More Hedges for WPX Energy in Wake of Falling OIl Prices

The sliding oil prices have prompted Tulsa-based WPX Energy to take protective steps this week as it announced Wednesday it has added more hedges to protect cash flows and repurchased a portion of notes that are due in early 2017. The company said nearly three quarters of its 2016 anticipated oil volumes are hedged well above current prices. The company has 29,380 barrels of oil a day hedged at $60.85 per barrel in 2016. This includes another 2,000 barrels a day added since the company’s most recent quarterly report.

Approximately two-thirds of WPX’s anticipated 2016 natural gas production is hedged at $3.63 per mmbtu. For 2017, WPX has 9,304 barrels of oil a day hedged at $61.66 per barrel and 92,500 mmbtu a day of natural gas hedged at $3.22.

Over the past two months, the Tulsa company has reduced long-term debt by repurchasing nearly $68 million in notes or 17 percent of a $400 million maturity due in early 2017 at a discount to par. The company’s next debt maturity does not occur until 2020.

“We continue to proactively manage our finances,” said Rick Muncrief, WPX President and chief executive officer. “This positions us to grow our portfolio when commodity prices rebound, especially our world-class Permian Delaware asset. The results of our early work in the basin are exceeding our expectations.”

The company has been increasing its liequidity through asset sales and exceeded its 2015 divestiture target with the previously announced agreement to sell its San Juan Basin gathering system. It remains engaged in discussions with third parties relating to the disposition of all or a part of its assets in the Piceance Basin.


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