Oil volumes exceed forecast by roughly 5,000
barrels per day
- 2Q oil volumes climbed to 80,800 bbl/d,
23% higher than 1Q
- 2Q Delaware oil volumes grew 94% vs.
year ago
- 2Q Williston oil volumes up 39% vs.
year ago
- 2Q total liquids, including NGLs, were
approximately 100,000 bbl/d
- WPX raising 2018 oil guidance 3% to
78,000-82,000 bbl/d for full-year
- Company has already more than replaced
San Juan Basin oil volumes divested in 1Q
WPX Energy (NYSE:WPX) reported second-quarter oil volumes of
80,800 bbl/d from its operations in the Delaware and Williston
basins, which were approximately 5,000 bbl/d higher than
expected.
The company now expects full-year oil volumes of 78,000-82,000
bbl/d for 2018, which is 3 percent higher than its original
forecast of 75,000-80,000 bbl/d. Volume growth in the latter half
of the year primarily is expected to occur in the fourth quarter
based on the timing of anticipated first sales in the Williston
Basin.
WPX reported an unaudited second-quarter 2018 net loss from
continuing operations available to common shareholders of $83
million, or a loss of $0.21 per share on a diluted basis. The loss
was driven by $154 million of net losses associated with its hedge
book resulting from higher forward oil prices, along with a $71
million loss on extinguishment of debt.
Adjusted net income from continuing operations in second-quarter
2018 was $23 million, or income of $0.06 per share. A
reconciliation accompanies this press release.
Over the past 12 months (2Q 2017 to 2Q 2018), WPX has increased
unhedged adjusted EBITDAX 235 percent excluding the impact of its
San Juan Basin operations that were divested.
CEO PERSPECTIVE
“During the second quarter, WPX continued to deliver strong
results as our produced volumes, especially crude oil, grew at an
impressive rate,” said Rick Muncrief, chairman and chief executive
officer.
“In addition, we’re reaping some of the best basis differentials
in the Permian Basin among our peers. We expect this to continue
over the next couple of years, which is an outcome of our
pro-active midstream and marketing strategy.
“The company’s results also reflect significant headway on
margin expansion. This is a credit to our people, the quality of
our assets and our keen focus on discipline and execution.
“Along with peer-leading well results in both of our basins, our
Permian team has actively engaged in acreage swaps which give us
the ability to drill more long laterals. With that, we’ve nearly
doubled our average lateral lengths in the basin over the past
three years. This has a tremendous impact on returns for an asset
with decades of development to come,” Muncrief added.
RECENT EVENTS
In July, WPX exercised its option to double its 12.5 percent
ownership interest in the Oryx II pipeline project to 25 percent,
which has been expanded from 400,0000 bbl/d to 650,000 bbl/d. WPX
has 100,000 bbl/d of firm crude oil capacity on the project that
will deliver volumes from the Delaware Basin to Midland and
Crane.
Also in July, WPX entered into a crude oil marketing agreement
for Williston production through mid-2020 which provides the
company with the option to receive Cushing market pricing for up to
15,000 barrels per day. It includes a location differential that
represents a discount to the applicable pipeline tariff.
During the second quarter, WPX repurchased approximately $900
million of long-term debt through a series of tender offers while
also issuing $500 million of new long-term notes due in 2026. WPX’s
total remaining long-term debt is approximately $2.18 billion. The
company’s next significant debt maturity does not occur until
2022.
As previously announced, WPX also amended its credit facility
during the second quarter resulting in an increase to total
commitments from $1.2 billion to $1.5 billion; an increase to the
borrowing base from $1.5 billion to $1.8 billion; and the maturity
was extended to 2023.
DELAWARE BASIN HIGHLIGHTS
WPX’s Delaware production averaged 74.4 Mboe/d in second-quarter
2018, up 18 percent vs. first-quarter 2018 and 83 percent higher
than the same period a year ago.
WPX had 20 wells with first sales in the basin during the second
quarter, including 15 long laterals of at least 1.5 miles each.
Most of the activity occurred in the Wolfcamp A interval.
