WPX Energy Announces Third-Quarter 2013 Results

  WPX Energy Announces Third-Quarter 2013 Results

Business Wire

TULSA, Okla. -- November 7, 2013

WPX Energy (NYSE:WPX) today announced its unaudited results for the third
quarter of 2013. Items driving the company’s operations and financial
performance include:

  *Initial Niobrara well hits 2 Bcf in cumulative production; 2nd Niobrara
    well continues impressive results
  *Company stems gas production decline; sequential quarter gas volumes
    higher
  *Oil production at all-time high; Bakken oil up 46% vs. 3Q last year
  *Bakken oil volumes on track for year-end exit rate of 15,000 bbl/d
  *First nine San Juan Gallup oil wells average initial flow rate of 728
    boe/d
  *3Q results negatively impacted by lower natural gas price realizations
  *Other items negatively affecting 3Q include an impairment, litigation
    accrual and tax provisions

CEO PERSPECTIVE

“During the third quarter, WPX made progress on expanding the foundation to
create shareholder value. Our oil production is at an all-time high. Our
natural gas production grew. We continue to achieve lower costs in the Bakken.
And we advanced our Niobrara and Gallup discoveries, providing additional
long-term growth potential,” said Ralph A. Hill, WPX’s president and chief
executive officer.

“As promised, the Piceance production decline has been arrested and volumes
are beginning to grow again. Bakken oil volumes are on track to grow 25 to 30
percent, with an exit rate of 15,000 barrels per day at the end of the year.
And production in the San Juan Gallup Sandstone is on track to meet a year-end
target of 3,400 barrels of oil equivalent per day – 70 percent of which is
oil.

“WPX’s results this year continue to build the foundation for 2014 and beyond.
We have a strong portfolio with attractive projects.

“As we have stressed in the past, we remain committed to optimizing our
portfolio over time. Our strategy is to be discerning with capital, focusing
on our highest-return basins. The Bakken and the Gallup oil plays, as well as
our liquids-rich Piceance position, currently generate the most attractive
returns. We are also advancing the delineation of our significant Piceance
Niobrara discovery as fast and prudently as possible,” Hill said.

“Operationally, our base business is performing very well across all of our
basins, with the exception of delays associated with third-party
infrastructure in the Marcellus. While we achieved 40 percent growth in the
Marcellus, we had expected greater production at this point. We are very
efficient in the basin with our costs and operations, but are disappointed by
the infrastructure constraints in our area.

“In light of the persisting infrastructure constraints, our 2014 capital
budget will allocate minimal capital to our Marcellus position. We are
confident we will be able to hold all of our economic acreage by amending and
extending our current leases, requiring limited incremental investment in the
region.

“As always, we will continue to reassess our plans in light of changing market
conditions, infrastructure development and capital availability,” Hill said.

“Our quarterly results are also impacted by lower price realizations, due in
part to a legacy 2009 sales agreement where we receive Appalachia pricing for
200 million gross cubic feet per day of our Rockies production. That gas is
transported on the Rex pipeline under an agreement with a firm shipper. The
contract expires in November 2014, at which point our revenues should improve
by $80 million to $100 million on an annualized basis.

“We expect 2013 capital spending to come in at our $1.2 billion guidance
level. Due to the Marcellus infrastructure problems, production volumes are
expected to come in at the lower end of the 2013 forecast range,” Hill said.

NIOBRARA SHALE UPDATE

Over its first 10 months, WPX’s initial Niobrara Shale discovery well has
produced 2 billion cubic feet of natural gas. The discovery well is currently
producing at a rate of 3.5 MMcf/d at a flowing tubing pressure of 1,950 pounds
per square inch (psi).

WPX’s second Niobrara well was completed at the end of September, posting an
initial rate of 11.8 MMcf/d at a flowing casing pressure of 5,700 psi.With a
reservoir pressure of 8,300 psi, the well found pressure gradients of 0.94
psi/foot that were even higher than the initial discovery well, despite being
in a shallower part of the basin.

The second Niobrara well is three miles to the southeast of the initial
discovery well, where the Niobrara formation is shallowest on the company’s
acreage. It was drilled to a total vertical depth of 9,062 feet with a
4,883-foot horizontal lateral. Completion operations included 19 frac stages.

