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Q1 2012 Operational Update – WPX Energy, Inc.

WPX Energy, Inc. · May 3, 2012 · 47 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. Q1 2012 Operational Update – WPX Energy, Inc. – slide 1
    1st Quarter 2012 Operational Update Ralph Hill Chief Executive Officer May 3, 2012 WPX 1st Quarter Operational Update - May 3, 2012
  2. Q1 2012 Operational Update – WPX Energy, Inc. – slide 2
    Execution in First 100 Days Disciplined management team Quick response to low natural gas prices 2012 capital cuts of 400 MM Directed 68% of capital to oil and liquids-rich plays Continued commitment to living within our means in…
  3. Q1 2012 Operational Update – WPX Energy, Inc. – slide 3
    Remaining 2012 Priorities for Value Creation Grow total domestic oil production by 50 - 60% in 2012 Maintain top-tier balance sheet in a depressed natural gas price environment Demonstrate continued financial discipline Costs…
  4. Q1 2012 Operational Update – WPX Energy, Inc. – slide 4
    Bakken WPX 1st Quarter Operational Update - May 3, 2012
  5. Q1 2012 Operational Update – WPX Energy, Inc. – slide 5
    Continued Superior Well Results Middle Bakken activity Spud 5 wells (green) 7 wells put on sales (blue) No wells currently waiting on completion Delineating asset to South 2 wells drilled (Good Bird and Black Hawk) Mid-June…
  6. Q1 2012 Operational Update – WPX Energy, Inc. – slide 6
    Performance Leader on Reservation Middle Bakken, Long Laterals Strong early production performance 180 Day Rate (rounded in 000's) 140 116 generates 120 112 109 100 91 84 EUR Comparison 80 700 663 Mbo SAND ONLY…
  7. Q1 2012 Operational Update – WPX Energy, Inc. – slide 7
    Van Hook Gathering System Reduces Cost and Creates Value Van Hook Gathering System Construction under way; 3Q 12 completion 34 MM total cost Pipe oil, gas and water; deliver fresh water Produce gas; minimizes flaring Removes…
  8. Q1 2012 Operational Update – WPX Energy, Inc. – slide 8
    Bakken Netback Price Analysis May - Dec. 2012 Gross wellhead sales price vs. WTI Volume % Volume Bbl/d Discount to WTI* Basin Priced Sales 60% 9,000 (13.00) Manifest Rail Deals 23% 3,500 (10.00) Enbridge Capacity 17% 2,500 (11.00)…
  9. Q1 2012 Operational Update – WPX Energy, Inc. – slide 9
    Piceance WPX 1st Quarter Operational Update - May 3, 2012
  10. Q1 2012 Operational Update – WPX Energy, Inc. – slide 10
    Piceance Successful While Disciplined Spud 70 wells 1Q 2012 Rig fleet at 5 for remainder 2012 Attained permits for 3 new water disposal wells Will add 8,000 Bbl/d additional disposal capacity Continuing trend of lowest cost…
  11. Q1 2012 Operational Update – WPX Energy, Inc. – slide 11
    Record Liquids Volumes in the Piceance Ryan Gulch Production NGL volumes continue to increase (Gross MMcf/d) Valley 140 Liquids yield of 38 Bbls/MMcf 120 100 MMcf/d 100 Ryan Gulch 80 Broke 100 MMcfd gross production in…
  12. Q1 2012 Operational Update – WPX Energy, Inc. – slide 12
    Marcellus Increasing Efficiencies and Reducing Cost 20% lower completion cost due to efficiencies and reduced contractor costs Pumped 224 frac stages in 1Q 2012 with 1 frac crew vs. 322 frac stages using 2 frac crews in 4Q 2011…
  13. Q1 2012 Operational Update – WPX Energy, Inc. – slide 13
    Laser Update Completed the 16 mainline on Oct. 23, 2011, free flowing into Millennium without compression Started the Dunbar Compressor Station on Jan. 10, 2012 Sale of Laser to Williams Partners L.P. (Williams) closed on Feb. 17,…
  14. Q1 2012 Operational Update – WPX Energy, Inc. – slide 14
    Apco WPX 1st Quarter Operational Update - May 3, 2012
  15. Q1 2012 Operational Update – WPX Energy, Inc. – slide 15
    Recent Argentine Government Actions Managements opinion is that this dispute is between the Argentine government and Repsol and not with the entire energy industry in Argentina. Apco has historically reinvested majority of its earnings…
  16. Q1 2012 Operational Update – WPX Energy, Inc. – slide 16
