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Spin Off Roadshow Presentation – WPX Energy, Inc.

WPX Energy, Inc. · Dec 31, 2011 · 48 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. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 1
    WPX Energy, Inc. Spin-Off Roadshow Presentation December 2011 Spin-Off Roadshow Presentation Fall / Winter 2011 2012 WPX Energy, Inc. All Rights Reserved
  2. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 2
    Spin-Off Overview Company WPX Energy, Inc. Ticker / Exchange WPX / NYSE Wednesday, November 30, 2011: Declaration Date Monday, December 12, 2011 through Distribution Date: when-issued trading period Key Dates Wednesday, December…
  3. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 3
    Management Representatives Ralph Hill (30 years) Chief Executive Officer Rod Sailor (26 years) Senior Vice President, Chief Financial Officer and Treasurer Neal Buck (31 years) Senior Vice President, Business Development and…
  4. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 4
    WPX Investment Highlights Economically attractive asset base across a number of high growth areas Largest operator in the Piceance with growing positions in the Bakken and the Marcellus Proven technical leader and cost-efficient…
  5. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 5
    WPXs Strategy Efficiently allocate capital for optimal portfolio returns Superior economic drilling returns in all our basins Continue our leading cost-efficient development approach Focus on large-scale, contiguous acreage blocks…
  6. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 6
    Premier E&P Portfolio Piceance Bakken Shale Marcellus 2.9 Tcfe Proved 23 MMboe Proved 0.1 Tcfe Proved 9.9 Tcfe 3P 185 MMboe 3P 1.7 Tcfe 3P 211,000 net acres 89,420 net acres 99,301 net acres Total 745 MMcfe/d 6.8 Mboe/d 19 MMcfe/d…
  7. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 7
    WPX 5-year Production Growth WPX ranks 4th in 5-year CAGR, despite holding production flat in 2009-10 to help manage Williams enterprise cash flows Annual U.S. Daily Production Growth U.S. Gas Producers 1,000 MMcfd (MMcfd, sorted by…
  8. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 8
    Piceance Spin-Off Roadshow Presentation Fall / Winter 2011 2012 WPX Energy, Inc. All Rights Reserved
  9. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 9
    Delivering Value Through Performance and Technology Premier Acreage 1 Natural Gas 10 Tcfe 3P Reserves Leader in Drilling and Predictable, Low Risk Position in World Producer in Colorado 10,000 locations Operating Efficiency Inventory…
  10. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 10
    Attractive Position in the Piceance Production and reserve foundation of WPX 745 MMcfe/d net production (October 2011) Includes approximately 25,900 Bbls/d NGLs Premier acreage position (211,000 net acres) Abundant inventory: 10…
  11. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 11
    Strong Returns in the Piceance Valley Why we are successful: Valley pay depths shallowest in Piceance WPX has 20%+ lower well cost than other Valley operators Attractive acreage and asset dynamics Mature development phase Optimal…
  12. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 12
    Piceance Highlands Implementing the Valley Model Distinct Features Remote location Topography Harsh weather conditions Deeper pay depths Evolving Opportunities Overview Advancing toward full development Increasing well count…
  13. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 13
    Significant Upside in the Piceance Mancos/Niobrara Play Over 149,000 net acres with multiple pay zone Mancos / Niobrara Dynamics potential in Mancos/Niobrara Valley and 6-7 Bcf/wells have been drilled by offset operators Williams…
  14. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 14
    Technical and Operational Leadership We were the first to: Obtain 10-acre well density Implement slickwater frac fluid system Initiate produced water recycling Introduce fitforpurpose drilling rigs Implement simultaneous…
  15. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 15
    Proven Track Record of Growth Piceance Production Growth Well Count/Avg Net Operated MMcfd Average Rig Count 1,000 30 2003-2010 900 26 Production CAGR 25 22% 25 800 22 710 690 700 650 666 20 600 17 550 551 489 500 15…
