WPX Energy Reports 2012 Results

  WPX Energy Reports 2012 Results

Business Wire

TULSA, Okla. -- February 28, 2013

WPX Energy (NYSE:WPX) today announced its unaudited operating and financial
results for the fourth quarter and the year ended Dec. 31, 2012. Highlights
for full-year 2012 include:

  *98% growth in Bakken oil production
  *40% growth in overall oil production
  *3% growth in overall NGL production
  *2% growth in overall natural gas production
  *634 Bcfe of domestic reserves additions

CEO PERSPECTIVE

“Our focused growth plan and rate-of-return driven strategy is delivering
strong results. Production is up, Bakken well costs are down and continue to
improve, and new opportunities like our Niobrara discovery are providing
upside potential and future visibility for value creation at WPX,” said Ralph
Hill, president and CEO.

“For 2012, we maintained the strength of our balance sheet in the face of
lower natural gas prices and exceeded our production goal even with ongoing
pipeline bottlenecks in the Marcellus.

“For 2013, our diversified portfolio of reserves gives us the opportunity to
continue to grow our Bakken production and devote the majority of our capital
to oil and liquids resource plays,” Hill said.

“We’re also committed to continuously improving the cost structure in each of
our basins and gaining new efficiencies as we apply our large-scale
development expertise.

“Specifically, reduced drilling times positively impact our internal rates of
return. Our record drilling times are 3.7 days in the Piceance Valley, 10.8
days in the Marcellus and 25 days in the Bakken.

“Piceance wells originally took 30 days to drill. A decade ago they took 20.
We’ve since reduced that by another 60 percent down to an average of 8 days
for our Valley wells. This is an example of the efficiencies we can deliver in
our other major operating areas,” Hill added.

FULL-YEAR 2012 FINANCIAL RESULTS

WPX reported an unaudited net loss attributable to WPX Energy of $223 million
for full-year 2012, or a loss of $1.12 per share on a fully-diluted basis,
compared with a net loss of $302 million, or a loss of $1.53 per share, in
2011.

The net loss from continuing operations attributable to WPX Energy was $245
million in 2012 vs. $160 million for full-year 2011.

Full-year 2012 results were impacted by a 22 percent decrease in domestic net
realized natural gas prices. Higher production volumes – particularly domestic
oil – together with lower asset impairments partially offset the impact of
lower realized natural gas prices.

Non-cash impairment charges included in continuing operations were $225
million in 2012 related to producing properties and costs of acquired unproved
reserves, compared with $367 million in 2011. These charges were primarily
driven by declines in forward natural gas prices.

Excluding these charges and unrealized mark-to-market gains (losses), WPX had
an adjusted loss from continuing operations of $123 million, or a loss of
$0.62 per share on a diluted basis, in 2012 compared with adjusted income from
continuing operations of $80 million, or $0.40 per share, in 2011. A
reconciliation accompanies this press release.

FOURTH-QUARTER 2012 FINANCIAL RESULTS

WPX reported an unaudited net loss attributable to WPX Energy of $106 million
for fourth-quarter 2012, or a loss of $0.53 per share on a fully-diluted
basis, compared with a net loss of $338 million, or a loss of $1.71 per share,
in the same period in 2011.

The net loss from continuing operations attributable to WPX Energy was $105
million in fourth-quarter 2012 vs. $209 million for the fourth quarter of
2011.

Oil revenues increased 56 percent quarter over quarter, but natural gas and
natural gas liquids (NGL) revenues declined a combined 19 percent. Results of
continuing operations were also impacted by non-cash impairment charges of
$108 million in fourth-quarter 2012 and $367 million in fourth-quarter 2011.

Excluding these charges and unrealized mark-to-market gains (losses), WPX had
an adjusted loss from continuing operations of $39 million, or a loss of $0.20
per share on a diluted basis, for fourth-quarter 2012, compared with adjusted
income from continuing operations of $24 million, or $0.12 per share, for the
same period in 2011. A reconciliation accompanies this press release.

ADJUSTED EBITDAX

WPX’s adjusted EBITDAX (a non-GAAP measure) for full-year 2012 was $1 billion,
compared with approximately $1.3 billion for the same measure in 2011. For
fourth-quarter 2012, WPX had adjusted EBITDAX of $256 million, compared with
$336 million for the same period in 2011.

The difference in year-over-year adjusted EBITDAX is primarily the result of
lower commodity prices in 2012 vs. 2011, partially offset by higher production
volumes.

