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May 2013 Operational Update – WPX Energy, Inc.

WPX Energy, Inc. · May 2, 2013 · 45 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. May 2013 Operational Update – WPX Energy, Inc. – slide 1
    Operational Update Ralph Hill, Chief Executive Officer May 2, 2013
  2. May 2013 Operational Update – WPX Energy, Inc. – slide 2
    2013 Path to Greater Shareholder Value Maintain disciplined natural gas development, poised for growth with sustained price recovery Grow oil production Continue cost improvements Pursue new opportunities, including Niobrara…
  3. May 2013 Operational Update – WPX Energy, Inc. – slide 3
    Recent Highlights 12 Bakken wells put on 1st sales in 1st quarter Niobrara well produces 1 Bcf in first 107 days of production New favorable Willow Creek contract effective Jan. 1, 2013 Favorable Piceance gathering contract rate…
  4. May 2013 Operational Update – WPX Energy, Inc. – slide 4
    Significant Cost Structure Improvements by the end of 2014 2013 run rate savings of 45MM - 65MM* Willow Creek improved processing fee and tier margin sharing Piceance gathering rate change Van Hook gathering system 2-4 Bbl savings…
  5. May 2013 Operational Update – WPX Energy, Inc. – slide 5
    Preeminent Piceance Position Superior acreage position WPX vs. Offset Operator Well D&C and Lifting Costs WPX contrast to offset operators 38% less D&C capital costs(1) Offset Operator WPX Energy 53% less operating lifting costs(2)…
  6. May 2013 Operational Update – WPX Energy, Inc. – slide 6
    Emerging Niobrara Resource Play Piceance Basin Piceance Basin Niobrara discovery well drilled in 2012 WPX has 20 - 30 Tcf Has produced for last 120 days Resource Potential IP 16 MMcf/d 7,300 psi 100 day average 9.5 MMcf/d 5,500 psi…
  7. May 2013 Operational Update – WPX Energy, Inc. – slide 7
    WPX Has Drilled the Top Niobrara Shale Well IP Flow Operator Well County, State Location/Basin Comp. Date 2,667 Boepd (1) 701-4 HN1 WPX Energy Williams GM Garfield, Colo. Piceance Dec. 2012 (16 MMcfpd) 1,831 Boepd EOG Resources,…
  8. May 2013 Operational Update – WPX Energy, Inc. – slide 8
    Williston Strong Well Performance, Efficiency Model Taking Hold 12 wells put on 1st Sales 10 Middle Bakken 7 Longs (Blue) & 3 Shorts (Green) 2 Three Forks Longs (Dark Blue) Wells continue to perform at or above expectation Average…
  9. May 2013 Operational Update – WPX Energy, Inc. – slide 9
    Appalachia Strong Production Growth, Increasing EURs and Lower Cost Production increased by 40% from 1Q 12 to 1Q 13 Drilling and completion cost continues to decrease Average days from spud to rig release for the 1Q 2013 reached a…
  10. May 2013 Operational Update – WPX Energy, Inc. – slide 10
    Financial Results Rod Sailor, Chief Financial Officer
  11. May 2013 Operational Update – WPX Energy, Inc. – slide 11
    1st Quarter Results 1Q Dollars in millions, except production numbers 2013 2012 Daily Production Gas (MMcf/d) 1,021 1,133 Oil (Mbbl/d) 19.4 16.1 NGLs (Mbbl/d) 21.7 30.7 Equivalent (MMcfe/d) 1,268 1,413 Adjusted EBITDAX 203…
  12. May 2013 Operational Update – WPX Energy, Inc. – slide 12
    Summary of Derivatives Related to Production As of 4/24/2013 Volume Weighted Avg. Price Natural Gas 2Q-4Q 2013 (Bbtu/d) (/MMBtu) Swaps 470 3.62 Volume Weighted Avg. Price Crude Oil 2Q-4Q 2013 (Bbl/d) (/Bbl) Swaps 9,000 100.97…
  13. May 2013 Operational Update – WPX Energy, Inc. – slide 13
    Premier WPX Portfolio Piceance Basin Bakken Shale Marcellus Shale San Juan Powder River Apco* 3,010 Bcfe Proved 80.0 MMboe Proved 322 Bcfe Proved 423 Bcfe Proved 236 Bcfe Proved 25 MMboe Proved 12,039 Bcfe 3P 173.4 MMboe 3P 2,023 Bcfe 3P…
  14. May 2013 Operational Update – WPX Energy, Inc. – slide 14
    Appendix
  15. May 2013 Operational Update – WPX Energy, Inc. – slide 15
    Key Statistics by Basin 2012 Average 2012 3P Gross Proved Additional Net Acreage Oil/NGL 3P Reserves Rig Count Production Drilling Reserves Resource (YE2012) Focused (YE2012 Bcfe) (Operated) (MMcfe/d) Locations (YE2012 Bcfe)…
  16. May 2013 Operational Update – WPX Energy, Inc. – slide 16
