018,” said Rick
Muncrief, president and chief executive officer.
EXPANDING IN THE DELAWARE BASIN
WPX is more than doubling its estimate for net resource
potential in the Permian’s Delaware Basin from 1.1 billion barrels
of oil equivalent to approximately 2.4 billion boe and raising the
projected number of gross drillable locations from more than 3,600
to more than 5,500.
WPX’s original estimate was conducted a year ago when it
acquired Delaware properties from RKI Exploration and Production.
The new assessment comes on the heels of increasing estimated
ultimate recoveries (EURs) earlier this year, identifying
additional benches (such as Wolfcamp X/Y), down-spacing
opportunities in targeted intervals, and purchasing more
acreage.
Subsequent to the close of the second quarter, WPX acquired
another 7,800 net acres in the Delaware basin from a privately held
undisclosed seller.
The acreage is close to WPX’s acreage position in central Eddy
County, New Mexico. It has multiple stacked horizontal targets,
including the Wolfcamp and Bone Spring intervals.
The bolt-on acquisition increases WPX’s position in the Permian
Basin to over 100,000 net acres. The purchase also includes
existing production of approximately 425 boe per day (55 percent
oil) from 16 vertical wells.
As previously announced, WPX plans to add a third rig in the
Delaware Basin in October to support delineation of the Wolfcamp D
and X/Y intervals. WPX’s development has primarily focused on the
Wolfcamp A to date.
Additionally, WPX is proceeding to expand its owned and operated
midstream infrastructure in the Delaware Basin with the addition of
a crude oil gathering system. This will increase reliability,
increase the optionality for market access and improve oil
differentials.
Planning and engineering are under way, with groundbreaking
scheduled to occur before year-end. The first phase of the project
is expected to be complete in mid-2017, with further build-out to
follow. WPX is planning a total installation of approximately 50
miles of pipe to support its Delaware production.
“We have a tremendous opportunity in the basin,” said Clay
Gaspar, chief operating officer. “The Delaware is a world-class oil
play, whose upside is being understood more and more through
ongoing resource assessment. We’re extremely pleased with our own
results, as well as the performance we’re seeing from offset
operators.”
SECOND-QUARTER FINANCIAL RESULTS
WPX reported an unaudited second-quarter 2016 net loss
attributable to common shareholders of $204 million, or a loss of
$0.68 per share on a diluted basis. A 46 percent increase in oil
sales vs. the preceding quarter was more than offset by a non-cash
net loss on derivatives as underlying commodity prices improved
causing a reduction in the value of those contracts.
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 $85
million, or a loss of $0.28 per share. Adjusted EBITDAX (a non-GAAP
financial measure) for the second quarter was $94 million. For the
first half of 2016, adjusted EBITDAX was $225 million.
Reconciliations for non-GAAP financial measures are available in
the tables that accompany this press release.
The weighted average gross sales price – prior to revenue
deductions – for oil decreased 20 percent vs. a year ago to $39.81
per barrel in second-quarter 2016. Natural gas prices decreased 26
percent to $1.63 per Mcf. NGL prices decreased 11 percent to $15.02
per barrel. The weighted average gross sales price for oil and
NGLs, however, rose 49 percent and 29 percent respectively compared
with the preceding quarter.
Second-quarter oil revenues of $142 million accounted for more
than 80 percent of total product revenues in a quarter for the
first time. Total product revenues were $176 million in
second-quarter 2016, up 39 percent vs. the preceding quarter. Total
product revenues for the first half of 2016 were $303 million,
including $239 million of oil sales.
LIQUIDITY REMAINS ROBUST
WPX’s total liquidity at the close of business on June 30 was
approximately $2.1 billion, consisting of $1.025 billion in undrawn
capacity on a revolving credit facility and the company’s
unrestricted cash and cash equivalents.
During the second quarter, WPX received approximately $538
million in net proceeds from a public offering of common stock. In
July, WPX applied a portion of the net proceeds to acquire
additional acreage in the Delaware Basin.
Based on current operating conditions, WPX believes it has ample
cash on-hand to accelerate drilling and completion activities if
conditions warrant, for midstream infrastructure development in the
Delaware Basin, and to fully fund planned operating capital
expenditures in excess of operating cash flows through 2018.
Since the end of the first quarter, the company repurchased $179
million of its 5.250 percent Senior Notes due 2017. The initial
$400 million balance on the 2017 maturity now stands at $125
million.