EBITDAX (non-GAAP)                  Full Year            Fourth Quarter
                                     2012      2011       2012      2011
                                     millions   millions   millions   millions
Net income (loss)                    ($211)     ($292)     ($104)     ($335)
Interest expense                     $102       $117       $25        $20
Provision (benefit) for income       ($111)     ($74)      ($40)      ($104)
taxes
Depreciation, depletion and          $966       $902       $247       $232
amortization
Exploration expenses                 $83        $126       $23        $26
EBITDAX                              $829       $779       $151       ($161)
                                                                      
Impairments                          $225       $367       $108       $367
Unrealized MTM (gains) losses        ($32)      $11        ($4)       $1
(Income) Loss from discontinued      ($22)      $142       $1         $129
operations
Adjusted EBITDAX                     $1,000     $1,299     $256       $336
                                                                      

EBITDAX represents earnings before interest expense, income taxes,
depreciation, depletion and amortization and exploration expenses. Adjusted
EBITDAX includes adjustments for impairments, unrealized mark-to-market gains
(losses) and discontinued operations.

WPX believes that these non-GAAP measures provide useful information regarding
its ability to meet future debt service, capital expenditures and working
capital requirements.

PRODUCTION

WPX’s overall domestic and international production climbed 4 percent in 2012
to an average of 1,386 MMcfe/d, excluding volumes for discontinued operations
in the Barnett Shale and Arkoma Basin which were sold in 2012.

The production increase was led by 40 percent growth in oil production, 3
percent growth in NGL production and 2 percent growth in natural gas
production. NGL growth was curbed in late 2012 due to reduced ethane recovery
rates.

Average Daily Production    Full Year              4Q            
                             2012   2011   Change   2012   2011   Change
Natural gas (MMcf/d)                                       
Piceance Basin               673     679     -1   %   637     686     -7   %
Marcellus Shale              63      15      320  %   71      27      163  %
Powder River Basin           208     226     -8   %   195     229     -15  %
San Juan Basin               132     135     -2   %   138     119     16   %
International                19      20      -5   %   19      21      -10  %
Other                       10     10     0    %   10     9      10   %
Subtotal (MMcf/d)            1,105   1,085   2    %   1,070   1,091   -2   %
                                                                      
Oil (Mbbl/d)
Bakken Shale                 9.5     4.8     98   %   11.4    6.4     78   %
Piceance                     2.3     2.3     0    %   2.0     2.2     -9   %
International                6.0     5.6     7    %   5.8     5.9     -2   %
Other                       0.2    0.2    12   %   0.2    0.3    -24  %
Subtotal (Mbbl/d)            18.0    12.9    40   %   19.4    14.8    31   %
                                                                      
NGLs (Mbbl/d)
Piceance                     27.5    27.1    1    %   23.1    27.1    -15  %
International                0.5     0.5     0    %   0.5     0.4     25   %
Other                       0.9    0.5    80   %   1.4    0.5    180  %
Subtotal (Mbbl/d)            28.9    28.1    3    %   25.0    28.0    -11  %
                                                                      
Total Production (MMcfe/d)   1,386  1,331  4    %   1,336  1,348  -1   %
                                                                           

Oil production in the Bakken Shale increased to an average of 11,400 barrels
per day in the fourth quarter. This represents a 78 percent increase vs. the
same period a year ago. The company’s 2012 exit rate in December was slightly
higher, at 11,600 barrels per day or 12,700 barrels of oil equivalent per day.

For the full-year, Bakken oil production increased 98 percent over 2011,
growing from an average of 4,800 barrels per day to an average of 9,500
barrels per day.

Piceance production remained nearly flat year-over-year, despite a decrease in
drilling and development. However, the basin’s total volumes from more than
4,100 wells continue to drive approximately 60 percent of WPX’s overall
production.

Natural gas production in the Marcellus Shale rose significantly in 2012.
Fourth-quarter 2012 volumes of 71 MMcf/d were up 163 percent vs. a year ago.
For the full-year, Marcellus production was up 320 percent vs. 2011 despite
ongoing reliability issues with a third-party gathering system. At year-end
2012, approximately 30 MMcf/d of Marcellus gas remained curtailed by
infrastructure constraints.

WPX’s total overall natural gas production increased 2 percent in 2012 to
1,105 MMcf/d, but declined 2 percent in the fourth quarter vs. the same period
a year ago reflecting the company’s capital discipline in reducing natural gas
drilling and completion activity.

Total NGL production increased 3 percent to 28,900 barrels per day in 2012 but
declined in the fourth quarter by 11 percent due to reduced ethane recovery.

The domestic net realized average price for natural gas, inclusive of hedges,
was $3.38 per Mcf in 2012, down 22 percent from $4.32 per Mcf a year ago.

The net realized average price for domestic oil, inclusive of hedges, was
$85.58 per barrel in 2012, up slightly from $85.30 per barrel a year ago.

The domestic net realized average price for NGL was $28.56 per barrel in 2012,
down 29 percent from $40.17 per barrel a year ago.

EXPENSES

WPX’s domestic expenses were approximately 15 percent lower for full-year 2012
than in 2011, primarily driven by lower gas management expenses. The following
expenses represent per-unit expenses related to the company’s domestic
production.