The Unconventional Oil & Gas Center ranks WPX’s initial discovery well as the
No. 1 Niobrara Shale producing well in the United States. WPX’s latest well
ranks No. 2.

A third Niobrara horizontal well was drilled during July and August, located
approximately 2,000 feet to the west of WPX’s initial discovery well. This
well will be sidetracked due to a casing failure that occurred before
completion operations could be commenced.

Drilling on the company’s next two Niobrara wells is starting. A vertical
delineation well located 12 miles to the east of the discovery well was spud
on Nov. 5. A horizontal step-out located three miles north of the discovery
well is scheduled to spud this weekend. The vertical well marks an
acceleration of WPX’s delineation work. The well was originally scheduled for
2014.

As previously announced, WPX plans to more than double its Niobrara drilling
in 2014, with 10 to 12 wells expected. Combined with previous Niobrara
activity, this will serve to delineate 80 percent of WPX’s Valley acreage.

GALLUP OIL UPDATE

WPX has now drilled and completed a total of nine Gallup Sandstone oil wells
in the San Juan Basin’s Mancos formation, including the four exploratory
wells. Another two wells are expected to begin production in the next week.
Another well is currently being drilled.

The company’s initial estimate of resource potential is approximately 66
million barrels of oil equivalent. WPX has 31,000 net acres under lease and
expects to acquire additional acreage.

WPX’s nine Gallup oil wells have flowed – on average – at an initial rate of
611 barrels of oil per day, or 728 barrels per day on an equivalent basis. The
production stream is approximately 70 percent oil and 30 percent natural gas.

The company expects to have a year-end 2013 Gallup oil exit rate of 2,388
bbl/d, or 3,400 bbl/d on an equivalent basis. WPX plans to more than double
its Gallup oil drilling in 2014 with 37 wells expected next year. WPX expects
the new activity to drive a 2014 exit rate of 6,620 bbl/d, or 8,400 bbl/d on
an equivalent basis.

WPX is now on pace to drill a total of 15 Gallup Sandstone wells during 2013,
which is ahead of its original plan to drill a total of 12 to 14. 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’s four most recent development wells were drilled
in an average of 17 days. WPX’s fastest Gallup well was drilled in just 14.6
days – more than twice as fast as the company’s first Gallup well.

The company’s Gallup Sandstone wells – on average – have been drilled to a
total depth of 5,400 feet, with horizontal laterals averaging 4,300 feet. WPX
receives a WTI price minus a differential of $11.50 per barrel.

THIRD-QUARTER FINANCIAL RESULTS

WPX reported an unaudited net loss from continuing operations attributable to
WPX Energy of $114 million for third-quarter 2013, or a loss of $0.57 per
share on a diluted basis, compared with a net loss of $66 million, or a loss
of $0.33 per share, in the same period a year ago.

Third-quarter 2013 results were negatively impacted by overall lower price
realization (including hedges) for natural gas, a $19 million impairment
charge related to the company’s costs of acquired unproved reserves, a $9
million tax provision related to the increase in a valuation allowance on
certain state deferred tax assets, a $7 million litigation accrual and a $6
million impact from changes to Argentine tax law affecting WPX’s investment in
Apco Oil and Gas International.

On the impairment, WPX’s accounting for costs of certain acquired unproved
reserves is based on discounted cash flows. As a result, declines in forward
commodity prices can drive further impairment regardless of whether there was
a change in the underlying reserve estimates.

For the first nine months of 2013, WPX reported an unaudited net loss from
continuing operations attributable to WPX Energy of $212 million, or a loss of
$1.06 per share on a diluted basis, compared with net loss of $140 million, or
a loss of $0.70 per share, for the same period in 2012.

WPX had an adjusted loss from continuing operations of $83 million, or a loss
of $0.41 per share on a diluted basis, for third-quarter 2013, compared with
an adjusted loss from continuing operations of $47 million, or a loss of $0.23
per share, for the same period in 2012. A reconciliation accompanies this
press release.

For the first nine months of 2013, WPX had an adjusted loss from continuing
operations of $178 million, or a loss of $0.89 per share on a diluted basis,
compared with an adjusted loss from continuing operations of $84 million, or a
loss of $0.42 per share, for the first nine months of 2012. A reconciliation
accompanies this press release.

