barclays ceo energy-power conference...wpx energy | barclays ceo energy-power conference | september...
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Barclays CEO Energy-Power Conference
Rick Muncrief, President and Chief Executive Officer
Sept. 9, 2015
Announced or completed more than half of year-end 2015 divestitures target ► Announced ~$185MM sale of Van Hook gathering system
► Completed ~$80MM sale of Powder River Basin operations
Upsized unsecured revolver to $1.750B Ability to rapidly lower or accelerate capital program
► Minimal capital required to maintain core acreage
Nearly fully hedged for the balance of 20151
► Oil production ~80% hedged at $85.14 per barrel
► Natural gas production ~75% hedged at $4.04 per MMbtu
Strong hedge position heading into 20162
► Oil production at least 50% hedged at $62.23 per barrel
► Natural gas production at least 70% hedged at $3.63 per MMbtu
Upsized unsecured revolver to $1.750B
WPX Highlights
1Based on mid-point of July – December production guidance. 2Based on the 2016 outlook mid-point in the RKI acquisition presentation
2 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Highlights Over the Past 16 Months
Rick Muncrief becomes CEO May 2014
WPX completes sale of working interest to Legacy LP June 2014
Infill project added ~200 gross locations in Williston August 2014 Completed sale of Northeast
Pennsylvania assets February 2015
Announced consolidation of Denver office to Tulsa March 2015
Completed sale of Northeast Supply Link
May 2015
Completed exit of international assets January 2015
Completed acquisition of RKI
August 2015
2014 2015 2016
Added partner to accelerate development of Trail Ridge Properties
August 2014
Outlined multi-year strategy October 2014
Named Clay Gaspar SVP of Operations and Development
October 2014
Gallup oil play hits 100,000 net acres June 2015
Targeting $400MM-$500MM
in Asset Sales Year-end 2016
Named Kevin Vann as CFO July 2014
Spud first 2 mile Niobrara lateral
July 2015
Adds 26K acres in Gallup oil play August 2014
Renegotiated $1.75B unsecured revolver July 2015
Targeting $150MM-$250MM in additional asset sales Year-end 2015
NOTE: Transactions totaling over $4 Billion. Acquisitions Asset sales
3 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Announced sale of Van Hook Gathering System August 2015
Completed Powder River Basin Sale
September 2015
Premier Western Energy Producer
PICEANCE BASIN Cash Flow + Resource Potential
• Vertical: Deep inventory (~10,000 locations) with infrastructure in place
• Niobrara/Mancos: 15 -20 Tcfe stacked-pay resource potential
• Stable cash flows provide financial flexibility
WILLISTON BASIN High Oil Content with Continuing Growth
• 600+ operated remaining locations, ~87,000 acres
• 37% production CAGR 2Q’12-2Q’15 (Mboe/d)
• Downspacing, infrastructure, operational efficiencies drive upside
PERMIAN BASIN Deep Inventory of High-Return Locations
• Decades of drillable locations
• Significant upside potential from downspacing and additional prospective horizons
• 670,000+ net prospective acres
SAN JUAN BASIN Oil and Natural Gas Development Opportunities
• Gallup Oil: 400+ locations, ~100,000 acres
• Natural gas: potential for future development opportunities
• Established infrastructure
4 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Core Delaware Basin Acreage
New Mexico
Texas
Infrastructure Hub
WPX ACREAGE
Wolfcamp
Bone Spring
Avalon
Delaware Sands
~92,000 net acres with 12 prospective zones
► 670,000+ net prospective acres of stacked pay
► 3,600+ gross risked locations
► ~98% of net acres held by production
► ~22,000 Boe/d current production
Infrastructure capacity in place for rapid development
► 375+ miles of gas gathering and water infrastructure
► 200,000 barrels per day of water gathering capacity
► Current gathering: ~90,000 bpd
► 90 MMcf/d of gas compression capacity
► Current compression: ~40 MMcf/d
Significant upside opportunities
