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WPX STRATEGIC UPDATE – WPX Energy, Inc.

WPX Energy, Inc. · Oct 9, 2014 · 29 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. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 1
    October 9, 2014 WPX Strategic Update Rick Muncrief President & CEO, WPX Energy
  2. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 2
    WPX Repositioning Update Agreed to sell our 69% equity interest in Apco Oil & Gas Control 84,000 net acres in the San Juan Gallup, 163% increase from year-end 2013 Other value-enhancing transactions Trail Ridge joint development carry…
  3. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 3
    WPX Operational Update San Juan Gallup 3rd rig added; record spud-to-rig release, 9.5 days Completing first two 7,500 laterals Williston Initial result of larger stimulations encouraging Reaffirm full-year production guidance…
  4. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 4
    WPX 20/20 Vision By 2020, WPX intends to 3x INCREASE MARGINS and 5x INCREASE OIL PRODUCTION which should lead to 3x INCREASE MARKET CAP WPX Strategic Update October 2014 6
  5. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 5
    20/20 Vision Measurable MarginsMargins (per Mcfe)1 Domestic Domestic Oil Oil Production Market Cap (B) (Mbbl/d) Production (MMbbl) 4.50 90 14 3.93 81 4.00 80 12.00 12 3.50 70 Oil Production (Mbbl/d) 10 Margins (per…
  6. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 6
    20/20 Vision not Dependent on Raising Commodity Prices Bullish natural gas longer-term, anticipate 3.50 - 4.50 pricing over the next 3 years Coal continues to lose power generation market share Advantaged feedstock pricing leads to…
  7. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 7
    WPX 20/20 Vision - Identity WPX will be known for Margin Growth Operational Performance Technical Excellence WPX Strategic Update October 2014 9
  8. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 8
    Foundation for 3x Margin Expansion SUPPLY Creation of enterprise supply chain management CHAIN MGMT. TRANSPORTATION Rockies Express agreement expires ROLL-OFF November 2014 IMPLEMENT 1.5-mile laterals in San Juan Gallup NEW…
  9. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 9
    Achieving 20/20 Vision Accelerate Oil Development Highest portfolio returns Increases operating margins Brings highest-value projects forward Culture, Communication Build Asset Scale and Cost Focus Create significant drilling…
  10. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 10
    20/20 Vision: Disciplined Focus on Profitable Growth AREAS OF FOCUS Commodity diversification INCREASE MARGINS Reduce DD&A and LOE through operational improvements Optimize SG&A costs and GP&T expenses AREAS OF FOCUS Reduce D&C…
  11. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 11
    20/20 Vision: Disciplined Focus on Profitable Growth Underway ACTIONS TAKEN Rockies Express agreement expires INCREASE MARGINS November 2014 Successful early exit program completed Creation of Supply Chain Management group…
  12. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 12
    Premier Western Energy Producer High-Quality Rocks (Rocks matter) WILLISTON BASIN Established Infrastructure (Infrastructure matters) PICEANCE BASIN Access to Premier Markets (Markets matter) SAN JUAN BASIN Commodity…
  13. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 13
    San Juan Basin Why We Like It: 30+ years of experience in the basin San Juan Gallup Highest returns in the portfolio Production stream: 70% oil, 15% natural gas and 15% NGL High-quality light sweet oil Return enhancement from…
  14. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 14
    Williston Basin Why We Like It: Highest quality rock in the play 10 years of inventory Production stream: 85% oil, 7% natural gas, 8% NGLs Opportunity for operational optimization Targeting 10MM drilling and completion cost…
  15. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 15
