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Q1 2014 Earnings Call – WPX Energy, Inc.

WPX Energy, Inc. · May 7, 2014 · 35 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 2014 Earnings Call – WPX Energy, Inc. – slide 1
    May 7, 2014 Operational Update Jim Bender, Chief Executive Officer
  2. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 2
    1st Quarter Highlights Adjusted EBITDAX increased 58% quarter over quarter Spud 68 wells in the Piceance 1st quarter Successful 10-acre density testing in Ryan Gulch 36% quarter-over-quarter oil growth in Williston despite record cold…
  3. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 3
    Legacy Transaction Particulars Legacy to purchase working interests for 355MM Working interest in Piceance Valley Excludes Ryan Gulch, Kokopelli, and the Niobrara and deeper formations Interest only in producing wells drilled prior…
  4. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 4
    Legacy Transaction Superior to MLP Legacy Transaction MLP Transaction fills majority of 2014 funding gap, enhancing financial strength Meaningfully accretive to WPXs current valuation WPX maintains operational control of…
  5. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 5
    May 7, 2014 Operational Update Bryan Guderian, Sr. VP of Operations
  6. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 6
    Piceance Highlights 1st-quarter activity Total Well Cost 2013 Spud 68 wells 2013 Plan 2013 Jan-Jun 2013 Jul-Dec 3,000 2,800 8th rig arrived in March Drilling & Completion Cost (M) 2,500 2,357 2,157 2,000 Continuing to drive…
  7. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 7
    Long-Term Value: Piceance Ryan Gulch Ryan Gulch offers competitive returns Returns are comparable to Valley operations Ryan Gulch Drilling Days per Well 30 Higher NGLs and EURs compared to Valley 26.3 24.7 25 Well costs reduced to…
  8. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 8
    Well Performance Drives Strong Williston Production Growth Continued strong production growth Four Bears Village New Town Produced 15.6 Mbo/d in 1Q (17.7 Mboe/d) Parshall 40% production growth vs. 1Q 2013 FBIR 13-24HZ FIRST SALES:…
  9. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 9
    San Juan Gallup Generating Excellent Results Production exceeds 1Q plan Oil production grows to average of 1.7 Mbo/d Total production averaged 2.2 Mboe/d CHACO 2306 06L 178H FIRST SALES: 3/9/2014 AVG. 30-DAY IP: 433 BOPD CHACO 2308…
  10. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 10
    Financial Results Kevin Vann, Chief Financial Officer
  11. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 11
    1st Quarter Results 1Q Dollars in millions, except production numbers 2014 2013 Daily Production Gas (MMcf/d) 975 1,021 Oil (Mbbl/d) 24.5 19.4 NGLs (Mbbl/d) 18.1 21.7 Equivalent (MMcfe/d) 1,230 1,268 Adjusted EBITDAX 320…
  12. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 12
    2014: 2nd Quarter and Full-Year Guidance (Includes Impact of Legacy Transaction) Production 2Q FY 2014 % of Net Realized Price3 2Q FY 2014 Natural Gas MMcf/d 918 - 9257 925 - 934 Natural Gas - NYMEX 80% - 85% 81% - 87% Oil Mbbl/d…
  13. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 13
    2014 Path to Greater Shareholder Value Legacy transaction in lieu of forming an MLP generates 355MM Stronger commodity prices increasing annual EBITDAX over previous guidance estimate Projected domestic oil growth of 39% year over…
  14. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 14
    Appendix
  15. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 15
    WPX Portfolio Piceance Williston San Juan Appalachia Powder River Apco1 3,019 Bcfe Proved 105 MMboe Proved 517 Bcfe Proved 328 Bcfe Proved 245 Bcfe Proved 22 MMboe Proved 11,878 Bcfe 3P 176 MMboe 3P 1,645 Bcfe 3P 1,555 Bcfe 3P 657 Bcfe…
  16. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 16
    Hedging Overview As of 5/5/2014 2Q - 4Q 2Q - 4Q 2015 2015 2014 Volumes 2014 Price Volumes Price Natural Gas1 (BBtu/d) (MMBtu) (BBtu/d) (MMBtu) Fixed Price Swaps 1,3 315 4.19 182 4.35 Collars 190 4.04 - 4.66 50 4.00 - 4.50 Crude…
  17. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 17
    Key Statistics by Basin 2014 Proved 2013 3P Reserves Net Acreage Average Oil/NGL Drillable Reserves Production (YE2013 (YE2013) Rig Count Focused Locations4 (YE2013 (MMcfe/d) Bcfe) (Op) Bcfe) Primary Areas of Focus Piceance1…
  18. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 18
    2013-14 Daily Production 2013 Avg 2014 Avg 1Q 2Q 3Q 4Q Total 1Q Domestic Production Gas (MMcf/d) 1,005 989 993 953 985 956 955 Oil (Mbbl/d) 13.8 15.1 17.1 18.9 16.2 19.3 19.3 NGLs (Mbbl/d) 21.2 20.8 19.7 19.7 20.3 17.6 17.6 MMcfe/d…
  19. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 19
