WPX Energy Announces Second-Quarter 2013 Net Income

  WPX Energy Announces Second-Quarter 2013 Net Income

Business Wire

TULSA, Okla. -- August 1, 2013

WPX Energy (NYSE:WPX) today announced its unaudited operating and financial
results for the second-quarter of 2013. Recent highlights include:

  *Oil discovery in New Mexico’s San Juan Basin
  *$18 million in unaudited 2Q net income
  *Niobrara discovery well produces 1.4 billion cubic feet in first 180 days
  *30% growth in Williston Basin oil production
  *Williston operational efficiencies driving greater number of wells in 2013
    with no change in rig count

CEO PERSPECTIVE

“We have high-performing assets and we are continuing our track record of
operations and exploration success,” said Ralph A. Hill, WPX’s president and
chief executive officer.

“We’re announcing another exploratory success – our second this year on the
heels of our Piceance Niobrara gas discovery. This one is in the oil window of
the San Juan Basin. The production is from the Mancos Gallup Sandstone. Based
on the commerciality of the results, we’re proceeding to develop this play,”
Hill added.

“This is our exploration project that we initially discussed at this time last
year. Based on having more than 31,000 net acres and four successful wells
already, we expect resource potential of approximately 66 million barrels of
oil equivalent net to WPX, with approximately 70 percent of the reserves being
oil.

“At the same time, we’re always pursuing cost improvements and efficiency
gains. In the Piceance, we deployed a new-build rig that runs entirely on
natural gas, significantly cutting our fuel cost by more than 80 percent or
roughly $2.6 million per year.

“In the Williston, we’re now doing simultaneous operations like we’ve done in
the Piceance, allowing us to both drill and complete wells concurrently on the
same pad. This is one way we’re driving down drilling days and costs in North
Dakota, making it possible to do more drilling and completions this year than
originally planned without increasing our rig count and all within our capital
guidance range.

“Our continued Williston Basin operational improvements should facilitate
seven more wells drilled and 11 additional completions this year for a new
total of 46 spuds and 52 completions,” Hill said.

“We expect thisto increase the year-end exit rate for our Williston oil
production by more than 2,000 barrels per day– or 15 percent –to a new total
of 15,000 barrels of oil per day.For 2014,this additional activity should
increase our Williston production by 8 percent.Our oil production growth rate
in the Williston has been impressive – up 30 percentin the second quarter
compared with a year ago.

“As we previously announced, we also moved to increase our natural gas volumes
this year and next, adding two drilling rigs in the Piceance Valley for the
remainder of the year. This will halt the decline in our gas volumes produced
and set the stage for future growth.

“The Piceance is the perfect place for this with processing, gathering, water
management and transportation already in place ready for greater volumes,”
Hill said.

GALLUP SANDSTONE OIL DISCOVERY

WPX is initiating oil development in New Mexico’s San Juan Basin after
exploratory drilling this spring yielded commercially economic results from
the Gallup Sandstone in the Mancos formation.

The company’s first four Gallup Sandstone wells flowed at a maximum rate of
488, 623, 1,004 and 800 barrels of oil equivalent per day, respectively.

The oil discovery marks WPX’s second exploratory success this year following a
natural gas discovery in the Piceance Basin’s Niobrara Shale.

WPX plans to drill eight to 10 more Gallup Sandstone wells during 2013, three
of which are already under way. Drilling activities in this area of the San
Juan Basin are not subject to seasonal closures.

WPX based its 2013 plan for the Gallup Sandstone on a 28-day drilling schedule
for each well. The company drilled its most recent well in just 15 days.

WPX is estimating a year-end 2013 exit rate of 3,400 boe/d from this new
development. The company’s Gallup Sandstone wells have an average total depth
of 5,400 feet, with horizontal laterals averaging 4,300 feet. Production is
transported by truck to a nearby pipeline injection point.

WPX currently has the lease rights to more than 31,000 net acres in the oil
window of the San Juan Basin for its Gallup Sandstone development. WPX has
nearly 100 percent working interest in these holdings. Efforts are under way
to acquire additional leases. The company’s initial estimate of resource
potential on the existing acreage is approximately 66 million barrels of oil
equivalent.

Existing personnel at WPX’s Aztec, N.M., office are overseeing the company’s
Gallup Sandstone operations. WPX has three decades of knowledge and experience
in the San Juan Basin. In 2010, WPX drilled the first two Mancos Shale
horizontal wells in the San Juan Basin. Those wells yielded a significant
natural gas discovery and a data set that has provided valuable information
leading to WPX’s recent Piceance Niobrara discovery and the new San Juan
Gallup oil production.

Overall, WPX has approximately 159,000 net acres under lease in the San Juan
Basin. Approximately 75,000 of these acres cover the Mancos formation.
Historically, WPX has developed natural gas wells in the San Juan, where today
it operates approximately 880 natural gas wells and holds a joint ownership
interest in another 2,400 wells.