The adjusted loss from continuing operations for the third-quarter and
year-to-date results excludes unrealized mark-to-market gains (losses), a $19
million impairment charge, a $7 million litigation accrual and a $6 million
impact from changes to Argentine tax law affecting WPX’s investment in Apco
Oil and Gas International.

Consolidated oil revenues increased 55 percent quarter-over-quarter, natural
gas revenues decreased 24 percent and natural gas liquids (NGL) revenues
decreased 12 percent.

The domestic net realized average price for natural gas excluding hedge impact
was $2.72 per Mcf in third-quarter 2013, up 20 percent from $2.26 per Mcf a
year ago. The 2012 period also benefitted from $107 million in realized gains
on derivatives designated as hedges, or an additional $1.09 per Mcf.

The net realized average price for domestic oil was $97.91 per barrel in
third-quarter 2013, an increase of 19 percent from $82.31 per barrel a year
ago. The 2012 period is inclusive of hedges.

The domestic net realized average price for NGL was $31.19 per barrel in
third-quarter 2013, up 28 percent from $24.43 per barrel a year ago.

ADJUSTED EBITDAX

WPX’s adjusted EBITDAX (a non-GAAP measure) for third-quarter 2013 was $174
million, compared with $230 million for the same period a year ago.

The primary factors contributing to the quarter-over-quarter decrease in
adjusted EBITDAX were lower revenues (inclusive of hedges) for both natural
gas and NGL, partially offset by higher domestic oil revenues.

For the first nine months of 2013, WPX’s adjusted EBITDAX was $587 million,
compared with $744 million for the first nine months of 2012.

                                                       
EBITDAX (non-GAAP)                 Third Quarter           YTD
                                   2013      2012         2013      2012
                                   millions   millions     millions   millions
Net income (loss)                  ($116)     ($61)        ($207)     ($107)
Interest expense                   $28        $25          $82        $77
Provision (benefit) for income     ($32)      ($28)        ($84)      ($71)
taxes
Depreciation, depletion and        $241       $243         $699       $719
amortization
Exploration expenses               $21        $22          $60        $60
EBITDAX                            $142       $201         $550       $678
                                                                      
Impairments                        $19        –            $19        $117
Net (gain) loss on derivatives     $15        $22          $31        ($63)
not designated as hedges
Realized gain (loss) on
derivatives not designated as      ($2)       $9           ($13)      $35
hedges
(Income) loss from discontinued    –          ($2)         –          ($23)
operations
Adjusted EBITDAX                   $174       $230         $587       $744
                                                                      

EBITDAX represents earnings before interest expense, income taxes,
depreciation, depletion and amortization and exploration expenses. Adjusted
EBITDAX includes adjustments for impairments, net gain (loss) on derivatives
not designated as hedges, realized gain (loss) on derivatives not designated
as hedges 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 third-quarter 2013 was
1,267 MMcfe/d, marking a return to increased volumes in sequential periods for
the first time since second-quarter 2012.

Total natural gas production of 1,012 MMcf/d in third-quarter 2013 decreased 6
percent vs. the prior-year period, but increased vs. the most recent quarter,
arresting a production decline after WPX deployed two additional rigs in the
Piceance in mid-year.

Oil production in the Williston Basin jumped 46 percent to an average of
13,980 barrels per day in the third quarter vs. 9,600 barrels per day in the
same period a year ago. Additionally, WPX had 990 barrels per day in the 2013
quarter that were in-transit by rail and barge shipments awaiting final
delivery. These barrels are not included in third-quarter 2013 production.

The company’s overall third-quarter NGL production was approximately 20,000
barrels per day, down 6 percent vs. the most recent quarter and down 30
percent vs. a year ago. WPX’s ethane recovery rate in third-quarter 2013 was
35 percent vs. 75 percent a year ago.