    2012-13 Daily Production 2012 Avg 2013 Avg 1Q 2Q 3Q 4Q Total 1Q Total Domestic Production Gas (MMcf/d) 1,114 1,123 1,058 1,051 1,086 1,005 1,005 NGLs (Mbbl/d) 30.2 30.5 28.4 24.5 28.4 21.2 21.2 Oil (Mbbl/d) 10.4 12.3 11.7 13.6 12…
  17. May 2013 Operational Update – WPX Energy, Inc. – slide 17
    WPX 2012 Domestic Reported Reserves 2012 year-end reserves before price revisions show strong growth year 200% reserve replacement ratio* Proved reserves growth of 10%* 1.74 drilling finding and development cost Liquids increase from…
  18. May 2013 Operational Update – WPX Energy, Inc. – slide 18
    2012 Year-End Domestic Reserves 2012 SEC Case Year-End 2012 Before Price Changes* Gas NGL Oil Equivalent Gas NGL Oil Equivalent Bcf Mbbl Mbbl Bcfe Bcf Mbbl Mbbl Bcfe Piceance Basin 2,339 103,094 8,755 3,010 2,773 124,204 11,025…
  19. May 2013 Operational Update – WPX Energy, Inc. – slide 19
    Contractual Cost Structure Improvements Effective Financial Run Contract Description Income Statement Start Date Rate Impact (1) Willow Creek Change in fee and margin % 1Q 13 25MM - 40MM Expense (Gathering & Processing)…
  20. May 2013 Operational Update – WPX Energy, Inc. – slide 20
    Piceance Basin Continues to Deliver Efficiencies and Lower Costs Prolific resource with 3P Reserves of 12.2 Tcfe with 10,000 locations Drilling Performance Spud to Rig Release (Days) Drilling efficiencies = More wells with fewer rigs…
  21. May 2013 Operational Update – WPX Energy, Inc. – slide 21
    WPX Positioned for Rapid Growth when Natural Gas Prices Recover Weve done it before We are ready to do it again 12% CAGR 1,000 Well Count 450 1,000 424 450 400 900 Avg. Rig Count 400 900 400 370 Net Op Bcfe 800 350 800 350…
  22. May 2013 Operational Update – WPX Energy, Inc. – slide 22
    Piceance Continuous Improvements Major cost savings made in Ryan Gulch Drilling cycle time improvements Completion design improvements New infrastructure Continued Improvement in Valley Ruthless attention to efficiencies…
  23. May 2013 Operational Update – WPX Energy, Inc. – slide 23
    Piceance Cryo Capacity Willow Creek Modified processing agreement with a revenue sharing component Mont Belvieu priced products via Overland Pass Pipeline Volume dedication yields advantaged OPPL T&F rates Enterprise Meeker…
  24. May 2013 Operational Update – WPX Energy, Inc. – slide 24
    Piceance Composite NGL Barrel and Realized Price (1st Quarter, 2013) Product NGL Product /Gal Mix Ethane(1) 44% .24 Propane 26% .84 Iso-Butane 8% 1.63 Normal Butane 7% 1.56 Natural Gasoline 15% 2.21 *Included in…
  25. May 2013 Operational Update – WPX Energy, Inc. – slide 25
    Piceance Basin Green: Highlands Yellow: Valley Net Acreage: 216,829(1) Average rigs running in 2013: 5 Remaining 3P drilling locations: 10,424(1) Composition: 80% Gas/20% Liquids (1) Acreage and drilling locations are based on…
  26. May 2013 Operational Update – WPX Energy, Inc. – slide 26
    Bakken Netback Price Analysis Estimated Volume % Gross Wellhead Sales Price vs. WTI (Apr - Jun 2013) Discount to WTI Basin-Priced Sales 51% (5.00) Rail Deals 40% (4.00) Enbridge Capacity 9% (7.00) Total Gross Sales 100% (4.75)…
  27. May 2013 Operational Update – WPX Energy, Inc. – slide 27
    Williston Basin Net Acreage: 84,205(1) Average rigs running in 2013: 4 Remaining 3P drilling locations: 478(1) Composition: Oil focused (1) Acreage and drilling locations are based on YE 2012 WPX Operational Update - May 2,…
  28. May 2013 Operational Update – WPX Energy, Inc. – slide 28
    Marcellus Greater Efficiencies Leading to Lower Costs Spud to rig release on Orion rigs improved by 10%; average days per well for the quarter was at an all-time low. vv Drilling rig moved back to Westmoreland vv near the end of…
  29. May 2013 Operational Update – WPX Energy, Inc. – slide 29
    First Susquehanna Compression Pilot Doubles Volumes on the Pad 10,000 1,000 9,000 900 8,000 800 Total Wellhead Production - MSCFD 7,000 700 Tubing Pressure in PSIG 6,000 600 5,000 500 4,000 400 3,000 300…
  30. May 2013 Operational Update – WPX Energy, Inc. – slide 30
    Appalachia Basin Net Acreage: 114,067(1) Average rigs running in 2013: 1 Remaining 3P drilling locations: 561(1) Composition: Dry Gas (1) Acreage and drilling locations are based on YE 2012. WPX Operational Update - May 2,…
