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Earnings 2011 Call – WPX Energy, Inc.

WPX Energy, Inc. · Feb 23, 2012 · 43 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Earnings 2011 Call – WPX Energy, Inc. – slide 1
    2011 Year-End Operational Update Ralph Hill Chief Executive Officer February 23, 2012 WPX Year-End Operational Update - February 23, 2012 1
  2. Earnings 2011 Call – WPX Energy, Inc. – slide 2
    Recent Highlights Became stand-alone publicly traded exploration and production company December 31, 2011 distribution date January 3, 2012 first date of regular way trading S&P 500 company (NYSE ticker: WPX) 197MM shares…
  3. Earnings 2011 Call – WPX Energy, Inc. – slide 3
    WPX Energy is: Geographically and product diverse Bakken 47.8 MMboe Proved Core areas: Bakken, Piceance and Marcellus 180.8 MMboe 3P Rapidly changing commodity mix: 86,113 net acres Piceance 2012 production Oil and NGLs 20%,…
  4. Earnings 2011 Call – WPX Energy, Inc. – slide 4
    Portfolio Transformation Core Product Mix Product mix - 3P Net Production Reserves Area Production Reserves Reserves 1,289 MMcfe 4,759 Bcfe Nat Gas Nat Gas 2009 1,163 MMcf/d 4,190 Bcf Rockies 90% gas, 88% gas, Focused 10%…
  5. Earnings 2011 Call – WPX Energy, Inc. – slide 5
    Proved Reserves Growth 6 5.3 Tcfe 4.9 Tcfe 5 4.8 Tcfe 8% 3% 5% 15% 8% 12% 4 89% 83% 77% Tcfe Oil 3 NGL Gas 2 1 0 2009 2010 2011 7 WPX Year-End Operational Update - February 23, 2012
  6. Earnings 2011 Call – WPX Energy, Inc. – slide 6
    3P Reserves 3P reserves 2010 vs. 2011 with 24% currently in oil and liquidsrich gas plays Oil NGL Gas Oil NGL Gas 7% 8% 17% 14% 78% 76% 2010 2011 Total 3P reserves: 17.3 Tcfe Total 3P reserves: 18.5 Tcfe 8 WPX…
  7. Earnings 2011 Call – WPX Energy, Inc. – slide 7
    2012 Capital Expenditures Total 2012 CapEx of 1.2B with 68% going to oil and liquidsrich plays Bakken Marcellus Piceance International Other Oil Natural Gas + NGL's Dry Gas 5% 5% 32% 32% 37% 31% 27% 31% BY AREA BY…
  8. Earnings 2011 Call – WPX Energy, Inc. – slide 8
    Piceance WPX Year-End Operational Update - February 23, 2012
  9. Earnings 2011 Call – WPX Energy, Inc. – slide 9
    Continued Efficiency Gains in the Piceance Improved Drilling Performance Drilling more wells/rig Split rig design utilized in remote areas Faster drilling offsets cost increases Record Production Achieved in 2011 Operated production…
  10. Earnings 2011 Call – WPX Energy, Inc. – slide 10
    Piceance Valley Basin Economics Type Well Economics Gross Well Cost 1.43 MM Gross Reserves 1,240 MMcfe Working Interest 97% Basin Facts Net Revenue Interest 81% Net Liquids Contribution .87/Mcf Net Lifting Cost (LOE) .25/Mcfe Net…
  11. Earnings 2011 Call – WPX Energy, Inc. – slide 11
    Ryan Gulch Basin Economics Type Well Economics Gross Well Cost 3.07 MM Gross Reserves 1,881 MMcfe Working Interest 52% Net Revenue Interest 45% Basin Facts Net Liquids Contribution 1.82/Mcf Net Lifting Cost (LOE) .44/Mcfe Net…
  12. Earnings 2011 Call – WPX Energy, Inc. – slide 12
    Increasing Yields to Maximize Value Willow Creek (65% of NGL volume) Long-term fee based contract Mont Belvieu priced products via Overland Pass Pipeline Volume dedication yields advantaged OPPL T&F rates Enterprise Meeker (35% of…
  13. Earnings 2011 Call – WPX Energy, Inc. – slide 13
    Bakken WPX Year-End Operational Update - February 23, 2012
  14. Earnings 2011 Call – WPX Energy, Inc. – slide 14
    Bakken Activity Highlights Increased net production more than 300% Leading edge completion design New sleeve technology Ceramic proppant Established strong well performance in area of development Bakken basis differential WTI…