Domestic Expenses                           Per-Unit Basis
                                             2012          2011
Lease operating                              $  0.52        $  0.51
Gathering, processing & transportation       $  1.04        $  1.05
Taxes other than income                      $  0.18        $  0.24
General & administrative                     $  0.56        $  0.57
DD&A                                         $  1.93  *     $  1.89
                                                            
* Reflects a decline in the 12-month average commodity price that is
used to calculate the company's DD&A rate. The impact is $31 MM.

CASH AND LIQUIDITY

At Dec. 31, 2012, WPX had approximately $153 million in cash and cash
equivalents – including $35 million for international operations.

The company’s total liquidity at the end of the year was approximately $1.65
billion, including an undrawn $1.5 billion revolving credit agreement.

DEVELOPMENT ACTIVITY

In 2012, WPX participated in 548 gross (367 net) wells in the United States,
including 102 gross (53 net) wells in the fourth quarter. This figure
represents the number of wells that were completed and began commercial
delivery of production. WPX did not have any dry holes in 2012.

Highlights for the company’s operated wells in its primary areas are provided
below, as well as those for WPX’s new opportunities. The balance of gross
(net) wells is accounted for in non-operated interests, as well as WPX’s own
properties in the San Juan and Powder River basins.

In the liquids-rich Piceance Basin, WPX completed 240 gross (209 net) wells in
2012, including 23 gross (19 net) in the fourth quarter. During 2012, WPX set
new record times in the Piceance, drilling a well on its Valley acreage in 3.7
days and a well on its Highlands acreage in 7.7 days.

In the oil-rich Bakken Shale, WPX completed 41 gross (27 net) wells in 2012,
including 14 gross (10 net) in the fourth quarter.

WPX continues to improve its drilling and completion costs in the Bakken,
particularly with the shift to multi-well development pads. The company’s
recent Bakken well costs are down 10 to 20 percent through fewer drilling days
and completion efficiencies.

With the benefit of pad drilling, WPX drilled a recent well in 2013 – the
Blackhawk 1-12 HW – in 25 days, which is the company’s record in the basin.

In the Marcellus Shale, WPX completed 54 gross (33 net) wells in 2012,
including 11 gross (9 net) in the fourth quarter. The majority of this
activity took place in Susquehanna County. At year-end, 25 gross wells were
awaiting completion and nine wells were awaiting pipeline connection.

Since the third quarter, WPX has shaved another half-day off its record
drilling time in the Marcellus. The company’s new best time is 10.8 days,
which was achieved in January 2013.

Also in 2013, on Jan. 22 WPX announced a natural gas discovery in western
Colorado’s Niobrara formation that was drilled, cored and completed in 2012.

The Niobrara discovery well has registered an average production rate of 10.6
million cubic feet per day over its first 60 days, despite being substantially
choked back.

WPX has the lease rights to approximately 180,000 net acres of the
Niobrara/Mancos shale play in western Colorado. Over time, the Niobrara
discovery has the potential to more than double the company’s proved, probable
and possible (3P) reserves.

2012 PROVED RESERVES

Yesterday, WPX announced that its domestic proved reserves at Dec. 31, 2012,
were nearly 4.5 trillion cubic feet equivalent based on 2012 commodity price
averages. The company added 634 Bcfe of proved domestic reserves in 2012
through drilling.

Including international reserves of 159 billion cubic feet equivalent, WPX had
total proved reserves of 4.65 Tcfe.

WPX’s press release about its 2012 proved reserves is available at
www.wpxenergy.com, including an alternate scenario whereby 2012 domestic
proved reserves were 19 percent higher at 5,339 Bcfe using 2011 SEC pricing.

TODAY’S CONFERENCE CALL

WPX management will discuss its 2012 results and 2013 outlook during a webcast
starting at 10 a.m. Eastern today. Participants can access the audio and the
slides for the event via the homepage at www.wpxenergy.com.

A limited number of phone lines also will be available at (866) 510-0676.
International callers should dial (617) 597-5361. The participant passcode for
both lines is 69817966. A replay will be available on WPX’s website for one
year following the event.

Form 10-K

WPX plans to file its 2012 Form 10-K with the Securities and Exchange
Commission later today. Once filed, the document will be available on both the
SEC and WPX websites.

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.
Consolidated
(UNAUDITED)

                   2011                                                  2012
(Dollars in       1st Qtr  2nd Qtr  3rd Qtr  4th Qtr    Year       1st Qtr  2nd Qtr  3rd Qtr  4th Qtr   YTD
millions)
                                                                                                                  
  Revenues:
  Product
  revenues:
  Natural gas      $ 408     $ 423     $ 440     $ 423       $ 1,694     $ 357     $ 312     $ 331     $ 364      $ 1,364
  sales
  Oil and
  condensate         52        83        84        93          312         106       122       118       145        491
  sales
  Natural gas       85     107    110    106      408       93     78     65     63      299   
  liquid sales
  Total product      545       613       634       622         2,414       556       512       514       572        2,154
  revenues
  Gas management     408       337       347       336         1,428       337       187       186       239        949
  Net gain
  (loss) on
  derivatives        2         6         12        9           29          14        71        (22 )     15         78
  not designated
  as hedges
  Other             3      3      2      3        11        3      5      (1  )   1       8     
  Total revenues     958       959       995       970         3,882       910       775       677       827        3,189
                                                                                                                  