► High intensity completions
► Downspacing/longer laterals
► Netback improvements
1,500 lb/ft Wolfcamp A well exceeding type curve1
► 199.2 Mboe of cumulative production first 224 days
► Exceeds type curve by 85.5Mboe, or 75% in the first 224 days
► Moving to 2,000 lb/ft completions
5 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
1 Covington 46-3H well
9,0
00
’
Delaware - World-Class Hydrocarbon System
Delaware Mountain Group
► 3,000’+ of stacked conventional sands
► 200+ vertical Delaware wells across Stateline position de-risk the play
► Horizontal development remains as upside potential
Avalon Shale
► Thick section of combined Upper and Lower Avalon with greater than 900’ of gross thickness in core of Stateline field
► Large hydrocarbon resource in place
► Both Upper and Lower Avalon have been de-risked by 50 producing wells on Stateline acreage
Bone Spring
► Three benches present
► Over 1,300’ of total gross interval
► Sufficient resource thickness exists to support stacked development
► Production currently established from 1st and 2nd Bone Spring on the acreage position
Wolfcamp
► Four benches present on Stateline acreage
► Total section in excess of 2,000’ thick
► Production currently established from A and C benches on Stateline
► Wolfcamp A de-risked by 29 horizontal wells
Hydrocarbon Pay Indication
WOLFCAMP B
WOLFCAMP C
WOLFCAMP D
CHERRY CANYON
BRUSHY CANYON
AVALON
FIRST BONE SPRING
SECOND BONE SPRING
BELL CANYON
THIRD BONE SPRING
WOLFCAMP A
6 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
$8.61
$6.11
$-
$3
$6
$9
2Q'14 2Q'15
Williston: Costs Down with Performance Increasing
$/B
OE
Flexible capital program ► Adding 3rd rig in November
► Inventory of 14 drilled uncompleted wells
Increased EUR’s 25% to 750 Mboe ► Additional upside with larger stimulations
Testing larger stimulations ► Higher intensity slick water completions
► 10MM pounds with more stages
Advancing drilling technology in 3 mile laterals
► Record 14,707’ rotary steerable run
► Cost reduction in rotary steerables competing with conventional tools
29% Decrease
LOE per BOE
HIGH INTENSITY
COMPLETIONS
7 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
$172
$152
$130 $130 $129 $126 $120
$115 $110
$98 $95
$60
$80
$100
$120
$140
$160
$180
San Juan Gallup: Continued Growth and Execution
300%+ production growth1
Efficiencies drive more wells with fewer rigs ► Two record wells of 7.9 days
► Intra-pad rig move of 0.3 days
Surpassed basin measured depth record 3x ► Unit #134H @ 13,418’
► Unit #133H @ 13,741’
► Unit #900H @ 15,391’, longest lateral drilled in basin
Oil gathering agreement improving differentials ► Oil differentials improve 24%2
► $8 -$10 differentials 2nd half of 2015 and beyond
Increased Gallup position to ~100,000 net acres
-$13.45
-$10.22
-$16
-$14
-$12
-$10
-$8
-$6
-$4
-$2
$0
2Q'14 2Q'15
24% Improvement
Oil Differentials Y/Y
12Q ’15 vs. 2Q ’14 equivalent production 22Q ’15 vs. 2Q ’14
Gallup Drilling Efficiency
Dri
llin
g C
ost
/ft.
8 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Piceance: Large-Scale Resource with Deep Potential
Half the time and twice the depth ► Spud May 2014: 1 mile drilled in 117 days
► Spud April 2015: 2 mile drilled in 50 days
2 mile Niobrara well ► Currently producing 13.3MMcf/d @ 6,200 psi
Testing alternative spacing in Mesa Verde ► Valley 20-acre spacing
► Ryan Gulch 15-acre spacing
Tailor frac design/volume in Mesa Verde ► Valley – 1,100 gal/ft to 2,500 gal/ft
► Ryan Gulch – 1,500 gal/ft to 2,500 gal/ft
► High volume 100 mesh test
Evaluate creative options to unlock Piceance Basin value
0
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
0 15 30 45 60 75 90 105 120
Me
asu
red
De
pth
(ft
)
Days From Spud
1 mile lateral spud May 2014 (Total measured depth of 15,787’)
2 mile lateral spud April 2015 (Total measured depth of 19,070’)
Piceance Niobrara Days vs. Depth
9 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
WPX is an Attractive Investment Opportunity