  31. May 2013 Operational Update – WPX Energy, Inc. – slide 31
    San Juan Basin Mancos Shale Potential Completed, monitored and evaluated more than 60 vertical Mancos completions from 2008 to present Extensive reservoir and geologic assessments done in 16 vertical wells Successfully drilled the…
  32. May 2013 Operational Update – WPX Energy, Inc. – slide 32
    Apco 1st Quarter Operational Update Argentina Colombia Neuquen Basin Development In Progress Llanos 32 Two more wells drilled where 2013 Neuquen basin development program we hold a 20% WI under way. Wells drilled have achieved…
  33. May 2013 Operational Update – WPX Energy, Inc. – slide 33
    Argentina Asset Map Entre Lomas 23% WI 40.7% Stock Interest Acambuco 1.5% WI in Petrolera (Effective Interest 52.8%) Bajada del Palo 23% WI 40.7% Stock Interest in Petrolera (Effective Interest 52.8%) Agua Amarga 23% WI…
  34. May 2013 Operational Update – WPX Energy, Inc. – slide 34
    Colombia Asset Map Middle Magdalena Basin Llanos Basin TURPIAL LLA-40 111M Acres 163M Acres LLA-32 100M Acres Oilfields Pipelines WPX Operational Update - May 2, 2013 36
  35. May 2013 Operational Update – WPX Energy, Inc. – slide 35
    2013 Guidance Annual Production Low Base High Capital Expenditures (in millions) Low Base High Gas - MMcf/d 1,008 1,028 1,039 Piceance 320 340 380 Oil - Mbbl/d 21.7 21.7 21.8 Bakken 360 370 380 *NGLs - Mbbl/d 20.5 20.8 20.9 Marcellus…
  36. May 2013 Operational Update – WPX Energy, Inc. – slide 36
    Impact of Ethane Rejection on 2013 Production Guidance 2013 planned volumes impacted by approximately 3% due to assumed ethane recovery level Maximum Ethane 2013 Plan Ethane Minimum Ethane Recovery Recovery Recovery Natural Gas MMcf/d…
  37. May 2013 Operational Update – WPX Energy, Inc. – slide 37
    Domestic Price Realization for 2013 Gas (/Mcf) NGL (/Bbl) Oil (/Bbl) 1Q 13 1Q 13 1Q 13 Weighted Average Sales Price 3.12 37.27 89.23 Revenue Adjustments(1) (0.27) (9.06) 0.54 Hedge Impact 0.05 0.00 0.00 Net Price(2) 2.90 28.21…
  38. May 2013 Operational Update – WPX Energy, Inc. – slide 38
    Domestic Price Realization for 2012 Gas (/Mcf) NGL (/Bbl) Oil (/Bbl) 1Q 12 2Q 12 3Q 12 4Q 12 1Q 12 2Q 12 3Q 12 4Q 12 1Q 12 2Q 12 3Q 12 4Q 12 Weighted Average Sales Price 2.60 1.93 2.46 3.03 42.92 36.79 33.73 35.89 86.25 81.18 81.38…
  39. May 2013 Operational Update – WPX Energy, Inc. – slide 39
    WPX 1st Quarter Liquidity At 03/31/13, 311 million letters Liquidity (millions) of credit outstanding under Cash and cash equivalents 03/31/13 112 bilateral agreements Less: Total revolver borrowings Apco Oil and Gas (38) at…
  40. May 2013 Operational Update – WPX Energy, Inc. – slide 40
    WPX Leader in Finding and Development Cost 2011E Excluding Leasehold Proved Developed F&D /Mcfe 1.48 WPX J.P. Morgan North American Equity Research, May 11, 2012 WPX Operational Update - May 2, 2013 42
  41. May 2013 Operational Update – WPX Energy, Inc. – slide 41
    Non-GAAP
  42. May 2013 Operational Update – WPX Energy, Inc. – slide 42
    Reconciliation Adjusted Income (Loss) from Continuing Operations (Unaudited) (Dollars in millions, except per share amounts) 2012 2013 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Income (loss) from continuing operations attributable…
  43. May 2013 Operational Update – WPX Energy, Inc. – slide 43
    Consolidated Statements of Operations and EBITDAX Reconciliations (Unaudited) Dollars in millions, except per share amounts 2012 2013 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Revenues: Product revenues: Natural gas sales 357 312…
  44. May 2013 Operational Update – WPX Energy, Inc. – slide 44
    Domestic Statements of Operations (Unaudited) Dollars in millions, except per share amounts 2012 2013 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Revenues: Product revenues: Natural gas sales 353 307 327 359 1,346 263 Oil and…
  45. May 2013 Operational Update – WPX Energy, Inc. – slide 45
    International Statements of Operations (Unaudited) Dollars in millions, except per share amounts 2012 2013 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr Revenues: Product revenues: Natural gas sales 4 5 4 5 18 4 Oil and condensate…

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