October 30, 2019 - 4:15 PM EDT
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WPX Energy Reports 3Q 2019 Results

TULSA, Okla.

Delivers free cash flow, capital discipline and share repurchase progress

  • 3Q oil volumes were 108.6 Mbbl/d; up 11% vs. 2Q
  • Projecting 109-111 Mbbl/d in 4Q oil volumes: up 4% vs. prior outlook
  • 3Q CAPEX was $264 million
  • Repurchased $58 million in shares to date at an avg. of $10.16 per share
  • CFFO up 39% in first three quarters of 2019 vs. year ago
  • Swapped 6.00% and 8.25% notes for 5.25% notes

WPX Energy (NYSE:WPX) reported third-quarter oil volumes of 108,600 barrels per day, which was 30 percent higher vs. a year ago and 11 percent higher than second-quarter 2019.

WPX reported unaudited third-quarter income available to common stockholders of $121 million, or income of $0.29 per share on a diluted basis. A year ago, WPX reported a loss of $0.01 per share.

Excluding derivatives and other items, WPX posted adjusted net income from continuing operations in third-quarter 2019 of $38 million, or income of $0.09 per share. A reconciliation accompanies this press release.

Adjusted EBITDAX (a non-GAAP financial measure) for third-quarter 2019 was $352 million, up 22 percent vs. $288 million in the same period a year ago. A reconciliation accompanies this release.

Cash flow from operations, inclusive of hedge impact, was $272 million in third-quarter 2019, which was 21 percent higher than $224 million in the same period a year ago.

Free cash flow for the third quarter was $42 million. Free cash flow for the quarter represents cash flow from operations ($272 million) adjusted for the impact of net changes in assets and liabilities ($34 million) less incurred capital expenditures ($264 million).

CEO PERSPECTIVE

“Our value proposition at WPX, both financially and strategically, is stronger than ever because of our consistent execution,” said Rick Muncrief, chairman and chief executive officer.

“We generated free cash flow in the quarter, are returning capital to shareholders ahead of schedule and are applying our technical expertise to lower costs and raise margins on barrels produced.

“All of this contributes to an exceptional outlook for the fourth quarter, 2020 and beyond, especially with improved capital efficiency, greater gas capture, lower interest expense and how we’re working to drive our leverage even lower,” Muncrief added.

RECENT EVENTS

In August, WPX announced a plan to opportunistically repurchase up to $400 million of its shares over the next 24 months. To date, the company has since repurchased $58 million of its common stock at an average price of $10.16 per share, retiring 5.7 million shares.

During the third quarter, WPX completed tender offers repurchasing $456 million of its outstanding 6.00 percent notes due in 2022 and $94 million of its 8.25 percent notes due in 2023 through a public offering for 5.25 percent notes due in 2027.

These actions reduced WPX’s weighted average interest rate for long-term debt from 6.24 percent to 5.93 percent, effectively lowering its annual interest expense by approximately $4 million going forward. WPX’s next significant maturity does not occur until 2023, which is $406 million.

RAISING 4Q AND FULL-YEAR OUTLOOK

WPX is forecasting stronger fourth quarter oil volumes than originally detailed in its quarter-to-quarter guide for 2019.

This momentum also is driving the anticipated 2019 exit rate higher with no additional capital allocation. WPX originally forecast 5-10 percent growth vs. the 2018 exit rate. WPX now expects this year’s exit rate to grow 15 percent vs. a year ago.

WPX expects fourth-quarter oil volumes of 109-111 Mbbl/d. This also raises WPX’s outlook for full-year 2019 oil volumes to 102-104 Mbbl/d, up from its most recent estimate of 101-103 Mbbl/d.

WPX now expects full-year total production of 162-167 Mboe/d in 2019, up from its most recent estimate of 160-165 Mboe/d.

With one quarter remaining in the year, WPX’s tightened the range for its 2019 total capital development plan to $1,125-$1,250 million. The midpoint remains unchanged from the previous estimate of $1,100-$1,275 million.

Total capital spending in the third quarter was $264 million, predominantly from $233 million in D&C activity for operated wells and $22 million for midstream infrastructure.

Details related to anticipated full-year production, capital, realized pricing and expenses are available in WPX’s third-quarter investor presentation available online at www.wpxenergy.com.

DELAWARE BASIN: VOLUMES UP 28%

WPX’s Delaware production averaged 96.7 Mboe/d in third-quarter 2019, which was 28 percent higher than 75.4 Mboe/d in the same period a year ago.

Oil production of 47.2 Mbbl/d comprised 49 percent of third-quarter total Delaware production. Oil volumes were up 10 percent vs. 42.8 Mbbl/d in the third quarter a year ago.

Third-quarter Delaware NGL production was up 93 percent vs. a year ago. NGL volumes are up significantly in 2019 reflecting the benefit of processing capacity at WPX’s joint venture gas plant in Reeves County, which did not startup until the end of the third quarter last year. Physical natural gas volumes also are up due to increased gas capture and reduced flaring.

WPX’s average realized oil price in the Delaware was WTI minus $0.50 for the quarter, including Midland basis swaps.

WPX’s average realized natural gas price in the Delaware was NYMEX less $0.40 for the quarter, including basis swaps which increased the average realized price by $0.51 per Mcf. WPX also realized $3 million in net commodity management margins, or $0.20 per Mcf, related to further risk management activities around Delaware natural gas pricing exposure.