Seven 1.5-mile laterals on the Tucker Draw pad posted 24-hour
highs averaging more than 2,400 barrels of oil per day during
initial production on restricted flow. The Tucker Draw wells are
averaging approximately 1,200 barrels of oil per day for each well
after 60 days of production, with cumulative oil volumes
approaching 500,000 barrels. Cumulative production for the wells is
roughly 1,000,000 Boe.
On the Lindsay pad, the 1.5-mile 10-3B-2H lateral posted a high
of approximately 3,600 barrels of oil per day during initial
production from the Wolfcamp X/Y interval. It produced nearly
50,000 barrels of oil in its first 20 days. Cumulative production
exceeds 85,000 Boe. WPX increased cluster spacing and used 100
percent 100 mesh frac sand in the completion design.
Average lateral lengths of 7,500 feet in the Delaware during
2018 are on track to be approximately 20 percent longer than in
2017. WPX has now roughly doubled its average lateral lengths in
the Delaware since entering the basin in 2015 via its acquisition
of RKI E&P.
Progress continues at the Stateline gas plant in anticipation of
initial startup operations this month on the first of two 200
MMcf/d cryogenic processing trains. This facility is part of WPX’s
50/50 joint venture with Howard Energy Partners. Volumes from the
plant will flow to WhiteWater Midstream’s Agua Blanca pipeline that
WPX has a 20 percent stake in.
WILLISTON BASIN HIGHLIGHTS
Williston Basin production averaged 50.6 Mboe/d in
second-quarter 2018, up 28 percent vs. the most recent quarter and
45 percent higher than the same period a year ago.
WPX completed 12 Williston wells during the second quarter,
evenly split between the Bakken and Three Forks formations. All of
the wells are two-mile laterals. Three of the wells were in the
North Sunday Island area.
The three new North Sunday Island wells on the Mandan North pad
have cumulative 90-day production of more than 530,000 Boe (81%
oil). Initial production highs averaged 4,326 Boe/d per well, with
a high of 4,558 Boe/d on the Mandan North 13-24HB well.
Another well on the Mandan pad (13-24HA completed on March 30)
has posted an even higher IP than previously reported. Its new high
for a 24-hour volume is 5,990 Boe/d, made possible by being the
first of the four 2018 wells on the pad to begin flowback. This
well now has cumulative production of more than 215,000 Boe (81%
oil) after its first 100 days.
Five wells on the Mandaree South pad were part of WPX’s
second-quarter completions. After 60 days, the wells have
cumulative production of more than 426,000 Boe (81% oil). Initial
production highs averaged 2,714 Boe/d per well, with a high of
3,335 Boe/d on the Mandaree South 19-18HA well.
Two other second-quarter completions on the Joseph Eagle pad
posted 24-hour highs of 3,596 Boe/d and 3,465 Boe/d, each at 81
percent oil.
WPX’s first two wells in the North Sunday Island area – the
Hidatsa North 14-23HX well and the Mandan North 13-24HW well – now
have combined cumulative production of more than 910,000 Boe (81%
oil). The Hidatsa well has been online for roughly 300 days. The
Mandan well has been online for roughly 260 days. The two wells are
currently averaging more than 1,500 Boe/d per well.
The 7-well Arikara pad in the North Sunday Island area that went
online during late first-quarter 2018 now has cumulative volumes of
more than 1,445,000 Boe (81% oil) after roughly 130 days of
production. The top producer is the Arikara 15-22HB, with nearly
230,000 Boe after its first 130 days.
2Q FINANCIAL RESULTS
Oil and NGL sales of $504 million accounted for 97 percent of
WPX’s second-quarter 2018 total product revenues of $520 million.
Quarterly oil sales grew 30 percent vs. the most recent quarter
driven by higher average prices and production volumes.
Total product revenues of $927 million during the first half of
2018 were 124 percent higher than $413 million in the first half of
2017. Oil revenues of $828 million during the first half of 2018
were 135 percent higher than the same period a year ago.
For the first half of the year, WPX posted a net loss from
continuing operations attributable to common shareholders of $113
million, including $223 million of net pre-tax losses associated
with its hedging activities and a $71 million pre-tax loss on
extinguishment of debt.
On a per-Boe basis, lease operating expenses, general and
administrative expenses, and interest expense all declined in
second-quarter 2018 vs. the most recent quarter and the same period
a year ago.