  16. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 16
    Bakken Spin-Off Roadshow Presentation Fall / Winter 2011 2012 WPX Energy, Inc. All Rights Reserved
  17. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 17
    Bakken Shale Position Our Bakken Shale Position Has an Attractive Undeveloped Reservoir Quality Overview of Assets By Region Overview of Assets By County Spin-Off Roadshow Presentation Fall / Winter 2011 2012 WPX Energy, Inc. All…
  18. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 18
    Overview of our Bakken position Acquisition Facts Accomplishments Since the 12/21/2010 Closing 925 million acquisition of major acreage Drilled 18 wells; Completed 22 wells position in North Dakota's Bakken oil play Well results have…
  19. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 19
    Bakken/Three Forks: Undeveloped Potential 2010 YE 3P reserves Overview 185 MMboe Est. Total net 3P reserves: 185 MMboe SEC YE 2010: 23 MMboe proved reserves 58 3 to 4 lateral wells per 1,280 spacing unit per 104 formation Middle…
  20. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 20
    Williston Basin Takeaway Capacity Source: Bentek Spin-Off Roadshow Presentation Fall / Winter 2011 2012 WPX Energy, Inc. All Rights Reserved 22
  21. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 21
    Marcellus Spin-Off Roadshow Presentation Fall / Winter 2011 2012 WPX Energy, Inc. All Rights Reserved
  22. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 22
    Marcellus Shale Position We Have Continued Building Our Attractive Marcellus Shale Position Overview of Assets By Region Current Operations Update 99,301 net acres at 12/31/2010 Currently operating 4 rigs, increasing to 6 by 2012 40…
  23. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 23
    Susquehanna Acreage 40,000 net acres Susquehanna Acreage and Drilling Activity Logs show thick Marcellus section with high porosities Expanding rig count from 2 to 4 in 2012 Adjacent operator IPs up to 30 MMcfed, using 7-10 Bcfe…
  24. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 24
    Westmoreland Acreage 22,000 net acres Westmoreland Acreage and Drilling Activity Traded into 100% ownership in southern Westmoreland 2 rigs drilling in this area, expect to maintain 1 - 2 rigs in 2012 After-tax returns of 21% at…
  25. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 25
    International Spin-Off Roadshow Presentation Fall / Winter 2011 2012 WPX Energy, Inc. All Rights Reserved
  26. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 26
    Our 69% Interest in Apco The Market Value of Our 69% Interest in Apco as of 12/05/2011 is 1.7 Billion (1) Overview Map of Assets (2) We own 20.3 million shares of Apco Oil and Gas International Inc. (NASDAQ: APAGF), representing a…
  27. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 27
    Drilling Economics Spin-Off Roadshow Presentation Fall / Winter 2011 2012 WPX Energy, Inc. All Rights Reserved
  28. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 28
    Return Sensitivities at Various Natural Gas Price Scenarios Strong returns even at low natural gas prices 80.0% Marcellus, Susquehanna Piceance Valley Piceance Highlands 70.0% Marcellus, Westmoreland San Juan Powder River 60.0%…
  29. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 29
    Oil Price & Capital Sensitivity (Bakken) At 9.5 million drilling and completion rate and 95 NYMEX oil price we are generating at IRRs of 57% on our Bakken capex 90% 100% 80% 90% 80% 70% 70% 60% 60% R RI A-tax IRR…
  30. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 30
    Finance Spin-Off Roadshow Presentation Fall / Winter 2011 2012 WPX Energy, Inc. All Rights Reserved
  31. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 31
    Financial Considerations Financial Policies Pro Forma Capitalization ( in millions) As of September 30, 2011 Leverage policy: Historical Adj. Pro Forma Maintain a conservative capital structure to promote Cash and cash equivalents 50…
  32. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 32
    Proven Track Record of Creating Shareholder Value Growth We have delivered it and we will continue to make it happen Sustained earnings We know how to make money and have consistently delivered results Experienced management…