                                                           
Average Daily            3Q                               2Q        Sequential
Production
                         2013    2012    Change       2013    Change
Natural gas (MMcf/d)            
Piceance Basin           603       652       -8%          592       2%
Appalachian Basin        91        65        40%          85        7%
Powder River Basin       173       203       -15%         179       -3%
San Juan Basin           117       128       -9%          122       -4%
International            19        20        -5%          18        6%
Other                   9       10      -10%         11      -18%
Subtotal (MMcf/d)        1,012     1,078     -6%          1,007     0.5%
                                                                    
Oil (Mbbl/d)
Williston Basin          14.0      9.6       46%          12.3      14%
San Juan Basin           1.1       –         NM           0.5       120%
Piceance Basin           1.7       2.0       -15%         2.0       -15%
International            5.3       6.2       -15%         6.1       -13%
Other                   0.3     0.1     200%         0.3     –
Subtotal (Mbo/d)         22.4      17.9      25%          21.2      6%
                                                                    
NGLs (Mbbl/d)
Piceance Basin           18.4      27.5      -33%         19.7      -7%
International            0.5       0.5       0%           0.5       0%
Other                   1.2     0.9     33%          1.1     9%
Subtotal (Mbbl/d)        20.1      28.9      -30%         21.3      -6%
                                                                    
Total Production         1,267   1,359   -7%          1,262   0.4%
(MMcfe/d)
                                                                    

EXPENSES

WPX’s domestic expenses were approximately 4 percent higher in third-quarter
2013 than the same period in 2012, primarily driven by a $19 million
impairment to costs of acquired unproved reserves due to a decrease in forward
gas prices, higher domestic lease and facility operating expenses, higher
operating taxes and a $7 million litigation accrual. Partially offsetting
these increases was $18 million in lower gathering, processing and
transportation expense.

WPX's domestic lease and facility operating expenses in third-quarter 2013
were $74 million vs. $60 million in third-quarter 2012. The increase is
primarily attributable to an increase in production in the Williston Basin and
increased water disposal costs.

Domestic gathering, processing and transportation charges were $106 million in
third-quarter 2013 vs. $124 million in third-quarter 2012.

One of the drivers behind the 15 percent decrease is the effect of favorable
contract terms for gathering and processing services in the Piceance,
partially offset by the $6 million impact of costs associated with the
transportation of Williston production to locations outside the basin offering
higher prices for oil.

Also included in third-quarter 2013 gathering, processing and transportation
charges is a $13 million year-to-date downward adjustment in gathering,
processing and transportation charges related to the reporting of certain
costs in prior quarters. This adjustment is offset in revenues.

Taxes other than income for domestic operations in third-quarter 2013 were $30
million vs. $17 million in third-quarter 2012, driven by higher commodity
prices excluding hedges and an increase in Williston Basin production.

CASH AND LIQUIDITY

Net cash provided by operating activities for the first nine months of 2013
was $518 million, including $231 million in the third quarter.

At September 30, 2013, WPX had approximately $58 million in unrestricted
domestic cash and cash equivalents and $50 million in international cash.

The company’s domestic liquidity at the end of third-quarter 2013 was
approximately $1.3 billion after drawing $270 million from its $1.5 billion
revolving credit agreement during the first nine months of the year.

DEVELOPMENT AND INVESTING ACTIVITY

For the first nine months of 2013, WPX made approximately $843 million of
capital investments, including $295 million in the third quarter. For
full-year 2013, WPX expects its capital spending to come in at its $1.2
billion plan.

For the first nine months of 2013, WPX domestic operations participated in 320
gross (249 net) wells, including 99 gross (71 net) in the third 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 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 53 gross (49 net) wells in third-quarter
2013, for a total of 192 gross (183 net) in the first nine months of the year.
The company deployed seven rigs on its Piceance acreage during the third
quarter.

In the Williston Basin, WPX completed 13 gross (9 net) wells during the third
quarter, for a total of 34 gross (25 net) for the first nine months of the
year. This marks the largest quarterly number of Williston completions for WPX
this year, with eight of the 13 completions located in the Three Forks
formation.

During the quarter, WPX began to test a new completion design in the Williston
based on infill density project results.The design includes additional stages
and slower pump rates to further stimulate the reservoir along the horizontal
lateral.Results are expected early next year.

In the Appalachian Basin, WPX completed 7 gross (4 net) wells during the third
quarter, and a total of 24 gross (18 net) for the first nine months of 2013.
The company has one rig deployed in the Appalachian Basin, located in north
Westmoreland County.