Core Acreage
Deep Oil Inventory
Massive HBP Natural Gas Option
Financing and Delevering Options
WPX holds core acreage in each of its basins
Decades of drilling inventory with ~4,600 quality drillable locations in the Delaware, Williston and San Juan Gallup
Natural gas holdings exposed to growing demand in western markets
Ability to efficiently finance transaction with cash flow growth and deleveraging options
Visibility to Growth High returns drive future production and returns growth
10 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Appendix
Pro Forma WPX Hedges
12 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Sep - Dec 2015 2016 2017
Volume/Day Average Price Volume/Day Average Price Volume/Day Average Price
Natural Gas (MMBtu)
Fixed Price Swaps¹ 436,506 $4.06 412,132 $3.63 - -
Costless Collars 50,000 $4.00 - $4.50 - - - -
Fixed Price Calls - - - - 16,301 $4.50
Natural Gas Basis (MMBtu)
MidCon Basis Swaps 20,000 ($0.18) 5,000 ($0.23) - -
Rockies Basis Swaps 280,000 ($0.17) 90,000 ($0.24) - -
San Juan Basis Swaps 107,500 ($0.11) 60,000 ($0.19) - -
SoCal Basis Swaps 50,000 $0.08 17,500 ($0.03) - -
Permian Basis Swaps - - 10,000 ($0.19) - -
Crude Oil (bbl)
Fixed Price Swaps¹ 30,433 $85.45 25,049 $62.23 5,554 $65.30
Crude Oil Basis (bbl)
Midland Basis Swaps 3,770 $0.30 5,000 ($0.45) - -
1 In connection with several natural gas and crude oil swaps, we entered into swaptions with the swap counterparties granting the counterparty the right, but not
the obligation, to enter into an underlying swap with us in the future. Natural gas swaptions for 2016 total 90,000 MMBtu/d at a weighted average strike price of
$4.23. Crude oil swaptions for 2016 total 8,500 bbl/d; 3,250 bbl/d at a weighted average strike price of $62.81 and 5,250 bbl/d at a weighted average strike price
of $97.55. Natural gas swaptions for 2017 total 65,000 MMBtu/d at a weighted average strike price of $4.19.
Updated: September 1, 2015
Williston Overview
~87,000 net acres
► Currently operating 2 rigs
► 2nd rig in August, well-to-well contract
► 3rd rig in November, well-to-well contract
600+ gross drilling locations
► 520 operated drilling locations
► 90 non-op locations
Commodity mix
► 87% oil
► 7% natural gas
► 6% NGLs
Available sales outlets
► Clearbrook, Minn. (WTI)
► Guernsey, Wyo. (WTI)
► Local refining markets
► Rail to all coastal markets (Brent, LLS, WTI)
N D
13 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
San Juan Overview
~232,000 net acres ► Oil window: ~100,000 acres1
► Gas window: ~132,000 acres
► Currently operating 2 rigs
~3,900 total gross drilling locations2
► Oil window: 400+3
► Gas window: ~3,5002
Commodity mix ► Oil window
► Oil: 54%
► NGLs: 22%
► Gas: 24%
► Gas window ► Natural gas: 99%
► NGLs: 1%
Available sales outlets ► Oil: Local refining markets or rail (WTI, Brent, LLS)
► Gas: Blanco Hub
DRY GAS
WET GAS
OIL
1 Acreage owned or controlled by WPX 2 Includes non-op and operated locations 3 Assumes 4,600' laterals
14 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Piceance Overview
~200,000 net acres ► Currently operating 1 rig
~10,000 gross drilling locations
Commodity mix1
► 2% oil
► 77% natural gas
► 21% NGLs
Available sales outlets
► San Juan
► Rockies
► California
► MidCon
Unbooked deep resource potential
► Niobrara/Mancos: ~160,000 acres
► Dry gas
CO
1 Assumes full ethane recovery
15 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
$59
$51
$46
$48
$50
$52
$54
$56
$58
$60
2Q'14 2Q'15
$78
$69
$64
$66
$68
$70
$72
$74
$76
$78
$80
2Q'14 2Q'15
$68
$56
$0
$10
$20
$30
$40
$50
$60
$70
$80
2Q'14 2Q'15
Cost Continue to Trend Lower
LOE
GP&T
14% Decrease
G&A1
10% Decrease
18% Decrease
12% Decrease
1 Excludes one-time expenses associated with Early Exit Program (2014), Severance and Relocation (2015)
$(10.92)
$(7.62)
$(12.00)
$(10.00)
$(8.00)
$(6.00)
$(4.00)
$(2.00)
$-
2Q'14 2Q'15
Oil Differentials
30% Improvement
$ in
Mill
ion
s $
in M
illio
ns