Adjusted EBITDAX (a non-GAAP financial measure) for the second
quarter rose 133 percent to $287 million vs. the same period a year
ago. Reconciliations for non-GAAP financial measures are available
in the tables that accompany this press release.
Based on its second-quarter adjusted EBITDAX, WPX’s annualized
run rate for net debt/EBITDAX is now 1.8x.
For the first half of 2018, adjusted EBITDAX was $487 million,
or 134 percent higher than $208 million in the first half of 2017.
The improvement in adjusted EBITDAX is driven by higher production
volumes and higher prices, partially offset by higher realized
losses on derivatives.
The weighted average gross sales price – prior to revenue
deductions – was $64.04 per barrel for oil, $2.30 for natural gas
and $24.15 per barrel for NGL during second-quarter 2018.
WPX’s total liquidity at the close of business on June 30, 2018,
was approximately $1.5 billion, including cash, cash equivalents
and all of its available revolver capacity with the exception of
$65 million in outstanding letters of credit.
Cash flow from operations, inclusive of hedge impact, in the
first half of 2018 was $428 million of which $283 million came in
the second quarter. Second-quarter cash flow was 136 percent higher
than a year ago.
2Q PRODUCTION
Total production volumes of 125.0 Mboe/d in second-quarter 2018
increased 22 percent vs. first-quarter 2018 and were 65 percent
higher than the same period a year ago. Liquids volumes accounted
for 80 percent of second-quarter 2018 production.
Oil volumes of 80,800 bbl/d were 23 percent higher than the most
recent quarter and 61 percent higher vs. the same period a year
ago, led by a 94 percent increase in the Delaware Basin over the
past 12 months.
Average Daily Production 2Q
1Q Sequential 2018
2017 Change
2018 Change
Oil (Mbbl/d)
Delaware Basin 39.1 20.2 94 % 33.8 16 % Williston Basin
41.7 30.1 39 % 32.0
30 % Subtotal (Mbbl/d) 80.8 50.3 61 % 65.8 23 %
NGLs (Mbbl/d) Delaware Basin 14.2 8.0 78 % 10.9 30 %
Williston Basin
4.6 2.5 84 % 4.0
15 % Subtotal (Mbbl/d) 18.8 10.5 79 % 14.9 26 %
Natural gas (MMcf/d) Delaware Basin 126.7 75.1 69 % 111.2 14
% Williston Basin 25.5 14.0
82 % 21.1 21 % Subtotal (MMcf/d) 152.2 89.1 71
% 132.3 15 %
Total Production (Mboe/d) 125.0
75.7 65 % 102.7 22 %
Note: 2Q 2017 figures do not include volumes associated with
assets that have since been divested, including Appalachia and San
Juan. The chart is a true apples-to-apples comparison that shows
how WPX is developing its core properties.
WPX completed 32 gross operated wells (29 net) in its two core
basins during second-quarter 2018 and participated in another seven
gross (1 net) non-operated wells in the Delaware Basin.
Capital spending during the second quarter was $355 million,
including $23 million in midstream development expenses and $5
million in land purchases.
For the balance of 2018, WPX has 70,500 bbl/d of oil hedged at a
weighted average price of $53.94 per barrel; 129,158 MMBtu/d of
natural gas hedged at a weighted average price of $2.99 per MMBtu;
and 12,100 bbl/d of NGL hedged. Hedge prices for NGL barrel
components are included in the appendix of the webcast slide deck
at www.wpxenergy.com.
For 2019, WPX has 43,000 bbl/d of oil hedged at a weighted
average price of $53.55 per barrel and 48,470 MMBtu/d of natural
gas hedged at a weighted average price of $2.87 per MMBtu.
UPDATED 2018 GUIDANCE
WPX is raising its full-year 2018 oil production guidance to an
average of 78,000-82,000 bbl/d, up 3 percent from previous guidance
of 75,000-80,000 bbl/d. Guidance for total equivalent production in
2018 is now 122-130 Mboe/d, up from 117-126 Mboe/d.
The company also updated its 2018 capital spending forecast to
$1,300-$1,400 million, driven by additional investments for
non-operated wells, facilities and infrastructure in the Delaware
Basin, along with larger completions in the Williston Basin. WPX
also raised its projection for midstream equity investments to
$70-$85 million.