OIL PRODUCTION REMAINS ABOVE 40,000 BARRELS PER DAY
Total company production volumes were 85.2 Mboe per day in the
second quarter. Production was up 6 percent vs. the preceding
quarter, primarily from Delaware gas volumes that were previously
impacted by an outage at a third-party gas processing plant in
prior quarters.
Second-quarter oil volumes of 40,900 barrels per day were
comparable to the company’s high of 41,500 barrels per day in the
first quarter despite reduced development activity in the Williston
and San Juan basins. Total liquids accounted for 60 percent of
production.
Average Daily Production
2Q 1Q 2016 2015
Change
2016 Change
Oil (Mbbl/d)
Delaware Basin 13.8 - n/a
12 15 %
Williston Basin
20 22.6 -12 % 21.8 -8 % San Juan Basin 7 8.5 -18 % 7.5 -7 % Other
0 0 0 % 0.2
NM Subtotal (Mbbl/d) 40.9 31.1 32 % 41.5 -1 %
NGLs
(Mbbl/d) Delaware Basin 4.1 - n/a 1.9 116 %
Williston Basin
2.1 2 5 % 2 5 % San Juan Basin 3.7 3.1 19 % 3.8 -3 % Other
0.1 0.1 0 % 0.1 0
% Subtotal (Mbbl/d) 10 5.2 92 % 7.8 28 %
Natural gas
(MMcf/d) Delaware Basin 49 - n/a 21 133 % Williston Basin 12 12
0 % 13 -8 % San Juan Basin 127 126 1 % 131 -3 % Other
18 26 -31 % 20 -20 %
Subtotal (MMcf/d) 206 164 26 % 185 11 %
Total Production
(MMcfe/d) 511 382 34 % 480
6 %
Total Production (Mboe/d) 85.2 63.7
34 % 80.1 6 %
For the remainder of 2016, WPX has 30,712 barrels per day of oil
hedged at a weighted average price of $60.16 per barrel. WPX has
natural gas derivatives totaling 145,965 MMBtu per day for the
remainder of 2016 at a weighted average price of $3.93 per
MMBtu.
For 2017, WPX has 25,054 barrels per day of oil hedged at a
weighted average price of $50.74 per barrel. WPX also has 110,000
MMBtu per day of natural gas hedged at a weighted average price of
$2.91 per MMBtu. For 2018, WPX has 6,000 barrels per day of oil
hedged at a weighted average price of $60.14 per barrel.
WPX participated in the completion of 26 gross (14.1 net) wells
from continuing operations in second-quarter 2016. Capital spending
for drilling and completion in the first half of 2016 was $264
million, including $94 million in the second quarter. These amounts
are in line with the company’s guidance range of $400 million to
$450 million for the full year.
Amounts for 2016 capital spending also include $26 million of
Piceance activity that will effectively be reimbursed in
conjunction with the sale of the Piceance subsidiary.
2Q 2016 WELL COMPLETIONS
OPERATED NON-OPERATED Gross Net Gross
Net Delaware Basin 8 8 3 0.20 Williston Basin 0 0 0 0
San Juan Basin 6 5.9 0 0 Other (Green River) 0 0 9 0.04
TOTAL 14 13.9 12 0.24
DELAWARE BASIN
WPX operates in the core of the Permian’s world-class Delaware
Basin, where the company has more than 5,500 gross drillable
locations across 13 prospective intervals based on a recent
resource assessment.
Delaware production averaged 26 Mboe per day in the second
quarter, up 50 percent vs. the preceding quarter primarily from gas
volumes that were previously impacted due to a third-party plant
outage. WPX’s oil volumes in the basin increased 15 percent vs. the
preceding quarter.
For the first half of 2016, the maximum initial production rates
for Wolfcamp A wells averaged 1,024 barrels of oil per day, 36
percent higher than 2015 IP rates. Sixty-day rates for Wolfcamp A
wells in the first half of 2016 averaged 716 barrels of oil per
day, 43 percent higher than 2015 results.
The Lindsay 2-4H well continues to represent an early-time
production record for WPX’s 1-mile Wolfcamp A wells using larger
completions. It posted 30-day production averaging 1,944 Boe per
day and has cumulative production of 166 Mboe through 90 days. The
well is averaging 50 percent oil.