NIOBRARA SHALE UPDATE

Aspreviously announced, WPX continues to plan to drill a total of four
horizontal Niobrara wells in the Piceance during 2013 as a first step in the
delineation of the company’s Niobrara discovery.

Over its first 180 days, WPX’s Niobrara Shale discovery well has produced 1.4
billion cubic feet of natural gas. The discovery well is currently producing
4.4 MMcf/d at a flowing tubing pressure of about 2,300 pounds per square inch.

WPX has finished drilling its second Niobrara well, with completion expected
in August. WPX’s third Niobrara well was spud July 12, with completions
expected to begin in September.

The drilling rig on WPX’s Niobrara development uses a 100-percent natural gas
engine, which reduces fuel costs by more than 80 percent vs. diesel. WPX
expects to convert four additional Piceance rigs this year to employ bi-fuel
engines that use both natural gas and diesel.

“WPX intends to aggressively delineate this impressive discovery,” CEO Ralph
Hill said. “We are confident the Niobrara is prospective throughout our
180,000 net acres. We expect to finish a current 3D shoot of 24,000 acres by
mid-2014. After that, we’ll have 3D coverage on more than 65 percent of our
Valley acreage.

“Management’s plan is to more than double our Niobrara drilling in 2014, with
10 to 12 wells expected. After that, we will have delineated 80 percent of our
Valley acreage. It’s important that we balance our desire to rapidly develop
this with the right systematic technical approach to drilling and evaluating
our early wells.

“We believe that our Piceance team is among the very best in the nation in
rapid, efficient development. Plus, the Piceance has all of the infrastructure
in place with no constraints,” Hill added.

SECOND-QUARTER FINANCIAL RESULTS

WPX reported unaudited net income from continuing operations attributable to
WPX Energy of $18 million for second-quarter 2013, or income of $0.09 per
share on a diluted basis, compared with a net loss of $33 million, or a loss
of $0.17 per share, in the same period a year ago.

For the first six months of 2013, WPX reported an unaudited net loss from
continuing operations attributable to WPX Energy of $98 million, or a loss of
$0.49 per share on a diluted basis, compared with net loss of $74 million, or
a loss of $0.37 per share, for the same period in 2012.

WPX had an adjusted loss from continuing operations of $44 million, or a loss
of $0.22 per share on a diluted basis, for second-quarter 2013, compared with
an adjusted loss from continuing operations of $30 million, or a loss of $0.15
per share, for the same period in 2012. A reconciliation accompanies this
press release.

For the first six months of 2013, WPX had an adjusted loss from continuing
operations of $95 million, or a loss of $0.47 per share on a diluted basis,
compared with an adjusted loss from continuing operations of $37 million, or a
loss of $0.19 per share, for the first six months of 2012. A reconciliation
accompanies this press release.

Consolidated oil revenues increased 24 percent quarter-over-quarter, natural
gas revenues increased 1 percent and natural gas liquids (NGL) revenues
decreased 26 percent.

The domestic net realized average price for natural gas was $3.45 per Mcf in
second-quarter 2013, up 15 percent from $3.01 per Mcf a year ago. The 2012
period is inclusive of derivatives designated as hedges totaling $130 million,
or $1.27 per Mcf.

The net realized average price for domestic oil was $87.76 per barrel in
second-quarter 2013, an increase of 4.6 percent from $83.89 per barrel a year
ago. The 2012 period is inclusive of hedges.

The domestic net realized average price for NGL was $30.21 per barrel in
second-quarter 2013, up 8 percent from $27.96 per barrel a year ago.

ADJUSTED EBITDAX

WPX’s adjusted EBITDAX (a non-GAAP measure) for second-quarter 2013 was $210
million, compared with $251 million for the same period a year ago.

The primary factors contributing to the quarter-over-quarter decrease in
adjusted EBITDAX were lower volumes for both natural gas and NGL, partially
offset by higher domestic net realized average prices.

For the first six months of 2013, WPX’s adjusted EBITDAX was $413 million,
compared with $514 million for the first half of 2012.

EBITDAX (non-GAAP)          Second Quarter           YTD
                             2013       2012           2013       2012
                             millions     millions       millions     millions
Net income (loss)            $22          ($6   )        ($91  )      ($46  )
Interest expense             $28          $26            $54          $52
Provision (benefit) for      $11          ($18  )        ($52  )      ($43  )
income taxes
Depreciation, depletion      $227         $248           $458         $476
and amortization
Exploration expenses         $20         $19           $39         $38   
EBITDAX                      $308        $269          $408        $477  
                                                                      
Impairments                  –            $65            –            $117
Unrealized MTM (gains)       ($98  )      ($60  )        $5           ($59  )
losses
(Income) loss from           –           ($23  )        –           ($21  )
discontinued operations
Adjusted EBITDAX             $210        $251          $413        $514  
                                                                            

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 in second-quarter 2013 was
1,262 MMcfe/d, down 12 percent vs. the same period in 2012 but in line with
the company’s 2013 forecast.

