1Q'2016 Earnings Call
Capital One Securities 11th Annual Energy Conference December 7, 2016
Executing on Long-Term Strategy
WILLISTON SAN JUAN DELAWARE
Deep Inventory of High Returns Free cashflow positive by YE18
Avg. well payout period 18-24 months
Financial Flexibility Strong hedge book through 2018
Net debt to EBITDAX below 2.5x YE 2018
Increasing Activity Oil/EBITDAX CAGR 20%-35% through 2020
Funded with cash on-hand and CFFO
2
WPX Liquidity, Hedges and Debt Maturities Cash and Equivalents @ (9/30/16)
$623
Undrawn Revolver
1,025
2017 Note Balance @ (9/30/16)
(125)
Pro Forma Liquidity
$1,523
STRONG HEDGE POSITION CREATES CERTAINITY FOR DRILLING$3.93 PROGRAM
100% 80%
$3.02
$50.93
60% 40% 20%
Dollars listed in millions
0%
2017
Oil Oil: 39,554 bbl/d Hedged ► $50.93 per barrel Gas: 170,000 mmbtu/d ► $3.02 per MMBtu
20171
2018
Pro-Forma Liquidity
% of Production Hedged
STRONG LIQUIDITY
Natural Gas Oil: 30,000 bbl/d Hedged ► $54.61 per barrel Gas: 125,000 mmbtu/d ► $2.95 per MMBtu
Pro-Forma Debt Maturities $1,200 $1,000
$MM
$800 $600 $400
Expect $1.2B OF SALES PROCEEDS IN 1H OF 2016
$1,485 UNDRAWN
$1,100 $500
$200
$500
$500
2022
2023
2024
Senior Notes
Senior Notes
Senior Notes
$0 2016
2017
2018
2019
2020 Senior Notes
1 Based
on midpoint of guidance.
2021
3
Poised for Rapid Sustainable Growth ASSET QUALITY SUPPORTS RAPID 160 140
OIL GROWTH
ASSET QUALITY SUPPORTS RAPID
FORECAST AT HIGH-END OF PREVIOUS RANGE
$1,800
CAGR: 35%
$1,600
HIGH CASE
CAGR: 20% OIL MBBL/D
120
$1,400
LOW CASE
EBITDAX GROWTH
FORECAST AT HIGH-END OF PREVIOUS RANGE CAGR: 35% HIGH CASE
CAGR: 20% LOW CASE
$1,200
100
$1,000 80 $800 60
$600
40
$400
20
$200
0 2014
2015
2016
2017
UPDATED FORECAST
2018
2019
LOW CASE
$0
2020
2015
HIGH CASE
2016
2017
UPDATED FORECAST
2018 LOW CASE
2019
2020
HIGH CASE
Forecast at High-End of Previous Range ► ►
25% oil growth in 2017 50% oil growth in 2018
► ►
Free cashflow positive by year-end 2018 Assumes modest 1-3 rig additions per year
Assumes 2017 WTI $50Bbl /NYMEX $2.75Mcf and 2018-2020 WTI $55Bbl /NYMEX $3.00 Mcf. Note: Prior years adjusted to remove Piceance
4
Overview of WPX’s World-Class Delaware Position BELL CANYON
100,000+ TOTAL NET ACRES, ~60,000 NET ACRES NEAR STATELINE1
WOLFCAMP
CHERRY CANYON
BRUSHY CANYON
2.4+ BBOE NET RESOURCE POTENTIAL AND 5,500 GROSS LOCATIONS2
9,000’
DELAWARE SANDS
OWNED/OPERATED MIDSTREAM INFRASTRUCTURE
AVALON
BONE SPRING
COMMODITY MIX3 56% OIL, 28% NATURAL GAS, 16% NGLS
AVALON FIRST BONE SPRING SECOND BONE SPRING THIRD BONE SPRING
WOLFCAMP X/Y WOLFCAMP A WPX OPERATED ACREAGE
NON-OPERATED ACREAGE
WOLFCAMP B WOLFCAMP C WOLFCAMP D
Includes ~1,000 acres in Midland Basin non-op and operated locations 3 Based on YTD Production 1
2 Includes
Hydrocarbon Pay Indication
5
Delaware Basin: Exciting Future Catalysts
350 FT
660’
LOWER WOLFCAMP A WOLFCAMP B
1 MILE
7,000 GAS RATE (MMCFD)- 5,931 FCP (PSI)- 3,800 1,000
OIL RATE (BOPD)- 676
Upper/Lower Wolfcamp A spacing test underway
1 Based
on 2-stream production
►
INCREASE IN AVG. LATERAL LENGTH
6,000 5,000 4,000 3,000 2,000 1,000 0
100
0
30
Oil
►
~56%
Wolfcamp D: East Pecos 22-14H1 Avg. Lateral Length (ft.)