$ in
Mill
ion
s
16 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Strong Well Results Validate Delaware Core Position
Winkler
Eddy
Culberson Reeves
Loving
New Mexico
Lea
Texas
Anadarko McKnight 54-1-29 (4,000’ lat.) IP(30): 1.020 bbl/d Avalon
EOG Brown Bear 36 State #701H IP(30): 2,915 Boe/d Wolfcamp
RKI Jackson Unit 019H (4,320’ lat.) IP(30): 1,280 Boe/d 2nd Bone Spring
EOG State Magellan 2H (4,868’ lat.) IP(30): 1,027 Boe/d 2nd Bone Spring
EOG Brown Bear 36 State #502H IP(30): 2,125 Boe/d 2nd Bone Spring
EOG Gemini 2H (4,870’ lat.) IP(30): 1,907 Boe/d 2nd Bone Spring
EOG State Galileo 6H IP(30): 2,252 Boe/d Avalon
RKI Lindsay 10-1H (4,386’ lat.) IP(30): 1,035 Boe/d Lower Avalon
RKI Lindsay 10-8H IP(30): 1,294 Boe/d Wolfcamp
RKI Bunin 4-2H (3,618’ lat.) IP(30): 1,176 Boe/d Wolfcamp A
RKI CBR 44-2H (4,120’ lat.) IP(30): 1,188 Boe/d Wolfcamp A
OXY Goodnight 27 Federal 5H (2,800’ lat.) IP(30): 935 Boe/d Bone Spring
RKI Longview Federal 31-1H IP(30): 1,496 Boe/d 1st Bone Spring
Legend Anadarko
Apache
BHP
Cimarex
Concho
Devon
EOG
Mewbourne
OXY RKI
Shell
Other Operators
WPX Leasehold
RKI Pecos State 46-1H ([3,624’ lat.) IP(30): 1,269 Boe/d Avalon
Concho Lizard Pot Federal 5H (4,431’) IP(30): 1,200 Boe/d Bone Spring
OXY Misty 35 Federal Com 4H ( 4,135’) IP(30): 1,400 Boe/d Bone Spring
Mewbourne Gobbler 5 B2PM State Com 1H IP(30): 2,400 Boe/d Bone Spring
BHP Extinction 57-T1 32 1H (4,695’ lat.) IP(30): 1,279 bbl/d Wolfcamp D
Concho Jack Federal 4H (4,021’ lat.) IP(30): 1795 Boe/d Bone Spring
Matador Guitar 10 24S 202H IP(30): 822 Boe/d Wolfcamp
RKI Burton 4 IL Fed Com 1H (4,068’ lat.) IP(30): 1,293 Boe/d Bone Spring
ANADARKO HARRISON 29-28 1H IP(30): 1650 Boe/d Wolfcamp A
17 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Infrastructure Capacity in Place for Rapid Development
Produced water gathering system ► 174 miles of pipeline
► 200,000 barrels per day of water gathering capacity
► Current gathering: ~90,000 bpd
Fresh water transfer system ► 16 miles of pipeline
► Supports temporary system to D&C new wells
► Significantly reduces well costs
Gas gathering system ► 192 miles of pipeline
► 90 MMcf/d of gas compression capacity
► Current compression: ~40 MMcf/d
Full field accessibility to electrical power
Opportunity to improve netbacks with future oil gathering build out
Future Oil Gathering Pipeline
Fresh Water Pipeline
Gas Gathering Pipeline
Produced Water Disposal
WPX Leasehold
18 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
2014-15 Reported Daily Production
2014 2015 1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total
Total Production
Gas (MMcf/d) 795 791 746 742 768 705 675 690
Oil (Mbbl/d) 19.3 23.7 25.8 32.3 25.3 34.6 32.7 33.7
NGLs (Mbbl/d) 17.6 17.9 17.1 15.9 17.1 16.9 19.7 18.3
Mboe/d 169.4 173.4 167.2 171.9 170.5 169.1 164.8 166.9
Note: Excludes discontinued operations (Powder River and International production)
19 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Domestic Price Realization for 2015
Gas ($/Mcf) Oil ($/bbl) NGL ($/bbl)
1Q ’15 2Q ’15 3Q ’15 4Q ’15 1Q ’15 2Q ’15 3Q ’15 4Q ’15 1Q ’15 2Q ’15 3Q ’15 4Q ’15
Weighted-Average Sales Price $2.90 $2.40 $38.34 $49.64 $22.74 $20.40
Revenue Adjustments1 $(.28) $(.32) $(.70) $(1.04) $(7.34) $(6.64)
Hedge Impact – – –
Net Price2 $2.62 $2.08 $37.64 $48.60 $15.40 $13.76
Realized Portion of Derivatives Not Designated as Hedges3 $1.05 $1.02 $29.49 $24.92 – –
Net Price Including All Derivatives
$3.67 $3.10 $67.13 $73.52 $15.40 $13.76
1 Natural gas revenue adjustments are primarily related to field compression fuel. NGL revenue adjustments include T&F and revenue sharing. Of the oil revenue adjustments, gathering deductions represent $(1.40). 2 “Net Price” equals income statement product revenues by commodity, divided by volume. 3 Represents the realized cash flows that occurred during each quarter, which are attributable to derivatives that were not designated as hedges for accounting purposes.