WPX has various spacing tests under way in the basin and
continues to conduct trials on completion designs including
different sand volumes and perforation cluster spacing. These tests
are designed to optimize production and result in operational
efficiencies and cost savings. WPX is self-sourcing sand for its
Delaware completions, providing the company with direct access to
mines.
WILLISTON BASIN
WPX’s Williston Basin production comes from the Bakken and Three
Forks formations. Approximately 85 percent of the production stream
is oil.
Williston production averaged 24.1 Mboe per day in the second
quarter, compared with 26 Mboe per day in the preceding quarter.
WPX did not complete any wells in the basin during the second
quarter.
Completion activity in the basin will resume in August. WPX
expects to complete three to four wells per month through
December.
WPX drilled four Williston wells (gross) in the second quarter,
consisting of two in the Bakken and two in the Three Forks. All
four wells were 2-mile laterals. The drilling time per well
averaged 17.7 days.
The Owl Comes Out 8-9HC lateral was drilled in just 16.3 days,
which is WPX’s best time in the basin for a 2-mile lateral. WPX’s
goal is to achieve spud-to-rig release in 12 days for a 2-mile
lateral in the basin.
SAN JUAN BASIN
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, including considerable dry Mancos
upside.
San Juan Basin production averaged 31.9 Mboe per day in the
second quarter, compared with 33.1 Mboe per day in the preceding
quarter.
WPX completed a six-well pad in the West Lybrook unit in the
second quarter. The combined lateral length of the wells exceeded
eight miles. Drilling averaged 7.7 days per well. Four of the wells
were completed with 1,000-pound-per-foot completion designs. The
other two were completed with a 1,500-pound design. D&C costs,
including facilities, averaged $4.1 million for the 1.5-mile
laterals (3).
WPX brought the six wells online sequentially utilizing a
controlled flowback procedure. The wells were subsequently shut-in
during initial production after a fire impacted temporary storage
tanks and surface equipment at the pad.
In the day prior to being shut in, the pad hit a peak rate of
6,000 barrels of oil while none of the wells were fully open. WPX
is in the process of bringing the wells back on production.
UPDATED GUIDANCE
As previously announced in June, WPX increased its full-year oil
production guidance for 2016 to an average of 39 to 41 Mbbl per
day, up 5 percent from previous guidance of 37 to 39 Mbbl per day.
Guidance for total equivalent production in 2016 is 77 to 82 Mboe
per day.
Additionally, WPX is tightening the range for its expected
commodity price differentials in 2016 and modifying its estimates
for certain expenses this year, including lower expected cash
operating expenses and higher DD&A.
Full information about WPX’s 2016 guidance is available in the
second-quarter slide presentation at www.wpxenergy.com.
JOIN THURSDAY’S WEBCAST
The company’s next webcast takes place on Aug. 4 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 36768570.
UPCOMING CONFERENCE PRESENTATIONS
WPX Chief Operating Officer Clay Gaspar is scheduled to speak at
the Enercom Oil and Gas Conference on Tuesday, Aug. 16, at 10:55
a.m. Eastern.
WPX CEO Rick Muncrief is scheduled to present at Barclays
Capital CEO Energy-Power Conference on Tuesday, 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 2016 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 is an oil-focused energy company with operations in the
Permian’s Delaware Basin, the Williston Basin and the San Juan
Basin. The company has reshaped its holdings through more than $5
billion of transactions and posted double-digit oil volume growth
in each of the past four years.