Total natural gas production of just over 1 billion cubic feet per day in
second-quarter 2013 decreased 12 percent vs. the prior-year period, but just 1
percent vs. first-quarter 2013. With the two additional rigs in the Piceance,
WPX expects to arrest its gas production decline.

Marcellus Shale natural gas production in the Appalachian Basin increased 33
percent to 85 MMcf/d vs. a year ago. Significant remedial work to improve
compressor performance was completed along the Laser pipeline system that
services WPX’s Susquehanna County production, continuing to resolve
third-party infrastructure constraints.

Oil production in the Williston Basin increased 30 percent to an average of
12,300 barrels per day in the second-quarter vs. 9,500 barrels per day in the
same period a year ago, despite being impacted by in-transit rail shipments
awaiting final delivery. Barring this impact, the average would have been
approximately 12,800 barrels per day, or about 500 barrels per day higher, in
second-quarter 2013.

NGL production in the Piceance Basin also decreased vs. a year ago, down 34
percent to 19.7 Mbbl/d due to lower ethane recovery rates. WPX’s ethane
recovery rate in the second-quarter was 37 percent vs. 74 percent a year ago.

Average Daily           2Q                          1Q      Sequential
Production
                         2013    2012    Change       2013    Change
Natural gas (MMcf/d)            
Piceance Basin           592       712       -17%         614       -4%
Appalachian Basin        85        64        33%          74        15%
Powder River Basin       179       214       -16%         182       -2%
San Juan Basin           122       123       -1%          124       -2%
International            18        19        -5%          17        6%
Other                   11      10      10%          10      10%
Subtotal (MMcf/d)        1,007     1,142     -12%         1,021     -1%
                                                                    
Oil (Mbbl/d)
Williston Basin          12.3      9.5       30%          11.5      7%
Piceance Basin           2.0       2.7       -26%         2.0       0%
International            6.1       6.2       -2%          5.6       9%
Other                   0.7     0.1     NM           0.3     NM
Subtotal (Mbbl/d)        21.1      18.5      14%          19.4      9%
                                                                    
NGLs (Mbbl/d)
Piceance Basin           19.7      30.0      -34%         20.2      -2%
International            0.5       0.5       0%           0.5       0%
Other                   1.1     0.5     120%         1.0     10%
Subtotal (Mbbl/d)        21.3      31.0      -31%         21.7      -2%
                                                                    
Total Production         1,262   1,439   -12%         1,268   0%
(MMcfe/d)
                                                                    

NM is a percentage calculation that is not meaningful due to a change greater
than 200 percent.

EXPENSES

WPX’s domestic expenses were approximately 6 percent lower in second-quarter
2013 than the same period in 2012, primarily driven by the absence of an
impairment vs. a year ago, lower DD&A and lower gathering, processing and
transportation expenses.

WPX's domestic lease operating expenses (LOE) in second-quarter 2013 were $63
million vs. $60 million in second-quarter 2012. The increase is primarily
attributable to increased water disposal costs resulting from decreased
drilling and completion activities, as well as temporary infrastructure
constraints. Infrastructure improvements are progressing and expenses are
expected to decline over the latter half of the year.

Domestic gathering, processing and transportation charges were $110 million in
second-quarter 2013 vs. $120 million in second-quarter 2012. One of the
drivers behind the 8 percent improvement is the effect of favorable contract
terms for gathering and processing services in the Piceance.

Taxes other than income for domestic operations in second-quarter 2013 were
$30 million vs. $18 million in second-quarter 2012 driven by higher commodity
prices excluding hedges. Domestic general and administrative expenses (G&A)
were $69 million in second-quarter 2013 vs. $68 million in second-quarter
2012.

Domestic depreciation, depletion and amortization expenses (DD&A) were $217
million in second-quarter 2013 vs. $242 million in second-quarter 2012
primarily due to lower volumes.

CASH AND LIQUIDITY

Net cash provided by operating activities for the first six months of 2013 was
$287 million, including $144 million in the second quarter.

At June 30, 2013, WPX had approximately $41 million in unrestricted domestic
cash and cash equivalents and $49 million in international cash.

The company’s total liquidity at the end of second-quarter 2013 was
approximately $1.4 billion after drawing $180 million from its $1.5 billion
revolving credit agreement during the first half of the year. Subsequent to
the close of the quarter, WPX drew an additional $90 million from the
revolver.

INVESTING ACTIVITIES

For the first six months of 2013, WPX made approximately $548 million of
capital investments, including $277 million in the second quarter. For
full-year 2013, WPX continues to expect approximately $1.2 billion in total
capital spending.