  Costs and
  expenses:
  Lease and
  facility           63        61        70        68          262         67        67        68        81         283
  operating
  Gathering,
  processing and     112       121       130       124         487         135       120       124       127        506
  transportation
  Taxes other        30        43        32        29          134         30        25        23        33         111
  than income
  Gas
  management,
  including
  charges for        417       344       359       351         1,471       355       194       200       247        996
  unutilized
  pipeline
  capacity
  Exploration        12        14        74        26          126         19        19        22        23         83
  Depreciation,
  depletion and      207       224       239       232         902         228       248       243       247        966
  amortization
  Impairment of
  producing
  properties and
  costs of           -         -         -         367         367         52        65        -         108        225
  acquired
  unproved
  reserves
  General and        67        63        70        75          275         68        71        67        81         287
  administrative
  Other-net         1      4      (1  )   (4    )   -         5      (2  )   5      4       12    
  Total costs        909       874       973       1,268       4,024       959       807       752       951        3,469
  and expenses
                                                                                                                  
  Operating          49        85        22        (298  )     (142  )     (49 )     (32 )     (75 )     (124 )     (280  )
  income (loss)
                                                                                                                  
  Interest           (49 )     (48 )     -         (20   )     (117  )     (26 )     (26 )     (25 )     (25  )     (102  )
  expense
  Interest           4         4         -         1           9           2         3         2         1          8
  capitalized
  Investment
  income and        6      6      7      7        26        10     8      7      5       30    
  other
                                                                                                                  
  Income (loss)
  from
  continuing       $ 10      $ 47      $ 29      $ (310  )   $ (224  )   $ (63 )   $ (47 )   $ (91 )   $ (143 )   $ (344  )
  operations
  before income
  taxes
  Provision
  (benefit) for     3      17     10     (104  )   (74   )    (25 )   (18 )   (28 )   (40  )   (111  )
  income taxes
  Income (loss)
  from             $ 7       $ 30      $ 19      $ (206  )   $ (150  )   $ (38 )   $ (29 )   $ (63 )   $ (103 )   $ (233  )
  continuing
  operations
  Income (loss)
  from              (8  )   (2  )   (3  )   (129  )   (142  )    (2  )   23     2      (1   )   22    
  discontinued
  operations
  Net income       $ (1  )   $ 28      $ 16      $ (335  )   $ (292  )   $ (40 )   $ (6  )   $ (61 )   $ (104 )   $ (211  )
  (loss)
  Less: Net
  income
  attributable      2      3      2      3        10        3      4      3      2       12    
  to
  noncontrolling
  interests
  Net income
  (loss)           $ (3  )  $ 25    $ 14    $ (338  )  $ (302  )   $ (43 )  $ (10 )  $ (64 )  $ (106 )  $ (223  )
  attributable
  to WPX Energy
                                                                                                                  
                                                                                                                  
                                                                                             
  Adjusted
  EBITDAX
  Reconciliation
  to net income
  (loss):
  Net income       $ (1  )   $ 28      $ 16      $ (335  )   $ (292  )   $ (40 )   $ (6  )   $ (61 )   $ (104 )   $ (211  )
  (loss)
  Interest           49        48        -         20          117         26        26        25        25         102
  expense
  Provision
  (benefit) for      3         17        10        (104  )     (74   )     (25 )     (18 )     (28 )     (40  )     (111  )
  income taxes
  Depreciation,
  depletion and      207       224       239       232         902         228       248       243       247        966
  amortization
  (a)
  Exploration       12     14     74     26       126       19     19     22     23      83    
  expenses
  EBITDAX            270       331       339       (161  )     779         208       269       201       151        829
  Impairment of
  producing
  properties and
  costs of           -         -         -         367         367         52        65        -         108        225
  acquired
  unproved
  reserves
  Unrealized MTM     18        (3  )     (5  )     1           11          1         (60 )     31        (4   )     (32   )
  (gains) losses
  (Income) loss
  from              8      2      3      129      142       2      (23 )   (2  )   1       (22   )
  discontinued
  operations
  Adjusted         $ 296   $ 330   $ 337   $ 336     $ 1,299    $ 263   $ 251   $ 230   $ 256    $ 1,000 
  EBITDAX
                                                                                                                  
  (a) Includes depreciation and amortization reported in general and administrative expense

                                                                                                                                          
                                                                                                                                                     
WPX Energy, Inc.
Domestic Segment
(UNAUDITED)

                       2011                                                                  2012
(Dollars in           1st Qtr      2nd Qtr      3rd Qtr      4th Qtr      Year         1st Qtr      2nd Qtr      3rd Qtr      4th Qtr      YTD
millions)
                                                                                                                                                     