UPPER WOLFCAMP A
OIL RATE (BOPD), GAS RATE (MMCFD), FCP (PSI)
WOLFCAMP X/Y
330’
IMPROVING
DEVELOPING
TESTING
60 90 Days Online Gas
120
2015
150
2016
2017E
Flowing Casing Pressure
Strong initial results from Wolfcamp D and 1st X/Y wells
►
Longer laterals, higher EURS and lower costs
6
Williston Basin: Strong, Consistent Results
70%+
GETTING BACK TO WORK ►
Added
►
Set new drilling record of 11.9 days1
►
Resumed completion of DUCS end of 3Q ►
►
2nd
rig in October
RETURNS6
BASIN OVERVIEW ► 85,000 net acres ► 575+ gross drilling locations4 ► 85% oil5
Current inventory of 13 DUCS
Current total well cost $5.5MM
24-hr IP2 Well
BOPD
MCFD
WI3
NRI
PETERSON 6-5-4HC
1,756
994
67.9%
50.9%
PETERSON 6-5-4HQ
1,925
687
67.9%
50.9%
PETERSON 6-5-4HZL
1,648
939
63.5%
47.6%
OLIVE MAE 7-8-9HA
1,864
991
95.8%
71.8%
PETERSON 6-5-4HD
1,957
974
67.9%
50.9%
OWL COMES OUT 8-9HC
1,673
775
62.0%
46.5%
WELLS 32-29HY
2,248
1,295
100.0%
78.9%
WELLS 32-29HD
2,552
2,472
100.0%
78.9%
WELLS 32-29HZ
2,506
1,907
100.0%
78.9%
ND
1 Spud
to rig release for a 2-mile lateral Does not include NGLs 3 Includes current non-consent interest 4 Includes non-op locations 5 Based off YTD production 6 Strip pricing as of October 26, 2016. Excludes G&A, acquisition land costs, and interest expense. Assumes vision. 2
7
San Juan Basin: Growing Catalyst with Year-over-Year Improvement CONTINUING TO RAISE THE BAR Driving better well performance
►
Strong performance on 6-well pad ► ► ► ►
6-well pad peak rate: 8,571 BOE/D (70% oil) Average 60-day rate: 1,013 BOE/D per well Average lateral length: 7,250 ft. Average D&C cost: ~$4.1MM
~140%
200 Cum Production MBOE
►
YoY Improving Well Performance1
250
INCREASE IN EUR SINCE 2013
~65%
150
INCREASE IN EUR SINCE 2015
100
50
0 0
Adding rig late December 2016 ►
Focus on West Lybrook unit
RETURNS2
BASIN OVERVIEW ►
~226,000 net acres ► ►
►
~3,900 total gross locations4 ► ►
12013-2015
Oil window: ~96,000 acres3 Gas window: ~130,000 acres ~4005
Oil window: Gas window: ~3,5004
90
120
150
180
210
240
270
300
330
360
120 100 80 60 40 20 0
based on 1-mile laterals, 2016 based on average of 7,200’ laterals Strip pricing as of October 26, 2016. Excludes G&A, acquisition land costs, and interest expense 3Acreage owned or controlled by WPX 4 Includes non-op and operated locations 5Assumes 4,600' laterals 2
60
2016 San Juan Gallup Wells
140
70%+
30
Days of Production
Cum Production MBOE
►
0
20 CURRENT 650 MBOE
40
60
80
Days of Production 6-WELL 2016 GUIDANCE PAD 465 MBOE
100 2016 GALLUP WELLS
120
8
Foundation in Place for Enhancing and Accelerating Value
►
VA LU E - D R I V E N WILLISTON BASIN
►
►
ST RO N G A S S E T S B I A S FO R AC T I O N
SAN JUAN BASIN HEADQUARTERS: TULSA DELAWARE BASIN
►
O P E R AT I O N A L FO C U S
9
Executing on Long-Term Strategy
WILLISTON SAN JUAN DELAWARE
Deep Inventory of High Returns Free cashflow positive by YE18
Avg. well payout period 18-24 months