WPX completed 18 Delaware wells during the third quarter, including nine in the Wolfcamp A interval, five wells in the Third Bone Spring formation and four in the Wolfcamp XY interval.

Two of the third-quarter Third Bone Spring wells were on the CBR 6-7 pad. Both wells had a 24-hour peak rate exceeding 4,300 Boe/d (59% oil), with combined 60-day cumulative production in excess of 214,000 barrels of oil. Sixty-day cumulative Boe for the two wells was nearly 365,000.

Two Wolfcamp A wells on the Pecos State 39-46 pad had 24-hour peak rates of 3,939 Boe/d (54% oil) and 3,819 Boe/d (53% oil).

On the Lindsay 10-15 pad, a Wolfcamp A well hit a 24-hour high of 4,150 Boe/d (54% oil) during initial production, and a Wolfcamp XY well hit 3,528 Boe/d (53% oil).

Following the completion of the second 200 MMcf/d cryogenic processing train at WPX’s 50/50 joint venture gas plant in Reeves County earlier this year, the plant is processing approximately 100 MMcf/d of third-party volumes in addition to WPX volumes.

The joint venture also completed a 16-inch-diamater trunk line that will begin transporting an estimated 40-50 MMcf/d of natural gas from WPX’s Sand Lake acreage position in the Delaware Basin to the Reeves County plant in early 2020.

WILLISTON BASIN: VOLUMES UP 58%

Williston Basin production averaged 76.8 Mboe/d in third-quarter 2019, which was 58 percent higher than 48.5 Mboe/d in the same period a year ago.

WPX completed 26 Williston wells during the third quarter, including 14 wells in the Bakken formation and 12 wells in the Three Forks formation.

The highest 24-hour rate for the third-quarter Williston completions was 5,664 Boe/d (81% oil) on the Bird Bear 35-26HB well. The six-well pad averaged nearly 4,600 Boe/d (81% oil) per well during 24-hour initial highs. Thirty-day production averaged 2,851 Boe/d per well.

Initial peak rates on the seven-well Lion pad averaged more than 3,800 Boe/d (81% oil) per well. Two of the wells on the pad hit 24-hour peak rates of 4,237 Boe/d.

The four-well Sweet Grass Woman pad also averaged nearly 3,800 Boe/d (81% oil) per well, led by the 22-15HD well that hit a 24-hour peak rate of 4,381 Boe/d.

WPX also drilled a Williston well in less than nine days during the quarter. The company drilled the St. Anthony 9-16-HY well in 8.63 days from spud to rig release with a lateral length of 9,886 feet.

3Q FINANCIAL RESULTS

Total product revenues of $581 million in third-quarter 2019 were five percent higher than the same period a year ago. Quarterly oil sales grew seven percent.

Total product revenues of $1,646 million during the first three quarters of 2019 were 11 percent higher than $1,481 million during the same period in 2018.

For the first three quarters of the year, WPX posted net income from continuing operations attributable to common shareholders of $378 million, or income of $0.89 per share on a diluted basis.

Adjusted net income from continuing operations for the first three quarters of 2019 was $97 million, or income of $0.23 per share. A reconciliation accompanies this press release.

During the third quarter, DD&A, lease operating expenses, taxes and G&A expense all declined on a per-Boe basis vs. the most recent quarter.

For the first three quarters of 2019, adjusted EBITDAX (a non-GAAP financial measure) was $1,003 million, or 29 percent higher than $775 million for the same period in 2018. Adjusted EBITDAX has now climbed for six consecutive quarters. Reconciliations for non-GAAP financial measures are available in the tables that accompany this press release.

The weighted average gross sales price – prior to revenue deductions and derivatives – was $54.25 per barrel for oil, $1.80 for natural gas and $11.92 per barrel for NGL during third-quarter 2019.

WPX’s total liquidity at the close of business on Sept. 30, 2019, was approximately $1.5 billion, including cash, cash equivalents and nearly all of its $1.5 billion available revolver capacity. WPX had no outstanding revolver borrowings at the end of the quarter, with the exception of outstanding letters of credit.

3Q PRODUCTION

Total production volumes of 173.4 Mboe/d in third-quarter 2019 increased 9 percent vs. second-quarter 2019 and were 40 percent higher than the same period a year ago. Liquids volumes accounted for 78 percent of third-quarter 2019 production.

Average Daily Production

Q3

 

2Q Sequential

2019

 

2018

 

Change

 

2019

 

Change

Oil (Mbbl/d)

Delaware Basin

47.2

42.8

10

%

46.4

2

%

Williston Basin

61.4

40.6

51

%

51.5

19

%

Subtotal (Mbbl/d)

108.6

83.4

30

%

97.9

11

%

 

NGLs (Mbbl/d)

 

Delaware Basin

19.3

10.0

93

%

21.7

-11

%

Williston Basin

7.7

3.7

108

%

5.7

35

%

Subtotal (Mbbl/d)

27.0

13.7

97

%

27.4

-1

%

 

Natural gas (MMcf/d)

 

Delaware Basin

180.9

135.4

34

%

170.9

6

%

Williston Basin

46.0

25.0

84

%

35.0

31

%

Subtotal (MMcf/d)

226.9

160.4

41

%

205.9

10

%

 

Total Production (Mboe/d)

173.4

123.8

40

%

159.6

9

%

WPX completed 44 gross operated wells (41 net) in its two core basins during third-quarter 2019 and participated in one gross (0 net) non-operated well in the Williston Basin.