20 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
-2.00
-1.50
-1.00
-0.50
0.00
0.50
2006 to 2010 2011 to Now 3 Yr Fwd 2006 to 2010 2011 to Now 3 Yr Fwd
Western Prices Have Increased Relative to Eastern Locations
($1.76)
($0.19) ($0.24)
$0.33
($1.06)
West Basis Strengthening1 East Basis Weakening2
$ p
er M
MB
tu
3 3
1 Northwest Wyoming/Rocky Mountain basis 2 Dominion South basis 3 3-year average strip price as of 7/27/2015
($0.42)
21 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Mexican Exports to Drive Western Demand Growth
W. Texas 3.1 Bcf/d
S. Texas 3.64 Bcf/d
Bentek Sourced Export Capacities
Costa Azul LNG Facility
Total Current Capacity
7.4 Bcf/d July 2014, El Paso announced 21 Year deal with Mexico’s CFE to provide up to 500 MMBtu/d of firm capacity from SJ basin to Mexico border beginning Nov. 2014.
North Baja 130 Mcf/d
Sempra and Pemex recently announced coordination for the potential development of LNG exports with assumed capacity of up to 1 Bcf/d.
Sept 2014, CFE outlines two pipe-line projects sourcing 2.5 Bcf/d from Waha, Texas, by 2017.
Colorado Interstate Gas Co El Paso Natural Gas Co Kern River Gas Transmission Co Northwest Pipeline Corp Questar Pipeline Co Transcolorado Gas Transmission Co Transwestern Pipeline Co
Arizona 812 MMcf/d
Total Proposed Capacity
7.7 Bcf/d
22 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
San Juan Gallup: Gathering Infrastructure Asset Description
► WPX built multi-commodity gathering system with multiple market outlets
► Current crude oil market access to Western’s Gallup, NM refinery and El Paso, TX refinery through Tex-New-Mex pipeline
► Additional outlets by rail (Brent, LLS, WTI)
► Natural gas market access through Williams and Enterprise
► 3rd party gathering potential
System Capacity
► ~220 total miles oil, natural gas, and water infrastructure by YE2015
► Existing CDPs with current storage of 10,000 bbls for water and oil
► Western’s Tex-New-Mex takeaway capacity of 65,000 bbls/d
► Western adding additional rail capacity
WPX CDP site
WPX constructed pipe
WPX planned pipe for 2015
Western Refining (oil pipe)
WPX leasehold
Western dedicated acreage
23 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Williston: Van Hook Gathering System
Asset Description
► WPX built multiple commodity gathering system
► Access to utility grade power
► 2nd Bench Three Forks upside
► 3rd party gathering potential
System Capacity ► 45 miles of oil, natural gas and water
lines
► 30 mile expansion complete by 3Q, 2016
► CDP with 7,200 bbls crude storage and 1,600 bbls water storage
► Gas market at Whiting CDP
► Multiple crude oil markets through Slawson
WPX constructed pipe
WPX planned pipe
WPX Leasehold
WPX CDP Site Whiting CDP
Van Hook CDP
24 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Piceance: Water Treatment System
Asset Description
► WPX built produced and completions water handling system
► Three water treatment facilities located in basin
► ~400 miles of water pipeline infrastructure
► System designed for 10 + rig program
► 3rd party water service opportunities
System Capacity ► Three water treatment facilities
► 18,700 – 37,400 bpd capacity per facility
► Disposal capacity of ~22,000 bpd
► Total storage capacity of ~1.9 MM bbls
WPX constructed pipe
WPX Leasehold
The Valley
The Highlands
25 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Non-GAAP
WPX Non-GAAP Disclaimer
This presentation may include certain financial measures, including adjusted EBITDAX (earnings before interest, taxes, depreciation, depletion, amortization and exploration expenses), that are non-GAAP financial measures as defined under the rules of the Securities and Exchange Commission.
