EnerCom Conference - WPX Energy
August 19, 2014
EnerCom Conference Rick Muncrief President & CEO, WPX Energy
WPX Portfolio Today Piceance
Williston
San Juan
Appalachia
Powder River
Apco1
3,019 Bcfe Proved 11,878 Bcfe 3P 221,186 Net Acres
105 MMboe Proved 176 MMboe 3P 88,6973 Net Acres
517 Bcfe Proved 1,645 Bcfe 3P 160,825 Net Acres
328 Bcfe Proved 1,555 Bcfe 3P 87,994 Net Acres
245 Bcfe Proved 657 Bcfe 3P 360,002 Net Acres
22 MMboe Proved 58 MMboe 3P 385,796 Net Acres
Total 2Domestic
WILLISTON BASIN
4,905 Bcfe Proved 17,211 Bcfe 3P 1,562,596 Net Acres3
POWDER RIVER BASIN
APPALACHIAN BASIN
PICEANCE BASIN
SAN JUAN BASIN
Natural Gas
ARGENTINA
Oil Natural Gas and Natural Gas Liquids Note: Acreage, proved and 3P numbers are as of 12/31/13. 1 Reflects WPX’s 69% ownership in APCO, as well as additional acreage 2 Total includes other reserves and acreage not depicted on slide. 3
owned by WPX.
Includes mineral interest acreage
The Oil & Gas Conference | August 19, 2014
2
Industry Recognition and Awards
40+
Awards
Innovation
Excellence
Involvement
Colorado Oil and Gas Drilling Innovation Award
Oil and Gas Investor Best Discovery Award
Community Involvement Award
The Oil & Gas Conference | August 19, 2014
3
2nd Quarter Highlights Domestic oil production up 57% 2Q ’14 vs. 2Q ’13 ►
Domestic oil production grew 23% 2Q ’14 vs. 1Q ’14
Adjusted EBITDAX increased 40% 2Q ’14 vs. 2Q ’13 ►
Domestic oil revenue grew 60% quarter over quarter
Adding nearly 200 locations in the Williston ►
Premium location adds in the highest quality rock in the play
Increasing San Juan Gallup spuds from 29 to 40 ►
~40% increase in spuds without increasing rig count
Increased full year oil production guidance by 10%
The Oil & Gas Conference | August 19, 2014
4
Piceance Basin
#1 Energy Producer in Colorado
More than 12,000 drillable locations
Excess infrastructure
Access to premium market
The Oil & Gas Conference | August 19, 2014
5
Piceance Operations Currently running 9 rigs 2nd quarter net production 691 MMcfe/d ► ► ►
Natural gas 584 MMcf/d NGL 15.8 Mbbl/d Oil 2.0 Mbbl/d
Lowest-cost operator ► ►
34% less D&C capital cost1 57% less operating lifting cost2
State-of-the-art water management system Successful Ryan Gulch 10-acre density Exploratory efforts in the Niobrara
¹Utilizing data from eight 2012 Rulison field non-op wells 2Utilizing
data from 215 Valley non-op wells – total well expense
The Oil & Gas Conference | August 19, 2014
6
Williston Basin
#1 Williston Producer in 1- and 2-year Cumulative Production
1
10 years of drillable inventory
Operating 5 rigs
6-million-pound stimulations
¹Based on NDIC data for Middle Bakken laterals (7,500’ - 12,000’ ) drilled on 1,280 spacing units put on 1st sales since January 2011. Peer group includes companies with at least 20 wells with 365 days of production and 10 wells with 730 days of production as of 6/30/2014. WPX acquired Williston properties December 2010. The Oil & Gas Conference | August 19, 2014
7
WPX is #1 in Middle Bakken Cumulative Production 1-Yr and 2-Yr Cumulative Production per Well1
Average 365-day cumulative production per well of 140.9 Mbo, 64% higher than the peer average
(Based on productive days) 250,000.00
200,000.00
WPX 2-Yr Cumulative Production per Well
Peer 2-Yr Cumulative Production per Well
WPX 1-Yr Cumulative Production per Well
Peer 1-Yr Cumulative Production per Well
Average 730-day cumulative production per well of 224.2 Mbo, 62% higher than the peer average
150,000.00
100,000.00
50,000.00
Peer 2-Yr Avg
SAMSON RESOURCES
OXY USA
MUREX PETROLEUM
PETRO-HUNT
HRC OPERATING
XTO ENERGY
ZENERGY
HUNT
OASIS
HESS
DENBURY ONSHORE
EOG RESOURCES
CONTINENTAL
NEWFIELD
MARATHON
SM ENERGY
QEP ENERGY
BURLINGTON
WHITING
SLAWSON
ZAVANNA
WPX
0.00
¹Based on NDIC data for Middle Bakken laterals (7,500’ - 12,000’ ) drilled on 1,280 spacing units put on 1st sales since January 2011. Peer group includes companies with at least 20 wells with 365 days of production and 10 wells with 730 days of production as of 6/30/2014. WPX acquired Williston properties December 2010.