  15. Earnings 2011 Call – WPX Energy, Inc. – slide 15
    180 Day Rate / EUR Comparison Middle Bakken, long laterals Strong early production performance 180 Day Rate (rounded in 000s) 112 120 109 generates 101 100 91 EUR Comparison 77 800 80 714 689 Mbo 53 700 60 547 46…
  16. Earnings 2011 Call – WPX Energy, Inc. – slide 16
    Bakken Basin Economics Type Well Economics Gross Well Cost 10.5 MM Gross Reserves 710 - 805 Mboe Working Interest 81% Net Revenue Interest 64% Basin Facts Net Liquids Contribution 5.10/Bbl Net Lifting Cost (LOE) 6.41/Bbl Net acreage:…
  17. Earnings 2011 Call – WPX Energy, Inc. – slide 17
    Marcellus WPX Year-End Operational Update - February 23, 2012
  18. Earnings 2011 Call – WPX Energy, Inc. – slide 18
    Marcellus Operational Update Reduced drilling times 35% from 4Q 2010; average spud-to-rig release time of 18.3 days in 4Q 2011 Drilled record lateral of 5,947 in Susquehanna County and 5,090 in Westmoreland County Dedicated frac…
  19. Earnings 2011 Call – WPX Energy, Inc. – slide 19
    Susquehanna Transport & Gathering Millennium Pipeline Millennium Pipeline contract provides significant flow assurance as well as access to diverse markets and pricing for Susquehanna County production including: TETCO M3 Dominion…
  20. Earnings 2011 Call – WPX Energy, Inc. – slide 20
    Marcellus Susquehanna Basin Economics Type Well Economics Gross Well Cost 6.0 to 8.0 MM Gross Reserves 7.0 to 9.0 Bcfe Working Interest 86% Net Revenue Interest 73% Net Liquids Contribution .00/Mcf Basin Facts Net Lifting Cost…
  21. Earnings 2011 Call – WPX Energy, Inc. – slide 21
    Apco WPX Year-End Operational Update - February 23, 2012
  22. Earnings 2011 Call – WPX Energy, Inc. – slide 22
    Our 69% Interest in Apco ARGENTINA All Apcos interests are non-operated Neuquen Basin Entre Lomas 96,000 net acres Apco is funded by its internally generated cash Bajada del Palo 59,000 net acres flow - no domestic cash sent to Apco…
  23. Earnings 2011 Call – WPX Energy, Inc. – slide 23
    Apco Operational Update 2012 1Q Update Development drilling progressing as planned; primarily in Entre Lomas and Bajada del Palo concessions Commence exploration drilling in Colombia in this quarter (Llanos 32) Actively…
  24. Earnings 2011 Call – WPX Energy, Inc. – slide 24
    2011 Financial Results and 2012 Guidance Rod Sailor Chief Financial Officer February 23rd, 2012 WPX Year-End Operational Update - February 23, 2012
  25. Earnings 2011 Call – WPX Energy, Inc. – slide 25
    4th Quarter And Full-year Results 4Q Full Year Dollars in Millions, except production numbers 2011 2010 2011 2010 Daily Production Gas (MMcf/d) 1,163 1,137 1,153 1,096 Oil (Mbbl/d) 15 8 13 8 NGLs (Mbbl/d) 28 25 28 23 Equivalent…
  26. Earnings 2011 Call – WPX Energy, Inc. – slide 26
    2012 Guidance Dollars in millions, except production numbers Capital expenditures Production Piceance 365 Gas (MMcf/d) 1,160 Bakken 370 Oil (Mbbl/d) 18 Marcellus 315 NGLs (Mbbl/d) 30 International 65 Equivalents (MMcfe/d)…
  27. Earnings 2011 Call – WPX Energy, Inc. – slide 27
    2012 Hedges and Hedging Strategy As of 2/14/2012 2012 Use of a combination of hedging instruments: NG fixed price at the basin fixed price swaps, basis swaps, costless collars Volume (Bbtu/d) 508 and swaptions Weighted average…
  28. Earnings 2011 Call – WPX Energy, Inc. – slide 28
    WPX 2012 Liquidity Guidance Liquidity (millions) All capacity under 1.5 billion, 5 year revolver is available at year-end General corporate borrowing facility Cash and cash equivalents 526 Facility became effective November 1 Less:…