FOCUSING THE WPX PORTFOLIO

Subsequent to the close of the third quarter, WPX completed the sale of deep
rights on approximately 140,000 net acres in Wyoming’s Powder River Basin for
$40.1 million.

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 has retained financial advisors to
support this process.

TODAY’S CONFERENCE CALL

WPX management will discuss its third-quarter results today during a webcast
starting at 10 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 (877) 280-4953.
International callers should dial (857) 244-7310. The conference
identification code for both phone numbers is 13852258. A replay will be
available on the company’s website for one year following the event.

Form 10-Q

WPX plans to file its third-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.

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  3rd Qtr   YTD
millions)
                                                                                                        
Revenues:
Product
revenues:
Natural gas      $ 357     $ 312     $ 331     $ 364      $ 1,364       $ 267      $ 316     $ 252      $ 835
sales
Oil and
condensate         106       122       118       145        491           139        151       183        473
sales
Natural gas       93     78     65     63      299         54      58     57      169   
liquid sales
Total product      556       512       514       572        2,154         460        525       492        1,477
revenues
Gas management     337       187       186       239        949           261        205       176        642
Net gain
(loss) on
derivatives        14        71        (22 )     15         78            (94  )     78        (15  )     (31   )
not designated
as hedges
Other             3      5      (1  )   1       8           4       7      5       16    
Total revenues     910       775       677       827        3,189         631        815       658        2,104
                                                                                                        
Costs and
expenses:
Lease and
facility           67        67        68        81         283           75         73        82         230
operating
Gathering,
processing and     135       120       124       127        506           107        111       106        324
transportation
Taxes other        30        25        23        33         111           35         36        36         107
than income
Gas
management,
including
charges for        355       194       200       247        996           243        222       201        666
unutilized
pipeline
capacity
Exploration        19        19        22        23         83            19         20        21         60
Depreciation,
depletion and      228       248       243       247        966           231        227       241        699
amortization
Impairment of
producing
properties and
costs of           52        65        -         108        225           -          -         19         19
acquired
unproved
reserves
General and        68        71        67        81         287           72         74        68         214
administrative
Other-net         5      (2  )   5      4       12          7       1      10      18    
Total costs        959       807       752       951        3,469         789        764       784        2,337
and expenses
                                                                                                        
Operating          (49 )     (32 )     (75 )     (124 )     (280  )       (158 )     51        (126 )     (233  )
income (loss)
                                                                                                        
Interest           (26 )     (26 )     (25 )     (25  )     (102  )       (26  )     (28 )     (28  )     (82   )
expense
Interest           2         3         2         1          8             1          1         2          4
capitalized
Investment
income and        10     8      7      5       30          7       9      4       20    
other
                                                                                                        
Income (loss)
from
continuing       $ (63 )   $ (47 )   $ (91 )   $ (143 )   $ (344  )     $ (176 )   $ 33      $ (148 )   $ (291  )
operations
before income
taxes
Provision
(benefit) for     (25 )   (18 )   (28 )   (40  )   (111  )      (63  )   11     (32  )   (84   )
income taxes
Income (loss)
from             $ (38 )   $ (29 )   $ (63 )   $ (103 )   $ (233  )     $ (113 )   $ 22      $ (116 )   $ (207  )
continuing
operations
Income (loss)
from              (2  )   23     2      (1   )   22          -       -      -       -     
discontinued
operations
Net income       $ (40 )   $ (6  )   $ (61 )   $ (104 )   $ (211  )     $ (113 )   $ 22      $ (116 )   $ (207  )
(loss)
Less: Net
income (loss)
attributable      3      4      3      2       12          3        4       (2   )    5     
to
noncontrolling
interests
Net income
(loss)           $ (43 )  $ (10 )  $ (64 )  $ (106 )  $ (223  )     $ (116 )  $ 18    $ (114 )  $ (212  )
attributable
to WPX Energy
                                                                                                        
                                                                                                        
                                                                                     