  33. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 33
    Appendix Spin-Off Roadshow Presentation Fall / Winter 2011 2012 WPX Energy, Inc. All Rights Reserved
  34. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 34
    Piceance Valley: Typical Well Economics Development Cost Illustrative Economics per Mcf Drill & Complete ( in millions) 1.43 NYMEX Gas Price 4.85 Reserves (Bcfe) 1.24 Basin Differential (0.38) Net Drilling & Completion Cost (/Mcfe)…
  35. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 35
    Piceance Highlands: Typical Well Economics Development Cost Illustrative Economics per Mcf Drill & Complete ( in millions) 2.56 NYMEX Gas Price 4.85 Reserves (Bcfe) 1.70 Basin Differential (0.38) Net Drilling & Completion Cost…
  36. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 36
    Bakken Shale: Typical Well Economics Development Cost Illustrative Economics per Bbl Drill & Complete ( in millions) 9.50 NYMEX Oil Price 95.00 Reserves (Mboe) 710 Basin Adjustment (9.80) Net Drilling & Completion Cost (/boe) 16.82…
  37. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 37
    Marcellus Susquehanna: Typical Well Economics Development Cost Illustrative Economics per Mcf Drill & Complete ( in millions) 4.59 NYMEX Gas Price 4.85 Reserves (Bcfe) 5.55 Basin Differential 0.07 Net Drilling & Completion Cost…
  38. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 38
    Marcellus Westmoreland: Typical Well Economics Development Cost Illustrative Economics per Mcf Drill & Complete ( in millions) 4.73 NYMEX Gas Price 4.85 Reserves (Bcfe) 4.04 Basin Differential 0.07 Net Drilling & Completion Cost…
  39. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 39
    2010 EBITDAX Reconciliation 2010 EBITDAX Reconciliation ( in millions) Pro Forma Year Ended Historical Nine Months Ended December 31, September 30, 2010 2011 2010 Adjusted EBITDA Reconciliation to Net Income (Loss): Net income…
  40. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 40
    2011-2012 Guidance Dollars in millions 2011 2012 Adjusted segment profit 300 - 400 100 500 Annual DD&A 975 1,000 1,100 - 1,300 Segment profit + DD&A 1,275 1,400 1,200 1,800 Capital spending 1,350 - 1,550 1,200 - 1,800 Production…
  41. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 41
    Production Volumes Per Day 2010 2011 YOY 1Q 2Q 3Q 4Q Year 1Q 2Q 3Q 3Q Growth Natural gas & NGL basins - MMcfe/d Piceance 632 651 682 730 674 706 725 758 11% Powder River 238 228 237 214 229 225 220 233 -1.7% Marcellus 4 4 4 8 5 9 9 15…
  42. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 42
    2011-12 Hedge Positions As of 9/30/2011 4Q 2011 2012 Fixed price at the basin Volume (BBtu/d) 395 508 Weighted average price (/MMBtu) 5.25 5.06 Oil Hedges Volume (Mbbls/d) 4.5 7.2 Weighted average price (/bbls) 96.56 97.32…
  43. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 43
    Rockies Exports and Takeaway Capacity 14.00 Kern River Expansions 12.00 Ruby Pipeline 10.00 Volumes (Bcf/d) 8.00 6.00 4.00 2.00 0.00 07 07 08 08 09 09 10 10 11 11 12 12 13 13 14 14 15…
  44. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 44
    WPX has Secured Takeaway Capacity to Support its Susquehanna County Development Plan Susquehanna County Capacity Plan 450,000 400,000 350,000 300,000 250,000 Mcf/d 200,000 150,000 100,000 50,000 0 11 12…
  45. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 45
    WPX Non-GAAP Reconciliations
  46. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 46
    WMB 2012 segment profit guidance (excluding E&P) reported to adjusted Dollars in millions 2012 Guidance (Excluding E&P) Low Midpoint High Reported segment profit: Williams Partners ( WPZ) 1,730 1,950 2,170 Midstream Canada & Olefins…
  47. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 47
    2011 segment profit guidance reported to adjusted Dollars in millions 2011 Guidance Low Midpoint High Reported segment profit: Exploration & Production 230 315 400 Adjustments: Impairments of certain nat. gas properties and…
  48. Spin Off Roadshow Presentation – WPX Energy, Inc. – slide 48
    2012 segment profit guidance reported to adjusted Dollars in millions 2012 Guidance Low Midpoint High Reported segment profit: Exploration & Production 100 300 500 Adjustments: - - - Adjusted segment profit: Exploration &…

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