WPX Energy Sells Piceance Assets for $910 Million

Tulsa based WPX Energy is selling its Piceance Subsidiary for $910 million dollars. Terra Energy Partners is buying WPX Energy Rocky Mountain, LLC. They expect the sale to be closed sometime in the second quarter of this year.

As part of the deal, Terra will assume approximately $100 million in transportation obligations in exchange for more than $90 million of WPX’s natural gas hedge value. WPX will keep more than $110 million in additional hedge gains, which will be realized throughout the year.

The sale of WPX Energy Rocky Mountain is another link in the chain of moves WPX is making to change its business plan. WPX will act more as a Permian-focused company and have a better oil and natural gas mix. In August, the company acquired assets in the Permian Basin. It now has about 94,000 acres representing more than 670,000 prospective net effective acres. Early production returns are exceeding expectations according to WPX.

The proceeds for the Piceance deal could be used in a variety of ways including paying down debt, additional drilling and infrastructure development and expansion.

“Our bias for action and being opportunistic won’t change. We will pursue our very best investment options and continually evaluate how to optimize our assets. We’ve created a balanced portfolio with an excellent runway for sustained value generation,” said WPX President and Chief Executive Officer Rick Muncrief.