Williston wells are now being drilled faster, more efficiently and at a lower
cost than 2012, facilitating the opportunity for additional development
primarily during the fourth quarter of 2013. This work will be done with the
four existing rigs WPX already has in the basin.

DEVELOPMENT ACTIVITY

For the first six months of 2013, WPX domestic operations participated in 223
gross (176 net) wells, including 98 gross (78 net) in the second quarter.
These figures represent the number of wells that were completed and began
commercial delivery of production.

Highlights for the company’s operated wells in its core growth areas are
provided below. 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 Piceance Basin, WPX completed 64 gross (59 net) wells in second-quarter
2013, for a total of 139 gross (134 net) in the first six months of the year.
The company deployed seven rigs on its Piceance acreage during the majority of
the second quarter.

WPX’s Niobrara discovery well in the Piceance Basin registered an average
production rate of almost 5.7 million cubic feet per day in the second
quarter. It has already exceeded more than 1.4 billion cubic feet in
cumulative production.

In the Williston Basin, WPX completed 9 gross (7 net) wells during the second
quarter, for a total of 21 gross (16 net) for the first half of the year.
Since 2011, WPX has completed 100 Williston wells.

A shift to multi-well development pads and new completion efficiencies
continues to drive 10-20 percent lower Williston well costs vs. a year ago.
During the second quarter, WPX successfully executed simultaneous operations –
SIMOPS – on seven completions on the Good Bird and Blackhawk Tri-Unit pads.
These seven wells were fracture stimulated from a half mile away while new
adjacent wells were being drilled on the same pad.

In the Appalachian Basin, WPX completed 10 gross (7 net) wells during the
second quarter, and a total of 17 gross (13 net) for the first half of 2013.
The company has one rig deployed in the Appalachian Basin, located in north
Westmoreland County. Well performance in the area continues to exceed
expectations.

POTENTIAL ASSET SALES

WPX has completed a rigorous auction for its holdings in Wyoming’s Powder
River Basin. After this process, management concluded that retaining ownership
of the assets at the present time represents greater value for shareholders
than the bids received. WPX remains open to the potential sale or partial
monetization of these assets in the future.

Additionally, WPX continues to consider the disposition of its interests in
Apco Oil and Gas International, Inc. (NASDAQ:APAGF). WPX holds an approximate
69 percent controlling equity interest in Apco, which owns oil and gas
interests in Argentina and Colombia.

WPX is encouraged by recent activity near Apco’s Vaca Muerta acreage. Any
potential transaction related to Apco is expected to be a 2014 event. WPX has
retained an advisor to support this process.

TODAY’S CONFERENCE CALL

WPX management will discuss its second-quarter results today during a webcast
starting at 11 a.m. Eastern. Participants are encouraged to access the event
and the corresponding slides at www.wpxenergy.com.

A limited number of phone lines also will be available at (866) 515-2911.
International callers should dial (617) 399-5125. The conference
identification code for both phone numbers is 13946419. A replay will be
available on the company’s website for one year following the event.

Form 10-Q

WPX plans to file its second-quarter Form 10-Q with the Securities and
Exchange Commission this week. Once filed, the document will be available on
both the SEC and WPX websites.

UPCOMING CONFERENCE PRESENTATION

WPX CEO Ralph Hill is slated to present at the Enercom Oil and Gas Conference
in Denver on Tuesday, Aug. 13. Hill's presentation is scheduled to begin at 10
a.m. Eastern. Please visit www.wpxenergy.com on the day of the event to
confirm the presentation time and to view the webcast.

About WPX Energy, Inc.

WPX Energy is an exploration and production company focused on developing its
significant oil and gas reserves, particularly in the Piceance, Williston and
Appalachian basins. 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)
                                                                                         
                 2012                                                           2013
(Dollars in     1st Qtr   2nd Qtr   3rd Qtr   4th Qtr    Year        1st Qtr    2nd Qtr   YTD
millions)
                                                                                                         
Revenues:
Product
revenues:
Natural gas      $ 357       $ 312       $ 331       $ 364        $ 1,364       $ 267        $ 316       $ 583
sales
Oil and
condensate         106         122         118         145          491           139          151         290
sales
Natural gas       93      78      65      63       299         54       58      112   
liquid sales
Total product      556         512         514         572          2,154         460          525         985
revenues
Gas management     337         187         186         239          949           261          205         466
Net gain
(loss) on
derivatives        14          71          (22 )       15           78            (94  )       78          (16   )
not designated
as hedges
Other             3       5       (1  )    1        8           4        7       11    
Total revenues     910         775         677         827          3,189         631          815         1,446
                                                                                                         