This presentation is accompanied by a reconciliation of these non-GAAP financial measures to their nearest GAAP financial measures. Management uses these financial measures because they are widely accepted financial indicators used by investors to compare a company’s performance. Management believes that these measures provide investors an enhanced perspective of the operating performance of the company and aid investor understanding. Management also believes that these non-GAAP measures provide useful information regarding our ability to meet future debt service, capital expenditures and working capital requirements. These non-GAAP financial measures should not be considered in isolation or as substitutes for a measure of performance prepared in accordance with United States generally accepted accounting principles.
27 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Reconciliation-Adjusted Income (Loss) from Continuing Operations (Unaudited) 2014 2015
(Dollars in millions, except per share amounts) 1Q 2Q 3Q 4Q Year 1Q 2Q 3Q 4Q YTD
Income (loss) from continuing operations attributable to WPX Energy, Inc. available to common stockholders $ - $ (144) $ 46 $ 227 $ 129 $ 22 $ (23) $ (1)
Income (loss) from continuing operations - diluted earnings per share $ - $(0.71) $ 0.23 $ 1.10 $ 0.62 $ 0.11 $ (0.12) $ (0.01)
Pre-tax adjustments:
Impairment of producing properties, costs of acquired unproved reserves and leasehold (1) $ - $ - $ - $ 20 $ 20 $ - $ - $ -
Impairments- exploratory related $ - $ 40 $ 22 $ 67 $ 129 $ - $ - $ -
Loss on sale of working interests in the Piceance Basin $ - $ 195 $ 1 $ - $ 196 $ - $ - $ -
Net gain on sales of assets $ - $ - $ - $ - $ - $ (69) $ (209) $ (278)
Expense related to Early Exit Program $ - $ 2 $ 8 $ - $ 10 $ - $ - $ -
Contract termination and early rig release expenses $ - $ - $ 6 $ 6 $ 12 $ 26 $ - $ 26
Assignment of natural gas storage commitment $ - $ - $ - $ 14 $ 14 $ - $ - $ -
Costs related to severance and relocation $ - $ - $ - $ - $ - $ 8 $ 7 $ 15
Costs related to acquistion $ - $ - $ - $ - $ - $ - $ 1 $ 1
Unrealized MTM (gain) loss $ 27 $ - $ (133) $ (453) $ (559) $ 30 $ 203 $ 233
Total pre-tax adjustments $ 27 $ 237 $ (96) $ (346) $ (178) $ (5) $ 2 $ (3)
Less tax effect for above items $ (10) $ (87) $ 35 $ 126 $ 64 $ 2 $ (1) $ 1
Impact of new state tax law in New York (net of federal benefit) $ 9 $ - $ - $ - $ 9 $ - $ - $ -
Total adjustments, after-tax $ 26 $ 150 $ (61) $ (220) $ (105) $ (3) $ 1 $ (2)
Adjusted income (loss) from continuing operations available to common stockholders $ 26 $ 6 $ (15) $ 7 $ 24 $ 19 $ (22) $ (3)
Adjusted diluted earnings (loss) per common share $ 0.13 $ 0.03 $(0.07) $ 0.03 $ 0.12 $ 0.09 $ (0.11) $ (0.02)
Diluted weighted-average shares (millions) 205.2 202.7 207.5 206.3 206.3 205.9 205 204.6
(1) These items are presented net of amounts attributable to noncontrolling interests.