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) 2015
2016 (Dollars in millions) 1st Qtr 2nd
Qtr 3rd Qtr 4th Qtr YTD
1st Qtr 2nd Qtr YTD
Revenues: Product
revenues: Oil sales $ 112 $ 138 $ 120 $ 124 $ 494 $ 97 $ 142 $ 239
Natural gas sales 41 26 37 34 138 25 24 49 Natural gas liquid sales
3 5
6 9 23
5 10
15 Total product revenues 156 169 163 167 655 127 176
303 Gas management 157 56 35 38 286 31 116 147 Net gain (loss) on
derivatives 105 (71 ) 205 179 418 57 (154 ) (97 ) Other 2
- 4
1 7
1 - 1
Total revenues 420 154 407 385 1,366 216 138 354
Costs and expenses: Lease and facility operating 35 32 34 44 145 42
41 83 Gathering, processing and transportation 17 16 17 14 64 16 20
36 Taxes other than income 15 16 14 17 62 11 16 27 Gas management,
including charges for unutilized pipeline capacity 109 58 43 51 261
39 132 171 Exploration 7 6 56 16 85 9 12 21 Depreciation, depletion
and amortization 117 123 136 152 528 152 163 315 Net (gain) loss on
sales of assets (69 ) (208 ) (2 ) (70 ) (349 ) (198 ) (4 ) (202 )
General and administrative 54 53 45 58 210 53 55 108 Acquisition
costs - - 23 - 23 - - - Other-net 22
3 8
30 63 2
2 4 Total costs
and expenses 307 99 374 312 1,092 126 437 563
Operating
income (loss) 113 55 33 73
274 90 (299 ) (209 )
Interest expense (33 ) (32 ) (65 ) (57 ) (187 ) (57 ) (53 )
(110 ) Gain (loss) on extinguishment of debt - - (65 ) - (65 ) 3 (3
) - Investment income and other 1
1 -
(4 ) (2 ) (1 ) 2
1 Income (loss) from
continuing operations before income taxes $ 81 $ 24 $ (97 ) $ 12 $
20 $ 35 $ (353 ) $ (318 ) Provision (benefit) for income taxes
29 1
(27 ) 21 24
35 (130 )
(95 )
Income (loss) from continuing operations $
52 $ 23 $ (70 ) $
(9 ) $ (4 ) $ -
$ (223 ) $ (223 ) Income
(loss) from discontinued operations 16
(53 ) (160 )
(1,525 ) (1,722 ) (12 )
25 13
Net income
(loss) $ 68 $ (30 ) $
(230 ) $ (1,534 ) $
(1,726 ) $ (12 ) $
(198 ) $ (210 ) Less: Net income
(loss) attributable to noncontrolling interests 1
- -
- 1 -
- -
Net income (loss) attributable to WPX Energy, Inc. $
67 $ (30 )
$ (230 ) $
(1,534 ) $ (1,727
) $ (12 ) $
(198 ) $ (210 )
Less: Dividends on preferred stock -
- 4
5 9 5
6 11
Net income
(loss) attributable to WPX Energy, Inc. common stockholders
$ 67 $ (30
) $ (234 )
$ (1,539 ) $
(1,736 ) $ (17 )
$ (204 ) $ (221
)
Amounts attributable to WPX Energy,
Inc. common stockholders:
Income (loss) from continuing operations $ 52 $ 23 $ (74 ) $ (14 )
$ (13 ) $ (5 ) $ (229 ) $ (234 ) Income (loss) from discontinued
operations 15 (53 )
(160 ) (1,525 )
(1,723 ) (12 ) 25
13
Net income (loss) $ 67
$ (30 )
$ (234 ) $ (1,539
) $ (1,736 ) $
(17 ) $ (204 )
$ (221 )
Summary of Production Volumes (1) Oil
(MBbls) 2,972 2,832 3,123 3,551 12,479 3,774 3,719 7,493 Natural
gas (MMcf) 15,832 14,913 16,901 18,542 66,187 16,820 18,764 35,583
Natural gas liquids (MBbls) 379 476 733 823 2,412 708 909 1,617
Combined equivalent volumes (MBoe)
(2) 5,990 5,794 6,673
7,465 25,922 7,285 7,755 15,041
Per day volumes Oil
(MBbls/d) 33.0 31.1 33.9 38.6 34.2 41.5 40.9 41.2 Natural gas
(MMcf/d) 176 164 184 202 181 185 206 196 Natural gas liquids
(MBbls/d) 4.2 5.2 8.0 9.0 6.6 7.8 10.0 8.9 Combined equivalent
volumes (Mboe/d)
(2) 66.6 63.7 72.5 81.1 71.0 80.1 85.2 82.6
(1) Excludes our Piceance Basin,
Powder River Basin and international operations, which were
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) $ 37.69 $ 48.75 $ 38.23 $ 35.14 $
39.61 $ 25.62 $ 38.38 $ 31.96 Natural gas (per Mcf) $ 2.59 $ 1.76 $
2.18 $ 1.81 $ 2.08 $ 1.52 $ 1.23 $ 1.37 Natural gas liquids (per
barrel) $ 9.30 $ 9.81 $ 8.76 $ 9.75 $ 9.39 $ 7.14 $ 11.21 $ 9.43
(1) Excludes our Piceance Basin,
Powder River Basin and international operations, which were
classified as discontinued operations.