Adjusted
EBITDAX
Reconciliation
to net income
(loss):
Net income       $ (40 )   $ (6  )   $ (61 )   $ (104 )   $ (211  )     $ (113 )   $ 22      $ (116 )   $ (207  )
(loss)
Interest           26        26        25        25         102           26         28        28         82
expense
Provision
(benefit) for      (25 )     (18 )     (28 )     (40  )     (111  )       (63  )     11        (32  )     (84   )
income taxes
Depreciation,
depletion and      228       248       243       247        966           231        227       241        699
amortization
Exploration       19     19     22     23      83          19      20     21      60    
expenses
EBITDAX            208       269       201       151        829           100        308       142        550
Impairment of
producing
properties and
costs of           52        65        -         108        225           -          -         19         19
acquired
unproved
reserves
Net (gain)
loss on
derivatives        (14 )     (71 )     22        (15  )     (78   )       94         (78 )     15         31
not designated
as hedges
Realized gain
(loss) on
derivatives        15        11        9         11         46            9          (20 )     (2   )     (13   )
not designated
as hedges
(Income) loss
from              2      (23 )   (2  )   1       (22   )      -       -      -       -     
discontinued
operations
Adjusted         $ 263   $ 251   $ 230   $ 256    $ 1,000      $ 203    $ 210   $ 174    $ 587   
EBITDAX

                                                                                                                        
                                                                                                                                   
WPX Energy, Inc.
Domestic Segment
(UNAUDITED)
                                                                                                                                   
                 2012                                                                    2013
(Dollars in     1st Qtr      2nd Qtr      3rd Qtr      4th Qtr      Year          1st Qtr      2nd Qtr      3rd Qtr      YTD
millions)
                                                                                                                                   
Revenues:
Product
revenues:
Natural gas      $ 353         $ 307         $ 327         $ 359         $ 1,346         $ 263         $ 310         $ 248         $ 821
sales
Oil and
condensate         80            95            87            114           376             111           121           154           386
sales
Natural gas       92         77         65         62         296           53         58         57         168     
liquid sales
Total product      525           479           479           535           2,018           427           489           459           1,375
revenues
Gas management     337           187           186           239           949             261           205           176           642
Net gain
(loss) on
derivatives        14            71            (22     )     15            78              (94     )     78            (15     )     (31     )
not designated
as hedges
Other             3          4          (1      )   1          7             1          1          3          5       
Total revenues     879           741           642           790           3,052           595           773           623           1,991
                                                                                                                                   
Costs and
expenses:
Lease and
facility           61            60            60            70            251             67            63            74            204
operating
Gathering,
processing and     135           120           124           125           504             106           110           106           322
transportation
Taxes other        25            18            17            27            87              29            30            30            89
than income
Gas
management,
including
charges for        355           194           200           247           996             243           222           201           666
unutilized
pipeline
capacity
Exploration        14            16            19            23            72              18            17            21            56
Depreciation,
depletion and      222           242           236           239           939             224           217           233           674
amortization
Impairment of
producing
properties and
costs of           52            65            -             108           225             -             -             19            19
acquired
unproved
reserves
General and        65            68            64            76            273             69            69            65            203
administrative
Other-net         5          -          4          3          12            6          5          7          18      
Total costs        934           783           724           918           3,359           762           733           756           2,251
and expenses
                                                                                                                                   
Operating          (55     )     (42     )     (82     )     (128    )     (307    )       (167    )     40            (133    )     (260    )
income (loss)
                                                                                                                                   
Interest           (26     )     (26     )     (25     )     (25     )     (102    )       (26     )     (28     )     (28     )     (82     )
expense
Interest           2             3             2             1             8               1             1             2             4
capitalized
Investment
income and        2          -          1          -          3             2          2          -          4       
other
                                                                                                                                   
Income (loss)
from
continuing       $ (77     )  $ (65     )  $ (104    )  $ (152    )  $ (398    )     $ (190    )  $ 15        $ (159    )  $ (334    )
operations
before income
taxes
                                                                                                                