Financial Flexibility Strong hedge book through 2018
Net debt to EBITDAX below 2.5x YE 2018
Increasing Activity Oil/EBITDAX CAGR 20%-35% through 2020
Funded with cash on-hand and CFFO
2
WPX Liquidity, Hedges and Debt Maturities Cash and Equivalents @ (9/30/16)
$623
Undrawn Revolver
1,025
2017 Note Balance @ (9/30/16)
(125)
Pro Forma Liquidity
$1,523
STRONG HEDGE POSITION CREATES CERTAINITY FOR DRILLING$3.93 PROGRAM
100% 80%
$3.02
$50.93
60% 40% 20%
Dollars listed in millions
0%
2017
Oil Oil: 39,554 bbl/d Hedged ► $50.93 per barrel Gas: 170,000 mmbtu/d ► $3.02 per MMBtu
20171
2018
Pro-Forma Liquidity
% of Production Hedged
STRONG LIQUIDITY
Natural Gas Oil: 30,000 bbl/d Hedged ► $54.61 per barrel Gas: 125,000 mmbtu/d ► $2.95 per MMBtu
Pro-Forma Debt Maturities $1,200 $1,000
$MM
$800 $600 $400
Expect $1.2B OF SALES PROCEEDS IN 1H OF 2016
$1,485 UNDRAWN
$1,100 $500
$200
$500
$500
2022
2023
2024
Senior Notes
Senior Notes
Senior Notes
$0 2016
2017
2018
2019
2020 Senior Notes
1 Based
on midpoint of guidance.
2021
3
Poised for Rapid Sustainable Growth ASSET QUALITY SUPPORTS RAPID 160 140
OIL GROWTH
ASSET QUALITY SUPPORTS RAPID
FORECAST AT HIGH-END OF PREVIOUS RANGE
$1,800
CAGR: 35%
$1,600
HIGH CASE
CAGR: 20% OIL MBBL/D
120
$1,400
LOW CASE
EBITDAX GROWTH
FORECAST AT HIGH-END OF PREVIOUS RANGE CAGR: 35% HIGH CASE
CAGR: 20% LOW CASE
$1,200
100
$1,000 80 $800 60
$600
40
$400
20
$200
0 2014
2015
2016
2017
UPDATED FORECAST
2018
2019
LOW CASE
$0
2020
2015
HIGH CASE
2016
2017
UPDATED FORECAST
2018 LOW CASE
2019
2020
HIGH CASE
Forecast at High-End of Previous Range ► ►
25% oil growth in 2017 50% oil growth in 2018
► ►
Free cashflow positive by year-end 2018 Assumes modest 1-3 rig additions per year
Assumes 2017 WTI $50Bbl /NYMEX $2.75Mcf and 2018-2020 WTI $55Bbl /NYMEX $3.00 Mcf. Note: Prior years adjusted to remove Piceance
4
Overview of WPX’s World-Class Delaware Position BELL CANYON
100,000+ TOTAL NET ACRES, ~60,000 NET ACRES NEAR STATELINE1
WOLFCAMP
CHERRY CANYON
BRUSHY CANYON
2.4+ BBOE NET RESOURCE POTENTIAL AND 5,500 GROSS LOCATIONS2
9,000’
DELAWARE SANDS
OWNED/OPERATED MIDSTREAM INFRASTRUCTURE
AVALON
BONE SPRING
COMMODITY MIX3 56% OIL, 28% NATURAL GAS, 16% NGLS
AVALON FIRST BONE SPRING SECOND BONE SPRING THIRD BONE SPRING
WOLFCAMP X/Y WOLFCAMP A WPX OPERATED ACREAGE
NON-OPERATED ACREAGE
WOLFCAMP B WOLFCAMP C WOLFCAMP D
Includes ~1,000 acres in Midland Basin non-op and operated locations 3 Based on YTD Production 1
2 Includes
Hydrocarbon Pay Indication
5
Delaware Basin: Exciting Future Catalysts
350 FT
660’
LOWER WOLFCAMP A WOLFCAMP B
1 MILE
7,000 GAS RATE (MMCFD)- 5,931 FCP (PSI)- 3,800 1,000
OIL RATE (BOPD)- 676
Upper/Lower Wolfcamp A spacing test underway
1 Based
on 2-stream production
►
INCREASE IN AVG. LATERAL LENGTH
6,000 5,000 4,000 3,000 2,000 1,000 0
100
0
30
Oil
►
~56%
Wolfcamp D: East Pecos 22-14H1 Avg. Lateral Length (ft.)
