Did WPX Energy’s Management Strategies Help?



WPX Energy’s 1Q16 operational performance

For 1Q16, WPX Energy (WPX) reported total production of 80.1 MBoe (thousand barrels of oil equivalent) per day. Its reported production excludes production volumes from Piceance Basin operations, which were divested in 1Q16. On continuing basis, WPX’s production is ~20% higher compared to 1Q15 production of 66.6 MBoe per day. Sequentially and on a continuing basis, WPX’s 1Q16 production is lower by ~1% when compared to 4Q15.

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WPX Energy’s new production mix

For 1Q16, WPX Energy reported 52% of crude oil in its production mix. That’s much higher when compared to a ~20% crude oil production mix in 1Q15. WPX’s production mix has shifted dramatically following the acquisition of Delaware Basin properties in the Permian Basin last year and the recent sale of its Piceance Basin subsidiary. Prior to the Piceance divestiture, natural gas volumes accounted for 70% of WPX’s production mix a year ago. Piceance Basin operations accounted for ~52% of the company’s total production in 4Q15. For more information you can read How Is WPX Energy Strategically Transforming Itself?

EP Energy (EPE), Diamondback Energy (FANG), Energen (EGN), Approach Resources (AREX), and Clayton Williams Energy (CWEI) also operate in the Permian Basin and have higher percentages of crude oil in their production mix. SM Energy (SM), which also operates in the Permian Basin, is targeting a 1% per quarter growth for crude oil in its production mix by deploying its capital from the Eagle Ford Shale to the Permian Basin. The SPDR S&P Oil and Gas Exploration & Production ETF (XOP) generally invests at least 80% of its total assets in oil and gas exploration companies. The Vanguard Energy ETF (VDE) invests in the broader energy market.

WPX Energy’s production guidance

For 2016, WPX Energy expects total production of 75–80 MBoe (one thousand barrels of oil equivalent) per day. For 2016, WPX expects crude oil production of 37–39 MBoe per day. Other upstream companies such as EP Energy (EPE), EnCana (ECA), Approach Resources (AREX), and Clayton Williams Energy (CWEI) are expecting ~14%, ~15%, ~18%, and ~25% year-over-year decreases, respectively, in their 2016 production volumes.

Continue reading to the next part to see what Wall Street analysts are saying about WPX after its 1Q16 earnings.


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