                                                                                                                
Summary of
Production
Volumes
Natural gas        101,346       102,163       97,310        96,664        397,483         90,411        90,022        91,392        271,825
(MMcf)
Oil (MBbls)        948           1,123         1,076         1,247         4,394           1,242         1,373         1,575         4,189
Natural gas
liquids            2,746         2,779         2,613         2,254         10,392          1,907         1,895         1,811         5,613
(MBbls)
Combined
equivalent         123,511       125,574       119,443       117,670       486,198         109,303       109,628       111,707       330,638
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        $ 2.72        $ 3.02
(per Mcf)
Oil (per         $ 84.54       $ 83.89       $ 82.31       $ 90.76       $ 85.58         $ 89.77       $ 87.76       $ 97.91       $ 92.17
barrel)
Natural gas
liquids (per     $ 33.46       $ 27.96       $ 24.43       $ 28.12       $ 28.56         $ 28.21       $ 30.21       $ 31.19       $ 29.85
barrel)
                                                                                                                
Expenses per
Mcfe
Lease and
facility         $ 0.50        $ 0.47        $ 0.51        $ 0.60        $ 0.52          $ 0.61        $ 0.59        $ 0.65        $ 0.62
operating
Gathering,
processing and   $ 1.09        $ 0.95        $ 1.04        $ 1.06        $ 1.04          $ 0.98        $ 1.00        $ 0.94        $ 0.97
transportation
Taxes other      $ 0.20        $ 0.15        $ 0.14        $ 0.23        $ 0.18          $ 0.27        $ 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        $ 2.09        $ 2.04
amortization
General and      $ 0.52        $ 0.54        $ 0.53        $ 0.65        $ 0.56          $ 0.62        $ 0.64        $ 0.58        $ 0.61
administrative
                                                                                                                
Unutilized
pipeline
capacity
Total
unutilized
pipeline         $ 11          $ 12          $ 12          $ 11          $ 46            $ 13          $ 14          $ 17          $ 44
capacity in
gas management
expense

                                                                                             
                                                                                                        
WPX Energy, Inc.
International Segment
(UNAUDITED)
                                                                                                        
                 2012                                                   2013
(Dollars in     1st Qtr  2nd Qtr    3rd Qtr  4th Qtr  Year         1st Qtr  2nd Qtr    3rd Qtr  YTD
millions)
                                                                                                        
Revenues:
Product
revenues:
Natural gas      $ 4       $ 5         $ 4       $ 5       $ 18         $ 4       $ 6         $ 4       $ 14
sales
Oil and
condensate         26        27          31        31        115          28        30          29        87
sales
Natural gas       1       1        -       1       3           1       -        -       1
liquid sales
Total product      31        33          35        37        136          33        36          33        102
revenues
Gas management     -         -           -         -         -            -         -           -         -
Net gain
(loss) on
derivatives        -         -           -         -         -            -         -           -         -
not designated
as hedges
Other             -       1        -       -       1           3       6        2       11
Total revenues     31        34          35        37        137          36        42          35        113
                                                                                                        
Costs and
expenses:
Lease and
facility           6         7           8         11        32           8         10          8         26
operating
Gathering,
processing and     -         -           -         2         2            1         1           -         2
transportation
Taxes other        5         7           6         6         24           6         6           6         18
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          8         25
amortization
Impairment of
producing
properties and
costs of           -         -           -         -         -            -         -           -         -
acquired
unproved
reserves
General and        3         3           3         5         14           3         5           3         11
administrative
Other-net         -       (2    )   1       1       -           1       (4    )   3       -
Total costs        25        24          28        33        110          27        31          28        86
and expenses
                                                                                                        
Operating          6         10          7         4         27           9         11          7         27
income (loss)
                                                                                                        
Interest           -         -           -         -         -            -         -           -         -
expense
Interest           -         -           -         -         -            -         -           -         -
capitalized
Investment
income and        8       8        6       5       27          5       7        4       16
other
                                                                                                        
Income (loss)
from
continuing       $ 14     $ 18      $ 13     $ 9      $ 54         $ 14     $ 18      $ 11     $ 43
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       1,707     4,812
(MMcf)
Oil (MBbls)        507       562         573       536       2,178        506       553         484       1,543
Natural gas
liquids            45        44          45        47        181          42        44          42        128
(MBbls)
Combined
equivalent         5,052     5,362       5,569     5,235     21,218       4,775     5,202       4,862     14,839
volumes
(MMcfe)(2)

