WPX Energy Reports 2012 Proved Reserves
*Domestic reserves of 4,491 Bcfe; total reserves of 4,650 Bcfe
*Domestic reserves of 5,339 Bcfe before the effect of price changes
*148% reserves replacement rate for domestic oil and NGL production
*62% increase in domestic oil reserves
*634 Bcfe of domestic reserves additions
*16,600 remaining domestic undrilled proved, probable and possible (3P)
TULSA, Okla. -- February 27, 2013
WPX Energy (NYSE:WPX) announced today that its domestic proved reserves at
Dec. 31, 2012, were nearly 4.5 trillion cubic feet equivalent based on 2012
commodity price averages. Including international reserves of 159 billion
cubic feet equivalent, WPX had total proved reserves of 4.65 Tcfe.
Year-end 2012 domestic reserves reflect a mixture of 75 percent natural gas
and 25 percent natural gas liquids (NGL) and crude oil.
Under an alternative scenario applying 2011 prices, year-end 2012 domestic
reserves were 19 percent higher at 5,339 Bcfe. Using this same scenario, the
reserves replacement rate was 200 percent in 2012.
Domestic Proved 2011 2011 2012 2012
Year-End Adjusted Year-End Adjusted
Natural Gas (Bcf) 3,983 3,760 3,369 4,073
NGL (MMbbl) 134 133 110 132
Oil (MMbbl) 47 47 77 79
Total in Bcf 5,070 4,846 4,491 5,339
2011 adjusted excludes discontinued operations that were divested in 2012.
2012 adjusted represents an alternate price scenario using 2011 SEC prices.
The alternate scenario reflects SEC prices used for the company’s year-end
2011 reserves which were calculated using the 12-month average,
first-of-the-month price during 2011 for the applicable indices for each
basin, as adjusted for local price differentials.
Applying the prices used for year-end 2011 reserves to the year-end 2012
reserves resulted in an average natural gas price of $3.68 per Mcf, an average
oil price of $86.75 per barrel and an average NGL price of $51.83 per barrel.
These prices decreased 35 percent, 5 percent and 29 percent respectively in
2012 to $2.39 for natural gas, $82.32 for oil and $37.01 for NGL.
Despite the impact of lower commodity prices in 2012, WPX’s proved, probable
and possible (3P) reserves at year-end 2012 were 18.1 Tcfe – virtually
equivalent to year-end 2011. This does not include the impact of the company’s
recent Niobrara natural gas discovery in the Piceance Basin. Over time, the
Niobrara discovery has the potential to more than double the company’s 3P
On a 3P basis, WPX has approximately 16,600 gross remaining undrilled
locations across all of its domestic acreage and interests, including more
than 10,000 locations in the Piceance Basin.
“Our drilling program in the oil-rich Bakken Shale is a significant driver in
the WPX story,” said Ralph A. Hill, president and chief executive officer.
“We doubled our oil production in the Bakken in 2012 compared with a year ago.
We generated an 870 percent production replacement rate in the play, and now
we hold our Bakken acreage by production.
“We’re also experiencing lower costs in the Bakken since we started multi-well
development pads, which translate into reduced drilling days and a 25 percent
efficiency gain in our rig deployment.
“We’ll basically be able to drill the same amount of Bakken wells this year as
we did in 2012, but with less rigs. This is an ongoing goal at WPX – doing
things more and more efficiently,” Hill added.
PROVED RESERVES AND PRODUCTION BACKGROUND
Domestically, WPX added 634 Bcfe of proved reserves in 2012 through drilling
even with substantially low prices last year. In 2012, WPX participated in 548
gross (367 net) wells in the United States, achieving a success rate of 100
percent. The company’s domestic drilling finding and development cost was
$1.74 per Mcfe in 2012, compared with $1.37 per Mcfe in 2011 and $1.84 in
Proved Reserves Reconciliation
Amounts in Bcf equivalent
U.S. proved reserves Dec. 31, 2011 5,070
2012 Production (including discontinued operations) (496)
U.S. Proved reserves Dec. 31, 2012 4,491
International reserves 159
Total Dec. 31, 2012 proved reserves 4,650
Domestic Revisions and Extensions at 2011 prices 848
Alternative Reserves Scenario 5,498
The percentage of reserves in the proved developed category continues to
increase. In 2012, proved developed accounted for 60 percent of reserves vs.
59 percent in 2011 and 58 percent in 2010.
Year-over-year, daily production – excluding discontinued operations –
increased 4 percent in 2012 vs. 2011. The company’s total production of 1,386
Mcfe/d in 2012 represents enough fuel to meet the energy needs of an estimated
6 million homes per day.
WPX’s domestic oil production rose 64 percent in 2012, while NGL production
rose 3 percent. The company’s total oil and NGL production grew to nearly
47,000 barrels per day, compared with 41,000 barrels per day in 2011.
Average Daily Net Production 2012 2011
Natural gas (MMcf) 1,086 1,065
NGL (Mbbl) 28.4 27.6
Oil (Mbbl) 12.0 7.3
Total in MMcf equivalent 1,328 1,274
Natural gas (MMcf) 19 20
NGL (Mbbl) 0.5 0.5
Oil (Mbbl) 6.0 5.6
Total in MMcf equivalent 58 57
Natural gas (MMcf) 1,105 1,085
NGL (Mbbl) 28.9 28.1
Oil (Mbbl) 18.0 12.9
Total in MMcf equivalent 1,386 1,331
NGL & oil equivalents were calculated using a 6:1 ratio.
Proved Reserves Summary
Approximately 99 percent of WPX’s year-end 2012 U.S. proved reserves estimates
were audited by Netherland, Sewell & Associates, Inc. Their judgment
determined that the company’s estimates are, in the aggregate, reasonable and
have been prepared in accordance with the Standards Pertaining to the
Estimating and Auditing of Oil and Gas Reserves Information promulgated by the
Society of Petroleum Engineers (SPE standards).
Approximately 99 percent of proved reserves estimates for international
properties were audited by Ralph E. Davis Associates Inc. The majority of
WPX’s international interests come via its 69 percent ownership interest in
Apco Oil and Gas International.
Proved reserves are estimated quantities that geological and engineering data
demonstrate with reasonable certainty to be recoverable in the future from
known reservoirs under the Security and Exchange Commission pricing
provisions, existing operating methods and government regulations.
Year-End Proved Reserves 2012 2011
Natural Gas (Bcf) 3,369 3,983
NGL (MMbbl) 110 134
Oil (MMbbl) 77 47
Total in Bcf equivalent 4,491 5,070
Natural Gas (Bcf) 64 90
NGL (MMbbl) 0 1
Oil (MMbbl) 16 16
Total in Bcf equivalent 159 194
Natural Gas (Bcf) 3,433 4,073
NGL (MMbbl) 110 135
Oil (MMbbl) 92 63
Total in Bcf equivalent 4,650 5,265
NGL & oil equivalents were calculated using a 6:1 ratio.
Reserves for 2012 exclude discontinued operations.
About WPX Energy, Inc.
WPX Energy is an exploration and production company focused on developing its
significant oil and gas reserves, particularly in the liquids-rich Piceance
Basin, the Bakken and Three Forks oil shales and the Marcellus Shale. WPX also
has domestic operations in the San Juan and Powder River basins, as well as a
69 percent interest in Apco Oil and Gas International. Go to
http://www.wpxenergy.com/investors.aspx to join our e-mail list.
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.
WPX Energy, Inc.
Kelly Swan, 539-573-4944
David Sullivan, 539-573-9360
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