Costs and
expenses:
Lease and
facility           67          67          68          81           283           75           73          148
operating
Gathering,
processing and     135         120         124         127          506           107          111         218
transportation
Taxes other        30          25          23          33           111           35           36          71
than income
Gas
management,
including
charges for        355         194         200         247          996           243          222         465
unutilized
pipeline
capacity
Exploration        19          19          22          23           83            19           20          39
Depreciation,
depletion and      228         248         243         247          966           231          227         458
amortization
Impairment of
producing
properties and
costs of           52          65          -           108          225           -            -           -
acquired
unproved
reserves
General and        68          71          67          81           287           72           74          146
administrative
Other-net         5       (2  )    5       4        12          7        1       8     
Total costs        959         807         752         951          3,469         789          764         1,553
and expenses
                                                                                                         
Operating          (49 )       (32 )       (75 )       (124 )       (280  )       (158 )       51          (107  )
income (loss)
                                                                                                         
Interest           (26 )       (26 )       (25 )       (25  )       (102  )       (26  )       (28 )       (54   )
expense
Interest           2           3           2           1            8             1            1           2
capitalized
Investment
income and        10      8       7       5        30          7        9       16    
other
                                                                                                         
Income (loss)
from
continuing       $ (63 )     $ (47 )     $ (91 )     $ (143 )     $ (344  )     $ (176 )     $ 33        $ (143  )
operations
before income
taxes
Provision
(benefit) for     (25 )    (18 )    (28 )    (40  )    (111  )      (63  )    11      (52   )
income taxes
Income (loss)
from             $ (38 )     $ (29 )     $ (63 )     $ (103 )     $ (233  )     $ (113 )     $ 22        $ (91   )
continuing
operations
Income (loss)
from              (2  )    23      2       (1   )    22          -        -       -     
discontinued
operations
Net income       $ (40 )     $ (6  )     $ (61 )     $ (104 )     $ (211  )     $ (113 )     $ 22        $ (91   )
(loss)
Less: Net
income
attributable      3       4       3       2        12          3        4       7     
to
noncontrolling
interests
Net income
(loss)           $ (43 )   $ (10 )   $ (64 )   $ (106 )   $ (223  )     $ (116 )   $ 18     $ (98   )
attributable
to WPX Energy
                                                                                                         
                                                                                  
Adjusted
EBITDAX
Reconciliation
to net income
(loss):
Net income       $ (40 )     $ (6  )     $ (61 )     $ (104 )     $ (211  )     $ (113 )     $ 22        $ (91   )
(loss)
Interest           26          26          25          25           102           26           28          54
expense
Provision
(benefit) for      (25 )       (18 )       (28 )       (40  )       (111  )       (63  )       11          (52   )
income taxes
Depreciation,
depletion and      228         248         243         247          966           231          227         458
amortization
Exploration       19      19      22      23       83          19       20      39    
expenses
EBITDAX            208         269         201         151          829           100          308         408
Impairment of
producing
properties and
costs of           52          65          -           108          225           -            -           -
acquired
unproved
reserves
Unrealized MTM     1           (60 )       31          (4   )       (32   )       103          (98 )       5
(gain) loss
(Income) loss
from              2       (23 )    (2  )    1        (22   )      -        -       -     
discontinued
operations
Adjusted         $ 263    $ 251    $ 230    $ 256     $ 1,000      $ 203     $ 210    $ 413   
EBITDAX
                                                                                                         

WPX Energy, Inc.
Domestic Segment
(UNAUDITED)
                                                                                                                
                 2012                                                                            2013
(Dollars in     1st Qtr       2nd Qtr       3rd Qtr       4th Qtr       YTD           1st Qtr       2nd Qtr       YTD
millions)
                                                                                                                                 
Revenues:
Product                                                                                                                      
revenues:
Natural gas      $ 353           $ 307           $ 327           $ 359           $ 1,346         $ 263           $ 310           $ 573
sales
Oil and
condensate         80              95              87              114             376             111             121             232
sales
Natural gas       92          77          65          62          296           53          58          111     
liquid sales
Total product      525             479             479             535             2,018           427             489             916
revenues
Gas management     337             187             186             239             949             261             205             466
Net gain
(loss) on
derivatives        14              71              (22     )       15              78              (94     )       78              (16     )
not designated
as hedges
Other             3           4           (1      )    1           7             1           1           2       
Total revenues     879             741             642             790             3,052           595             773             1,368
                                                                                                                                 
Costs and
expenses:
Lease and
facility           61              60              60              70              251             67              63              130
operating
Gathering,
processing and     135             120             124             125             504             106             110             216
transportation
Taxes other        25              18              17              27              87              29              30              59
than income
Gas
management,
including
charges for        355             194             200             247             996             243             222             465
unutilized
pipeline
capacity
Exploration        14              16              19              23              72              18              17              35
Depreciation,
depletion and      222             242             236             239             939             224             217             441
amortization
Impairment of
producing
properties and
costs of           52              65              -               108             225             -               -               -
acquired
unproved
reserves
General and        65              68              64              76              273             69              69              138
administrative
Other-net         5           -           4           3           12            6           5           11      
Total costs        934             783             724             918             3,359           762             733             1,495
and expenses
                                                                                                                                 