Expenses per
Boe (1) Lease and facility operating $ 5.90 $ 5.54 $ 5.07 $
5.82 $ 5.59 $ 5.74 $ 5.34 $ 5.53 Gathering, processing and
transportation $ 2.91 $ 2.65 $ 2.53 $ 1.95 $ 2.48 $ 2.17 $ 2.57 $
2.38 Taxes other than income $ 2.45 $ 2.83 $ 2.06 $ 2.26 $ 2.38 $
1.47 $ 2.05 $ 1.77 Depreciation, depletion and amortization $ 19.56
$ 21.21 $ 20.37 $ 20.43 $ 20.39 $ 20.93 $ 21.02 $ 20.98 General and
administrative $ 8.94 $ 9.21 $ 6.72 $ 7.88 $ 8.12 $ 7.34 $ 7.09 $
7.21
(1) Excludes our Piceance Basin,
Powder River Basin and international operations, which were
classified as discontinued operations.
WPX Energy, Inc. Reconciliation of Adjusted
EPS and EBITDAX (NON-GAAP) (UNAUDITED)
2015 2016 (Dollars in millions, except
per share amounts) 1st Qtr 2nd Qtr
3rd Qtr 4th Qtr Year
1st Qtr 2nd Qtr YTD
Income (loss)
from continuing operations attributable to WPX Energy, Inc.
available to common stockholders $ 52 $ 23
$ (74 ) $ (14 ) $
(13 ) $ (5 ) $ (229 ) $ (234 )
Income (loss) from continuing operations - diluted earnings per
share $ 0.25 $ 0.11 $
(0.29 ) $ (0.06 ) $ (0.06 ) $ (0.02 )
$ (0.76 ) $ (0.81 )
Pre-tax
adjustments: Impairments- exploratory related $ - $ - $ 47 $ 3
$ 50 $ - $ - $ - Net (gain) loss on sales of assets $ (69 ) $ (208
) $ (2 ) $ (70 ) $ (349 ) $ (198 ) $ (4 ) $ (202 ) Contract
termination and early rig release expenses $ 26 $ - $ - $ 5 $ 31 $
- $ - $ - Accrual for certain future gathering obligations
associated with an abandoned area $ - $ - $ - $ 23 $ 23 $ - $ - $ -
Costs related to severance and relocation $ 8 $ 7 $ 1 $ (1 ) $ 15 $
3 $ 7 $ 10 Costs related to acquisition (including loss on acquired
debt extinguishment) $ - $ 1 $ 103 $ 1 $ 105 $ - $ - $ - Previously
capitalized costs expensed following credit facility amendment $ -
$ - $ - $ - $ - $ 4 $ - $ 4 (Gain) loss on retirement of debt $ - $
- $ - $ - $ - $ (3 ) $ 3 $ - Unrealized MTM (gain) loss $ 30
$ 203 $ (50 ) $ 16
$ 199 $ 76 $ 223
$ 299
Total pre-tax adjustments
$ (5 ) $ 3 $ 99 $ (23 ) $ 74 $ (118 ) $ 229 $ 111 Less tax effect
for above items $ 2 $ (1 ) $ (35 ) $ 7 $ (27 ) $ 43 $ (85 ) $ (41 )
Impact of state deferred tax rate change $ - $ - $ - $ 7 $ 7 $ 14 $
- $ 14 Impact of state valuation allowance $ -
$ - $ - $ -
$ - $ 8 $ -
$ 8
Total adjustments, after-tax $ (3 )
$ 2 $ 64 $ (9 )
$ 54 $ (53 ) $ 144
$ 92
Adjusted income (loss) from continuing operations
available to common stockholders $ 49 $ 25
$ (10 ) $ (23 ) $
41 $ (58 ) $ (85 ) $ (142 )
Adjusted diluted earnings (loss) per common share $ 0.24
$ 0.12 $ (0.04 )
$ (0.08 ) $ 0.17 $ (0.21 )
$ (0.28 ) $ (0.49 )
Diluted
weighted-average shares (millions) 205.9 206.8 251.2 275.4
234.2 276.1 300.7 288.2
Adjusted EBITDAX Reconciliation to
net income (loss): Net income (loss) $ 68 $ (30 ) $ (230 )
$
(1,534
)
$
(1,726
)
$ (12 ) $ (198 ) $ (210 ) Interest expense 33 32 65 57 187 57 53
110 Provision (benefit) for income taxes 29 1 (27 ) 21 24 35 (130 )
(95 ) Depreciation, depletion and amortization 117 123 136 152 528
152 163 315 Exploration expenses 7
6 56
16 85 9
12 21
EBITDAX 254 132 - (1,288
) (902 ) 241 (100 )
141 Accrual for certain future gathering obligations
associated with an abandoned area - - - 23 23 - - - Net (gain) loss
on sales of assets (69 ) (208 ) (2 ) (70 ) (349 ) (198 ) (4 ) (202
) RKI acquisition costs and loss on extinguishment of acquired debt
- 1 87 - 88 - - - Net (gain) loss on derivatives (105 ) 71 (205 )
(179 ) (418 ) (57 ) 154 97 Net cash received (paid) related to
