WPX Energy’s normalized free cash flow in 2017
For 9M17 (the first nine months of 2017), WPX Energy (WPX) had normalized free cash flows (or FCF) of about -275%, the fifth lowest among the crude oil (USO) and natural gas (UNG) producers we have been tracking. To know more about our normalized free cash flow methodology and filtering criteria, refer to part one of this series.
WPX Energy’s free cash flow trend
In 3Q17, WPX Energy reported negative FCF of ~$227 million, which is lower than WPX’s FCF of -$147 million in 3Q16. In 4Q16, WPX Energy reported positive FCF (free cash flow). However, WPX’s free cash flows were negative from 1Q17 to 3Q17.
WPX Energy’s normalized free cash flow trend
In the last one year, WPX Energy’s (WPX) normalized free cash flow increased from -507% in 3Q16 to -263% in 3Q17. The decrease in WPX Energy’s normalized FCF in the last four quarters can be attributed to the high increase in its OCF (operating cash flow) compared to the increase in capital expenditures in the last four quarters. In the last four quarters, WPX’s OCF increased by ~197% to ~$86 million, whereas its capital expenditures increased by ~78% to ~$313 million.
WPX Energy’s stock performance in 2017
Year-to-date in 2017, WPX’s stock is down by ~8.9%. In 2017, so far, WPX Energy’s stock outperformed the SPDR S&P Oil and Gas Exploration & Production ETF (XOP), which has more than 78% weight in upstream companies. Year-to-date in 2017, XOP is down by ~13.1%. In comparison, the SPDR Dow Jones Industrial Average ETF (DIA) increased by ~27.9%.
Next, we will take a look at Wall Street analysts’ ratings.