Post on 20-May-2020
N Y S E : W P X
3RD QUARTER EARNINGS CALLR I C K M U N C R I E F , C H A I R M A N & C E O
O C T O B E R 3 1 , 2 0 1 9
Consistent Execution of our Plan
2
GENERATING FREE CASH FLOW3Q’19 free cashflow of $42MM1; annualized FCF yield 4%2
MAINTAINING CAPITAL DISCIPLINEExpect full year capital at the mid-point3
INCREASING 4Q OIL PRODUCTION GUIDE 4%Projecting 4Q’18 to 4Q’19 exit rate of ~15%; previously 5% - 10%
STRONGER MOMENTUM ENTERING 2020Free cash flow at $50 WTI4
2. Based on the closing price as of 10/24/2019; $10.00.
1. Free cash flow 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).
3. Full year capital guidance range $1,125 - $1,250MM.4. Based on $50 WTI, $2.50 NYMEX
3
Shareholder Aligned Focus
COMMITTED TO DELIVER LONG-TERM SHAREHOLDER VALUE
REDUCED DEBT
TENDEREDDEBT
Expecting ~$100MM of FCF 2H 2019
Expecting continued FCF generation in 2020
GENERATING FREE CASH
REPURCHASEDSTOCK
Opportunistically reshaped debt towers
No material maturity until 2023
Announced up to $400MM opportunistic
buyback program
Purchased $58MM worth of shares since
August 5, 2019
Paid down $280MM of net debt YTD in 2019
2 0 2 3
4
WPX – 5 Year Vision ($50 - $55 WTI)
F I V E Y E A R V I S I O N
FCF YIELD TARGETING 7% - 10%
CONTINUE OPPORTUNISTIC SHARE BUYBACK PROGRAM
DRIVING LEVERAGE TO 1.0X
BASE DECLINE RATE OF ~30% OR LOWER
IMPLEMENT DURABLE GROWING DIVIDEND; TARGETING 2% YIELD
DOUBLE DIGIT ROCE
C L A Y G A S P A R , P R E S I D E N T & C H I E F O P E R A T I N G O F F I C E R
OPERATIONS
Well Design Driving Efficiencies, Lowering Costs
6
$1,376$1,289
$1,189$1,105
$1,020
2018 3Q 2018 4Q 2019 1Q 2019 2Q 2019 3Q
Drill ($/Ft.) Complete ($/Ft.) Facility ($/Ft.)
$767$835
$779
$668 $670
2018 3Q 2018 4Q 2019 1Q 2019 2Q 2019 3Q
Drill ($/Ft.) Complete ($/Ft.) Facility ($/Ft.)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2017 1Q 2017 2Q 2017 3Q 2017 4Q 2018 1Q 2018 2Q 2018 3Q 2018 4Q 2019 1Q 2019 2Q 2019 3Q
GR
OSS L
ATE
RA
L FO
OTA
GE
GROSS COMPLETED LATERAL FOOTAGE BY QUARTER
DELAWARE BASIN D,C&F WELL COSTS ($/FT)1WILLISTON BASIN D,C&F WELL COSTS ($/FT)1
WPX CONTINUES TO LOWER COSTS AND IMPROVE EFFICIENCIES IN BOTH BASINS
AV
ER
AG
E L
ATE
RA
L LE
NG
TH
GROSS LATERAL FOOTAGE (DELAWARE) GROSS LATERAL FOOTAGE (WILLISTON) AVERAGE LATERAL LENGTH
1. Includes Drilling, Completions, Facilities and Artificial Lift.
87,419’
198,643’ 200,790’184,742’
250,686’
363,697’
301,683’
220,514’
377,771’
223,877’
391,162’
Strong 3rd Bone Spring Results
7
WELL
COSTS
BELOW
$9.5MM
REALIZED
PRICE
WELL
RESULTSFOR CBR 6-7 PAD (2 WELLS)
~365,00060-DAY CUMULATIVE BOE
AVG. REALIZED PRICE OIL2
$55.96
0
50
100
150
200
250
300
0 30 60 90
FOR 2-MILE WELL1
DELAWARE OPERATIONS
RAISING THE BAR
CBR 9 PAD CBR 11 PAD
STRONG PERFORMANCET H I R D B O N E S P R I N G
NORMALIZED DAYS ON PRODUCTION
1. 3Q average 2-mile well cost including Drilling, Completions, Facilities and Artificial lift.2. Realized prices includes basis hedges.