settlement of derivatives 135 132 155 195 617 133 69 202 (Income)
loss from discontinued operations (16 )
53 160
1,525 1,722 12
(25 ) (13 )
Adjusted
EBITDAX $ 199 $
181 $ 195
$ 206 $ 781
$ 131 $ 94
$ 225
WPX Energy, Inc. Consolidated Statements of
Operations (Unaudited)
Three months ended June 30,
Six months ended June 30, 2016
2015 2016 2015
(Millions, except per share amounts) Revenues:
Product revenues: Oil sales $ 142 $ 138 $ 239 $ 250 Natural gas
sales 24 26 49 67 Natural gas liquid sales 10
5 15 8 Total product revenues
176 169 303 325 Gas management 116 56 147 213 Net gain (loss) on
derivatives (154 ) (71 ) (97 ) 34 Other - -
1 2 Total revenues 138
154 354 574 Costs
and expenses: Lease and facility operating 41 32 83 67 Gathering,
processing and transportation 20 16 36 33 Taxes other than income
16 16 27 31 Gas management, including charges for unutilized
pipeline capacity 132 58 171 167 Exploration 12 6 21 13
Depreciation, depletion and amortization 163 123 315 240 Net (gain)
loss on sales of assets (4 ) (208 ) (202 ) (277 ) General and
administrative 55 53 108 107 Other - net 2 3
4 25 Total costs and expenses
437 99 563 406
Operating income (loss) (299 ) 55 (209 ) 168 Interest
expense (53 ) (32 ) (110 ) (65 ) Investment income and other
(1 ) 1 1 2 Income (loss)
from continuing operations before income taxes (353 ) 24 (318 ) 105
Provision (benefit) for income taxes (130 ) 1
(95 ) 30 Income (loss) from continuing
operations (223 ) 23 (223 ) 75 Income (loss) from discontinued
operations 25 (53 ) 13
(37 ) Net income (loss) (198 ) (30 ) (210 ) 38 Less: Net income
(loss) attributable to noncontrolling interests -
- - 1 Net income (loss)
attributable to WPX Energy, Inc. (198 ) (30 ) (210 ) 37 Less:
Dividends on preferred stock 6 -
11 - Net income (loss) attributable to WPX
Energy, Inc. common stockholders $ (204 ) $ (30 ) $ (221 ) $ 37
Amounts attributable to WPX Energy, Inc. common
stockholders: Income (loss) from continuing operations $ (229 )
$ 23 $ (234 ) $ 75 Income (loss) from discontinued operations
25 (53 ) 13 (38 ) Net
income (loss) $ (204 ) $ (30 ) $ (221 ) $ 37
Basic
earnings (loss) per common share: Income (loss) from continuing
operations $ (0.76 ) $ 0.11 $ (0.81 ) $ 0.37 Income (loss) from
discontinued operations 0.08 (0.25 )
0.04 (0.19 ) Net income (loss) $ (0.68 ) $ (0.14 ) $
(0.77 ) $ 0.18 Basic weighted-average shares
(millions) 300.7 205.0 288.2 204.6
Diluted earnings
(loss) per common share: Income (loss) from continuing
operations $ (0.76 ) $ 0.11 $ (0.81 ) $ 0.37 Income (loss) from
discontinued operations 0.08 (0.25 )
0.04 (0.19 ) Net income (loss) $ (0.68 ) $ (0.14 ) $
(0.77 ) $ 0.18 Diluted weighted-average shares
(millions) 300.7 206.8 288.2 206.4
WPX Energy,
Inc. Consolidated Balance Sheets (Unaudited)
June 30, 2016 December 31,
2015 ASSETS (Millions) Current assets: Cash and
cash equivalents $ 1,031 $ 38 Accounts receivable, net of allowance
of $6 million as of June 30, 2016 and December 31, 2015 192 300
Derivative assets 101 308 Inventories 37 46 Assets classified as
held for sale 8 178 Other 26 23 Total
current assets 1,395 893 Properties and equipment (successful
efforts method of accounting) 8,602 8,415 Less: Accumulated
depreciation, depletion and amortization (2,184 )
(1,893 ) Properties and equipment, net 6,418 6,522 Derivative
assets 21 51 Assets classified as held for sale - 894 Other
noncurrent assets 28 33 Total assets $
7,862 $ 8,393
LIABILITIES AND EQUITY
