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Howard Weil 40th Annual Energy Conference – WPX Energy, Inc.

WPX Energy, Inc. · Mar 28, 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. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 1
    Howard Weil 40th Annual Energy Conference Ralph Hill Chief Executive Officer March 28, 2012 Howard Weil Conference - New Orleans, March 28, 2012 1
  2. Howard Weil 40th Annual Energy Conference – 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) 197 MM shares…
  3. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 3
    WPX Energy Is: Geographically and product diverse Bakken Core areas: Bakken, Piceance and Marcellus 47.8 MMboe Proved 180.8 MMboe 3P Rapidly changing commodity mix: 86,113 net acres 2012 production Oil and NGLs, 20%, Piceance…
  4. Howard Weil 40th Annual Energy Conference – 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. Howard Weil 40th Annual Energy Conference – 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 Howard Weil Conference - New Orleans, March 28, 2012 7
  6. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 6
    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 Howard Weil…
  7. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 7
    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…
  8. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 8
    Piceance Howard Weil Conference - New Orleans, March 28, 2012
  9. Howard Weil 40th Annual Energy Conference – 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. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 10
    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…
  11. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 11
    Bakken Howard Weil Conference - New Orleans, March 28, 2012
  12. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 12
    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…
  13. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 13
    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…
  14. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 14
    Marcellus Howard Weil Conference - New Orleans, March 28, 2012
  15. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 15
    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 6,488 in Westmoreland County Dedicated frac…
  16. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 16
    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…
  17. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 17
    Apco Howard Weil Conference - New Orleans, March 28, 2012
  18. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 18
    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…
  19. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 19
    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…
  20. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 20
    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)…
  21. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 21
    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…
  22. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 22
    APPENDIX Howard Weil Conference - New Orleans, March 28, 2012
  23. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 23
    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…
  24. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 24
    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…
  25. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 25
    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…
  26. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 26
    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…
  27. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 27
    2012 Hedges and Hedging Strategy Use of a combination of hedging instruments: As of 2/14/2012 2012 fixed price swaps, basis swaps, costless collars NG fixed price at the basin and swaptions Volume (Bbtu/d) 508 Weighted average…
  28. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 28
    WPX 2012 Liquidity Guidance All capacity under 1.5 billion, 5-year Liquidity (millions) revolver is available at year-end General corporate borrowing facility Cash and cash equivalents 526 Facility became effective November 1 Less:…
  29. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 29
    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…
  30. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 30
    2012 Tax Guidance 2011 2011 2011 2011 Tax Rates 1st Qtr 2nd Qtr 3rd Qtr Year-to-Date Provision (benefit) at statutory rate 4 35% 19 35% 29 35% (146) 35% Increases (decreases) in taxes resulting from: State income taxes (net of…
  31. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 31
    Domestic Price Realization Gas (/Mcf) NGL (/Bbl) OIL (/Bbl) 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 4.10 4.31 4.19 3.55 47.81 53.75 53.07 52.63 90.63 104.02 92.43 90.27 Price Deduct…
  32. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 32
    2010-11 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…
  33. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 33
    Northeast Pennsylvania Susquehanna WPX acreage Howard Weil Conference - New Orleans, March 28, 2012 35
  34. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 34
    Williston Basin WPX acreage Howard Weil Conference - New Orleans, March 28, 2012 36
  35. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 35
    Piceance Basin WPX acreage Howard Weil Conference - New Orleans, March 28, 2012 37
  36. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 36
    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%…
  37. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 37
    Non-GAAP Howard Weil Conference - New Orleans, March 28, 2012
  38. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 38
    WPX Non-GAAP Disclaimer This presentation may include certain financial measures, including adjusted EBITDAX (earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses), adjusted segment profit,…
  39. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 39
    2011-12 Adjusted EBITDAX Reconciliation Year Ended Pro Forma Year Dollars in millions Dec. 31, 2011 Ended Dec. 31, 2012 Adjusted EBITDAX Reconciliation to Net Income (Loss): Net Income (Loss) (292) 78 Interest Expense 117…
  40. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 40
    Reconciliation Adjusted Net Income from Continuing Operations (Unaudited) 2010 2011 Dollars in millions, except per share amounts 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Income (loss) from…
  41. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 41
    Consolidated EBITDAX Reconciliation (Unaudited) 2010 2011 Dollars in millions 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Revenues: Product revenues Natural gas sales 490 427 454 441 1,812 434 453 464…
  42. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 42
    Domestic Income Statement 2010 2011 Dollars in millions 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Revenues: Product revenues Natural gas sales 486 424 451 436 1,797 430 449 460 440 1,779 Natural gas…
  43. Howard Weil 40th Annual Energy Conference – WPX Energy, Inc. – slide 43
    International Income Statement (Unaudited) 2010 2011 Dollars in millions 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Revenues: Product revenues: Natural gas sales 4 3 3 5 15 4 4 4 4 16 Natural gas…

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