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WPX Energy Closes Piceance Basin Obligation through Buyout
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WPX Energy Inc. announced that it has entered into a buyout agreement of $239 million which will free the company from its Piceance Basin transport obligation. The completion of the buyout will release WPX Energy from $164 million in letters of credit and their associated annual interest expenses, and from nearly $400 million in demand obligations from 2016 through 2032.
WPX Energy continues to undertake initiatives and the buyout decision is another strategic step toward its transformation. This buyout will mark the complete exit of WPX Energy from the Piceance Basin, allowing the company to concentrate on its core assets situated in the Permian, Williston and San Juan basins.
WPX Energy will use its cash on-hand to fund the agreement and expects to complete the transaction in the third quarter of 2016, subject to regulatory approval and typical closing conditions.
Piceance Basin assets did not feature in the long-term holdings of WPX Energy and the company in Feb 2016 made an announcement to sell its Piceance subsidiary WPX Energy Rocky Mountain, LLC for $910 million. This transaction was closed in Apr 2016.
As a result of the sale of natural gas assets and transformation of its existing asset portfolio, WPX Energy’s first-quarter 2016 production mix consisted of 62% Oil and NGL and 38% natural gas compared with 70% natural gas and 30% Oil and NGL in first-quarter 2015.
WPX Energy’s focus on oil has started to yield results. The company also increased its estimated ultimate recoveries for its Delaware Basin wells in the Permian to 900,000 barrels of oil equivalents (boe) by 34% from its acquisition type curve of 670,000 boe.
Apart from taking steps to transform the portfolio of productive asset mix, the company has also decided to lower cost of operations through reduced drilling times, efficient use of pad design and completion activities, and negotiating lower costs from its vendors for goods and services.
WPX Energy currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Sanchez Energy Corporation (SN - Free Report) , Bonanza Creek Energy, Inc. and Contango Oil & Gas Company , all carrying a Zacks Rank #2 (Buy).
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WPX Energy Closes Piceance Basin Obligation through Buyout
WPX Energy Inc. announced that it has entered into a buyout agreement of $239 million which will free the company from its Piceance Basin transport obligation. The completion of the buyout will release WPX Energy from $164 million in letters of credit and their associated annual interest expenses, and from nearly $400 million in demand obligations from 2016 through 2032.
WPX Energy continues to undertake initiatives and the buyout decision is another strategic step toward its transformation. This buyout will mark the complete exit of WPX Energy from the Piceance Basin, allowing the company to concentrate on its core assets situated in the Permian, Williston and San Juan basins.
WPX Energy will use its cash on-hand to fund the agreement and expects to complete the transaction in the third quarter of 2016, subject to regulatory approval and typical closing conditions.
Piceance Basin assets did not feature in the long-term holdings of WPX Energy and the company in Feb 2016 made an announcement to sell its Piceance subsidiary WPX Energy Rocky Mountain, LLC for $910 million. This transaction was closed in Apr 2016.
As a result of the sale of natural gas assets and transformation of its existing asset portfolio, WPX Energy’s first-quarter 2016 production mix consisted of 62% Oil and NGL and 38% natural gas compared with 70% natural gas and 30% Oil and NGL in first-quarter 2015.
WPX Energy’s focus on oil has started to yield results. The company also increased its estimated ultimate recoveries for its Delaware Basin wells in the Permian to 900,000 barrels of oil equivalents (boe) by 34% from its acquisition type curve of 670,000 boe.
Apart from taking steps to transform the portfolio of productive asset mix, the company has also decided to lower cost of operations through reduced drilling times, efficient use of pad design and completion activities, and negotiating lower costs from its vendors for goods and services.
WPX Energy currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Sanchez Energy Corporation (SN - Free Report) , Bonanza Creek Energy, Inc. and Contango Oil & Gas Company , all carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>