  Revenues:
      Product
      revenues:
      Natural gas      $ 404         $ 419         $ 436         $ 419         $ 1,678       $ 353         $ 307         $ 327         $ 359         $ 1,346
      sales
      Oil and
      condensate         34            63            62            67            226           80            95            87            114           376
      sales
      Natural gas       84         106        109        105        404         92         77         65         62         296     
      liquid sales
      Total product      522           588           607           591           2,308         525           479           479           535           2,018
      revenues
      Gas management     408           337           347           336           1,428         337           187           186           239           949
      Net gain
      (loss) on
      derivatives        2             6             12            9             29            14            71            (22     )     15            78
      not designated
      as hedges
      Other             2          2          1          2          7           3          4          (1      )   1          7       
      Total revenues     934           933           967           938           3,772         879           741           642           790           3,052
                                                                                                                                                     
  Costs and
  expenses:
      Lease and
      facility           58            55            63            59            235           61            60            60            70            251
      operating
      Gathering,
      processing and     112           121           130           124           487           135           120           124           125           504
      transportation
      Taxes other        27            37            26            23            113           25            18            17            27            87
      than income
      Gas
      management,
      including
      charges for        417           344           359           351           1,471         355           194           200           247           996
      unutilized
      pipeline
      capacity
      Exploration        11            13            74            25            123           14            16            19            23            72
      Depreciation,
      depletion and      202           219           233           226           880           222           242           236           239           939
      amortization
      Impairment of
      producing
      properties and
      costs of           -             -             -             367           367           52            65            -             108           225
      acquired
      unproved
      reserves
      General and        64            61            67            71            263           65            68            64            76            273
      administrative
      Other-net         -          4          (2      )   (5      )   (3      )    5          -          4          3          12      
      Total costs        891           854           950           1,241         3,936         934           783           724           918           3,359
      and expenses
                                                                                                                                                     
  Operating income       43            79            17            (303    )     (164    )     (55     )     (42     )     (82     )     (128    )     (307    )
  (loss)
                                                                                                                                                     
  Interest expense       (49     )     (48     )     -             (20     )     (117    )     (26     )     (26     )     (25     )     (25     )     (102    )
  Interest               4             4             -             1             9             2             3             2             1             8
  capitalized
  Investment income     1          2          2          1          6           2          -          1          -          3       
  and other
                                                                                                                                                     
  Income (loss) from
  continuing           $ (1      )  $ 37        $ 19        $ (321    )  $ (266    )   $ (77     )  $ (65     )  $ (104    )  $ (152    )  $ (398    )
  operations before
  income taxes
                                                                                                                               
                                                                                                                               
  Summary of
  Production
  Volumes(1)
  Natural gas (MMcf)     92,473        95,207        102,615       98,485        388,780       101,346       102,163       97,310        96,664        397,483
  Oil (MBbls)            384           714           736           816           2,651         948           1,123         1,076         1,247         4,394
  Natural gas            2,425         2,527         2,567         2,539         10,057        2,746         2,779         2,613         2,254         10,392
  liquids (MBbls)
  Combined
  equivalent volumes     109,331       114,655       122,430       118,614       465,030       123,511       125,574       119,443       117,670       486,198
  (MMcfe)(2)
                                                                                                                                                     
  (1) Excludes production from our Arkoma Basin and Barnett Shale operations which were classified as discontinued operations and comprised less than 6 percent
      of our total production.
  (2) Oil and natural gas liquids were converted to MMcfe using the ratio of one barrel of oil, condensate or natural gas liquids to six thousand cubic feet of
      natural gas.
                                                                                                                               
                                                                                                                               
  Realized average
  price per unit,
  including the
  impact of hedges
  (1)
      Natural gas      $ 4.37        $ 4.41        $ 4.25        $ 4.25        $ 4.32        $ 3.48        $ 3.01        $ 3.35        $ 3.71        $ 3.38
      (per Mcf)
      Oil (per         $ 87.13       $ 87.51       $ 84.75       $ 83.10       $ 85.30       $ 84.54       $ 83.89       $ 82.31       $ 90.76       $ 85.58
      barrel)
      Natural gas
      liquids (per     $ 34.84       $ 41.90       $ 42.54       $ 41.14       $ 40.17       $ 33.46       $ 27.96       $ 24.43       $ 28.12       $ 28.56
      barrel)
                                                                                                                                                     
  (1) Excludes our Arkoma Basin and Barnett Shale operations, which were classified as discontinued operations.
                                                                                                                               