For the balance of 2019, WPX has 83,000 bbl/d of oil hedged with fixed price swaps at a weighted average price of $56.72 per barrel, 5,000 bbl/d with fixed price calls at a weighted average price of $54.08 per barrel, and 8,000 bbl/d with collars at a weighted average price of $50 for the floor and $60.19 for the ceiling.

WPX also has 110,000 MMBtu/d of natural gas hedged with fixed price swaps at a weighted average price of $3.07 per MMBtu for the balance of 2019.

For 2020, WPX has 55,000 bbl/d of oil hedged with fixed price swaps at a weighted average price of $57.03 per barrel and 20,000 bbl/d with collars at a weighted average price of $53.33 for the floor and $63.48 for the ceiling.

THURSDAY WEBCAST

The company’s next webcast takes place on Oct. 31 beginning at 10 a.m. Eastern. Investors are encouraged to access the event and the corresponding slides at www.wpxenergy.com.

A limited number of phone lines also will be available at (833) 832-5123. International callers should dial (469) 565-9820. The conference identification code is 5288286.

FORM 10-Q

WPX plans to file its third-quarter 2019 Form 10-Q with the Securities and Exchange Commission this week. Once filed, the document will be available on the SEC and WPX websites.

About WPX Energy, Inc.

WPX is an independent energy producer with core positions in the Permian and Williston basins. WPX’s production is approximately 80 percent oil/liquids and 20 percent natural gas. The company also has an infrastructure portfolio in the Permian Basin. Visit www.wpxenergy.com for more information.

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding future drilling and production are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, the volatility of oil, natural gas and NGL prices; uncertainties inherent in estimating oil, natural gas and NGL reserves; drilling risks; environmental risks; and political or regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the date of this press release, even if subsequently made available by WPX Energy on its website or otherwise. WPX Energy does not undertake and expressly disclaims any obligation to update the forward-looking statements as a result of new information, future events or otherwise. Investors are urged to consider carefully the disclosure in our filings with the Securities and Exchange Commission, available from us at WPX Energy, Attn: Investor Relations, P.O. Box 21810, Tulsa, Okla., 74102, or from the SEC’s website at www.sec.gov.

Additionally, 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. From time to time, we elect to use “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 in our SEC filings 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.

WPX Energy, Inc.
Consolidated (GAAP)
(UNAUDITED)
 

2018

 

 

2019

 

(Dollars in millions)

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Year

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

Year

 
Revenues:
Product revenues:
Oil sales

$

360

 

$

468

 

$

503

 

$

459

 

$

1,790

 

$

449

 

$

511

 

$

539

 

$

1,499

 

Natural gas sales

 

17

 

 

16

 

 

18

 

 

36

 

 

87

 

 

25

 

 

16

 

 

16

 

 

57

 

Natural gas liquid sales

 

30

 

 

36

 

 

33

 

 

49

 

 

148

 

 

33

 

 

31

 

 

26

 

 

90

 

Total product revenues

 

407

 

 

520

 

 

554

 

 

544

 

 

2,025

 

 

507

 

 

558

 

 

581

 

 

1,646

 

Net gain (loss) on derivatives

 

(69

)

 

(154

)

 

(139

)

 

443

 

 

81

 

 

(207

)

 

78

 

 

175

 

 

46

 

Commodity management

 

36

 

 

64

 

 

68

 

 

36

 

 

204

 

 

59

 

 

58

 

 

38

 

 

155

 

Other

 

-

 

 

-

 

 

1

 

 

(1

)

 

-

 

 

-

 

 

1

 

 

1

 

 

2

 

Total revenues

 

374

 

 

430

 

 

484

 

 

1,022

 

 

2,310

 

 

359

 

 

695

 

 

795

 

 

1,849

 

 
Costs and expenses:
Depreciation, depletion and amortization

 

161

 

 

197

 

 

193

 

 

226

 

 

777

 

 

219

 

 

221

 

 

241

 

 

681

 

Lease and facility operating

 

55

 

 

59

 

 

68

 

 

90

 

 

272

 

 

86

 

 

94

 

 

96

 

 

276

 

Gathering, processing and transportation

 

18

 

 

20

 

 

26

 

 

43

 

 

107

 

 

42

 

 

40

 

 

49

 

 

131

 

Taxes other than income

 

30

 

 

41

 

 

45

 

 

41

 

 

157

 

 

39

 

 

43

 

 

46

 

 

128

 

Exploration

 

19

 

 

17

 

 

18

 

 

21

 

 

75

 

 

24

 

 

24

 

 

22

 

 

70

 

General and administrative:
General and administrative expenses

 

36

 

 

34

 

 

36

 

 

44

 

 

150

 

 

39

 

 

40

 

 

42

 

 

121

 

Equity-based compensation

 

7

 

 

10

 

 

8

 

 

7

 

 

32

 

 

8

 

 

8

 

 

9

 

 

25

 

Total general and administrative

 

