June 15, 2017 - 8:32 AM EDT
Print Email Article Font Down Font Up Charts

Featured Company News - WPX Energy and Howard Energy Partners Converge to Develop Permian Midstream Assets

Research Desk Line-up: New Concept Energy Post Earnings Coverage

LONDON, UK / ACCESSWIRE / June 15, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for WPX Energy, Inc. (NYSE: WPX). WPX Energy and Howard Midstream Energy Partners LLC (HEP) announced on June 13, 2017, the formation of a Joint Venture (JV) to jointly develop crude oil and natural gas gathering and processing infrastructure in the Stateline area of the Permian's Delaware Basin. The areas covered under the JV are located in and around West Texas and eastern New Mexico. For immediate access to our complimentary reports, including today's coverage, register for free now at:

http://protraderdaily.com/register/

Discover more of our free reports coverage from other companies within the Independent Oil & Gas industry. Pro-TD has currently selected New Concept Energy, Inc. (NYSE MKT: GBR) for due-diligence and potential coverage as the Company reported on May 15, 2017, its financial results for Q1 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on New Concept Energy when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on WPX; also brushing on GBR. Go directly to your stock of interest and access today's free coverage at:

http://protraderdaily.com/optin/?symbol=WPX

http://protraderdaily.com/optin/?symbol=GBR

Commenting on the JV, Rick Muncrief, Chairman, President and CEO of WPX said:

“As a producer, this is a bold and innovative way to lay a well-defined path for our expected volumes and create an additional platform for generating shareholder value. Today's agreement breaks new ground on both fronts. We believe the Howard team has the right skills, capabilities and focus to make this joint venture a success and we're excited to work with them.”

Mike Howard, Chairman and CEO of Howard Energy Partners added:

“This joint venture not only diversifies HEP's footprint into the most prolific basin in the nation, but it demonstrates our team's ability to differentiate ourselves among our competitors and to raise significant capital for large-scale infrastructure projects. We are confident that our midstream operational expertise, coupled with strong financial support and WPX's production track record, will make for a successful partnership in the Delaware.”

Scope of the JV and Role of each Partner

As per the 50/50 JV agreement, the area of operations will cover than 600 square miles in Lea and Eddy counties in New Mexico and Reeves and Loving counties in Texas. Out of this, 50,000 net acres in Delaware is dedicated by WPX and represents 37% of its total acreage in the region.

Both Companies will have equal voting interest and operational influence in the JV.

HEP will complete the construction of approximately 50-mile crude oil gathering system, build a new cryogenic natural gas processing complex with an initial capacity of 400 million cubic feet per day, and build associated natural gas and product pipelines. WPX has already started the initial construction of the crude oil gathering system. HEP will also be the operator of the said assets. The JV does not put a cap on the minimum volume or drilling commitments.

The transaction value of the deal for WPX is approximately $863 million and includes initial cash payable, the capital carry, and WPX's ownership interest. At the start of the project HEP will pay WPX an upfront amount of $300 million. HEP will also spend $263 million for initial capital expenditures for the JV and includes $132 million carry for WPX.

HEP has partnered with Singapore's sovereign wealth fund - GIC, Alinda Capital Partners, and Alberta Investment Management Company (AIMCo) to raise $563 million of new capital for its commitment to the JV with WPX

The JV does not cover WPX's ownership of Stateline natural gas and water gathering systems which is spread over 375 miles of scalable existing infrastructure as well as midstream rights for the remaining acreage position in the Delaware.

The JV is expected to close in Q3 2017.

Action Plan

Before the close of the WPX - HEP deal, both Companies will start work on the construction of the crude oil gathering system and begin work on the cryogenic processing plant. In 2016 WPX had started work on the planned 50-mile crude gathering system and has already installed nearly half of the planned 50-mile crude gathering system. WPX has 40 wells tied in the system and some of them are ready for completion before they can become part of the oil gathering system.

The crude oil gathering pipeline will have the capacity of approximately 125,000 barrels of oil per day. Both WPX/ HEP expect the project to be completed in H1 2018. The project is designed in such a manner that it can be scaled up through additional horsepower and line looping and can take advantage of any other commercial opportunities. The scaling up would require very little capital investment.

Both WPX/ HEP plan to complete the initial 200 MMcf/d train for the cryogenic natural gas processing complex in H1 2017. They plan to add a second train in mid-2019 which will help them in doubling the capacity.

WPX's plans for its natural gas at Delaware Basin

In May 2017, WPX had revealed that it had signed an agreement with a major pipeline Company to begin shipping natural gas from the Waha hub in the Permian Basin to Katy, Texas. The operation is expected to start from November 2017. The agreement plans to initially start shipping with 100,000 MMBtu per day and later on increase the capacity up to 200,000 MMBtu per day.

WPX has also completed a long-term agreement for its Agua Blanca Pipeline with WhiteWater Midstream. As per the agreement WhiteWater will start with 300,000 MMBtu/d of natural gas capacity from the Stateline area to Waha and get 10% ownership. It has the option of increasing this capacity to 500,000 MMBtu/d and its ownership up to 20%. The Agua Blanca Pipeline will start with 75 miles long 36-inch diameter pipe with a capacity of 1.25 Bcf/d and in future it can be expanded to 1.75 Bcf/d. WhiteWater expects that the pipeline will be ready to accept first volumes from H1 2018.

Last Close Stock Review

At the close of trading session on Wednesday, June 14, 2017, WPX Energy's stock price declined 7.77% to end the day at $9.74. A total volume of 10.44 million shares were exchanged during the session, which was above the 3-month average volume of 7.76 million shares. The Company's shares gained 0.31% since the beginning of the year. At Wednesday's closing price, the stock's net capitalization stands at $4.06 billion.

Pro-Trader Daily:

Pro-Trader Daily (Pro-TD) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and Canadian stocks. PRO-TD has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

PRO-TD has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email contact@protraderdaily.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by PRO-TD. PRO-TD is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

PRO-TD, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. PRO-TD, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, PRO-TD, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither PRO-TD nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://protraderdaily.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: contact@protraderdaily.com

Phone number: (917) 341.4653

Office Address: Mainzer Landstrasse 50 Frankfurt am Main, Germany 60325

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Pro-Trader Daily


Source: ACCESSWIRE (June 15, 2017 - 8:32 AM EDT)

News by QuoteMedia
www.quotemedia.com
Tags:

Legal Notice