$185 Million Transaction Part of Plan Targeting $400-$500 Million in Divestitures by Year-End
TULSA, Okla.–(BUSINESS WIRE)– WPX Energy (NYSE: WPX) announced today that it has agreed to sell a North Dakota gathering system for approximately $185 million to a private equity fund managed by the Ares EIF Group, a subsidiary of Ares Management, L.P. (NYSE: ARES).
The parties expect to close the transaction in approximately 60 days. The sale is part of WPX’s delevering plan targeting $400-$500 million in divestitures by the end of 2015. WPX also is targeting another $400-$500 million in asset sales in 2016.
WPX is working to quickly reduce debt just two weeks after closing a transformative acquisition that added decades of drilling inventory in the core of the Permian’s Delaware Basin.
“We are aggressively moving on our delevering plan just as we said we would do,” stated Rick Muncrief, WPX president and chief executive officer.
The sale of the North Dakota asset consists of an oil, natural gas and water gathering system. WPX previously installed the infrastructure coinciding with its drilling program in the Williston Basin.
Under the terms of the agreement, WPX will continue to operate the system which currently gathers approximately 11,000 barrels per day of oil, approximately 6,500 Mcf/d of natural gas, approximately 5,000 barrels per day of water, and can be expanded. The system supports WPX’s development in the Van Hook peninsula area.
WPX produced an average of 22,600 barrels per day of oil in the Williston Basin during second-quarter 2015, up 20 percent from the same period a year ago.
Other portfolio rationalization opportunities include the monetization of additional midstream infrastructure, non-operated properties or other asset sales, along with evaluating creative options to unlock Piceance Basin value.
About WPX Energy, Inc.
WPX is a domestic energy producer with operations in the western United States. The company has reported double-digit oil volume growth in each of the past three years and operates more than 5,000 natural gas wells. WPX is reshaping its portfolio through more than $4 billion of acquisitions and divestitures.