43

 

 

44

 

 

44

 

 

51

 

 

182

 

 

47

 

 

48

 

 

51

 

 

146

 

Commodity management

 

39

 

 

54

 

 

63

 

 

26

 

 

182

 

 

49

 

 

41

 

 

36

 

 

126

 

Net (gain) loss on sales of assets

 

1

 

 

(1

)

 

(1

)

 

(2

)

 

(3

)

 

-

 

 

-

 

 

-

 

 

-

 

Other-net

 

2

 

 

2

 

 

2

 

 

1

 

 

7

 

 

2

 

 

3

 

 

12

 

 

17

 

Total costs and expenses

 

368

 

 

433

 

 

458

 

 

497

 

 

1,756

 

 

508

 

 

514

 

 

553

 

 

1,575

 

 
Operating income (loss)

 

6

 

 

(3

)

 

26

 

 

525

 

 

554

 

 

(149

)

 

181

 

 

242

 

 

274

 

 
Interest expense

 

(46

)

 

(39

)

 

(38

)

 

(40

)

 

(163

)

 

(41

)

 

(40

)

 

(38

)

 

(119

)

Loss on extinguishment of debt

 

-

 

 

(71

)

 

-

 

 

-

 

 

(71

)

 

-

 

 

-

 

 

(47

)

 

(47

)

Gains on equity method investment transactions

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

126

 

 

247

 

 

-

 

 

373

 

Investment income (loss) and other

 

(1

)

 

1

 

 

(2

)

 

(2

)

 

(4

)

 

2

 

 

1

 

 

4

 

 

7

 

 
Income (loss) from continuing operations before income taxes

$

(41

)

$

(112

)

$

(14

)

$

483

 

$

316

 

$

(62

)

$

389

 

$

161

 

$

488

 

Provision (benefit) for income taxes

 

(15

)

 

(33

)

 

(8

)

 

130

 

 

74

 

 

(14

)

 

84

 

 

39

 

 

109

 

Income (loss) from continuing operations

$

(26

)

$

(79

)

$

(6

)

$

353

 

$

242

 

$

(48

)

$

305

 

$

122

 

$

379

 

Income (loss) from discontinued operations

 

(89

)

 

(2

)

 

(1

)

 

1

 

 

(91

)

 

-

 

 

-

 

 

(1

)

 

(1

)

Net income (loss)

$

(115

)

$

(81

)

$

(7

)

$

354

 

$

151

 

$

(48

)

$

305

 

$

121

 

$

378

 

Less: Dividends on preferred stock

 

4

 

 

4

 

 

-

 

 

-

 

 

8

 

 

-

 

 

-

 

 

-

 

 

-

 

Net income (loss) available to WPX Energy, Inc. common stockholders

$

(119

)

$

(85

)

$

(7

)

$

354

 

$

143

 

$

(48

)

$

305

 

$

121

 

$

378

 

Amounts available to WPX Energy, Inc. common stockholders:
Income (loss) from continuing operations

$

(30

)

$

(83

)

$

(6

)

$

353

 

$

234

 

$

(48

)

$

305

 

$

122

 

$

379

 

Income (loss) from discontinued operations

 

(89

)

 

(2

)

 

(1

)

 

1

 

 

(91

)

 

-

 

 

-

 

 

(1

)

 

(1

)

Net income (loss)

$

(119

)

$

(85

)

$

(7

)

$

354

 

$

143

 

$

(48

)

$

305

 

$

121

 

$

378

 

 
 
 
Summary of Production Volumes (1)
Oil (MBbls)

 

5,920

 

 

7,352

 

 

7,670

 

 

8,828

 

 

29,769

 

 

8,648

 

 

8,905

 

 

9,991

 

 

27,543

 

Natural gas (MMcf)

 

11,908

 

 

13,854

 

 

14,759

 

 

18,844

 

 

59,365

 

 

18,210

 

 

18,736

 

 

20,874

 

 

57,821

 

Natural gas liquids (MBbls)

 

1,340

 

 

1,713

 

 

1,259

 

 

2,420

 

 

6,733

 

 

2,288

 

 

2,493

 

 

2,486

 

 

7,267

 

Combined equivalent volumes (MBoe) (2)

 

9,245

 

 

11,374

 

 

11,389

 

 

14,389

 

 

46,396

 

 

13,971

 

 

14,520

 

 

15,955

 

 

44,446

 

Per day volumes
Oil (MBbls/d)

 

65.8

 

 

80.8

 

 

83.4

 

 

96.0

 

 

81.6

 

 

96.1

 

 

97.9

 

 

108.6

 

 

100.9

 

Natural gas (MMcf/d)

 

132.3

 

 

152.2

 

 

160.4

 

 

204.8

 

 

162.6

 

 

202.3

 

 

205.9

 

 

226.9

 

 

211.8

 

Natural gas liquids (MBbls/d)

 

14.9

 

 

18.8

 

 

13.7

 

 

26.3

 

 

18.4

 

 

25.4

 

 

27.4

 

 

27.0

 

 

26.6

 

Combined equivalent volumes (Mboe/d) (2)

 

102.7

 

 

125.0

 

 

123.8

 

 

156.4

 

 

127.1

 

 

155.2

 

 

159.6

 

 

173.4

 

 

162.8

 

 

(1)

Excludes activity classified as discontinued operations.