UPPER WOLFCAMP A
OIL RATE (BOPD), GAS RATE (MMCFD), FCP (PSI)
WOLFCAMP X/Y
330’
IMPROVING
DEVELOPING
TESTING
60 90 Days Online Gas
120
2015
150
2016
2017E
Flowing Casing Pressure
Strong initial results from Wolfcamp D and 1st X/Y wells
►
Longer laterals, higher EURS and lower costs
6
Williston Basin: Strong, Consistent Results
70%+
GETTING BACK TO WORK ►
Added
►
Set new drilling record of 11.9 days1
►
Resumed completion of DUCS end of 3Q ►
►
2nd
rig in October
RETURNS6
BASIN OVERVIEW ► 85,000 net acres ► 575+ gross drilling locations4 ► 85% oil5
Current inventory of 13 DUCS
Current total well cost $5.5MM
24-hr IP2 Well
BOPD
MCFD
WI3
NRI
PETERSON 6-5-4HC
1,756
994
67.9%
50.9%
PETERSON 6-5-4HQ
1,925
687
67.9%
50.9%
PETERSON 6-5-4HZL
1,648
939
63.5%
47.6%
OLIVE MAE 7-8-9HA
1,864
991
95.8%
71.8%
PETERSON 6-5-4HD
1,957
974
67.9%
50.9%
OWL COMES OUT 8-9HC
1,673
775
62.0%
46.5%
WELLS 32-29HY
2,248
1,295
100.0%
78.9%
WELLS 32-29HD
2,552
2,472
100.0%
78.9%
WELLS 32-29HZ
2,506
1,907
100.0%
78.9%
ND
1 Spud
to rig release for a 2-mile lateral Does not include NGLs 3 Includes current non-consent interest 4 Includes non-op locations 5 Based off YTD production 6 Strip pricing as of October 26, 2016. Excludes G&A, acquisition land costs, and interest expense. Assumes vision. 2
7
San Juan Basin: Growing Catalyst with Year-over-Year Improvement CONTINUING TO RAISE THE BAR Driving better well performance
►
Strong performance on 6-well pad ► ► ► ►
6-well pad peak rate: 8,571 BOE/D (70% oil) Average 60-day rate: 1,013 BOE/D per well Average lateral length: 7,250 ft. Average D&C cost: ~$4.1MM
~140%
200 Cum Production MBOE
►
YoY Improving Well Performance1
250
INCREASE IN EUR SINCE 2013
~65%
150
INCREASE IN EUR SINCE 2015
100
50
0 0
Adding rig late December 2016 ►
Focus on West Lybrook unit
RETURNS2
BASIN OVERVIEW ►
~226,000 net acres ► ►
►
~3,900 total gross locations4 ► ►
12013-2015
Oil window: ~96,000 acres3 Gas window: ~130,000 acres ~4005
Oil window: Gas window: ~3,5004
90
120
150
180
210
240
270
300
330
360
120 100 80 60 40 20 0
based on 1-mile laterals, 2016 based on average of 7,200’ laterals Strip pricing as of October 26, 2016. Excludes G&A, acquisition land costs, and interest expense 3Acreage owned or controlled by WPX 4 Includes non-op and operated locations 5Assumes 4,600' laterals 2
60
2016 San Juan Gallup Wells
140
70%+
30
Days of Production
Cum Production MBOE
►
0
20 CURRENT 650 MBOE
40
60
80
Days of Production 6-WELL 2016 GUIDANCE PAD 465 MBOE
100 2016 GALLUP WELLS
120
8
Foundation in Place for Enhancing and Accelerating Value
►
VA LU E - D R I V E N WILLISTON BASIN
►
►
ST RO N G A S S E T S B I A S FO R AC T I O N
SAN JUAN BASIN HEADQUARTERS: TULSA DELAWARE BASIN
►
O P E R AT I O N A L FO C U S
9
