TULSA, Okla.--(BUSINESS WIRE)--WPX Energy (NYSE: WPX) has signed an agreement to buy out the remaining transportation obligations that supported its prior operating presence in the Piceance Basin for approximately $239 million.
Upon closing, WPX will release all of its Piceance-related firm transportation capacity across four interstate pipeline systems to Citadel NGPE, LLC.
The buyout eliminates approximately $164 million in letters of credit and their associated annual interest expenses, and releases WPX from nearly $400 million in demand obligations from 2016 through 2032.
|DEMAND OBLIGATIONS RELEASED|
|2016 amount based on Aug. through Dec.|
“This is another strategic step in the transformation of our company and the simplification of our story,” said Rick Muncrief, WPX president and chief executive officer.
“It strengthens our liquidity, increases cash flow in subsequent years, frees up future revolver capacity and completes our full exit from the Piceance Basin,” Muncrief added.
WPX is using cash on-hand to fund the agreement. The parties expect to close the transaction in the third quarter, subject to regulatory approval and typical closing conditions.
Following the transaction, WPX expects to have approximately $1.3 billion in liquidity, consisting of $1.025 billion in undrawn revolver capacity along with the company’s unrestricted cash and cash equivalents.
WPX previously completed the sale of its wholly owned WPX Energy Rocky Mountain, LLC, subsidiary in April. WPX has used proceeds from asset sales to eliminate prior borrowings on its revolver, pay down debt ahead of schedule and strengthen its cash position.
About WPX Energy, Inc.
WPX is an oil-focused energy company with operations in the Permian’s Delaware Basin, the Williston Basin and the San Juan Basin. The company has reshaped its holdings through more than $5 billion of transactions and posted double-digit oil volume growth in each of the past four years.
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.