(2)

Mboe are calculated using the ratio of six Mcf to one barrel of oil.
 
 
Realized average price per unit (1)
Oil (per barrel)

$

60.91

 

$

63.63

 

$

65.52

 

$

52.05

 

$

60.14

 

$

51.92

 

$

57.42

 

$

53.92

 

$

54.42

 

Natural gas (per Mcf)

$

1.44

 

$

1.12

 

$

1.22

 

$

1.90

 

$

1.46

 

$

1.36

 

$

0.88

 

$

0.77

 

$

0.99

 

Natural gas liquids (per barrel)

$

22.14

 

$

20.94

 

$

26.68

 

$

20.14

 

$

21.97

 

$

14.47

 

$

12.21

 

$

10.73

 

$

12.42

 

 

(1)

Excludes activity classified as discontinued operations.
 
Expenses per Boe (1)
Depreciation, depletion and amortization

$

17.38

 

$

17.31

 

$

17.01

 

$

15.68

 

$

16.75

 

$

15.68

 

$

15.24

 

$

15.11

 

$

15.33

 

Lease and facility operating

$

5.97

 

$

5.20

 

$

5.92

 

$

6.25

 

$

5.85

 

$

6.13

 

$

6.50

 

$

6.02

 

$

6.21

 

Gathering, processing and transportation

$

1.93

 

$

1.79

 

$

2.29

 

$

2.95

 

$

2.30

 

$

2.98

 

$

2.78

 

$

3.10

 

$

2.96

 

Taxes other than income

$

3.21

 

$

3.67

 

$

3.96

 

$

2.83

 

$

3.39

 

$

2.79

 

$

2.95

 

$

2.90

 

$

2.88

 

General and administrative:
General and administrative expenses

$

3.84

 

$

3.06

 

$

3.17

 

$

3.00

 

$

3.22

 

$

2.81

 

$

2.73

 

$

2.69

 

$

2.74

 

Equity-based compensation

 

0.80

 

 

0.83

 

 

0.68

 

 

0.55

 

 

0.70

 

 

0.56

 

 

0.56

 

 

0.54

 

 

0.55

 

Total general and administrative

$

4.64

 

$

3.89

 

$

3.85

 

$

3.55

 

$

3.92

 

$

3.37

 

$

3.29

 

$

3.23

 

$

3.29

 

Interest expense

$

4.95

 

$

3.43

 

$

3.36

 

$

2.75

 

$

3.51

 

$

2.95

 

$

2.76

 

$

2.37

 

$

2.68

 

 

(1)

Excludes activity classified as discontinued operations.
 
 
WPX Energy, Inc.
Reconciliation of NON-GAAP Measures
(UNAUDITED)
 

2018

 

 

2019

(Dollars in millions, except per share amounts)

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

4th Qtr

 

Year

 

 

1st Qtr

 

2nd Qtr

 

3rd Qtr

 

Year

 
Reconciliation of adjusted income (loss) from continuing operations available to common stockholders:
Income (loss) from continuing operations available to WPX Energy, Inc. common stockholders - reported

$

(30

)

$

(83

)

$

(6

)

$

353

 

$

234

 

$

(48

)

$

305

 

$

122

 

$

379

 

Pre-tax adjustments:
Net (gains) losses on sales of assets and equity method investment transactions

$

1

 

$

(1

)

$

(1

)

$

(2

)

$

(3

)

$

(126

)

$

(247

)

$

-

 

$

(373

)

Loss on extinguishment of debt

$

-

 

$

71

 

$

-

 

$

-

 

$

71

 

$

-

 

$

-

 

$

47

 

$

47

 

Impact of pending settlement offer

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

11

 

$

11

 

Voluntary exit program

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

3

 

$

3

 

Net (gain) loss on derivatives

$

69

 

$

154

 

$

139

 

$

(443

)

$

(81

)

$

207

 

$

(78

)

$

(175

)

$

(46

)

Net cash received (paid) related to settlement of derivatives

$

(55

)

$

(78

)

$

(85

)

$

(19

)

$

(237

)

$

9

 

$

(10

)

$

4

 

$

3

 

Total pre-tax adjustments

$

15

 

$

146

 

$

53

 

$

(464

)

$

(250

)

$

90

 

$

(335

)

$

(110

)

$

(355

)

Less tax effect for above items

$

(3

)

$

(33

)

$

(13

)

$

107

 

$

58

 

$

(20

)

$

76

 

$

25

 

$

81

 

Impact of state deferred tax rate changes and state related adjustments

$

(4

)

$

-

 

$

-

 

$

(1

)

$

(5

)

$

(1

)

$

-

 

$

-

 

$

(1

)

Impact of tax valuation allowance (annual effective tax rate method)

$

-

 

$

-

 

$

-

 

$

2

 

$

2

 

$

1

 

$

(9

)

$

1

 

$

(7

)

Adjustment for estimated annual effective tax rate method

$

-

 

$

(7

)

$

(5

)

$

12

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

Total adjustments, after tax

$

8

 

$

106

 

$

35

 

$

(344

)

$

(195

)

$

70

 

$

(268

)

$

(84

)

$

(282

)

Adjusted income (loss) from continuing operations available to common stockholders

$

(22

)