    Apco 2012 1st Quarter Operational Update Argentina Development drilling results meeting expectations Actively investigating Vaca Muerta formation in Coirn Amargo Colombia Drilled Maniceno 1 well in Llanos 32 block and have set…
  17. Q1 2012 Operational Update – WPX Energy, Inc. – slide 17
    1st Quarter Financial Results and 2012 Guidance Rod Sailor Chief Financial Officer May 3, 2012 WPX 1st Quarter Operational Update - May 3, 2012
  18. Q1 2012 Operational Update – WPX Energy, Inc. – slide 18
    1st Quarter Results 1Q Dollars in millions, except production numbers 2012 2011 Daily Production Gas (MMcf/d) 1,133 1,048 Oil (Mbbl/d) 16.1 9.6 NGLs (Mbbl/d) 30.7 27.4 Equivalent (MMcfe/d) 1,413 1,270 Adjusted EBITDAX 262…
  19. Q1 2012 Operational Update – WPX Energy, Inc. – slide 19
    2012 Guidance Previous Guidance Current Guidance Dollars in millions, except production numbers Feb. 23, 2012 May 3, 2012 Daily Production Gas (MMcf/d) 1,160 1,090 (1) Oil (Mbbl/d) 18 18 NGLs (Mbbl/d) 30 30 Equivalents (MMcfe/d)…
  20. Q1 2012 Operational Update – WPX Energy, Inc. – slide 20
    WPX 1st Quarter Liquidity At 3/31/12, 278 million letters Liquidity (millions) of credit outstanding under Cash and cash equivalents 3/31/12 362 bilateral facilities Less: Sold Barnett and Arkoma assets Apco Oil and Gas (41) for 306…
  21. Q1 2012 Operational Update – WPX Energy, Inc. – slide 21
    Premier WPX Portfolio 18.5 Tcfe 3P reserves, 2012 production 20% Oil/NGLs with 80% gas, 46% revenues oil/liquids Bakken 47.8 MMboe Proved Piceance Basin Piceance 180.8 MMboe 3P Large-scale position, 1 gas producer in Colorado. 3,496…
  22. Q1 2012 Operational Update – WPX Energy, Inc. – slide 22
    APPENDIX WPX 1st Quarter Operational Update - May 3, 2012
  23. Q1 2012 Operational Update – WPX Energy, Inc. – slide 23
    2012 Capital Expenditures Total 2012 CapEx of 1.2 B with 68% going to oil and liquids-rich plays Bakken Marcellus Piceance International Other Oil Natural Gas + NGLs Dry Gas 5% 5% 32% 32% 37% 31% 27% 31% By Area By…
  24. Q1 2012 Operational Update – WPX Energy, Inc. – slide 24
    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 WPX 1st Quarter Operational Update - May 3, 2012 27
  25. Q1 2012 Operational Update – WPX Energy, Inc. – slide 25
    3P Reserves 3P reserves 2010 vs. 2011 with 24% currently in oil and liquids-rich 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 WPX 1st…
  26. Q1 2012 Operational Update – WPX Energy, Inc. – slide 26
    Piceance Cryo Capacity 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 NGL volume)…
  27. Q1 2012 Operational Update – WPX Energy, Inc. – slide 27
    Bakken YE 2011 Undeveloped Location Summary 574 undeveloped locations 68% WI 574 Undeveloped Locations 460 operated 84% WI 114 non-op 18% WI 274 (48%) Middle Bakken wells 0 3 - 4 laterals per 1,280/640 acre drilling unit 114…
  28. Q1 2012 Operational Update – WPX Energy, Inc. – slide 28
    Our 69% Interest in Apco ARGENTINA All Apcos interests are non-operated Neuquen Basin Apco is funded by its internally generated Entre Lomas 96,000 net acres cash flow no domestic cash sent to Apco Bajada del Palo 59,000 net acres WPX…
  29. Q1 2012 Operational Update – WPX Energy, Inc. – slide 29
    Piceance Valley Basin Economics Type Well Economics Gross Well Cost 1.43 MM Gross Reserves 1,240 MMcfe Basin Facts Working Interest 97% Net Revenue Interest 81% Net acreage: 102,277 Net Liquids Contribution .87/Mcf Net Lifting…
  30. Q1 2012 Operational Update – WPX Energy, Inc. – slide 30
    Ryan Gulch Basin Economics Type Well Economics Gross Well Cost 3.07 MM Gross Reserves 1,881 MMcfe Basin Facts Working Interest 52% Net Revenue Interest 45% Net acreage: 34,918 Net Liquids Contribution 1.82/Mcf Net Lifting Cost…
  31. Q1 2012 Operational Update – WPX Energy, Inc. – slide 31
    Bakken Basin Economics Type Well Economics Gross Well Cost 10.5 MM Gross Reserves 710 - 805 Mboe Basin Facts Working Interest 81% Net Revenue Interest 64% Net acreage: 86,113 Net Liquids Contribution 5.10/Bbl Net Lifting Cost…
