Rick Muncrief, Chairman & CEO March 27, 2017 · Rick Muncrief, Chairman & CEO March 27, 2017 Scotia...
Transcript of Rick Muncrief, Chairman & CEO March 27, 2017 · Rick Muncrief, Chairman & CEO March 27, 2017 Scotia...
Rick Muncrief, Chairman & CEOMarch 27, 2017
Scotia Howard Weil 2017 Energy Conference
WPX’s Portfolio
DELAWARE
54%
30%
GAS
OIL 80%+DELAWARE (WCA)
WILLISTONSAN JUAN GALLUP
ROR
2WELL ECONOMICSFlat $54.09 Oil and $2.91 Gas1
WILLISTON BASIN
DELAWARE BASIN
SAN JUANBASIN
1 3-year average strip price as of February 24, 20172 Excludes G&A, acquisition land costs, and interest expense. Assumes vision for Delaware and Williston
70%+
100%+DELAWARE LONG LATERALS3
HEADQUARTERSTULSA
NG
L16%
WILLISTON
83%
9%
GAS
OIL
NG
L8%
SAN JUAN GALLUP
47%
31%
GAS
NG
L22%
OIL
2
PRODUCT MIX
Expanding WPX’s World-Class Delaware Position
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PANTHER ACQUISITION OVERVIEW► Added 18,000+ acres in core of Delaware
► Total Delaware position: ~120,000 net acres
► 920 gross locations, including 150+ long lateral locations
► Maintain Panther’s current 2 rig program
► Valuation primarily supported on 3 zones with upside in 5
additional zones
► Closed mid-March
N E W M E X I C O
T E X A S
CULBERSON
LEA
EDDY
WARD
REEVES
LOVING
PECOS
WINKLER
WPX OPERATED ACREAGE
PANTHER ACREAGE
SELF-FUNDING DEVELOPMENT2 rig program funded with operating cashflows
DEEP INVENTORY OF CORE DELAWAREResource supports sustained growth
HIGH QUALITY ROCKMultiple stacked pay intervals with significant upside
ACCRETIVE TO CASHFLOWS AND NAVAccretive to shareholders 2017 and beyond
BENEFITS
THICK Hydrocarbon Stack Across Entire Acreage Position
A STATE LINE LOG B EAST TYPE LOG C CENTRAL TYPE LOG D SOUTH TYPE LOGN E W M E X I C O
T E X A S
WARD
LEAEDDY
REEVES
LOVING WINKLERA B
C
D
DE-RISKED
UPSIDE POTENTIAL
De-risked pay section across acreage with
substantial UPSIDE
WPX OPERATED ACREAGE ACQUIRED ACREAGE
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Strong Acreage Position in Core of Delaware Basin at Attractive Price
Source: Company filings, RS Energy Group, PLS, and 1Derrick. Selected transactions in 2H 2016. 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.
RSPP/Silver Hill – 10/2016
Purchase price: $2,544mm
Production, net: 15,000 boe/d (69% oil)
Acreage: 41,000
Adj. $/acre: $47,415
Callon/Ameredev– 12/2016
Purchase price: $615mm
Production, net: 1,945 boe/d (71% oil)
Acreage: 16,098
Adj. $/acre: $32,228
(2)
Diamondback/Private operator – 7/2016
Purchase price: $560mm
Production, net: 1,000 boe/d (89% oil)
Acreage: 19,180
Adj. $/acre: $26,721
(3)
Attractive acquisition price of ~$28,500(5) per undeveloped net acre compares favorably to recent Southern Delaware Basin acquisitions
Diamondback/Brigham – 12/2016
Purchase price: $2,428mm
Production, net: 9,482 boe/d (77% oil)
Acreage: 76,319
Adj. $/acre: $24,224
(4)
Selected Southern Delaware Basin Transactions in 2H 2016
Lea
Winkler
Oxy/J Cleo – 10/2016
Purchase price: $2,000mm
Production, net: 7,000 boe/d (72% oil)
Acreage: 35,000
Adj. $/acre: $39,571
(1)
PDC/Kimmeridge – 8/2016
Purchase price: $1,500 mm
Production, net: 7,000 boe/d (42% oil)
Acreage: 57,000
Adj. $/acre: $22,018
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
Centennial/Silverback – 11/2016
Purchase price: $855mm
Production, net: 3,500 boe/d
Acreage: 35,000
Adj. $/acre: $20,429
WPX ACREAGEACQUIRED ACREAGE
LOVING
LEAEDDY
REEVES
CULBERSON
WINKLER
WARD
PECOS
ANDREWS
5
0%
20%
40%
60%
80%
100%
Oil Natural Gas
WPX Liquidity, Hedges and Debt Maturities
Cash and Equivalents @ (12/31/16) $496
Revolver Capacity $1,025
Letters of Credit <$66>
Liquidity $1,450
Debt Maturities
Senior Notes Senior Notes Senior NotesSenior Notes
Expect $1.2B OF
SALES PROCEEDS
IN 1H OF 2016
$1,485 UNDRAWN
$50.87
% o
f Pro
duct
ion
Hedg
ed $3.93
1 Based on midpoint of guidance2 Hedge position March-December 2017
20171,2
$500
$1,100
$500 $500
$0
$200
$400
$600
$800
$1,000
$1,200
2016 2017 2018 2019 2020 2021 2022 2023 2024
$MM
STRONG HEDGE POSITION CREATES CERTAINITY FOR DRILLING PROGRAM
Oil: 40,000 bbl/d Hedged► $54.57 per barrel
Gas: 185,000 mmbtu/d► $2.98 per MMBtu
Oil: 39,428 bbl/d Hedged► $50.87 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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Contracted Service Cost Mitigates Potential Inflation
Contracts in Place for 2017
Services Exposed to Spot Market
Note: D&C components based on latest blended AFE (Williston, San Juan, Delaware)
2017 D&C COST BREAKDOWN
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.