  29. Earnings 2011 Call – WPX Energy, Inc. – slide 29
    Why WPX Is A Good Investment Economically attractive diversified asset base across a number of high growth areas Largest operator in the Piceance, substantial positions in the Bakken and the Marcellus Proven technical leader and…
  30. Earnings 2011 Call – WPX Energy, Inc. – slide 30
    Non-GAAP WPX Year-End Operational Update - February 23, 2012
  31. Earnings 2011 Call – WPX Energy, Inc. – slide 31
    2011 - 2012 Adjusted EBITDAX Reconciliation 2011 2012 EBITDAX Reconciliation Pro Forma Year Year Ended Ended December ( in millions) December 31, 31, 2011 2012 Adjusted EBITDAX Reconciliation to Net Income (Loss): Net Income…
  32. Earnings 2011 Call – WPX Energy, Inc. – slide 32
    Reconciliation - Adjusted Net Income from Continuing Operations 35 WPX Year-End Operational Update - February 23, 2012
  33. Earnings 2011 Call – WPX Energy, Inc. – slide 33
    Consolidated EBITDAX Reconciliation W P X E n e rg y , In c . C o ns o l i d a t e d (UNAUDITED) 2 0 10 2 0 11 (Do llars in millio ns ) 1s t Qt r 2 nd Qt r 3 rd Qt r 4 t h Qt r Y ear 1s t Qt r 2 nd Qt r 3 rd Qt r 4 t h Qt r Y ear R…
  34. Earnings 2011 Call – WPX Energy, Inc. – slide 34
    Domestic Income Statement 2 0 10 2 0 11 (Do llars in millio ns ) 1s t Qt r 2 nd Qt r 3 rd Qt r 4 t h Qt r Y ear 1s t Qt r 2 nd Qt r 3 rd Qt r 4 t h Qt r Y ear R e ve nue s : P ro duc t re ve nue s Na tura l ga s s a le s 486 424…
  35. Earnings 2011 Call – WPX Energy, Inc. – slide 35
    International Income Statement 2 0 10 2 0 11 (Do llars in millio ns ) 1s t Qt r 2 nd Qt r 3 rd Qt r 4 t h Qt r Y ear 1s t Qt r 2 nd Qt r 3 rd Qt r 4 t h Qt r Y ear R e ve nue s : P ro duc t re ve nue s : Na tura l ga s s a le s 4 3…
  36. Earnings 2011 Call – WPX Energy, Inc. – slide 36
    APPENDIX WPX Year-End Operational Update - February 23, 2012
  37. Earnings 2011 Call – WPX Energy, Inc. – slide 37
    Northeast Pennsylvania - Susquehanna WPX acreage 40 WPX Year-End Operational Update - February 23, 2012
  38. Earnings 2011 Call – WPX Energy, Inc. – slide 38
    Williston Basin WPX acreage 41 Q4 Earnings Call February 2012
  39. Earnings 2011 Call – WPX Energy, Inc. – slide 39
    Piceance Basin WPX acreage 42 WPX Year-End Operational Update - February 23, 2012
  40. Earnings 2011 Call – WPX Energy, Inc. – slide 40
    Argentina Asset Map Entre Lomas 23% WI Acambuco 1.5% WI 40.7% Stock Interest in Petrolera (Effective Interest 52.8%) Bajada del Palo 23% WI 40.7% Stock Interest in Petrolera (Effective Interest 52.8%) Sur Rio Deseado 88% WI…
  41. Earnings 2011 Call – WPX Energy, Inc. – slide 41
    2012 Tax Guidance Tax rates 2011 2011 2011 2011 First Quarter Second Quarter Third Quarter Year-to-Date Provision (benefit) at statutory rate 4 35% 19 35% 29 35% (146) 35% Increases (decreases) in taxes resulting from: State…
  42. Earnings 2011 Call – WPX Energy, Inc. – slide 42
    Domestic Price Realization OIL (/BBL) NGL (/BBL) Gas (/Mcf) Q1 11 Q2 11 Q3 11 Q4 11 Q1 11 Q2 11 Q3 11 Q4 11 Q1 11 Q2 11 Q3 11 Q4 11 Price point 90.41 99.28 91.89 89.87 45.66 50.14 46.40 45.38 4.11 4.31 4.19 3.79 Price deducts (2.61)…
  43. Earnings 2011 Call – WPX Energy, Inc. – slide 43
    2011 Daily Production 2010 2011 Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Domestic Production Oil (Mbbl/d) 2 2 2 3 2 4 8 8 9 7 NGLs (Mbbl/d) 20 23 21 24 22 27 28 28 28 28 Gas (MMcf/d) 1,052 1,054 1,080 1,118 1,076 1,091 1,115 1,182…

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