  32. Q1 2012 Operational Update – WPX Energy, Inc. – slide 32
    Marcellus Susquehanna Basin Economics Type Well Economics Gross Well Cost 6.0 to 8.0 MM Gross Reserves 7.0 to 9.0 Bcfe Basin Facts Working Interest 86% Net Revenue Interest 73% Net acreage: 106,976* Net Liquids Contribution…
  33. Q1 2012 Operational Update – WPX Energy, Inc. – slide 33
    2012 Hedges and Hedging Strategy Use of a combination of hedging As of 3/31/2012 April - Dec. 2012 instruments: NG fixed price at the basin Volume (Bbtu/d) 508 Fixed price swaps Weighted average price (/MMBtu) 5.04 Costless collars…
  34. Q1 2012 Operational Update – WPX Energy, Inc. – slide 34
    2012 Tax Guidance 2012 2012 Tax Rates 1st Qtr 1st Qtr Year-to-Date Year-to-Date Provision (benefit) at statutory rate (22) 35% Increases (decreases) in taxes resulting from: State income taxes (net of federal benefit) (2)…
  35. Q1 2012 Operational Update – WPX Energy, Inc. – slide 35
    Domestic Price Realization Gas (/Mcf) NGL (/Bbl) Oil (/Bbl) Q1 12 Q2 12 Q3 12 Q4 12 Q1 12 Q2 12 Q3 12 Q4 12 Q1 12 Q2 12 Q3 12 Q4 12 Price Point 2.51 43.61 103.05 Revenue Deduct (0.11) (10.15) (15.98) Hedge Impact 1.08 0.00…
  36. Q1 2012 Operational Update – WPX Energy, Inc. – slide 36
    2011-12 Daily Production 2011 2012 Q1 Q2 Q3 Q4 Total Q1 Q2 Q3 Q4 Total Domestic Production Oil (Mbbl/d) 4.3 7.9 8.0 8.9 7.3 10.4 10.4 NGLs (Mbbl/d) 26.9 27.8 27.9 27.6 27.6 30.2 30.2 Gas (MMcf/d) 1,027 1,046 1,115 1,070 1,065 1,114…
  37. Q1 2012 Operational Update – WPX Energy, Inc. – slide 37
    Northeast Pennsylvania Susquehanna WPX acreage WPX 1st Quarter Operational Update - May 3, 2012 40
  38. Q1 2012 Operational Update – WPX Energy, Inc. – slide 38
    Williston Basin WPX acreage WPX 1st Quarter Operational Update - May 3, 2012 41
  39. Q1 2012 Operational Update – WPX Energy, Inc. – slide 39
    Piceance Basin WPX acreage WPX 1st Quarter Operational Update - May 3, 2012 42
  40. Q1 2012 Operational Update – 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%…
  41. Q1 2012 Operational Update – WPX Energy, Inc. – slide 41
    Non-GAAP WPX 1st Quarter Operational Update - May 3, 2012
  42. Q1 2012 Operational Update – WPX Energy, Inc. – slide 42
    2012 Adjusted EBITDAX Reconciliation Pro Forma Year Dollars in millions Ended Dec. 31, 2012 Adjusted EBITDAX Reconciliation to Net Income (Loss): Net Income (Loss) 44 Interest Expense 92 Provision (Benefit) for Income Taxes…
  43. Q1 2012 Operational Update – WPX Energy, Inc. – slide 43
    Net Debt Reconciliation Net Debt Calculation Long Term Debt 3/31/12 1,509 Less: Cash and Cash Equivalents 362 Net Debt 3/31/2012 1,147 WPX 1st Quarter Operational Update - May 3, 2012 47
  44. Q1 2012 Operational Update – WPX Energy, Inc. – slide 44
    Reconciliation Adjusted Net Income from Continuing Operations (Unaudited) 2011 2012 Dollars in millions, except per share amounts 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Income (loss) from continuing operations attributable to…
  45. Q1 2012 Operational Update – WPX Energy, Inc. – slide 45
    Consolidated Statement of Operations and EBITDAX Reconciliation (Unaudited) 2011 2012 Dollars in millions 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Revenues: Product revenues: Natural gas sales 408 423 440 423 1,694 357 Natural…
  46. Q1 2012 Operational Update – WPX Energy, Inc. – slide 46
    Domestic Statement of Operations (Unaudited) 2011 2012 Dollars in millions 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Revenues: Product revenues: Natural gas sales 404 419 436 419 1,678 353 Natural gas liquid sales 84 106 109 105…
  47. Q1 2012 Operational Update – WPX Energy, Inc. – slide 47
    International Statement of Operations (Unaudited) 2011 2012 Dollars in millions 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Revenues: Product revenues: Natural gas sales 4 4 4 4 16 4 Natural gas liquid sales 1 1 1 1 4 1 Oil and…

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