Further details and information about WPX’s updated 2018
guidance are available in the second-quarter slide presentation at
www.wpxenergy.com.
THURSDAY WEBCAST
The company’s next webcast takes place on Aug. 2 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 (833)
832-5123. International callers should dial (469) 565-9820. The
conference identification code is 8995306.
UPCOMING CONFERENCE PRESENTATIONS
WPX President and Chief Operating Officer Clay Gaspar is
scheduled to speak at the Enercom Oil and Gas Conference on
Tuesday, Aug. 21, at 10 a.m. Eastern.
WPX CEO Rick Muncrief is scheduled to present at Barclays
Capital CEO Energy-Power Conference on Tuesday, Sept. 4, at 12:25
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 2018 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 independent energy producer with core positions in the
Permian and Williston basins. WPX’s production is approximately 80
percent oil/liquids and 20 percent natural gas. The company also
has an emerging infrastructure portfolio in the Permian Basin.
Visit www.wpxenergy.com for more information.
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)
2017 2018 (Dollars in millions)
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
YTD 1st Qtr 2nd Qtr YTD Revenues:
Product revenues: Oil sales $ 159 $ 194 $ 218 $ 308 $ 879 $ 360 $
468 $ 828 Natural gas sales 17 16 13 21 67 17 16 33 Natural gas
liquid sales 11 16
16 27 70 30
36 66 Total
product revenues 187 226 247 356 1,016 407 520 927 Net gain (loss)
on derivatives 203 116 (106 ) (210 ) 3 (69 ) (154 ) (223 )
Commodity management 5 8 4 8 25 36 64 100 Other -
- - 1
1 - -
- Total revenues 395 350 145 155 1,045
374 430 804 Costs and expenses: Depreciation, depletion and
amortization 113 141 133 155 542 161 197 358 Lease and facility
operating 36 41 45 46 168 55 59 114 Gathering, processing and
transportation (1) 5 6 5 8 24 18 20 38 Taxes other than income 13
19 19 28 79 30 41 71 Exploration 36 16 17 18 87 19 17 36 General
and administrative 41 44 40 41 166 43 44 87 Commodity management 5
8 4 10 27 39 54 93 Net (gain) loss on sales of assets (31 ) (7 )
(112 ) (11 ) (161 ) 1 (1 ) - Other-net 4
7 4 -
15 2 2
4 Total costs and expenses 222 275 155 295 947
368 433 801
Operating income (loss) 173
75 (10 ) (140 ) 98
6 (3 ) 3 Interest expense (47 )
(46 ) (48 ) (47 ) (188 ) (46 ) (39 ) (85 ) Loss on extinguishment
of debt - - (17 ) - (17 ) - (71 ) (71 ) Investment income (loss)
and other 2 - 2
(1 ) 3 (1 )
1 - Income (loss) from
continuing operations before income taxes $ 128 $ 29 $ (73 ) $ (188
) $ (104 ) $ (41 ) $ (112 ) $ (153 ) Provision (benefit) for income
taxes 33 (298 ) 305
(168 ) (128 ) (15 )
(33 ) (48 )
Income (loss) from
continuing operations $ 95 $ 327
$ (378 ) $ (20 ) $
24 $ (26 ) $ (79 )
$ (105 ) Income (loss) from discontinued
operations (3 ) (251 ) 232
(18 ) (40 ) (89 )
(2 ) (91 )
Net income (loss) $
92 $ 76 $ (146 ) $
(38 ) $ (16 ) $
(115 ) $ (81 ) $
(196 ) Less: Dividends on preferred stock 4
4 3
4 15 4 4
8
Net income (loss) available
to WPX Energy, Inc. common stockholders $ 88
$ 72 $ (149
) $ (42 ) $
(31 ) $ (119 ) $
(85 ) $ (204 ) Amounts
available to WPX Energy, Inc. common stockholders: Income
(loss) from continuing operations $ 91 $ 323 $ (381 ) $ (24 ) $ 9 $
(30 ) $ (83 ) $ (113 ) Income (loss) from discontinued operations
(3 ) (251 ) 232
(18 ) (40 ) (89 ) (2 )
(91 )
Net income (loss) $ 88
$ 72 $ (149
) $ (42 ) $
(31 ) $ (119 ) $
(85 ) $ (204 )
(1)
2018 includes the impact of the application of ASC 606 with an
offset to product revenues.
