barclays global ceo -energy power conference · 2017-09-05 · rick muncrief, chairman & ceo...
TRANSCRIPT
Rick Muncrief, Chairman & CEOSeptember 6th, 2017
Barclays Global CEO-Energy Power Conference
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2017- Continuing to Execute
Increasing 2017 annual oil growth guidance from 30% to 40%
3rd Bone Spring well 30-day average 1,647 Boe/d (50% oil)
Williston: Estatis 6-well pad 30-day cumulative oil of ~258,000 barrels
OPERATIONAL TRANSACTIONAL
Announced Permian Midstream JV agreement which includes upfront cash and capital carry
Signed Delaware Basin oil pipeline JV which includes capacity and minority interest
Began process to market legacy San Juan natural gas assets3
1 Lindsay well 10-15-19H upper Wolfcamp A 2 Lindsay well 10-15-18H lower Wolfcamp A3 Includes both operated and non-operated assets
Upper Wolfcamp A 24-HR IP: 4,067 Boe/d (56% oil) 3,180 psi FCP1
Lower Wolfcamp A 24-HR IP: 3,712 Boe/d (59% oil) 2,990 psi FCP2
WPX 2018 Strategic Goals
FREE CASH FLOWNEUTRAL BY YE 2018
35%-45% GROWTHWITH FLAT RIG COUNT IN 20182
$300-$400MM IN NON-CORE ASSET SALES BY YE 20181
BELOW 2.5XNET DEBT/EBITDAX BY YE 2018
1 Includes San Juan legacy operated and non-operated natural gas assets2 2018 year-over-year oil growth. 3
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Large Inventory with Commodity Optionality
PORTFOLIOOF OPTIONS
HIGHOIL MIX
BALANCED COMMODITY MIX
HIGHGAS MIX2
Commodity Mix >60% OIL 40%-59% OIL >60% GAS
# of Locations 3,150+ 3,350+ 800+
# of Rig Years ~185 ~225 ~50
1 Based on strip pricing 8/31/20172 Does not include San Juan Legacy or Taylor Ranch locations
Rig year assumptions: SJG- 40 wells/rig Williston- 22 wells/rig Delaware- 15 wells/rig
TOTAL NET RESOURCE POTENTIAL: 5.4++BBOE2
MULTI-DECADE DEVELOPMENT
>7,300POTENTIAL GROSS LOCATIONS IN
DELAWARE, WILLISTON & SAN JUAN GALLUP
WILLISTON
SAN JUAN GALLUP
DELAWARE
2018 AVERAGE WELL RETURNS 50%+1
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WPX: Current Commodity Mix and Inventory Depth
1 Based on 2Q’17 production2 Does not include San Juan Legacy or Taylor Ranch locations
40%
49%
11%
55%32%
13%
CURRENT COMMODITY MIX1
CURRENT COMMODITY MIX1
GROSSLOCATIONS
7,300+2
~460RIG YEARS2
Rig year assumptions: SJG- 40 wells/rig Williston- 22 wells/rig Delaware- 15 wells/rig
HIGH OIL MIX
BALANCED MIXHIGH GAS MIX
HIGH OIL MIX
BALANCED MIXHIGH GAS MIX
OIL
NGLSGAS
43%
46%
11%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 2016 2017E
Oil NGLs Gas
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Shift to a More Balanced Commodity Mix
16,200 BPD2013 OIL OUTPUT1
58,500 BPD2017 EST. OIL OUTPUT38%
OIL VOLUMES GROWTH CAGR
1 Excludes international production
COM
MO
DITY
MIX
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Staying Ahead in Securing Infrastructure in the Delaware
GATHERING REGIONAL END MARKET
NGL
GASGAS PROCESSING FACILITY AND
GAS GATHERING SYSTEMSIGNED AGREEMENT WITH
WHITEWATER TO WAHA WITH OWNERSHIP STAKE
SIGNED AGREEMENT TO GULF COAST
OIL SIGNED AGREEMENT TO GULF COAST
CRUDE GATHERING SYSTEM SIGNED CRUDE TAKEAWAY AGREEMENT WITH ORYX WITH
OWNERSHIP STAKE
DIRECT CONNECT TO PLANT UNDERWAY
DIRECT CONNECT TO LONG-HAUL PIPELINE
AMPLE CAPACITY TO GULF COAST FRACTIONATION
1 Does not include Taylor Ranch locations2 Includes non-op and operated locations
Delaware Overview
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Drilled 8 zones YTD
Validated 330’ spacing in Stateline U/L Wolfcamp A
Drilled first 3rd Bone Spring well