    Larger Williston Stimulations Peak Month Production Middle Bakken Peak Month1 Three Forks Peak Month2 14% increase 13% increase 880 800 860 780 840 760 820 740 Barrels of Oil Barrels of Oil 800 720 780 700 760 680…
  16. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 16
    Early Results From Larger Stimulations Ruby Pad Cumulative Production 60,000 Middle Bakken Ruby 31-30 HA Three Forks Ruby 31-30 HW 50,000 Three Forks Ruby 31-30 HX 40,000 Original Middle Bakken 3MM Type Curve Cumulative…
  17. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 17
    Piceance Basin Why We Like It: Massive resource and scale 25 years of drillable inventory Exploration upside in the Niobrara and Mancos Current production of 13.7MMcf/d 7,325 psi Excess regional takeaway capacity with access to…
  18. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 18
    Resource Assessment Underway Potential Catalysts for Growth WILLISTON SAN JUAN Additional Longer laterals Downspacing in the Gallup Larger Increasing stimulations leasehold Greater EURs PICEANCE EXPLORATION Ryan Gulch Early…
  19. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 19
    WPX Future: 2015 Outlook 2015 guidance will be released December 2014 Current hedging program provides capital flexibility 50% of oil production hedged at an average price of 94.88 per barrel 50% of natural gas hedged at an average…
  20. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 20
    Western Prices Have Increased Relative to Eastern Locations 0.50 West Basis Strengthening1 East Basis Weakening2 0.33 0.00 (0.18) (0.18) (0.25) per MMBtu -0.50 -1.00 (1.15) -1.50 (1.74) -2.00 3 3 2006 to…
  21. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 21
    Strong Western Supply/Demand Fundamentals Through 2019 Northwest 2.0 Bcf/d Deman d +2.0 demand increase Bcf/d through 2019 Rockies and Southwest San Juan Basin production flat to declining 0.5 Bcf/d Demand through 2019…
  22. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 22
    Our Transport Costs are Decreasing while Northeast Producers are Increasing WPX Northeast Producer 1 Northeast Producer 2 500,000 450,000 400,000 350,000 Transportation Costs (/MM) 300,000 250,000 200,000 150,000…
  23. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 23
    Foundational Elements for 20/20 Vision COST RISK We are building FOCUS TOLERANCE one vision, one culture, one mission. ENTREPRENEURIAL MINDSET CULTURE OF ACCOUNTABILITY WPX Strategic Update October 2014 25
  24. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 24
    WPX 20/20 Vision By 2020, WPX intends to 3x INCREASE MARGINS and 5x INCREASE OIL PRODUCTION which should lead to 3x INCREASE MARKET CAP WPX Strategic Update October 2014 26
  25. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 25
    Appendix
  26. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 26
    Hedging Overview As of 10/01/2014 Balance of 2014 1 2015 Volume/Day Average Price Volume/Day Average Price Natural Gas (MMBtu) Fixed Price Swaps2 315,000 4.19 272,055 4.31 Costless Collars 190,000 4.04 - 4.66 50,000 4.00 - 4.50…
  27. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 27
    Williston Type Well Reflecting Infill Reserves Target D&C Type Curve 80% 1400 700 70% 1200 600 60% 1000 500 50% Oil Rate Boe/d B-tax IRR Cum Oil Mboe 800 400 40% 600 300 30% 400 200 20% 200 30 + Yrs 100 Middle Bakken:…
  28. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 28
    San Juan Gallup Oil Type Wells Target D&C Type Curve 180% 700 800 160% 600 700 140% 600 120% 500 Cum Oil Mboe Oil Rate Boe/d 500 100% B-tax IRR 400 400 300 80% 300 60% 200 30 + Yrs 200 40% 100 100 765 Mboe…
  29. WPX STRATEGIC UPDATE – WPX Energy, Inc. – slide 29
    Piceance Highlands Ryan Gulch Type Well Target D&C Type Curve 60% 2,500 2,500 50% 2,000 2,000 40% Cum Gas MMcfe Gas Rate Mcfed B-tax IRR 1,500 1,500 30% 1,000 1,000 20% 500 500 30 + Yrs 10% 0 0 2.16 Bcfe EUR, 1.8MM…

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