$

23

 

$

29

 

$

9

 

$

39

 

$

22

 

$

37

 

$

38

 

$

97

 

 
 
 
 
Reconciliation of adjusted diluted income (loss) per common share:
Income (loss) from continuing operations - diluted earnings per share - reported

$

(0.07

)

$

(0.21

)

$

(0.01

)

$

0.83

 

$

0.57

 

$

(0.11

)

$

0.72

 

$

0.29

 

$

0.89

 

Impact of adjusted diluted weighted-average shares

$

-

 

$

0.01

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

Pretax adjustments (1):
Net (gains) losses on sales of assets and equity method investment transactions

$

-

 

$

-

 

$

-

 

$

-

 

$

(0.01

)

$

(0.30

)

$

(0.58

)

$

-

 

$

(0.88

)

Loss on extinguishment of debt

$

-

 

$

0.18

 

$

-

 

$

-

 

$

0.17

 

$

-

 

$

-

 

$

0.11

 

$

0.11

 

Impact of pending settlement offer

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

0.03

 

$

0.03

 

Voluntary exit program

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

Net (gain) loss on derivatives

$

0.17

 

$

0.38

 

$

0.33

 

$

(1.04

)

$

(0.20

)

$

0.49

 

$

(0.19

)

$

(0.41

)

$

(0.11

)

Net cash received (paid) related to settlement of derivatives

$

(0.13

)

$

(0.20

)

$

(0.20

)

$

(0.06

)

$

(0.57

)

$

0.02

 

$

(0.02

)

$

0.01

 

$

0.01

 

Total pretax adjustments

$

0.04

 

$

0.36

 

$

0.13

 

$

(1.10

)

$

(0.61

)

$

0.21

 

$

(0.79

)

$

(0.26

)

$

(0.84

)

Less tax effect for above items

$

(0.02

)

$

(0.08

)

$

(0.04

)

$

0.26

 

$

0.14

 

$

(0.05

)

$

0.18

 

$

0.06

 

$

0.20

 

Impact of state deferred tax rate changes and state related adjustments

$

(0.01

)

$

-

 

$

-

 

$

-

 

$

(0.01

)

$

-

 

$

-

 

$

-

 

$

-

 

Impact of tax valuation allowance (annual effective tax rate method)

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

$

(0.02

)

$

-

 

$

(0.02

)

Adjustment for estimated annual effective tax rate method

$

-

 

$

(0.02

)

$

(0.01

)

$

0.03

 

$

-

 

$

-

 

$

-

 

$

-

 

$

-

 

Total adjustments, after-tax

$

0.01

 

$

0.26

 

$

0.08

 

$

(0.81

)

$

(0.48

)

$

0.16

 

$

(0.63

)

$

(0.20

)

$

(0.66

)

Adjusted diluted income (loss) per common share

$

(0.06

)

$

0.06

 

$

0.07

 

$

0.02

 

$

0.09

 

$

0.05

 

$

0.09

 

$

0.09

 

$

0.23

 

Reported diluted weighted-average shares (millions)

 

398.6

 

 

400.0

 

 

414.0

 

 

424.0

 

 

411.7

 

 

421.0

 

 

423.5

 

 

421.8

 

 

423.0

 

Effect of dilutive securities due to adjusted income (loss) from continuing operations available to common stockholders

 

-

 

 

3.1

 

 

3.7

 

 

-

 

 

-

 

 

2.6

 

 

-

 

 

-

 

 

-

 

Adjusted diluted weighted-average shares (millions)

 

398.6

 

 

403.1

 

 

417.7

 

 

424.0

 

 

411.7

 

 

423.6

 

 

423.5

 

 

421.8

 

 

423.0

 

 
(1) Per share impact is based on adjusted diluted weighted-average shares.
 
 
 
Reconciliation of Adjusted EBITDAX
Net income (loss) - reported

$

(115

)

$

(81

)

$

(7

)

$

354

 

$

151

 

$

(48

)

$

305

 

$

121

 

$

378

 

Interest expense

 

46

 

 

39

 

 

38

 

 

40

 

 

163

 

 

41

 

 

40

 

 

38

 

 

119

 

Provision (benefit) for income taxes

 

(15

)

 

(33

)

 

(8

)

 

130

 

 

74

 

 

(14

)

 

84

 

 

39

 

 

109

 

Depreciation, depletion and amortization

 

161

 

 

197

 

 

193

 

 

226

 

 

777

 

 

219

 

 

221

 

 

241

 

 

681

 

Exploration expenses

 

19

 

 

17

 

 

18

 

 

21

 

 

75

 

 

24

 

 

24

 

 

22

 

 

70

 

EBITDAX

 

96

 

 

139

 

 

234

 

 

771

 

 

1,240

 

 

222

 

 

674

 

 

461

 

 

1,357

 

Net (gains) losses on sales of assets and equity method investment transactions

 

1

 

 

(1

)

 

(1

)

 

(2

)

 

(3

)

 

(126

)

 

(247

)

 

-

 

 

(373

)

Loss on extinguishment of debt

 

-

 

 

71

 

 

-

 

 

-

 

 

71

 

 

-

 

 

-

 

 

47

 

 

47

 

Impact of pending settlement offer

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

11

 

 

11

 

Voluntary exit program

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

3

 