  Expenses per Mcfe
  (1)
      Lease and
      facility         $ 0.52        $ 0.48        $ 0.51        $ 0.51        $ 0.51        $ 0.50        $ 0.47        $ 0.51        $ 0.60        $ 0.52
      operating
      Gathering,
      processing and   $ 1.02        $ 1.06        $ 1.06        $ 1.04        $ 1.05        $ 1.09        $ 0.95        $ 1.04        $ 1.06        $ 1.04
      transportation
      Taxes other      $ 0.24        $ 0.33        $ 0.22        $ 0.19        $ 0.24        $ 0.20        $ 0.15        $ 0.14        $ 0.23        $ 0.18
      than income
      Depreciation,
      depletion and    $ 1.84        $ 1.92        $ 1.90        $ 1.91        $ 1.89        $ 1.80        $ 1.93        $ 1.98        $ 2.02        $ 1.93
      amortization
      General and      $ 0.58        $ 0.53        $ 0.55        $ 0.60        $ 0.57        $ 0.52        $ 0.54        $ 0.53        $ 0.65        $ 0.56
      administrative
                                                                                                                                                     
  (1) Excludes our Arkoma Basin and Barnett Shale operations, which were classified as discontinued operations.
                                                                                                                               
  Unutilized
  pipeline capacity
      Total
      unutilized
      pipeline         $ 10          $ 7           $ 9           $ 9           $ 35          $ 11          $ 12          $ 12          $ 11          $ 46
      capacity in
      gas management
      expense

                                                                                                         
                                                                                                                    
WPX Energy, Inc.
International
Segment
(UNAUDITED)

                       2011                                               2012
(Dollars in           1st Qtr  2nd Qtr  3rd Qtr  4th Qtr  Year      1st Qtr  2nd Qtr    3rd Qtr  4th Qtr  YTD
millions)
                                                                                                                    
  Revenues:
      Product
      revenues:
      Natural gas      $ 4       $ 4       $ 4       $ 4       $ 16       $ 4       $ 5         $ 4       $ 5       $ 18
      sales
      Oil and
      condensate         18        20        22        26        86         26        27          31        31        115
      sales
      Natural gas       1       1       1       1       4         1       1        -       1       3
      liquid sales
      Total product      23        25        27        31        106        31        33          35        37        136
      revenues
      Gas management     -         -         -         -         -          -         -           -         -         -
      Net gain
      (loss) on
      derivatives        -         -         -         -         -          -         -           -         -         -
      not designated
      as hedges
      Other             1       1       1       1       4         -       1        -       -       1
      Total revenues     24        26        28        32        110        31        34          35        37        137
                                                                                                                    
  Costs and
  expenses:
      Lease and
      facility           5         6         7         9         27         6         7           8         11        32
      operating
      Gathering,
      processing and     -         -         -         -         -          -         -           -         2         2
      transportation
      Taxes other        3         6         6         6         21         5         7           6         6         24
      than income
      Gas
      management,
      including
      charges for        -         -         -         -         -          -         -           -         -         -
      unutilized
      pipeline
      capacity
      Exploration        1         1         -         1         3          5         3           3         -         11
      Depreciation,
      depletion and      5         5         6         6         22         6         6           7         8         27
      amortization
      Impairment of
      producing
      properties and
      costs of           -         -         -         -         -          -         -           -         -         -
      acquired
      unproved
      reserves
      General and        3         2         3         4         12         3         3           3         5         14
      administrative
      Other-net         1       -       1       1       3         -       (2    )   1       1       -
      Total costs        18        20        23        27        88         25        24          28        33        110
      and expenses
                                                                                                                    
  Operating income       6         6         5         5         22         6         10          7         4         27
  (loss)
                                                                                                                    
  Interest expense       -         -         -         -         -          -         -           -         -         -
  Interest               -         -         -         -         -          -         -           -         -         -
  capitalized
  Investment income     5       4       5       6       20        8       8        6       5       27
  and other
                                                                                                                    
  Income (loss) from
  continuing           $ 11     $ 10     $ 10     $ 11     $ 42       $ 14     $ 18      $ 13     $ 9      $ 54
  operations before
  income taxes
                                                                                              
                                                                                              
  Summary of Net
  Production Volumes
  (1)
  Natural gas (MMcf)     1,826     1,940     1,726     1,896     7,389      1,737     1,726       1,861     1,737     7,061
  Oil (MBbls)            473       509       529       542       2,054      507       562         573       536       2,178
  Natural gas            44        47        55        37        183        45        44          45        47        181
  liquids (MBbls)
  Combined
  equivalent volumes     4,926     5,280     5,231     5,373     20,810     5,052     5,362       5,569     5,235     21,218
  (MMcfe)(2)
                                                                                                                    
  (1) Reflects approximately 69 percent of Apco's production (which corresponds to our ownership interest in Apco) and other
      minor directly held interests.
  (2) Oil and natural gas liquids were converted to MMcfe using the ratio of one barrel of oil, condensate or natural gas
      liquids to six thousand cubic feet of natural gas.