Summary of Production Volumes (1) Oil (MBbls) 3,504
4,572 4,973 5,915 18,964 5,920 7,352 13,271 Natural gas (MMcf)
7,747 8,357 7,946 11,261 35,311 11,908 13,854 25,763 Natural gas
liquids (MBbls) 706 959 829 1,162 3,656 1,340 1,713 3,053 Combined
equivalent volumes (MBoe)
(2) 5,501 6,923 7,126 8,954 28,505
9,245 11,374 20,618
Per day volumes Oil (MBbls/d) 38.9 50.2
54.1 64.3 52.0 65.8 80.8 73.3 Natural gas (MMcf/d) 86 92 86 122 97
132 152 142 Natural gas liquids (MBbls/d) 7.8 10.5 9.0 12.6 10.0
14.9 18.8 16.9 Combined equivalent volumes (Mboe/d)
(2) 61.1
76.1 77.5 97.3 78.1 102.7 125.0 113.9
(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) $ 45.32 $ 42.65 $ 43.74 $ 52.04 $
46.36 $ 60.91 $ 63.63 $ 62.42 Natural gas (per Mcf) $ 2.18 $ 1.90 $
1.67 $ 1.82 $ 1.89 $ 1.44 $ 1.12 $ 1.27 Natural gas liquids (per
barrel) $ 16.31 $ 15.76 $ 19.28 $ 23.92 $ 19.26 $ 22.14 $ 20.94 $
21.47
(1) Excludes activity classified as
discontinued operations.
Expenses per Boe (1) Depreciation, depletion and
amortization $ 20.63 $ 20.26 $ 18.72 $ 17.34 $ 19.03 $ 17.38 $
17.31 $ 17.34 Lease and facility operating $ 6.57 $ 5.92 $ 6.29 $
5.17 $ 5.90 $ 5.97 $ 5.20 $ 5.55 Gathering, processing and
transportation $ 0.94 $ 0.80 $ 0.76 $ 0.83 $ 0.83 $ 1.93 $ 1.79 $
1.85 Taxes other than income $ 2.41 $ 2.68 $ 2.77 $ 3.09 $ 2.78 $
3.21 $ 3.67 $ 3.46 General and administrative $ 7.38 $ 6.40 $ 5.62
$ 4.51 $ 5.80 $ 4.64 $ 3.89 $ 4.23 Interest expense $ 8.46 $ 6.75 $
6.66 $ 5.32 $ 6.61 $ 4.95 $ 3.43 $ 4.11
(1) Excludes
activity classified as discontinued operations.
WPX Energy, Inc. Reconciliation of
NON-GAAP Measures (UNAUDITED)
2017 2018 (Dollars
in millions, except per share amounts) 1st Qtr 2nd
Qtr 3rd Qtr 4th Qtr Year
1st Qtr 2nd Qtr YTD
Reconciliation of adjusted
income (loss) from continuing operations available to common
stockholders: Income (loss) from continuing operations
available to WPX Energy, Inc. common stockholders - reported
$ 91 $ 323
$ (381 ) $ (24 )
$ 9 $ (30 )
$ (83 ) $ (113 )
Pre-tax adjustments: Impairments reported in exploration
expense $ 23 $ - $ - $ - $ 23 $ - $ - $ - Net (gain) loss on sales
of assets $ (31 ) $ (7 ) $ (112 ) $ (11 ) $ (161 ) $ 1 $ (1 ) $ -
Loss on extinguishment of debt $ - $ - $ 17 $ - $ 17 $ - $ 71 $ 71
Unrealized MTM (gain) loss $ (208 ) $ (102 ) $ 120
$ 191 $ 1 $ 14 $
76 $ 90
Total pre-tax adjustments $
(216 ) $ (109 ) $ 25 $ 180 $ (120 ) $ 15 $ 146 $ 161 Less tax
effect for above items $ 81 $ 41 $ (10 ) $ (68 ) $ 44 $ (3 ) $ (33
) $ (37 ) Impact of state deferred tax rate change $ (6 ) $ - $ - $
(6 ) $ (12 ) $ (4 ) $ - $ (4 ) Impact of state tax valuation
allowance (annual effective tax rate method) $ (6 ) $ (161 ) $ 171
$ (4 ) $ - $ - $ - $ - Impact of federal rate change (a) $ - $ - $
- $ (83 ) $ (83 ) $ - $ - $ - Adjustment for estimated annual
effective tax rate method $ - $ (148 ) $ 155
$ (7 ) $ - $ - $ (7 )
$ (7 )
Total adjustments, after tax $ (147 ) $
(377 ) $ 341 $ 12 $ (171 ) $ 8
$ 106 $ 113
Adjusted income
(loss) from continuing operations available to common
stockholders $ (56 ) $
(54 ) $ (40 )
$ (12 ) $ (162 )
$ (22 ) $ 23
$ - (a) Includes $92
million for the provisional impact of the Tax Cuts and Jobs Act
offset by the impact of the pre-tax adjustments above.
