Scotia Howard Weil 2017 Energy Conference. Rick Muncrief, Chairman & CEO March 27, 2017

Transcription

1 Scotia Howard Weil 2017 Energy Conference Rick Muncrief, Chairman & CEO March 27, 2017

2 WPX s Portfolio PRODUCT MIX DELAWARE WELL ECONOMICS Flat $54.09 Oil and $2.91 Gas 1 16% NGL 30% GAS DELAWARE LONG LATERALS 3 100%+ WILLISTON 8% 9% NGL GAS 54% OIL DELAWARE (WCA) WILLISTON SAN JUAN GALLUP 80%+ 70%+ ROR 2 83% OIL SAN JUAN GALLUP WILLISTON BASIN 22% NGL 31% GAS 47% OIL SAN JUAN BASIN HEADQUARTERS TULSA DELAWARE BASIN 1 3-year average strip price as of February 24, Excludes G&A, acquisition land costs, and interest expense. Assumes vision for Delaware and Williston 2

3 Expanding WPX s World-Class Delaware Position PANTHER ACQUISITION OVERVIEW Added 18,000+ acres in core of Delaware EDDY Total Delaware position: ~120,000 net acres 920 gross locations, including 150+ long lateral locations LEA Maintain Panther s current 2 rig program Valuation primarily supported on 3 zones with upside in 5 additional zones Closed mid-march NEW MEXICO TEXAS LOVING WINKLER BENEFITS HIGH QUALITY ROCK Multiple stacked pay intervals with significant upside CULBERSON WARD SELF-FUNDING DEVELOPMENT 2 rig program funded with operating cashflows REEVES DEEP INVENTORY OF CORE DELAWARE Resource supports sustained growth ACCRETIVE TO CASHFLOWS AND NAV Accretive to shareholders 2017 and beyond WPX OPERATED ACREAGE PANTHER ACREAGE PECOS 3

4 THICK Hydrocarbon Stack Across Entire Acreage Position A STATE LINE LOG B EAST TYPE LOG C CENTRAL TYPE LOG D SOUTH TYPE LOG EDDY LEA NEW MEXICO A LOVING B TEXAS WINKLER C WARD REEVES D WPX OPERATED ACREAGE ACQUIRED ACREAGE De-risked pay section across acreage with substantial UPSIDE DE-RISKED UPSIDE POTENTIAL 4

5 Strong Acreage Position in Core of Delaware Basin at Attractive Price Selected Southern Delaware Basin Transactions in 2H 2016 PDC/Kimmeridge 8/2016 RSPP/Silver Hill 10/2016 Purchase price: $1,500 mm Production, net: 7,000 boe/d (42% oil) ANDREWS Purchase price: $2,544mm Production, net: 15,000 boe/d (69% oil) Acreage: 57,000 Adj. $/acre: $22,018 EDDY Lea LEA Acreage: 41,000 Adj. $/acre: $47,415 Centennial/Silverback 11/2016 Callon/Ameredev 12/2016 (2) Purchase price: $855mm Purchase price: $615mm Production, net: 3,500 boe/d Production, net: 1,945 boe/d (71% oil) Acreage: 35,000 LOVING Acreage: 16,098 Adj. $/acre: $20,429 WINKLER Winkler Adj. $/acre: $32,228 Silver Run/Centennial 7/2016 Purchase price: $1,735 mm Production, net: 7,212 boe/d (82% oil) Acreage: 42,500 Adj. $/acre: $34,884 WARD Diamondback/Private operator 7/2016 Purchase price: $560mm Production, net: 1,000 boe/d (89% oil) Acreage: 19,180 Adj. $/acre: $26,721 (3) CULBERSON Oxy/J Cleo 10/2016 (1) Purchase price: $2,000mm Production, net: 7,000 boe/d (72% oil) Acreage: 35,000 Adj. $/acre: $39,571 REEVES PECOS Diamondback/Brigham 12/2016 Purchase price: $2,428mm Production, net: 9,482 boe/d (77% oil) Acreage: 76,319 Adj. $/acre: $24,224 (4) WPX ACREAGE ACQUIRED ACREAGE Attractive acquisition price of ~$28,500 (5) per undeveloped net acre compares favorably to recent Southern Delaware Basin acquisitions Source: Company filings, RS Energy Group, PLS, and 1Derrick. Selected transactions in 2H Excludes EOG/Yates. Note: 3Q values exclude PDP value of $35,000 Boe/d and 4Q values exclude PDP value of $40,000 Boe/d. (1) Adjusted $/acre excludes $235MM for EOR assets and $100mm for SWD infrastructure. (2) Excludes $18.4mm for gas gathering infrastructure and SWD wells/facilities. (3) Adjusted $/acre excludes $12.5mm for SWD infrastructure. (4) Purchase price adjusted for production at $40,000 Boe/d and mineral interest and midstream assets of ~$200 million. (5) Purchase price adjusted for production at $40,000 Boe/d. 5

6 WPX Liquidity, Hedges and Debt Maturities Liquidity Cash and (12/31/16) $496 Revolver Capacity $1,025 Letters of Credit <$66> Liquidity $1,450 Dollars listed in millions STRONG LIQUIDITY % of Production Hedged 100% 80% 60% 40% 20% 0% STRONG HEDGE POSITION CREATES CERTAINITY FOR DRILLING PROGRAM $3.93 $50.87 $3.02 Oil ,2 Natural Gas 2017 Oil: 39,428 bbl/d Hedged $50.87 per barrel Gas: 170,000 mmbtu/d $3.02 per MMBtu 2018 Oil: 40,000 bbl/d Hedged $54.57 per barrel Gas: 185,000 mmbtu/d $2.98 per MMBtu Debt Maturities $1,200 $MM $1,000 $800 $600 $400 $200 Expect $1.2B OF SALES PROCEEDS IN 1H OF 2016 $1,485 UNDRAWN $500 $1,100 $500 $500 $ Senior Notes Senior Notes Senior Notes Senior Notes 1 Based on midpoint of guidance 2 Hedge position March-December