Operating          (55     )       (42     )       (82     )       (128    )       (307    )       (167    )       40              (127    )
income (loss)
                                                                                                                                 
Interest           (26     )       (26     )       (25     )       (25     )       (102    )       (26     )       (28     )       (54     )
expense
Interest           2               3               2               1               8               1               1               2
capitalized
Investment
income and        2           -           1           -           3             2           2           4       
other
                                                                                                                                 
Income (loss)
from
continuing       $ (77     )   $ (65     )   $ (104    )   $ (152    )   $ (398    )     $ (190    )   $ 15         $ (175    )
operations
before income
taxes
                                                                                                        
                                                                                                        
Summary of
Production
Volumes
Natural gas        101,346         102,163         97,310          96,664          397,483         90,411          90,022          180,433
(MMcf)
Oil (MBbls)        948             1,123           1,076           1,247           4,394           1,242           1,373           2,614
Natural gas
liquids            2,746           2,779           2,613           2,254           10,392          1,907           1,895           3,802
(MBbls)
Combined
equivalent         123,511         125,574         119,443         117,670         486,198         109,303         109,628         218,931
volumes
(MMcfe)(1)
                                                                                                                                 
(1)         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
Natural gas      $ 3.48          $ 3.01          $ 3.35          $ 3.71          $ 3.38          $ 2.90          $ 3.45          $ 3.18
(per Mcf)
Oil (per         $ 84.54         $ 83.89         $ 82.31         $ 90.76         $ 85.58         $ 89.77         $ 87.76         $ 88.71
barrel)
Natural gas
liquids (per     $ 33.46         $ 27.96         $ 24.43         $ 28.12         $ 28.56         $ 28.21         $ 30.21         $ 29.21
barrel)
                                                                                                                                 
                                                                                                        
Expenses per
Mcfe
Lease and
facility         $ 0.50          $ 0.47          $ 0.51          $ 0.60          $ 0.52          $ 0.61          $ 0.59          $ 0.60
operating
Gathering,
processing and   $ 1.09          $ 0.95          $ 1.04          $ 1.06          $ 1.04          $ 0.98          $ 1.00          $ 0.99
transportation
Taxes other      $ 0.20          $ 0.15          $ 0.14          $ 0.23          $ 0.18          $ 0.27          $ 0.27          $ 0.27
than income
Depreciation,
depletion and    $ 1.80          $ 1.93          $ 1.98          $ 2.02          $ 1.93          $ 2.04          $ 1.98          $ 2.01
amortization
General and      $ 0.52          $ 0.54          $ 0.53          $ 0.65          $ 0.56          $ 0.62          $ 0.64          $ 0.63
administrative
                                                                                                                                 
                                                                                                        
Unutilized
pipeline
capacity
Total
unutilized
pipeline         $ 11            $ 12            $ 12            $ 11            $ 46            $ 13            $ 14            $ 27
capacity in
gas management
expense
                                                                                                                                           

WPX Energy, Inc.
International Segment
(UNAUDITED)
                                                                                         
                 2012                                                           2013
(Dollars in     1st Qtr   2nd Qtr     3rd Qtr   4th Qtr   YTD        1st Qtr   2nd Qtr     YTD
millions)
                                                                                                          
Revenues:
Product
revenues:
Natural gas      $ 4         $ 5           $ 4         $ 5         $ 18         $ 4         $ 6           $ 10
sales
Oil and
condensate         26          27            31          31          115          28          30            58
sales
Natural gas       1        1         -        1        3           1        -         1     
liquid sales
Total product      31          33            35          37          136          33          36            69
revenues
Gas management     -           -             -           -           -            -           -             -
Net gain
(loss) on
derivatives        -           -             -           -           -            -           -             -
not designated
as hedges
Other             -        1         -        -        1           3        6         9     
Total revenues     31          34            35          37          137          36          42            78
                                                                                                          
Costs and
expenses:
Lease and
facility           6           7             8           11          32           8           10            18
operating
Gathering,
processing and     -           -             -           2           2            1           1             2
transportation
Taxes other        5           7             6           6           24           6           6             12
than income
Gas
management,
including
charges for        -           -             -           -           -            -           -             -
unutilized
pipeline
capacity
Exploration        5           3             3           -           11           1           3             4
Depreciation,
depletion and      6           6             7           8           27           7           10            17
amortization
Impairment of
producing
properties and
costs of           -           -             -           -           -            -           -             -
acquired
unproved
reserves
General and        3           3             3           5           14           3           5             8
administrative
Other-net         -        (2    )    1        1        -           1        (4    )    (3    )
Total costs        25          24            28          33          110          27          31            58
and expenses
                                                                                                          