 

3

 

Net (gain) loss on derivatives

 

69

 

 

154

 

 

139

 

 

(443

)

 

(81

)

 

207

 

 

(78

)

 

(175

)

 

(46

)

Net cash received (paid) related to settlement of derivatives

 

(55

)

 

(78

)

 

(85

)

 

(19

)

 

(237

)

 

9

 

 

(10

)

 

4

 

 

3

 

(Income) loss from discontinued operations

 

89

 

 

2

 

 

1

 

 

(1

)

 

91

 

 

-

 

 

-

 

 

1

 

 

1

 

Adjusted EBITDAX

$

200

 

$

287

 

$

288

 

$

306

 

$

1,081

 

$

312

 

$

339

 

$

352

 

$

1,003

 

 
 
 
WPX Energy, Inc.
Consolidated Statements of Operations
(Unaudited)
 

Three months ended September 30,

 

Nine months ended September 30,

 

2019

 

 

 

2018

 

 

 

2019

 

 

 

2018

 

(Millions, except per-share amounts)
Revenues:
Product revenues:
Oil sales

$

539

 

$

503

 

$

1,499

 

$

1,331

 

Natural gas sales

 

16

 

 

18

 

 

57

 

 

51

 

Natural gas liquid sales

 

26

 

 

33

 

 

90

 

 

99

 

Total product revenues

 

581

 

 

554

 

 

1,646

 

 

1,481

 

Net gain (loss) on derivatives

 

175

 

 

(139

)

 

46

 

 

(362

)

Commodity management

 

38

 

 

68

 

 

155

 

 

168

 

Other

 

1

 

 

1

 

 

2

 

 

1

 

Total revenues

 

795

 

 

484

 

 

1,849

 

 

1,288

 

Costs and expenses:
Depreciation, depletion and amortization

 

241

 

 

193

 

 

681

 

 

551

 

Lease and facility operating

 

96

 

 

68

 

 

276

 

 

182

 

Gathering, processing and transportation

 

49

 

 

26

 

 

131

 

 

64

 

Taxes other than income

 

46

 

 

45

 

 

128

 

 

116

 

Exploration

 

22

 

 

18

 

 

70

 

 

54

 

General and administrative (including equity-based compensation of $9 million, $8 million, $25 million and $25 million for the respective periods)

 

51

 

 

44

 

 

146

 

 

131

 

Commodity management

 

36

 

 

63

 

 

126

 

 

156

 

Other - net

 

12

 

 

1

 

 

17

 

 

5

 

Total costs and expenses

 

553

 

 

458

 

 

1,575

 

 

1,259

 

 
Operating income

 

242

 

 

26

 

 

274

 

 

29

 

Interest expense

 

(38

)

 

(38

)

 

(119

)

 

(123

)

Loss on extinguishment of debt

 

(47

)

 

-

 

 

(47

)

 

(71

)

Gains on equity method investment transactions

 

-

 

 

-

 

 

373

 

 

-

 

Investment income (loss) and other

 

4

 

 

(2

)

 

7

 

 

(2

)

Income (loss) from continuing operations before income taxes

 

161

 

 

(14

)

 

488

 

 

(167

)

Provision (benefit) for income taxes

 

39

 

 

(8

)

 

109

 

 

(56

)

Income (loss) from continuing operations

 

122

 

 

(6

)

 

379

 

 

(111

)

Loss from discontinued operations

 

(1

)

 

(1

)

 

(1

)

 

(92

)

Net income (loss)

 

121

 

 

(7

)

 

378

 

 

(203

)

Less: Dividends on preferred stock

 

-

 

 

-

 

 

-

 

 

8

 

Net income (loss) available to WPX Energy, Inc. common stockholders

$

121

 

$

(7

)

$

378

 

$

(211

)

 
Amounts available to WPX Energy, Inc. common stockholders:
Income (loss) from continuing operations

$

122

 

$

(6

)

$

379

 

$

(119

)

Loss from discontinued operations

 

(1

)

 

(1

)

 

(1

)

 

(92

)

Net income (loss)

$

121

 

$

(7

)

$

378

 

$

(211

)

 
Basic earnings (loss) per common share:
Income (loss) from continuing operations

$

0.29

 

$

(0.01

)

$

0.90

 

$

(0.29

)

Loss from discontinued operations

 

-

 

 

-

 

 

-

 

 

(0.23

)

Net income (loss)

$

0.29

 

$

(0.01

)

$

0.90

 

$

(0.52

)

 
Basic weighted-average shares

 

420.8

 

 

414.0

 

 

421.4

 

 

404.3

 

 
Diluted earnings (loss) per common share:
Income (loss) from continuing operations

$

0.29

 

$

(0.01

)

$

0.89

 

$

(0.29

)

Loss from discontinued operations

 

-

 

 

-

 

 

-

 

 

(0.23

)

Net income (loss)

$

0.29

 

$

(0.01

)

$

0.89

 

$

(0.52

)

 
Diluted weighted-average shares

 

421.8

 

 

414.0

 

 

423.0

 

 

404.3

 

 
 
WPX Energy, Inc.
Consolidated Balance Sheets
(Unaudited)
 
 

September 30, 2019

 

December 31, 2018

ASSETS

(Millions)