CU
MU
LATI
VE M
BO
E
Williston: Continual Year-over-Year Improvement
8
WILLISTON OPERATIONS
EXCEEDING EXPECTATIONS
0
75
150
225
300
0 90 180 270 360
NORMALIZED DAYS ON PRODUCTION
WELL
COSTS
WELL
RESULTS
BELOW
$6.7MM
BOE/D PER WELL (81% OIL)
2,851
FIRST YEAR CUMULATIVE OIL PRODUCTION
6 WELL BIRD BEAR PAD AVG. 30-DAY IP
YEAR-OVER-YEAR
IMPROVEMENTAVG. CUMULATIVE OIL
PRODUCTION
OIL
PRODUCTION
FOR 2-MILE WELL1
CU
MU
LATI
VE O
IL (
MB
BL)
1. 3Q average 2-mile well cost including Drilling, Completions, Facilities and Artificial lift.
K E V I N V A N N , C H I E F F I N A N C I A L O F F I C E R
FINANCIALS
10
3Q 2019 Results
3Q YTD
2019 2018 2019 2018
Average Daily Production
Oil (Mbbl/d) 108.6 83.4 100.9 76.7
Gas (MMcf/d) 226.9 160.4 211.8 148.4
NGLs (Mbbl/d) 27.0 13.7 26.6 15.8
Equivalent (MBOE/d) 173.4 123.8 162.8 117.2
Adjusted EBITDAX $352 $288 $1,003 $775
Adjusted Net Income (Loss)
from Continuing Operations$38 $29 $97 $30
Capital Expenditures $264 $370 $1,030 $1,074
Note: Adjusted EBITDAX and adjusted net income are non-GAAP measures. A reconciliation to relevant GAAP measures is provided in this presentation. 1. Free cash flow 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).
$40MM+ FREE CASH FLOW GENERATION1 GROWTH IN OIL VOLUMES
3Q’19 vs. 3Q’18
30% GROWTH IN ADJ. EBITDAX
3Q’19 vs. 3Q’18
22%
Capital Unchanged, Oil Production Higher
11METRIC
PREVIOUS 4Q EST.
NEW 4Q EST.
% CHANGE
OIL (MBBL/D)
105.5(midpoint)
110.0(midpoint) 4%
CAPEX$265MM
(midpoint)$265MM
(midpoint)0%
MAINTAINING CAPITAL GROWING PRODUCTION
F U L L Y E A R O I L
P R O D U C T I O N E S T .
F U L L Y E A R
C A P I T A L E S T .
102 -104 MBBL/D$1,125 - $1,250MM
98
100
102
104
106
108
110
112
114
Previous 4Q Updated 4Q
Base Range
4%4Q OIL PRODUCTION
GUIDANCE
MIDPOINT TO MIDPOINT
0
50
100
150
200
250
300
350
Previous 4Q Updated 4Q
D&C Infrastructure Range
4Q CAPEX
GUIDANCE
UNCHANGEDMIDPOINT TO MIDPOINT
11
MB
BL/
D
$M
M
NO NEAR-TERM DEBT MATURIT IES
Reduced and Restructured Debt
12
$73
$406
$650
$500
$600
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2019 2020 2021 2022 2023 2024 2025 2026 2027
TOTAL LT NOTES
$2,229MM
WEIGHTED AVG.
COUPON
5.93%
REVOLVING
CREDIT FACILITY
$1.5B1
1. Maturity in April 2023.
Positioned for Sustainable Value Creation
13
OUR DRIVE
OUR FOCUS
OUR PORTFOLIOPERMIAN - WILLISTON - MIDSTREAM
FINANCIAL DISCIPLINE - OIL GROWTH - VALUE CREATION
STRONG EXECUTION - CREATE OPPORTUNITIES - REMAIN DISCIPLINED
APPENDIX
2019 Full-Year Guidance
Capital Plan Production FY 2019
Oil Mbbl/d 102 – 104
Natural Gas MMcf/d 210 – 215
NGL Mbbl/d 25 – 27
Total MBOE/d 162 – 167Net Realized Price4 FY 2019
NGL – % of WTI 20% – 25%
Avg. Price Differentials3 FY 2019
Oil – WTI per barrel ($2.00) – ($3.00)
NYMEX – Nat. Gas (Mcf) ($1.25) – ($1.75)
1. Excludes land, acquisition and other capital expenses.2. Land capital is funded with proceeds from asset sales in 2019.3. Average price differentials for oil and natural gas exclude hedges, but include basis differential and revenue adjustments.4. Percentage of realized price ranges for NGLs excludes hedges, but includes basis differential and revenue adjustments.5. Excludes severance due to voluntary early exit program.6. Rate does not reflect any potential valuation allowance or other adjustments to deferred tax assets.