                                                                                                                      
                                                                                                                                 
WPX Energy, Inc.
Reconciliation-
Adjusted Income
(Loss) from
Continuing
Operations
(UNAUDITED)

                     2011                                                        2012
(Dollars in
millions, except    1st Qtr    2nd Qtr    3rd Qtr    4th Qtr    Year       1st Qtr    2nd Qtr    3rd Qtr    4th Qtr    YTD
per share amounts)
                                                                                                                                         
  Income (loss)
  from continuing
  operations
  attributable to    $ 5       $ 27      $ 17      $ (209  )  $ (160  )   $ (41   )  $ (33   )  $ (66   )  $ (105  )  $ (245  )
  WPX Energy, Inc.
  available to
  common
  stockholders
  Income (loss)
  from continuing
  operations -       $ 0.03    $ 0.13    $ 0.09    $ (1.06 )  $ (0.81 )   $ (0.21 )  $ (0.17 )  $ (0.33 )  $ (0.53 )  $ (1.23 )
  diluted earnings
  per share
  Adjustments:
       Impairment
       of
       producing
       properties    $ -         $ -         $ -         $ 367       $ 367       $ 52        $ 65        $ -         $ 108       $ 225
       and costs
       of acquired
       unproved
       reserves
       Unrealized
       MTM (gains)   $ 18      $ (3    )  $ (5    )  $ 1       $ 11       $ 1       $ (60   )  $ 31      $ (4    )  $ (32   )
       losses
  Total              $ 18        $ (3    )   $ (5    )   $ 368       $ 378       $ 53        $ 5         $ 31        $ 104       $ 193
  adjustments
  Less tax effect    $ (7    )  $ 1       $ 2       $ (135  )  $ (138  )   $ (19   )  $ (2    )  $ (12   )  $ (38   )  $ (71   )
  for above items
  Adjusted income
  (loss) from
  continuing
  operations         $ 16      $ 25      $ 14      $ 24      $ 80       $ (7    )  $ (30   )  $ (47   )  $ (39   )  $ (123  )
  available to
  common
  stockholders
  Adjusted diluted
  earnings (loss)    $ 0.08    $ 0.13    $ 0.07    $ 0.12    $ 0.40     $ (0.04 )  $ (0.15 )  $ (0.23 )  $ (0.20 )  $ (0.62 )
  per common share
  Weighted-average
  shares -diluted      197.1       197.1       197.1       197.1       197.1       198.1       198.9       199.1       199.2       198.8
  - millions (1)
                                                                                                                                 
  (1)  For comparative purposes and to provide a more meaningful calculation for weighted average shares, we have assumed the amount of
       common stock issued at December 31, 2011 to be outstanding for all 2011 periods presented.



WPX Energy, Inc.
Consolidated Statement of Operations
(Unaudited)
                                                           
                    Three months ended December        Year ended December 31,
                    31,
                    2012             2011            2012        2011
                    (Millions, except per share amounts)
Revenues:
  Product
  revenues:
  Natural gas       $  364             $ 423           $ 1,364       $ 1,694
  sales
  Oil and
  condensate           145               93              491           312
  sales
  Natural gas         63              106           299         408   
  liquid sales
  Total product        572               622             2,154         2,414
  revenues
  Gas management       239               336             949           1,428
  Net gain (loss)
  on derivatives       15                9               78            29
  not designated
  as hedges
  Other               1               3             8           11    
Total revenues         827               970             3,189         3,882
Costs and
expenses:
  Lease and
  facility             81                68              283           262
  operating
  Gathering,
  processing and       127               124             506           487
  transportation
  Taxes other          33                29              111           134
  than income
  Gas management,
  including
  charges for          247               351             996           1,471
  unutilized
  pipeline
  capacity
  Exploration          23                26              83            126
  Depreciation,
  depletion and        247               232             966           902
  amortization
  Impairment of
  costs of
  producing
  properties and       108               367             225           367
  costs of
  acquired
  unproved
  reserves
  General and          81                75              287           275
  administrative
  Other - net         4               (4    )        12          -     
Total costs and        951               1,268           3,469         4,024
expenses
                                                                     
Operating income       (124   )          (298  )         (280  )       (142  )
(loss)
Interest expense       (25    )          (20   )         (102  )       (117  )
Interest               1                 1               8             9
capitalized
Investment income     5               7             30          26    
and other
Income (loss)
from continuing        (143   )          (310  )         (344  )       (224  )
operations before
income taxes
Provision
(benefit) for         (40    )         (104  )        (111  )      (74   )
income taxes
Income (loss)
from continuing        (103   )          (206  )         (233  )       (150  )
operations
Income (loss)
from discontinued     (1     )         (129  )        22          (142  )
operations
Net income (loss)      (104   )          (335  )         (211  )       (292  )
  Less: Net
  income
  attributable to     2               3             12          10    
  noncontrolling
  interests
Net income (loss)
attributable to     $  (106   )        $ (338  )       $ (223  )     $ (302  )
WPX Energy
                                                                     
