TULSA, Okla.--(BUSINESS WIRE)--WPX Energy (NYSE: WPX) announced today it signed an agreement to sell its operations in northeast Pennsylvania and release certain firm transportation capacity to Southwestern Energy Company (NYSE:SWN) for approximately $300 million cash.
“The transformation of our company continues as we execute our strategy,” said Rick Muncrief, WPX president and chief executive officer.
“We’re heading into 2015 reshaped, refocused and ready to grow margins, develop our highest returning assets and build the long-term value of the company,” Muncrief added.
WPX’s first transaction involving its Marcellus Shale operations marks the company’s sixth significant agreement it has entered into since May to narrow the company’s business focus, increase scalability of core assets, bring value forward and further strengthen its balance sheet. As previously announced, WPX also recently executed a new five-year, $1.5 billion senior unsecured credit facility.
The sale to Southwestern Energy Company includes physical operations covering approximately 46,700 net acres, roughly 50 million cubic feet per day of net natural gas production and 63 operated horizontal wells. The assets are primarily located in Susquehanna County, Pa.
The transaction also includes the release of firm transportation capacity WPX has under contract in the northeast, primarily 260 million cubic feet per day with Millennium Pipeline. Upon the transfer of the firm capacity, WPX will be released from approximately $24 million per year in annual demand obligations associated with the transport.
WPX and Southwestern expect to close the transaction during the first quarter of 2015 subject to regulatory approval and typical closing conditions.
WPX’s remaining operations in the Marcellus Shale primarily consists of its physical operations in Westmoreland County in southwestern Pennsylvania and additional firm transport capacity on Transco’s Northeast Supply Link line. These assets also are targeted for divestiture.
UPCOMING CONFERENCE PRESENTATION
WPX CEO Rick Muncrief is scheduled to speak at the Capital One Securities annual energy conference on Thursday, Dec. 11, at approximately 10:20 a.m. Eastern. Please visit www.wpxenergy.com on the day of the event to confirm the time, see the slides and listen to the presentation.
About WPX Energy, Inc.
WPX Energy develops and operates oil and gas producing properties in North Dakota, New Mexico and Colorado. The company has a long history of innovation and stakeholder engagement, recognized through more than 40 local, state, federal and industry awards.
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding future drilling and production are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, the volatility of oil, natural gas and NGL prices; uncertainties inherent in estimating oil, natural gas and NGL reserves; drilling risks; environmental risks; and political or regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the date of this press release, even if subsequently made available by WPX Energy on its website or otherwise. WPX Energy does not undertake and expressly disclaims any obligation to update the forward-looking statements as a result of new information, future events or otherwise. Investors are urged to consider carefully the disclosure in our filings with the Securities and Exchange Commission, available from us at WPX Energy, Attn: Investor Relations, P.O. Box 21810, Tulsa, Okla., 74102, or from the SEC’s website at www.sec.gov.
Additionally, the SEC requires oil and gas companies, in filings made with the SEC, to disclose proved reserves, which are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible – from a given date forward, from known reservoirs, under existing economic conditions, operating methods, and governmental regulations. The SEC permits the optional disclosure of probable and possible reserves. From time to time, we elect to use “probable” reserves and “possible” reserves, excluding their valuation. The SEC defines “probable” reserves as “those additional reserves that are less certain to be recovered than proved reserves but which, together with proved reserves, are as likely as not to be recovered.” The SEC defines “possible” reserves as “those additional reserves that are less certain to be recovered than probable reserves.” The Company has applied these definitions in estimating probable and possible reserves. Statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve estimates provided in this presentation that are not specifically designated as being estimates of proved reserves may include estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC‘s reserves reporting guidelines. Investors are urged to consider closely the disclosure in our SEC filings that may be accessed through the SEC’s website at www.sec.gov.
The SEC’s rules prohibit us from filing resource estimates. Our resource estimations include estimates of hydrocarbon quantities for (i) new areas for which we do not have sufficient information to date to classify as proved, probable or even possible reserves, (ii) other areas to take into account the low level of certainty of recovery of the resources and (iii) uneconomic proved, probable or possible reserves. Resource estimates do not take into account the certainty of resource recovery and are therefore not indicative of the expected future recovery and should not be relied upon. Resource estimates might never be recovered and are contingent on exploration success, technical improvements in drilling access, commerciality and other factors.