Current assets:
Cash and cash equivalents

$

13

 

$

3

 

Accounts receivable, net of allowance

 

553

 

 

405

 

Derivative assets

 

169

 

 

174

 

Inventories

 

46

 

 

48

 

Assets classified as held for sale

 

-

 

 

79

 

Other

 

35

 

 

30

 

Total current assets

 

816

 

 

739

 

Investments

 

51

 

 

167

 

Properties and equipment (successful efforts method of accounting)

 

10,985

 

 

9,949

 

Less: Accumulated depreciation, depletion and amortization

 

(3,411

)

 

(2,683

)

Properties and equipment, net

 

7,574

 

 

7,266

 

Derivative assets

 

56

 

 

4

 

Other noncurrent assets

 

123

 

 

27

 

Total assets

$

8,620

 

$

8,203

 

 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable

$

686

 

$

514

 

Accrued and other current liabilities

 

209

 

 

178

 

Derivative liabilities

 

35

 

 

23

 

Total current liabilities

 

930

 

 

715

 

Deferred income taxes

 

307

 

 

201

 

Long-term debt, net

 

2,201

 

 

2,485

 

Derivative liabilities

 

7

 

 

14

 

Other noncurrent liabilities

 

532

 

 

487

 

 
Equity:
Stockholders' equity:
Preferred stock (100 million shares authorized at $0.01 par value; no shares outstanding)

 

-

 

 

-

 

Common stock (2 billion shares authorized at $0.01 par value; 418.2 million shares and 420.6 million shares issued and outstanding at September 30, 2019 and December 31, 2018)

 

4

 

 

4

 

Additional paid-in-capital

 

7,698

 

 

7,734

 

Accumulated deficit

 

(3,059

)

 

(3,437

)

Total stockholders' equity

 

4,643

 

 

4,301

 

Total liabilities and equity

$

8,620

 

$

8,203

 

 
 
WPX Energy, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
 

Nine Months ended September 30,

 

2019

 

 

 

2018

 

(Millions)
Operating Activities(a)
Net income (loss)

$

378

 

$

(203

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization

 

681

 

 

559

 

Deferred income tax (provision) benefit

 

106

 

 

(84

)

Provision for impairment of properties and equipment (including certain exploration expenses)

 

62

 

 

53

 

Gains related to equity method investment transactions

 

(373

)

 

-

 

Net (gain) loss on derivatives

 

(46

)

 

362

 

Net settlements related to derivatives

 

3

 

 

(218

)

Amortization of stock-based awards

 

26

 

 

26

 

Loss on extinguishment of debt

 

47

 

 

71

 

Net loss on sales of assets including discontinued operations

 

-

 

 

150

 

Cash provided by (used in) operating assets and liabilities:
Accounts receivable

 

(193

)

 

(61

)

Inventories

 

1

 

 

(15

)

Other current assets

 

(2

)

 

5

 

Accounts payable

 

225

 

 

71

 

Federal income taxes receivable

 

38

 

 

-

 

Accrued and other current liabilities

 

(40

)

 

(48

)

Liabilities accrued in prior years for retained transportation and gathering contracts related to discontinued operations

 

(22

)

 

(37

)

Other, including changes in other noncurrent assets and liabilities

 

15

 

 

21

 

Net cash provided by operating activities (a)

 

906

 

 

652

 

 
Investing Activities(a)
Capital expenditures(b)

 

(1,090

)

 

(1,013

)

Proceeds from sales of assets and equity method investment transactions

 

589

 

 

682

 

Contributions to or purchases of equity method investments

 

(18

)

 

(72

)

Distributions from equity method investments

 

11

 

 

-

 

Other

 

1

 

 

-

 

Net cash used in investing activities (a)

 

(507

)

 

(403

)

 
Financing Activities
Proceeds from common stock

 

1

 

 

9

 

Dividends paid on preferred stock

 

-

 

 

(11

)

Payments for repurchases of common stock

 

(43

)

 

-

 

Borrowings on credit facility

 

1,281

 

 

726

 

Payments on credit facility

 

(1,611

)

 

(638

)

Proceeds from long-term debt, net of discount

 

593

 

 

494

 

Payments for retirement of long-term debt, including premium

 

(594

)

 

(986

)

Taxes paid for shares withheld

 

(16

)

 

(13

)

Payments for debt issuance costs and credit facility amendment fees

 

(2

)

 

(10

)

Other

 

6

 

 

29

 

Net cash used in financing activities

 

(385

)

 

(400

)

 
Net increase (decrease) in cash and cash equivalents and restricted cash

 

14

 

 

(151

)

Cash and cash equivalents and restricted cash at beginning of period

 

18

 

 

201

 

Cash and cash equivalents and restricted cash at end of period

$

32

 

$

50

 

 
 
(a) Amounts reflect continuing and discontinued operations unless otherwise noted.
(b) Increase to properties and equipment

$

(1,030

)

$

(1,074

)

Changes in related accounts payable and accounts receivable

 

(60

)

 

61

 

Capital expenditures

$

(1,090

)

$

(1,013

)

 

 

MEDIA CONTACT:
Kelly Swan
(539) 573-4944

INVESTOR CONTACT:
David Sullivan
(539) 573-9360


Source: Business Wire (October 30, 2019 - 4:15 PM EDT)

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