Reconciliation of adjusted diluted income (loss) per
common share: Income (loss) from continuing operations -
diluted earnings per share - reported $ 0.23
$ 0.77 $
(0.96 ) $ (0.06 )
$ 0.02 $ (0.07 )
$ (0.21 ) $ (0.28
) Impact of adjusted diluted weighted-average shares $ 0.01
$ 0.05 $ - $ -
$ - $ - $ 0.01 $ -
Pretax adjustments (b): Impairments reported in exploration
expense $ 0.06 $ - $ - $ - $ 0.06 $ - $ - $ - Net (gain) loss on
sales of assets $ (0.08 ) $ (0.02 ) $ (0.28 ) $ (0.03 ) $ (0.41 ) $
- $ - $ - Loss on extinguishment of debt $ - $ - $ 0.04 $ - $ 0.04
$ - $ 0.18 $ 0.18 Unrealized MTM (gain) loss $ (0.54 ) $
(0.26 ) $ 0.30 $ 0.48 $ -
$ 0.04 $ 0.18 $ 0.22
Total
pretax adjustments $ (0.56 ) $ (0.28 ) $ 0.06 $ 0.45 $ (0.31 )
$ 0.04 $ 0.36 $ 0.40 Less tax effect for above items $ 0.20 $ 0.10
$ (0.02 ) $ (0.18 ) $ 0.12 $ (0.02 ) $ (0.08 ) $ (0.09 ) Impact of
state tax rate change $ (0.01 ) $ - $ - $ (0.02 ) $ (0.03 ) $ (0.01
) $ - $ (0.01 ) Impact of state valuation allowance (annual
effective tax rate method) $ (0.02 ) $ (0.40 ) $ 0.43 $ 0.01 $ - $
- $ - $ - Impact of federal rate change $ - $ - $ - $ (0.21 ) $
(0.21 ) $ - $ - $ - Adjustment for estimated annual effective tax
rate method $ - $ (0.37 ) $ 0.39
$ (0.02 ) $ - $ - $ (0.02 ) $
(0.02 )
Total adjustments, after-tax $ (0.39 ) $
(0.95 ) $ 0.86 $ 0.03 $ (0.43 )
$ 0.01 $ 0.26 $ 0.28
Adjusted
diluted income (loss) per common share $ (0.15
) $ (0.13 ) $
(0.10 ) $ (0.03 )
$ (0.41 ) $ (0.06 )
$ 0.06 $ -
Reported diluted weighted-average shares (millions)
410.4 423.2 398.1 398.2 397.4
398.6 400.0 399.3 Effect of dilutive
securities due to adjusted income (loss) from continuing operations
available to common stockholders (24.1 ) (25.4
) - - (2.3
) - 3.1 3.2
Adjusted diluted weighted-average shares (millions)
386.3 397.8
398.1 398.2
395.1 398.6
403.1 402.5
(b) Per share impact is based on adjusted diluted weighted-average
shares.