Amounts
attributable to
WPX Energy, Inc.:
Basic and diluted
earnings (loss)
per common share:
  Income (loss)
  from continuing   $  (0.53  )        $ (1.06 )       $ (1.23 )     $ (0.81 )
  operations
  Income (loss)
  from                (0.00  )         (0.65 )        0.11        (0.72 )
  discontinued
  operations
  Net income        $  (0.53  )        $ (1.71 )       $ (1.12 )     $ (1.53 )
  (loss)
                                                                     
Weighted-average       199.2             197.1           198.8         197.1
shares



WPX Energy, Inc.
Consolidated Balance Sheet
(Unaudited)
                                                       
                               December 31, 2012            December 31, 2011
ASSETS                         (Dollars in millions, except per share amounts)
Current assets:
Cash and cash equivalents      $      153                   $    526
Accounts receivable, net of
allowance of $11 at December          443                        509
31, 2012 and $ 13 at
December 31, 2011
Deferred income taxes                 17                         -
Derivative assets                     58                         506
Inventories                           66                         73
Other                                35                       60        
Total current assets                  772                        1,674
Investments                           145                        125
Properties and equipment
(successful efforts method            13,339                     12,199
of accounting)
Less: Accumulated
depreciation, depletion and          (4,923     )              (3,977    )
amortization
Properties and equipment,             8,416                      8,222
net
Derivative assets                     2                          10
Other noncurrent assets              121                      401       
Total assets                   $      9,456                $    10,432    
                                                            
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable               $      509                   $    702
Accrued and other current             203                        186
liabilities
Deferred income taxes                 -                          116
Derivative liabilities               14                       152       
Total current liabilities             726                        1,156
Deferred income taxes                 1,401                      1,556
Long-term debt                        1,508                      1,503
Derivative liabilities                1                          7
Asset retirement obligations          316                        283
Other noncurrent liabilities          133                        168
                                                            
Equity:
Stockholders' equity:
Preferred Stock (100 million
shares authorized at $0.01            -                          -
par value; no shares issued)
Common Stock (2 billion
shares authorized at $0.01
par value; 199.3 million
shares issued at December
31, 2012 and 197.1 million
shares issued at December             2                          2
31, 2011)
Additional paid-in-capital            5,487                      5,457
Accumulated deficit                   (223       )               -
Accumulated other                    2                        219       
comprehensive income
Total stockholders' equity            5,268                      5,678
Noncontrolling interests in          103                      81        
consolidated subsidiaries
Total equity                         5,371                    5,759     
Total liabilities and equity   $      9,456                $    10,432    

                                                                
                                                                    
WPX Energy, Inc.
Consolidated Statement of Cash Flows
(Unaudited)

                                                     Year ended December 31,
                                                     2012           2011
                                                     (Millions)
Operating Activities
Net income (loss)                                    $ (211   )     $ (292   )
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
   Depreciation, depletion and amortization            973            951
   Deferred income tax benefit                         (160   )       (176   )
   Provision for impairment of properties and
   equipment (including certain exploration            288            694
   expenses)
   Amortization of stock-based awards                  28             5
   (Gain) loss on sale of assets                       (42    )       (1     )
   Cash provided (used) by operating assets and
   liabilities:
   Accounts receivable                                 68             (100   )
   Inventories                                         7              3
   Margin deposits and customer margin deposits        (5     )       (18    )
   payable
   Other current assets                                7              (11    )
   Accounts payable                                    (128   )       131
   Accrued and other current liabilities               12             10
   Changes in current and noncurrent derivative        (32    )       8
   assets and liabilities
   Other, including changes in other noncurrent       (11    )      2      
   assets and liabilities
Net cash provided by operating activities             794          1,206  
                                                                    
Investing Activities
Capital expenditures (a)                               (1,521 )       (1,572 )
Proceeds from sale of assets                           310            15
Purchases of investments                               (2     )       (12    )
Other                                                 9            13     
Net cash used in investing activities                 (1,204 )      (1,556 )
                                                                    
Financing Activities
Proceeds from common stock                             3              -
Proceeds from long-term debt                           6              1,502
Proceeds from revolver debt                            50             -
Payments of revolver debt                              (50    )       -
Contribution from noncontrolling interest              10             -
Excess tax benefit of stock based awards               13             -
Net increase in notes payable to Williams              -              159
Net changes in Williams' net investment                -              (777   )
Revolving debt facility costs                          -              (30    )
Other                                                 5            (15    )
Net cash provided by (used in) financing              37           839    
activities
                                                                    
Net increase (decrease) in cash and cash               (373   )       489
equivalents
Cash and cash equivalents at beginning of period      526          37     
Cash and cash equivalents at end of period           $ 153         $ 526    
                                                                    
________
(a) Increase to properties and equipment             $ (1,449 )     $ (1,641 )
Changes in related accounts payable                   (72    )      69     
Capital expenditures                                 $ (1,521 )     $ (1,572 )

Contact:

WPX Energy
Media Contact:
Kelly Swan, 539-573-4944
or
Investor Contact:
David Sullivan, 539-573-9360
 
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