7 Contracted Service Cost Mitigates Potential Inflation 2017 D&C COST BREAKDOWN Fluids/Cuttings/Solids Control Directional Equipment & Services Chemicals Other (Completions) Other (Drilling) Sand Stimulation Services Drilling Rigs Tubulars/Wellhead Cementing Material and Services Water of D&C costs are contracted through 2017 Majority of services exposed to inflation are contracted Focused on securing services since 2Q 2016 to prepare for activity ramp Some contracts go through 2018, others have options to extend past 2017 ~90% of D&C costs go through Supply Chain Mgmt. Contracts in Place for 2017 Services Exposed to Spot Market Note: D&C components based on latest blended AFE (Williston, San Juan, Delaware) 7

8 Delaware Basin: Delineation of the Wolfcamp XY C-STATE 16-1H IP 30: 1,635 BOE/D (65% OIL) 90 DAY CUM: 114,338 BOE LEA DELINEATING WOLFCAMP ACROSS POSITION EDDY E. PECOS FED COM 22-14H IP 30: 1,736 BOE/D (30% OIL) 90 DAY CUM: 139,336 BOE WOLFCAMP XY-PECOS STATE 46-6H Lateral length: ~4,800 ft Proppant (#/ft): ~1,750 Utilized diverter Hybrid completion design NEW MEXICO D LINDSAY 16-6H IP 30: 1,434 BOE/D (18% OIL) 90 DAY CUM: 119,047 BOE Tracking in-line with WCA 1,000 MBOE type curve after 45 days Engineered completions TEXAS D WOLFCAMP D-PECOS STATE 46-5H PECOS STATE 46-6H IP 30: 1,780 BOE/D (50% OIL) REEVES XY D LOVING PECOS STATE 46-5H IP 30: 1,628 BOE/D (22% OIL) Lateral length: ~4,850 ft Proppant (#/ft): ~2,750 Currently producing with 3,800 psi flowing tubing pressure (2-17) Utilized diverter Hybrid completion design Engineered completions CULBERSON WPX OPERATED ACREAGE PANTHER ACREAGE CBR SPACING TEST UNDERWAY PURPOSE OF TEST Validate 16 well U/L Wolfcamp A spacing Understand future infrastructure needs UPDATE ON CBR Expected first sales end of March 16 day record well spud-to-rig release 350 FT WOLFCAMP X/Y UPPER WOLFCAMP A LOWER WOLFCAMP A WOLFCAMP B Encouraging DFIT results Note: Well production data is on a 3-stream basis 1 MILE 8

9 Williston Basin: Strong, Consistent Results 39% oil growth 4Q 16 vs 3Q 16 4Q production 28.8 MBOE/d Set new drilling record of 11.7 days 1 WILLISTON HIGHLIGHTS Completed DUC inventory Current total well cost $5.5MM 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, DAYS CUM OIL PRODUCTION FOR 2016 NEW WELLS 2 WPX PEER 1 PEER 2 PEER 3 PEER 4 PEER 5 PEER 6 PEER 7 PEER 8 PEER 9 14 wells on 1 st sales during 4Q 6 Middle Bakken and 8 Three forks wells 180, , DAYS CUM OIL PRODUCTION FOR 2016 NEW WELLS 2 140, ,000 #1 PRODUCER ON CUMULATIVE OIL BASIS 90 DAYS/180 DAYS 2 100,000 80,000 60,000 40,000 20,000 - WPX PEER 1 PEER 2 PEER 3 PEER 4 PEER 5 PEER 6 PEER 7 PEER 8 PEER 9 1 Spud-to-rig release for a 2-mile lateral 2 Public data based on production from wells completed in 2016 Peers include AXA,BURLINGTON RESOURCES,EOG,ERF,HESS,LIBERTY RESOURCE,MRO,NFX,OAS,PETRO-HUNT,QEP,SM,STL,TPLM,WLL,XTO 9

10 San Juan Basin: Continued Strong Well Results CONTINUING TO RAISE THE BAR 21% oil growth 4Q 16 vs 3Q SAN JUAN GALLUP WELLS Set new basin record Drilled 1.5 mile lateral in 5.8 days Strong performance on 6-well pad Cumulative 180-day production: +1.0 MMBOE Average day: ~1,000 BOE/D per well (70% oil) Average lateral length: 7,250 ft. Average D&C cost: ~$4.1MM Cum Production MBOE Focused on West Lybrook in 2017 New rig spud first well 12/31/ Days of Production 65% IN EUR SINCE INCREASE CURRENT 650 MBOE 6-WELL PAD 2016 GALLUP WELLS Note: Well production data is on a 3-stream basis well performance based on 1 mile laterals, 2016 based on average of 7,200 laterals 10

11 U.S. Competitive Advantage: Agile and Flexible LOW COMMODITY PRICES: Ability to focus asset base Improve cost structure Increase well performance IMPROVING COMMODITY PRICES: Better well economics More investment Continue to innovate 11

12 Foundation in Place for Enhancing and Accelerating Value POSITIONED PRUDENT WILLISTON BASIN FLEXIBLE SAN JUAN BASIN HEADQUARTERS: TULSA DELAWARE BASIN DISCIPLINED 12