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WPX Energy Completes $910m Sale of its Piceance Subsidiary

Source: www.gulfoilandgas.com 4/8/2016, Location: North America

WPX Energy has completed the sale of its wholly owned subsidiary WPX Energy Rocky Mountain, LLC, to Terra Energy Partners LLC for $910 million subject to closing adjustments.

The divestiture greatly enhances WPX’s liquidity, will significantly improve its capital efficiency and returns, and lead to materially lower general and administrative expenses going forward.

The move also solidifies WPX’s focus on the Permian Basin and balances the company’s commodity mix. WPX expects oil to comprise approximately half of its future production volumes, up from roughly 20 percent in 2015.

The results of WPX’s Piceance Basin operations, including associated production volumes, will be reclassified as discontinued operations. Piceance production volumes will not be reflected in the company’s first-quarter 2016 financial and operations results.

WPX has a variety of options for the Piceance proceeds, including leverage reduction, additional drilling, infrastructure investments such as expanding its Permian gathering system, and buying out of any retained transportation obligations.

As previously announced, WPX also closed the sale of its San Juan Basin gathering system in March for $309 million in total consideration and recently strengthened its liquidity by amending its revolving credit facility. WPX received $1.2 billion of commitments on a senior secured facility, with an initial borrowing base of $1.025 billion.

“Over the past two years, we’ve built strong credibility by doing everything we said we’d do,” said Rick Muncrief, WPX president and CEO. “Our portfolio today is sharper and more focused than ever before, which is critical in the current environment. This transformation is a result of our tenacity, long-term vision and ability to execute.”

Following more than $5 billion of transactions over the past two years, WPX’s re-shaped portfolio boasts acreage in the core of two prolific oil-dominant areas – the Permian’s Delaware Basin and North Dakota’s Williston Basin – along with a leading position in the San Juan Basin.

Chief Operating Officer Clay Gaspar is scheduled to speak about WPX’s operations at the IPAA Oil and Gas Investor Symposium on Monday, April 11, at approximately 3:40 p.m. Eastern.

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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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