TULSA, Okla.--(BUSINESS WIRE)--WPX Energy (NYSE: WPX) announced today that it has agreed to sell a North Dakota gathering system for approximately $185 million to a private equity fund managed by the Ares EIF Group, a subsidiary of Ares Management, L.P. (NYSE: ARES).
The parties expect to close the transaction in approximately 60 days. The sale is part of WPX’s delevering plan targeting $400-$500 million in divestitures by the end of 2015. WPX also is targeting another $400-$500 million in asset sales in 2016.
WPX is working to quickly reduce debt just two weeks after closing a transformative acquisition that added decades of drilling inventory in the core of the Permian’s Delaware Basin.
“We are aggressively moving on our delevering plan just as we said we would do,” stated Rick Muncrief, WPX president and chief executive officer.
The sale of the North Dakota asset consists of an oil, natural gas and water gathering system. WPX previously installed the infrastructure coinciding with its drilling program in the Williston Basin.
Under the terms of the agreement, WPX will continue to operate the system which currently gathers approximately 11,000 barrels per day of oil, approximately 6,500 Mcf/d of natural gas, approximately 5,000 barrels per day of water, and can be expanded. The system supports WPX's development in the Van Hook peninsula area.
WPX produced an average of 22,600 barrels per day of oil in the Williston Basin during second-quarter 2015, up 20 percent from the same period a year ago.
Other portfolio rationalization opportunities include the monetization of additional midstream infrastructure, non-operated properties or other asset sales, along with evaluating creative options to unlock Piceance Basin value.
About WPX Energy, Inc.
WPX is a domestic energy producer with operations in the western United States. The company has reported double-digit oil volume growth in each of the past three years and operates more than 5,000 natural gas wells. WPX is reshaping its portfolio through more than $4 billion of acquisitions and divestitures.
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.