Peer 1-Yr Avg
The Oil & Gas Conference | August 19, 2014
8
San Juan Basin
#1 Returns in the WPX Portfolio
Rapidly growing oil production
Diversified product mix
Over 30 years’ experience
The Oil & Gas Conference | August 19, 2014
9
San Juan Gallup 2014 Well Performance Exceeding 2013
Avg Gross Cumulative Oil Production (Mbbl)
70 60
13 Wells 15 Wells
50
~40% Increase from 2013 to 2014
40 30 20
2013 Spuds
10
2014 Spuds
0 0
100
200
300 Days
400
500
600
Improving oil production from 2013 to 2014 ► ►
Average gross cumulative oil production grew by ~40% First 140 days of production
The Oil & Gas Conference | August 19, 2014
10
Strategic Review Process Underway
►
Full-scale review of entire portfolio
►
Multi-year strategy
►
Measurable strategy
►
Strategy to be unveiled this fall
The Oil & Gas Conference | August 19, 2014
11
Historical Commodity Snapshot In recent years, oil and natural gas have been range bound ►
Since 2011, 81% of days were over $90/bbl; 87% of days were under $105 Since 2011, 81% of days were over $3/MBtu; 98% of days were under $5
$150.00
WTI $/bbl
$13.00
$11.00
$110.00
$9.00
$90.00
$7.00
$70.00
$5.00
$50.00
$3.00
$30.00
$1.00
Natural Gas $/MBtu
$130.00
Oil Gas
Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14
►
The Oil & Gas Conference | August 19, 2014
12
Western Prices Have Increased Relative to Eastern Locations
0.50
West Basis Strengthening1
East Basis Weakening2 $0.33
0.00
$ per MMBtu
($0.18)
($0.14)
($0.21)
-0.50
-1.00 ($1.02)
-1.50 ($1.74) -2.00 2007 to 2010
2011 to Now
3 Yr Fwd
3
2007 to 2010
2011 to Now
3 Yr Fwd
3
1
Northwest Wyoming /Rocky Mountain basis Dominion South basis 3 3-year average strip price as of 8/11/2014 2
The Oil & Gas Conference | August 19, 2014
13
Shifting to Pure Play E&P Mindset
“We are building one culture, one organization, one mission.”
More Nimble
View Asset Base in New Way
Focus on Profitability
Greater Risk Tolerance
The Oil & Gas Conference | August 19, 2014
14
WPX Long-Term Vision Coming Into Focus
Company Strategy
Integrity
Scalability
Identity
The Oil & Gas Conference | August 19, 2014
15
The Oil & Gas Conference | August 19, 2014
16
EnerCom Conference Rick Muncrief President & CEO, WPX Energy
WPX Portfolio Today Piceance
Williston
San Juan
Appalachia
Powder River
Apco1
3,019 Bcfe Proved 11,878 Bcfe 3P 221,186 Net Acres
105 MMboe Proved 176 MMboe 3P 88,6973 Net Acres
517 Bcfe Proved 1,645 Bcfe 3P 160,825 Net Acres
328 Bcfe Proved 1,555 Bcfe 3P 87,994 Net Acres
245 Bcfe Proved 657 Bcfe 3P 360,002 Net Acres
22 MMboe Proved 58 MMboe 3P 385,796 Net Acres
Total 2Domestic
WILLISTON BASIN
4,905 Bcfe Proved 17,211 Bcfe 3P 1,562,596 Net Acres3
POWDER RIVER BASIN
APPALACHIAN BASIN
PICEANCE BASIN
SAN JUAN BASIN
Natural Gas
ARGENTINA
Oil Natural Gas and Natural Gas Liquids Note: Acreage, proved and 3P numbers are as of 12/31/13. 1 Reflects WPX’s 69% ownership in APCO, as well as additional acreage 2 Total includes other reserves and acreage not depicted on slide. 3
owned by WPX.