    Growing Higher-Margin Oil 77% oil CAGR since 2010 2014 growth in higher-margin oil Record oil production in 2013 39% year-over-year domestic oil growth Averaged 16.2 Mbo/d a 35% increase year over year Williston up 30% - 35% Discovered…
  20. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 20
    Domestic Price Realization for 2014 Gas (/Mcf) NGL (/bbl) Oil (/bbl) 1Q 14 2Q 14 3Q 14 4Q 14 1Q 14 2Q 14 3Q 14 4Q 14 1Q 14 2Q 14 3Q 14 4Q 14 Weighted-Average Sales Price 4.89 49.14 88.40 1 Revenue Adjustments (0.49) (10.87) (2.16)…
  21. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 21
    Domestic Price Realization for 2013 Gas (/Mcf) NGL (/bbl) Oil (/bbl) 1Q 13 2Q 13 3Q 13 4Q13 1Q 13 2Q 13 3Q 13 4Q13 1Q 13 2Q 13 3Q 13 4Q13 Weighted-Average Sales Price 3.12 3.78 3.16 3.30 37.27 37.41 43.10 43.32 89.23 88.62 99.43 87.79…
  22. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 22
    Piceance Basin Orange: Highlands Yellow: Valley Net acreage: 221,186 1 Current rig count: 9 Drillable locations: 12,4751 Composition: Gas/NGL focused 1 Acreage and drilling locations are as of 12/31/13 Niobrara Dedicated…
  23. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 23
    Piceance Composite NGL Barrel and Realized Price (1st Quarter, 2014) 48.00 Product Weighted Average NGL Product Mix /Gal NGL /barrel Ethane1 32% .30 Propane 32% 1.28 38.56 Net Realized Price Isobutane 9% 1.40 **0.60 per Mcf…
  24. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 24
    Williston Basin Net acreage: 80,7361 Current rig count 2014: 5 Drillable Locations: 4531,2 Composition: Oil focused 1 Acreage and drilling locations are as of 12/31/13 2 Does not include the impact of downspacing WPX…
  25. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 25
    WPX is 1 in Middle Bakken Cumulative Production Average 365-day cumulative production per well of 136.8 Mbo, 1-Yr 1-Yr andand 2-Yr 2-Yr Cum.Production Cumulative Oil Production per Well1 (Based on productive days) 52% higher than the…
  26. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 26
    Williston Netback Price Analysis Estimated Volume % Sales Outlets (Apr - Jun 2014) Basin-Priced Sales 56% Rail Deals 32% Enbridge Capacity 12% Total Sales Outlets 100% Assumed 2Q 2014 total netback of WTI less 10 - 11 per…
  27. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 27
    San Juan Basin Green: Deep/Shallow Yellow: Shallow Net Acreage: 160,8251 Current rig count: 2 Drillable locations: 2,9661 Composition: Gas/Oil 1Acreage and drilling locations are as of 12/31/13 WPX Operational Update May 7,…
  28. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 28
    Apco Highlights Argentina Vaca Muerta Exposure Initiated 7-well Neuqun horizontal Neuqun Basin (Vaca Muerta acreage) drilling program Entre Lomas 96,000 net acres Early results encouraging Bajada del Palo 59,000 net acres Two…
  29. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 29
    Argentina Asset Map Acambuco: 1.5% WI Noreste Basin Agua Amarga: Entre Lomas: 23% WI, 40.7% Stock Interest 23% WI, 40.7% Stock Interest in Petrolera in Petrolera (Effective Interest 52.8%) (Effective Interest 52.8%)…
  30. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 30
    Colombia Asset Map Valle Medio Del Magdalena Basin Llanos 40 Block 50% WI Turpial Block 163,000 acres 50% WI 100,000 acres Llanos Orientales Basin Llanos 32 Block 20% WI 111,000 acres Block Basin WPX…
  31. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 31
    Non-GAAP
  32. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 32
    Reconciliation-Adjusted Income (Loss) from Continuing Operations (Unaudited) 2013 2014 (Dollars in millions, except per share amounts) 1Q 2Q 3Q 4Q Year 1Q 2Q 3Q 4Q YTD Income (loss) from continuing operations attributable (116) 18…
  33. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 33
    Consolidated Statements of Operations and EBITDAX Reconciliations (Unaudited) 2013 2014 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Revenues: Product revenues: Natural gas sales 267 316 252 258 1,093 384 384 Oil and condensate sales 139 151 183…
  34. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 34
    Domestic Segment (Unaudited) 2013 2014 (Dollars in millions) 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Revenues: Product revenues: Natural gas sales 263 310 248 253 1,074 379 379 Oil and condensate sales 111 121 154 148 534 149 149 Natural…
  35. Q1 2014 Earnings Call – WPX Energy, Inc. – slide 35
    International Segment (Unaudited) 2013 2014 (Dollars in millions) 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD Revenues: Product revenues: Natural gas sales 4 6 4 5 19 5 5 Oil and condensate sales 28 30 29 28 115 26 26 Natural gas liquid sales 1…

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