Expenses FY 2019
$ per BOE
Lease & Facility Operating $6.00 – $6.25
GP&T $3.00 – $3.25
DD&A $15.00 – $16.00
G&A – Cash5 $2.40 – $2.60
G&A – Non-Cash $0.60 – $0.70
Exploration $1.25 – $1.50
Interest Expense $2.50 – $2.60
Production Tax 7% – 9%
Tax Provision6 21% – 25%
Capital Plan ($ in Millions) FY 2019
D&C / Facilities Capital $1,025 – $1,075
D&C Non-Operated $50 – $75
Midstream Opportunities $50 – $100
Total Development Capital1 $1,125 – $1,250
Land Capital2 $110
15
16
Domestic Price Realization for 2019
1. Natural gas revenue adjustments are primarily related to field compression fuel. NGL revenue adjustments include T&F and revenue sharing. Gathering deductions represent $(0.22) of the oil revenue
adjustments.
2. “Net Price” equals income statement product revenues by commodity, divided by volume.
3. Represents the realized settlement on derivatives that occurred during each quarter.
Oil ($/bbl) Gas ($/Mcf) NGL ($/bbl)
1Q ’19 2Q’19 3Q’19 4Q ’19 1Q ’19 2Q’19 3Q’19 4Q ’19 1Q ’19 2Q’19 3Q’19 4Q ’19
Weighted-Average Sales
Price$52.35 $57.50 $54.25 $2.60 $1.74 $1.80 $16.81 $13.66 $11.92
Revenue Adjustments1 $(0.43) $(0.08) $(0.33) $(1.24) $(0.86) $(1.03) $(2.34) $(1.45) $(1.19)
Net Price2 $51.92 $57.42 $53.92 $1.36 $0.88 $0.77 $14.47 $12.21 $10.73
Realized Portion of
Derivatives3 $0.04 $(2.98) $(1.25) $0.42 $0.88 $0.80
Net Price Including
Derivatives$51.96 $54.44 $52.67 $1.78 $1.76 $1.57 $14.47 $12.21 $10.73
WPX Hedges Updated: October 29, 2019
1. In addition to several crude oil swaps, WPX entered into calendar monthly average(CMA) NYMEX roll swaps which provide pricing adjustments to the trade month versus the delivery month
for contract pricing. 17
Oct – Dec 2019 2020
Volume/Day Average Price Volume/Day Average Price
Crude Oil (bbl)
Fixed Price Swaps1 83,000 $56.72 55,000 $57.03
Fixed Price Calls 5,000 $54.08 - -
Fixed Price Collars 8,000 $50.00 - $60.19 20,000 $53.33 - $63.48
Midland Basis Swaps 22,000 ($1.37) 7,486 ($1.31)
Magellan East Houston 2,000 $4.63 - -
Magellan East Houston vs. Midland Swaps 9,000 $6.02 - -
Magellan East Houston vs. Argus LLS WTI 2,000 $0.75 - -
Argus LLS WTI vs. Midland WTI Swaps 2,000 $8.60 - -
Clearbrook Bakken 8,000 ($3.23) - -
Brent/WTI Spread Basis Swaps - - 5,000 $8.36
Natural Gas (MMBtu)
Fixed Price Swaps 110,000 $3.07 - -
Natural Gas Basis (MMBtu)
Houston Ship Channel Basis Swaps 30,000 ($0.09) - -
Permian Basis Swaps 25,000 ($0.39) - -
West Texas Waha Basis Swaps 21,739 $1.98 60,000 ($0.79)
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
Consolidated Statement of Operations (GAAP)
18
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-Adjusted Income (Loss) from Continuing Operations (Non-GAAP)
19
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 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
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 $ 0.19
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
Reconciliation-Adjusted Income (Loss) Per Common Share
20(1) Per share impact is based on adjusted diluted weighted-average shares.
2018 2019
(Dollars in millions, except per share amounts) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr 3rd Qtr YTD
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
Reconciliation – Adjusted EBITDAX (Non-GAAP)
21
Disclaimers
22
The 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 future performance and, accordingly, recipients are expressly cautioned not to put undue reliance on forward-looking
statements or information due to the inherent uncertainty therein.
Reserves Disclaimer
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. 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.
WPX Non-GAAP Disclaimer
This 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.