Reconciliation of Adjusted
EBITDAX Net income (loss) - reported $ 92
$ 76 $ (146 ) $
(38 ) $ (16 ) $
(115 ) $ (81 ) $
(196 ) Interest expense 47 46 48 47 188 46 39 85
Provision (benefit) for income taxes 33 (298 ) 305 (168 ) (128 )
(15 ) (33 ) (48 ) Depreciation, depletion and amortization 113 141
133 155 542 161 197 358 Exploration expenses 36
16 17 18
87 19 17
36
EBITDAX 321 (19
) 357 14 673 96 139
235 Net (gain) loss on sales of assets (31 ) (7 ) (112 ) (11
) (161 ) 1 (1 ) - Loss on extinguishment of debt - - 17 - 17 - 71
71 Net (gain) loss on derivatives (203 ) (116 ) 106 210 (3 ) 69 154
223 Net cash received (paid) related to settlement of derivatives
(5 ) 14 14 (19 ) 4 (55 ) (78 ) (133 ) (Income) loss from
discontinued operations 3 251
(232 ) 18 40
89 2 91
Adjusted EBITDAX $ 85
$ 123 $ 150
$ 212 $ 570
$ 200 $ 287
$ 487 WPX
Energy, Inc. Consolidated Statements of Operations
(Unaudited)
Three months ended June 30, Six months
ended June 30, 2018 2017 2018 2017
(Millions, except per share amounts) Revenues: Product
revenues: Oil sales $ 468 $ 194 $ 828 $ 353 Natural gas sales 16 16
33 33 Natural gas liquid sales 36 16
66 27 Total product revenues 520 226
927 413 Net gain (loss) on derivatives (154 ) 116 (223 ) 319
Commodity management 64 8 100
13 Total revenues 430 350 804 745 Costs and
expenses: Depreciation, depletion and amortization 197 141 358 254
Lease and facility operating 59 41 114 77 Gathering, processing and
transportation 20 6 38 11 Taxes other than income 41 19 71 32
Exploration 17 16 36 52 General and administrative (including
equity-based compensation of $10 million, $8 million, $17 million
and $15 million for the respective periods) 44 44 87 85 Commodity
management 54 8 93 13 Net gain on sales of assets (1 ) (7 ) - (38 )
Other - net 2 7 4
11 Total costs and expenses 433 275
801 497 Operating income
(loss) (3 ) 75 3 248 Interest expense (39 ) (46 ) (85 ) (93 ) Loss
on extinguishment of debt (71 ) - (71 ) - Investment income (loss)
and other 1 - - 2
Income (loss) from continuing operations before income taxes
(112 ) 29 (153 ) 157 Benefit for income taxes (33 )
(298 ) (48 ) (265 ) Income (loss) from continuing
operations (79 ) 327 (105 ) 422 Loss from discontinued operations
(2 ) (251 ) (91 ) (254 ) Net income
(loss) (81 ) 76 (196 ) 168 Less: Dividends on preferred stock
4 4 8 8 Net
income (loss) available to WPX Energy, Inc. common stockholders $
(85 ) $ 72 $ (204 ) $ 160
Amounts available
to WPX Energy, Inc. common stockholders: Income (loss) from
continuing operations $ (83 ) $ 323 $ (113 ) $ 414 Loss from
discontinued operations (2 ) (251 ) (91 )
(254 ) Net income (loss) $ (85 ) $ 72 $ (204 ) $ 160
Basic earnings (loss) per common share: Income
(loss) from continuing operations $ (0.21 ) $ 0.81 $ (0.28 ) $ 1.06
Loss from discontinued operations - (0.63 )
(0.23 ) (0.65 ) Net income (loss) $ (0.21 ) $ 0.18
$ (0.51 ) $ 0.41 Basic weighted-average shares
400.0 397.8 399.3 392.1
Diluted earnings (loss) per
common share: Income (loss) from continuing operations $ (0.21
) $ 0.77 $ (0.28 ) $ 1.01 Loss from discontinued operations
- (0.60 ) (0.23 ) (0.61 ) Net income
(loss) $ (0.21 ) $ 0.17 $ (0.51 ) $ 0.40
Diluted weighted-average shares 400.0 423.2 399.3 418.8
WPX Energy, Inc. Consolidated Balance Sheets
(Unaudited)
June 30,2018
December 31,2017
ASSETS (Millions) Current assets: Cash and cash
equivalents $ 103 $ 189 Accounts receivable, net of allowance of $2
million as of June 30, 2018 and December 31, 2017 323 307
Derivative assets 136 36 Inventories 40 30 Assets classified as
held for sale - 811 Other 26 28 Total
current assets 628 1,401 Investments 92 70 Properties and equipment
(successful efforts method of accounting) 9,314 8,674 Less:
Accumulated depreciation, depletion and amortization (2,340
) (1,983 ) Properties and equipment, net 6,974 6,691
Derivative assets 49 23 Other noncurrent assets 27
22 Total assets $ 7,770 $ 8,207
LIABILITIES AND EQUITY Current liabilities: Accounts payable
$ 563 $ 446 Accrued and other current liabilities 148 209
Liabilities associated with assets held for sale - 20 Derivative
liabilities 363 171 Total current
liabilities 1,074 846 Deferred income taxes 42 117 Long-term debt,
net 2,154 2,575 Derivative liabilities 89 65 Asset retirement
obligations 48 32 Other noncurrent liabilities 428 445
Equity: Stockholders' equity: Preferred stock (100 million shares
authorized at $0.01 par value; 4.8 million shares outstanding at
June 30, 2018 and December 31, 2017) 232 232 Common stock (2
billion shares authorized at $0.01 par value; 400.3 million shares
and 398.3 million shares issued and outstanding at June 30, 2018
and December 31, 2017) 4 4 Additional paid-in-capital 7,483 7,479
Accumulated deficit (3,784 ) (3,588 ) Total equity
3,935 4,127 Total liabilities and
equity $ 7,770 $ 8,207
WPX Energy,
Inc. Consolidated Statements of Cash Flows
(Unaudited) Six Months
ended June 30, 2018 2017 (Millions)
Operating Activities(a) Net income (loss) $ (196 ) $ 168
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation, depletion and amortization 365
318 Deferred income tax benefit (75 ) (24 ) Provision for
impairment of properties and equipment (including certain
exploration expenses) 37 58 Net (gain) loss on derivatives 223 (319
) Net settlements related to derivatives (133 ) 9 Amortization of
stock-based awards 18 17 Loss on extinguishment of debt 71 - Net
(gain) loss on sales of assets including discontinued operations
151 (41 ) Cash provided (used) by operating assets and liabilities:
Accounts receivable (16 ) (49 ) Inventories (11 ) (3 ) Other
current assets 4 (5 ) Accounts payable 73 72 Federal income taxes
receivable - 12 Accrued and other current liabilities (59 ) (45 )
Liabilities accrued in prior years for retained transportation and
gathering contracts related to discontinued operations (28 ) (29 )
Other, including changes in other noncurrent assets and liabilities
4 3 Net cash provided by operating
activities (a) 428 142
Investing Activities(a) Capital expenditures(b) (660 ) (542
) Proceeds from sales of assets 686 38 Purchase of a business -
(798 ) Purchase of investments (23 ) (3 ) Net cash
provided by (used in) investing activities (a) 3
(1,305 )
Financing Activities Proceeds from
common stock 5 671 Dividends paid on preferred stock (8 ) (7 )
Borrowings on credit facility 303 85 Payments on credit facility
(303 ) (60 ) Proceeds from long-term debt, net of discount 494 -
Payments for retirement of long-term debt, including premium (986 )
- Taxes paid for shares withheld (12 ) (10 ) Payments for debt
issuance costs and credit facility amendment fees (10 ) - Other
1 (1 ) Net cash provided by (used in)
financing activities (516 ) 678 Net
decrease in cash and cash equivalents and restricted cash (85 )
(485 ) Cash and cash equivalents and restricted cash at beginning
of period 201 506 Cash and cash
equivalents and restricted cash at end of period $ 116 $ 21
(a) Amounts reflect continuing and
discontinued operations unless otherwise noted. (b) Increase to
properties and equipment $ (705 ) $ (596 ) Changes in related
accounts payable and accounts receivable 45 54
Capital expenditures $ (660 ) $ (542 )
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180801005854/en/
WPX EnergyMedia Contact:Kelly Swan,
539-573-4944orInvestor Contact:David Sullivan,
539-573-9360
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