28 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Reconciliation – EBITDAX (Unaudited)
2014 2015 (Dollars in millions) 1Q 2Q 3Q 4Q YTD 1Q 2Q 3Q 4Q YTD
Adjusted EBITDAX
Reconciliation to net income (loss):
Net income (loss) $ 19 $ (133) $ 66 $ 219 $ 171 $ 68 $ (30) $ 38
Interest expense 29 28 31 35 123 33 32 65
Provision (benefit) for income taxes 13 (82) 25 119 75 13 (14) (1)
Depreciation, depletion and amortization 193 202 201 214 810 216 227 443
Exploration expenses 15 54 28 76 173 7 6 13
EBITDAX 269 69 351 663 1,352 337 222 474
Impairment of producing properties, costs of acquired unproved reserves and equity investments
- - - 20 20 - - -
Loss on sale of working interests in the Piceance Basin - 195 1 - 196 - - -
Net gain on sales of assets - - - - - (69) (209) (278)
Net (gain) loss on derivatives 195 17 (148) (498) (434) (105) 71 (34)
Net cash received (paid) related to settlement of derivatives
(168) (17) 15 45 (125) 135 132 267
(Income) loss from discontinued operations (19) (11) (20) 8 (42) (46) 7 (39)
Adjusted EBITDAX $ 277 $ 253 $ 199 $ 238 $ 967 $ 252 $ 222 $ 474
29 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Disclaimer
The information contained in this summary has been prepared to assist you in making your own evaluation of the Company and does not purport to contain all of the information you may consider important in deciding whether to invest in shares of the Company’s common stock. In all cases, it is your obligation to conduct your own due diligence. All information contained herein, including any estimates or projections, is based upon information provided by the Company. Any estimates or projections with respect to future performance have been provided to assist you in your evaluation but should not be relied upon as an accurate representation of future results. No persons have been authorized to make any representations other than those contained in this summary, and if given or made, such representations should not be considered as authorized.
Certain statements, estimates and financial information contained in this summary constitute forward-looking statements or information. Such forward-looking statements or information involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from the results implied or expressed in such forward-looking statements or information. While presented with numerical specificity, certain forward-looking statements or information are based (1) upon assumptions that are inherently subject to significant business, economic, regulatory, environmental, seasonal, competitive uncertainties, contingencies and risks including, without limitation, the ability to obtain debt and equity financings, capital costs, construction costs, well production performance, operating costs, commodity pricing, differentials, royalty structures, field upgrading technology, and other known and unknown risks, all of which are difficult to predict and many of which are beyond the Company's control, and (2) upon assumptions with respect to future business decisions that are subject to change.
There can be no assurance that the results implied or expressed in such forward-looking statements or information or the underlying assumptions will be realized and that actual results of operations or future events will not be materially different from the results implied or expressed in such forward-looking statements or information. Under no circumstances should the inclusion of the forward-looking statements or information be regarded as a representation, undertaking, warranty or prediction by the Company or any other person with respect to the accuracy thereof or the accuracy of the underlying assumptions, or that the Company will achieve or is likely to achieve any particular results. The forward-looking statements or information are made as of the date hereof and the Company disclaims any intent or obligation to update publicly or to revise any of the forward-looking statements or information, whether as a result of new information, future events or otherwise. Recipients are cautioned that forward-looking statements or information are not guarantees of future performance and, accordingly, recipients are expressly cautioned not to put undue reliance on forward-looking statements or information due to the inherent uncertainty therein.
30 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015
Reserves Disclaimer
The SEC requires oil and gas companies, in filings made with the SEC, to disclose proved reserves, which are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible – from a given date forward, from known reservoirs, under existing economic conditions, operating methods, and governmental regulations. The SEC permits the optional disclosure of probable and possible reserves. We have elected to use in this presentation “probable” reserves and “possible” reserves, excluding their valuation. The SEC defines “probable” reserves as “those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.” The SEC defines “possible” reserves as “those additional reserves that are less certain to be recovered than probable reserves.” The Company has applied these definitions in estimating probable and possible reserves. Statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve estimates provided in this presentation that are not specifically designated as being estimates of proved reserves may include estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC’s reserves reporting guidelines. Investors are urged to consider closely the disclosure regarding our business that may be accessed through the SEC’s website at www.sec.gov.
The SEC’s rules prohibit us from filing resource estimates. Our resource estimations include estimates of hydrocarbon quantities for (i) new areas for which we do not have sufficient information to date to classify as proved, probable or even possible reserves, (ii) other areas to take into account the low level of certainty of recovery of the resources and (iii) uneconomic proved, probable or possible reserves. Resource estimates do not take into account the certainty of resource recovery and are therefore not indicative of the expected future recovery and should not be relied upon. Resource estimates might never be recovered and are contingent on exploration success, technical improvements in drilling access, commerciality and other factors.
31 WPX Energy | Barclays CEO Energy-Power Conference | September 9, 2015