Operating          6           10            7           4           27           9           11            20
income (loss)
                                                                                                          
Interest           -           -             -           -           -            -           -             -
expense
Interest           -           -             -           -           -            -           -             -
capitalized
Investment
income and        8        8         6        5        27          5        7         12    
other
                                                                                                          
Income (loss)
from
continuing       $ 14      $ 18       $ 13      $ 9       $ 54         $ 14      $ 18       $ 32    
operations
before income
taxes
                                                                                 
                                                                                 
Summary of Net
Production
Volumes (1)
Natural gas        1,737       1,726         1,861       1,737       7,061        1,485       1,620         3,105
(MMcf)
Oil (MBbls)        507         562           573         536         2,178        506         553           1,059
Natural gas
liquids            45          44            45          47          181          42          44            86
(MBbls)
Combined
equivalent         5,052       5,362         5,569       5,235       21,218       4,775       5,202         9,977
volumes
(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)
                                                                                                     
                   2012                                                                  2013
(Dollars in
millions, except  1st Qtr     2nd Qtr     3rd Qtr     4th Qtr     Year        1st Qtr     2nd Qtr     YTD
per share
amounts)
                                                                                                                     
Income (loss)
from continuing
operations
attributable to    $ (41   )   $ (33   )   $ (66   )   $ (105  )   $ (245  )     $ (116  )   $ 18       $ (98   )
WPX Energy, Inc.
available to
common
stockholders
Income (loss)
from continuing
operations -       $ (0.21 )   $ (0.17 )   $ (0.33 )   $ (0.53 )   $ (1.23 )     $ (0.58 )   $ 0.09     $ (0.49 )
diluted earnings
per share
Adjustments:
Impairment of
producing
properties and
costs of           $ 52          $ 65          $ -           $ 108         $ 225         $ -           $ -           $ -
acquired
unproved
reserves
Unrealized MTM     $ 1        $ (60   )   $ 31       $ (4    )   $ (32   )     $ 103      $ (98   )   $ 5     
(gain) loss
Total              $ 53          $ 5           $ 31          $ 104         $ 193         $ 103         $ (98   )     $ 5
adjustments
Less tax effect    $ (19   )   $ (2    )   $ (12   )   $ (38   )   $ (71   )     $ (38   )   $ 36       $ (2    )
for above items
Adjusted income
(loss) from
continuing
operations         $ (7    )   $ (30   )   $ (47   )   $ (39   )   $ (123  )     $ (51   )   $ (44   )   $ (95   )
available to
common
stockholders
Adjusted diluted
earnings (loss)    $ (0.04 )   $ (0.15 )   $ (0.23 )   $ (0.20 )   $ (0.62 )     $ (0.25 )   $ (0.22 )   $ (0.47 )
per common share
Diluted
weighted-average     198.1         198.9         199.1         199.2         198.8         199.9         203.8         200.1
shares
(millions)
                                                                                                                             

WPX Energy, Inc.
Consolidated Statement of Operations
(Unaudited)
                                                            
                     Three months ended June 30,       Year ended June 30,
                     2013            2012            2013        2012
                     (Millions, except per share amounts)
Revenues:
Product revenues:
Natural gas sales    $  316            $ 312           $ 583         $ 669
Oil and condensate      151              122             290           228
sales
Natural gas liquid     58             78            112         171   
sales
Total product           525              512             985           1,068
revenues
Gas management          205              187             466           524
Net gain (loss) on
derivatives not         78               71              (16   )       85
designated as
hedges
Other                  7              5             11          8     
Total revenues          815              775             1,446         1,685
Costs and
expenses:
Lease and facility      73               67              148           134
operating
Gathering,
processing and          111              120             218           255
transportation
Taxes other than        36               25              71            55
income
Gas management,
including charges       222              194             465           549
for unutilized
pipeline capacity
Exploration             20               19              39            38
Depreciation,
depletion and           227              248             458           476
amortization
Impairment of
costs of acquired       -                65              -             117
unproved reserves
General and             74               71              146           139
administrative
Other - net            1              (2    )        8           3     
Total costs and         764              807             1,553         1,766
expenses
                                                                     
Operating income        51               (32   )         (107  )       (81   )
(loss)
Interest expense        (28    )         (26   )         (54   )       (52   )
Interest                1                3               2             5
capitalized
Investment income      9              8             16          18    
and other
Income (loss) from
continuing              33               (47   )         (143  )       (110  )
operations before
income taxes
Provision
(benefit) for          11             (18   )        (52   )      (43   )
income taxes
Income (loss) from
continuing              22               (29   )         (91   )       (67   )
operations
Income (loss) from
discontinued           -              23            -           21    
operations
Net income (loss)       22               (6    )         (91   )       (46   )
Less: Net income
attributable to        4              4             7           7     
noncontrolling
interests
Net income (loss)
attributable to      $  18            $ (10   )       $ (98   )     $ (53   )
WPX Energy
                                                                     