Current liabilities: Accounts payable $ 226 $ 278 Accrued and other
current liabilities 264 301 Liabilities associated with assets held
for sale 2 140 Current portion of long-term debt, net 160 1
Derivative liabilities 45 13 Total
current liabilities 697 733 Deferred income taxes 390 465 Long-term
debt, net 2,572 3,189 Derivative liabilities 44 2 Asset retirement
obligations 101 99 Liabilities associated with assets held for sale
- 133 Other noncurrent liabilities 200 237 Equity:
Stockholders' equity: Preferred stock (100 million shares
authorized at $0.01 par value; 7 million shares issued at June 30,
2016 and December 31, 2015) 339 339 Common stock (2 billion shares
authorized at $0.01 par value; 334.0 million shares issued at June
30, 2016 and 275.4 million shares issued at December 31, 2015) 3 3
Additional paid-in-capital 6,697 6,164 Accumulated deficit
(3,181 ) (2,971 ) Total stockholders' equity 3,858
3,535 Total liabilities and equity $ 7,862
$ 8,393
WPX Energy, Inc.
Consolidated Statements of Cash Flows (Unaudited)
Six months ended June 30,
2016 2015 (Millions)
Operating Activities(a) Net income (loss) $ (210 ) $ 38
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation, depletion and amortization 324
443 Deferred income tax provision (benefit) (82 ) (17 ) Provision
for impairment of properties and equipment (including certain
exploration expenses) 19 26 Net (gain) loss on derivatives in
continuing operations 97 (34 ) Net settlements related to
derivatives in continuing operations 202 267 Amortization of
stock-based awards 17 20 Net gain on sales of domestic assets and
international interests (254 ) (318 ) Unrealized loss on
derivatives included in discontinued operations 46 - Cash provided
(used) by operating assets and liabilities: Accounts receivable 102
176 Inventories 9 (2 ) Margin deposits and customer margin deposits
payable - 21 Other current assets 3 (4 ) Accounts payable (28 )
(145 ) Income taxes payable (33 ) - Accrued and other current
liabilities (103 ) (33 ) Accrued liabilities for retained
transportation and gathering contracts related to discontinued
operations (30 ) - Other, including changes in other noncurrent
assets and liabilities 6 (8 ) Net cash
provided by operating activities (a) 85 430
Investing Activities (a)
Capital expenditures (b)
(291 ) (679 ) Proceeds from sales of domestic assets and
international interests 1,139 772 Other (4 ) 2
Net cash provided by (used in) investing activities (a) 844
95
Financing Activities Proceeds
from common stock 540 2 Dividends paid on preferred stock (11 ) -
Borrowings on credit facility 380 181 Payments on credit facility
(645 ) (461 ) Payments for retirement of debt (196 ) - Payments for
debt issuance costs, credit facility amendment and fees (3 ) -
Other (1 ) - Net cash provided by (used in)
financing activities 64 (278 ) Net
increase (decrease) in cash and cash equivalents 993 247 Cash and
cash equivalents at beginning of period 38 70
Cash and cash equivalents at end of period $ 1,031 $
317
________
(a) Amounts also reflect activity related to discontinued
operations unless otherwise noted. (b) Increase to properties and
equipment $ (264 ) $ (435 ) Changes in related accounts payable and
accounts receivable (27 ) (244 ) Capital expenditures
$ (291 ) $ (679 )
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160803006428/en/
WPX Energy, Inc.Media Contact:Kelly Swan,
539-573-4944orInvestor Contact:David Sullivan,
539-573-9360
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