Tested 4,000 lbs/ft completion in Wolfcamp D
Upper Wolfcamp A 24-HR IP: 4,067 Boe/d (56% oil)
3,180 psi FCP4
Lower Wolfcamp A 24-HR IP: 3,712 Boe/d (59% oil)
2,990 psi FCP5
Moving to long laterals
DELAWARE BASIN~135,000 net acres
6,400+ gross locations1,2
50% oil/20% NGLS/30% gas3
CULBERSON
LEA
EDDY
WARDREEVES
LOVING
PECOS
WINKLER
CHAVES
WPX OPERATED ACREAGE
NON-OP ACREAGE
N E W M E X I C OT E X A S
OPERATIONAL UPDATE
3 Based on 2Q 2017 production
4 Lindsay well 10-15-19H upper Wolfcamp A 5 Lindsay well 10-15-18H lower Wolfcamp A
WILLIAMS
MOUNTRAIL
MCKENZIE
DUNN
MCLEAN
MERCER
DIVIDE BURKE
Williston Overview
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2017 average wells outperforming type cure
Continuing to test new completion designs
Testing more proppant, tighter spacing, # of stages
WILLISTON BASIN~85,000 net acres
~570 gross locations87% oil/7% NGLS/6% gas1
0
50
100
150
200
250
0 30 60 90 120 150 180
Behr (3) Caribou (3) Grizzly (3) Beaks (3)
Wolf Chief (2) Etstatis (6) Lucy Evans (3) 850 Type Curve
2017 WELL PERFORMANCEAVERAGE BY PAD
DAYS ON PRODUCTION
CUM
MBO
E
OPERATIONAL UPDATE
WPX OPERATED ACREAGE
NON-OP ACREAGE
1 Based on 2Q 2017 production
1 Includes non-op and operated locations2 Based on 2Q 2017 full-basin production
San Juan Overview
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Setting new drilling records
Facilities construction completed through early 2018
West Lybrook wells outperforming type curve
0
10
20
30
40
50
60
70
80
90
100
0 20 40 60 80 100 120
SAN JUAN BASIN235,000 net acres
~4,635 gross locations1
30% oil/12% NGLS/58% gas2
LA PLATA
RIO ARRIBASAN JUAN
ARCHULETA
C O L O R A D O
N E W M E X I C O
SANDOVAL
OIL WINDOW~105,000 acres~3351 locations
GAS WINDOW1
~130,000 acres~4,300 locations
CUM
OIL
MBB
LS
DAYS ON PRODUCTION
2Q WELL RESULTSADJUSTED FOR LATERAL LENGTH (7,500’)
OPERATIONAL UPDATE
WPX OPERATED ACREAGE
NON-OP ACREAGE
0%
20%
40%
60%
80%
100%
Oil Natural Gas
WPX Liquidity, Hedges and Debt Maturities
Cash and Equivalents @ (6/30/2017) $8
Revolver Capacity $1,109
Liquidity $1,117
Senior Debt Maturities
Senior Notes Senior Notes Senior NotesSenior Notes
$50.26
% o
f Pro
duct
ion
Hedg
ed $3.93
1 Based on midpoint of guidance2 Hedge position July-December 2017
20171,2
STRONG HEDGE POSITION CREATES CERTAINTY FOR DRILLING PROGRAM
Oil: 55,500 bbl/d Hedged► $52.69 per barrel
Gas: 185,000 mmbtu/d► $2.98 per MMBtu
Oil: 50,750 bbl/d Hedged► $50.26 per barrel
Gas: 170,000 mmbtu/d► $3.02 per MMBtu
2018
2017
Liquidity
Dollars listed in millions
STRONG LIQUIDITY
$3.02
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$350
$1,100
$500 $650
$0
$200
$400
$600
$800
$1,000
$1,200
2017 2018 2019 2020 2021 2022 2023 2024
$ M
M
Expect at least $300MM in proceeds at closing of the joint venture with Howard Energy Partners
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WPX Strategic Focus
► Operational Execution
► Financial Discipline
► Value-Driven Growth
DisclaimerThe 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 futureperformance and, accordingly, recipients are expressly cautioned not to put undue reliance on forward-looking statements or information due to the inherent uncertainty therein.
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Reserves DisclaimerThe 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.
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WPX Non-GAAP DisclaimerThis 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.
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