• Sand• Stimulation Services• Drilling Rigs• Tubulars/Wellhead• Cementing Material and Services• Water
• Fluids/Cuttings/Solids Control• Directional Equipment & Services• Chemicals• Other (Completions)• Other (Drilling)
Delaware Basin: Delineation of the Wolfcamp
N E W M E X I C O
T E X A S
CULBERSON
LEA
EDDY
LOVING
WPX OPERATED ACREAGE
PANTHER ACREAGE
D
D
XY
XY
C-STATE 16-1HIP 30: 1,635 BOE/D (65% OIL)90 DAY CUM: 114,338 BOE
E. PECOS FED COM 22-14HIP 30: 1,736 BOE/D (30% OIL)90 DAY CUM: 139,336 BOE
DELINEATING WOLFCAMP ACROSS POSITION
► WOLFCAMP XY-PECOS STATE 46-6H► Lateral length: ~4,800 ft► Proppant (#/ft): ~1,750► Tracking in-line with WCA 1,000
MBOE type curve after 45 days
660’330’
WOLFCAMP B
LOWER WOLFCAMP A
UPPER WOLFCAMP A
WOLFCAMP X/Y
1 MILE
350
FT
CBR SPACING TEST UNDERWAY
► PURPOSE OF TEST► Validate 16 well U/L Wolfcamp A spacing► Understand future infrastructure needs
PECOS STATE 46-6HIP 30: 1,780 BOE/D (50% OIL)
D
LINDSAY 16-6HIP 30: 1,434 BOE/D (18% OIL)90 DAY CUM: 119,047 BOE
PECOS STATE 46-5HIP 30: 1,628 BOE/D (22% OIL)
REEVES
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► Utilized diverter► Hybrid completion design► Engineered completions
► WOLFCAMP D-PECOS STATE 46-5H► Lateral length: ~4,850 ft► Proppant (#/ft): ~2,750► Currently producing with 3,800 psi
flowing tubing pressure (2-17)
► UPDATE ON CBR► Expected first sales end of March► 16 day record well spud-to-rig release► Encouraging DFIT results
► Utilized diverter► Hybrid completion design► Engineered completions
Note: Well production data is on a 3-stream basis
Williston Basin: Strong, Consistent Results
1 Spud-to-rig release for a 2-mile lateral2 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
► 39% oil growth 4Q’16 vs 3Q’16
► 4Q production 28.8 MBOE/d
► Set new drilling record of 11.7 days1
► Completed DUC inventory
► Current total well cost $5.5MM
► 14 wells on 1st sales during 4Q
► 6 Middle Bakken and 8 Three forks wells
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-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
WPX PEER 1 PEER 2 PEER 3 PEER 4 PEER 5 PEER 6 PEER 7 PEER 8 PEER 9
180 DAYS CUM OIL PRODUCTION FOR 2016 NEW WELLS2
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,00090 DAYS CUM OIL PRODUCTION FOR 2016 NEW WELLS2
WPX PEER 1 PEER 2 PEER 3 PEER 4 PEER 5 PEER 6 PEER 7 PEER 8 PEER 9
WILLISTON HIGHLIGHTS
#1 PRODUCERON CUMULATIVE OIL BASIS 90 DAYS/180 DAYS2
San Juan Basin: Continued Strong Well Results
12015 well performance based on 1 mile laterals, 2016 based on average of 7,200’ laterals
CONTINUING TO RAISE THE BAR
► 21% oil growth 4Q’16 vs 3Q’16
► 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
► Focused on West Lybrook in 2017
► New rig spud first well 12/31/20160
50
100
150
200
250
300
0 20 40 60 80 100 120 140 160 180 200Cu
m P
rodu
ctio
n M
BOE
Days of Production
6-WELLPAD
2016GALLUP WELLS
CURRENT650 MBOE65% IN EUR
SINCE 20151
2016 SAN JUAN GALLUP WELLS
INCREASE
10Note: Well production data is on a 3-stream basis
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U.S. Competitive Advantage: Agile and Flexible
► Ability to focus asset base
► Improve cost structure
► Increase well performance
IMPROVING COMMODITY PRICES:
► Better well economics
► More investment
► Continue to innovate
LOW COMMODITY PRICES:
Foundation in Place for Enhancing and Accelerating Value
► POSITIONED
► PRUDENT
► FLEXIBLE
► DISCIPL INED
WILLISTON BASIN
DELAWARE BASIN
SAN JUAN BASIN
HEADQUARTERS: TULSA
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