Includes mineral interest acreage
The Oil & Gas Conference | August 19, 2014
2
Industry Recognition and Awards
40+
Awards
Innovation
Excellence
Involvement
Colorado Oil and Gas Drilling Innovation Award
Oil and Gas Investor Best Discovery Award
Community Involvement Award
The Oil & Gas Conference | August 19, 2014
3
2nd Quarter Highlights Domestic oil production up 57% 2Q ’14 vs. 2Q ’13 ►
Domestic oil production grew 23% 2Q ’14 vs. 1Q ’14
Adjusted EBITDAX increased 40% 2Q ’14 vs. 2Q ’13 ►
Domestic oil revenue grew 60% quarter over quarter
Adding nearly 200 locations in the Williston ►
Premium location adds in the highest quality rock in the play
Increasing San Juan Gallup spuds from 29 to 40 ►
~40% increase in spuds without increasing rig count
Increased full year oil production guidance by 10%
The Oil & Gas Conference | August 19, 2014
4
Piceance Basin
#1 Energy Producer in Colorado
More than 12,000 drillable locations
Excess infrastructure
Access to premium market
The Oil & Gas Conference | August 19, 2014
5
Piceance Operations Currently running 9 rigs 2nd quarter net production 691 MMcfe/d ► ► ►
Natural gas 584 MMcf/d NGL 15.8 Mbbl/d Oil 2.0 Mbbl/d
Lowest-cost operator ► ►
34% less D&C capital cost1 57% less operating lifting cost2
State-of-the-art water management system Successful Ryan Gulch 10-acre density Exploratory efforts in the Niobrara
¹Utilizing data from eight 2012 Rulison field non-op wells 2Utilizing
data from 215 Valley non-op wells – total well expense
The Oil & Gas Conference | August 19, 2014
6
Williston Basin
#1 Williston Producer in 1- and 2-year Cumulative Production
1
10 years of drillable inventory
Operating 5 rigs
6-million-pound stimulations
¹Based on NDIC data for Middle Bakken laterals (7,500’ - 12,000’ ) drilled on 1,280 spacing units put on 1st sales since January 2011. Peer group includes companies with at least 20 wells with 365 days of production and 10 wells with 730 days of production as of 6/30/2014. WPX acquired Williston properties December 2010. The Oil & Gas Conference | August 19, 2014
7
WPX is #1 in Middle Bakken Cumulative Production 1-Yr and 2-Yr Cumulative Production per Well1
Average 365-day cumulative production per well of 140.9 Mbo, 64% higher than the peer average
(Based on productive days) 250,000.00
200,000.00
WPX 2-Yr Cumulative Production per Well
Peer 2-Yr Cumulative Production per Well
WPX 1-Yr Cumulative Production per Well
Peer 1-Yr Cumulative Production per Well
Average 730-day cumulative production per well of 224.2 Mbo, 62% higher than the peer average
150,000.00
100,000.00
50,000.00
Peer 2-Yr Avg
SAMSON RESOURCES
OXY USA
MUREX PETROLEUM
PETRO-HUNT
HRC OPERATING
XTO ENERGY
ZENERGY
HUNT
OASIS
HESS
DENBURY ONSHORE
EOG RESOURCES
CONTINENTAL
NEWFIELD
MARATHON
SM ENERGY
QEP ENERGY
BURLINGTON
WHITING
SLAWSON
ZAVANNA
WPX
0.00
¹Based on NDIC data for Middle Bakken laterals (7,500’ - 12,000’ ) drilled on 1,280 spacing units put on 1st sales since January 2011. Peer group includes companies with at least 20 wells with 365 days of production and 10 wells with 730 days of production as of 6/30/2014. WPX acquired Williston properties December 2010.
Peer 1-Yr Avg
The Oil & Gas Conference | August 19, 2014
8
San Juan Basin
#1 Returns in the WPX Portfolio
Rapidly growing oil production
Diversified product mix
Over 30 years’ experience
The Oil & Gas Conference | August 19, 2014
9
San Juan Gallup 2014 Well Performance Exceeding 2013
Avg Gross Cumulative Oil Production (Mbbl)
70 60
13 Wells 15 Wells
50
~40% Increase from 2013 to 2014
40 30 20
2013 Spuds
10
2014 Spuds
0 0
100
200
300 Days
400
500
600
Improving oil production from 2013 to 2014 ► ►
Average gross cumulative oil production grew by ~40% First 140 days of production
The Oil & Gas Conference | August 19, 2014
10
Strategic Review Process Underway
►
Full-scale review of entire portfolio
►
Multi-year strategy
►
Measurable strategy
►
Strategy to be unveiled this fall
The Oil & Gas Conference | August 19, 2014
11
Historical Commodity Snapshot In recent years, oil and natural gas have been range bound ►
Since 2011, 81% of days were over $90/bbl; 87% of days were under $105 Since 2011, 81% of days were over $3/MBtu; 98% of days were under $5
$150.00
WTI $/bbl
$13.00
$11.00
$110.00
$9.00
$90.00
$7.00
$70.00
$5.00
$50.00
$3.00
$30.00
$1.00
Natural Gas $/MBtu
$130.00
Oil Gas
Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14
►
The Oil & Gas Conference | August 19, 2014
12
Western Prices Have Increased Relative to Eastern Locations
0.50
West Basis Strengthening1
East Basis Weakening2 $0.33
0.00
$ per MMBtu
($0.18)
($0.14)
($0.21)
-0.50
-1.00 ($1.02)
-1.50 ($1.74) -2.00 2007 to 2010
2011 to Now
3 Yr Fwd
3
2007 to 2010
2011 to Now
3 Yr Fwd
3
1
Northwest Wyoming /Rocky Mountain basis Dominion South basis 3 3-year average strip price as of 8/11/2014 2
The Oil & Gas Conference | August 19, 2014
13
Shifting to Pure Play E&P Mindset
“We are building one culture, one organization, one mission.”
More Nimble
View Asset Base in New Way
Focus on Profitability
Greater Risk Tolerance
The Oil & Gas Conference | August 19, 2014
14
WPX Long-Term Vision Coming Into Focus
Company Strategy
Integrity
Scalability
Identity
The Oil & Gas Conference | August 19, 2014
15
The Oil & Gas Conference | August 19, 2014
16