Amounts
attributable to
WPX Energy, Inc.:
Basic and diluted
earnings (loss)
per common share:
Income (loss) from
continuing           $  0.09           $ (0.17 )       $ (0.49 )     $ (0.37 )
operations
Income (loss) from
discontinued           -              0.12          -           0.10  
operations
Net income (loss)    $  0.09          $ (0.05 )       $ (0.49 )     $ (0.27 )
                                                                     
Basic
weighted-average        200.4            198.9           200.1         198.5
shares (millions)
Diluted
weighted-average        203.8            198.9           200.1         198.5
shares (millions)
                                                                             

WPX Energy, Inc.
Consolidated Balance Sheet
(Unaudited)
                                                     
                               June 30, 2013            December 31, 2012
ASSETS                         (Dollars in millions, except per share amounts)
Current assets:
Cash and cash equivalents      $     90                   $     153
Accounts receivable, net of
allowance of $9 at June 30,          422                        443
2013 and $11 at December 31,
2012
Deferred income taxes                27                         17
Derivative assets                    53                         58
Inventories                          76                         66
Other                               48                       35        
Total current assets                 716                        772
Investments                          157                        145
Properties and equipment
(successful efforts method           13,847                     13,339
of accounting)
Less: Accumulated
depreciation, depletion and         (5,378    )               (4,923    )
amortization
Properties and equipment,            8,469                      8,416
net
Derivative assets                    20                         2
Other noncurrent assets             121                      121       
Total assets                   $     9,483               $     9,456     
                                                          
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable               $     515                  $     509
Accrued and other current            159                        203
liabilities
Deferred income taxes                -                          -
Derivative liabilities              27                       14        
Total current liabilities            701                        726
Deferred income taxes                1,347                      1,401
Long-term debt                       1,688                      1,508
Derivative liabilities               9                          1
Asset retirement obligations         330                        316
Other noncurrent liabilities         118                        133
                                                          
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; 200.6 million
shares issued at June 30,            2                          2
2013 and 199.3 million
shares issued at December
31, 2012)
Additional paid-in-capital           5,499                      5,487
Accumulated deficit                  (321      )                (223      )
Accumulated other                   (1        )               2         
comprehensive income
Total stockholders' equity           5,179                      5,268
Noncontrolling interests in         111                      103       
consolidated subsidiaries
Total equity                        5,290                    5,371     
Total liabilities and equity   $     9,483               $     9,456     
                                                                          

WPX Energy, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
                                                                  
                                                     Six months ended June 30,
                                                     2013           2012
                                                     (Millions)
Operating Activities
Net income (loss)                                    $  (91   )       $ (46  )
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation, depletion and amortization                458             483
Deferred income tax benefit                             (63   )         (56  )
Provision for impairment of properties and              29              142
equipment (including certain exploration expenses)
Amortization of stock-based awards                      17              15
(Gain) loss on sale of assets                           (5    )         (38  )
Cash provided (used) by operating assets and
liabilities:
Accounts receivable                                     23              163
Inventories                                             (9    )         7
Margin deposits and customer margin deposits            (5    )         (5   )
payable
Other current assets                                    (11   )         6
Accounts payable                                        9               (158 )
Accrued and other current liabilities                   (51   )         29
Changes in current and noncurrent derivative            5               (59  )
assets and liabilities
Other, including changes in other noncurrent           (19   )        (42  )
assets and liabilities
Net cash provided by operating activities              287           441  
                                                                      
Investing Activities
Capital expenditures (a)                                (548  )         (828 )
Proceeds from sale of assets                            10              306
Purchases of investments                                (3    )         (2   )
Other                                                  -             5    
Net cash used in investing activities                  (541  )        (519 )
                                                                      
Financing Activities
Proceeds from common stock                              2               1
Proceeds from long-term debt                            -               6
Borrowings on credit facility                           315             -
Payments on credit facility                             (135  )         -
Other                                                  9             (28  )
Net cash provided by (used in) financing               191           (21  )
activities
                                                                      
Net increase (decrease) in cash and cash                (63   )         (99  )
equivalents
Cash and cash equivalents at beginning of period       153           526  
Cash and cash equivalents at end of period           $  90           $ 427  
                                                                      
______
(a) Increase to properties and equipment             $  (540  )       $ (740 )
Changes in related accounts payable                    (8    )        (88  )
Capital expenditures                                 $  (548  )       $ (828 )

Contact:

WPX Energy, Inc.
Media Contact:
Kelly Swan, 539-573-4944
or
Investor Contact:
David Sullivan, 539-573-9360
 
Press spacebar to pause and continue. Press esc to stop.