      Reflects approximately 69 percent of Apco's production (which
(1)  corresponds to our ownership interest in Apco) and other minor directly
      held interests.
      Oil and natural gas liquids were converted to MMcfe using the ratio of
(2)   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    3rd Qtr    YTD
per share
amounts)
                                                                                                                     
Income (loss)
from continuing
operations
attributable to    $ (41   )  $ (33   )  $ (66   )  $ (105  )  $ (245  )     $ (116  )  $ 18      $ (114  )  $ (212  )
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    $ (0.57 )  $ (1.06 )
diluted earnings
per share
Pre-tax
adjustments:
Impairment of
producing
properties and
costs of           $ 52        $ 65        $ -         $ 108       $ 225         $ -         $ -         $ 19        $ 19
acquired
unproved
reserves
Accrual for        $ -         $ -         $ -         $ -         $ -           $ -         $ -         $ 7         $ 7
litigation
Unrealized MTM     $ 1       $ (60   )  $ 31      $ (4    )  $ (32   )     $ 103     $ (98   )  $ 13      $ 18    
(gain) loss
Total pre-tax      $ 53        $ 5         $ 31        $ 104       $ 193         $ 103       $ (98   )   $ 39        $ 44
adjustments
Less tax effect    $ (19   )   $ (2    )   $ (12   )   $ (38   )   $ (71   )     $ (38   )   $ 36        $ (14   )   $ (16   )
for above items
Impact of new
Argentine          $ -       $ -       $ -       $ -       $ -          $ -       $ -       $ 6       $ 6     
capital tax law
(1)
Total
adjustments,       $ 34      $ 3       $ 19      $ 66      $ 122        $ 65      $ (62   )  $ 31      $ 34    
after-tax
Adjusted income
(loss) from
continuing
operations         $ (7    )  $ (30   )  $ (47   )  $ (39   )  $ (123  )     $ (51   )  $ (44   )  $ (83   )  $ (178  )
available to
common
stockholders
Adjusted diluted
earnings (loss)    $ (0.04 )  $ (0.15 )  $ (0.23 )  $ (0.20 )  $ (0.62 )     $ (0.25 )  $ (0.22 )  $ (0.41 )  $ (0.89 )
per common share
Diluted
weighted-average     198.1       198.9       199.1       199.2       198.8         199.9       203.8       200.7       200.3
shares
(millions)

(1)  This item is presented net of amounts attributable to noncontrolling
      interests.

                                                    
                                                       
WPX Energy, Inc.
Consolidated Statement of Operations
(Unaudited)
                                                                 
                               Three months ended        Nine months ended
                               September 30,             September 30,
                               2013       2012          2013       2012
                               (Millions, except per share amounts)
Revenues:
Product revenues:
Natural gas sales              $ 252       $ 331         $ 835       $ 1,000
Oil and condensate sales         183         118           473         346
Natural gas liquid sales        57        65          169       236   
Total product revenues           492         514           1,477       1,582
Gas management                   176         186           642         710
Net gain (loss) on
derivatives not designated       (15   )     (22   )       (31   )     63
as hedges
Other                           5         (1    )      16        7     
Total revenues                   658         677           2,104       2,362
Costs and expenses:
Lease and facility operating     82          68            230         202
Gathering, processing and        106         124           324         379
transportation
Taxes other than income          36          23            107         78
Gas management, including
charges for unutilized           201         200           666         749
pipeline capacity
Exploration                      21          22            60          60
Depreciation, depletion and      241         243           699         719
amortization
Impairment of costs of           19          -             19          117
acquired unproved reserves
General and administrative       68          67            214         206
Other - net                     10        5           18        8     
Total costs and expenses         784         752           2,337       2,518
                                                                     
Operating income (loss)          (126  )     (75   )       (233  )     (156  )
Interest expense                 (28   )     (25   )       (82   )     (77   )
Interest capitalized             2           2             4           7
Investment income and other     4         7           20        25    
Income (loss) from
continuing operations before     (148  )     (91   )       (291  )     (201  )
income taxes
Provision (benefit) for         (32   )    (28   )      (84   )    (71   )
income taxes
Income (loss) from               (116  )     (63   )       (207  )     (130  )
continuing operations
Income (loss) from              -         2           -         23    
discontinued operations
Net income (loss)                (116  )     (61   )       (207  )     (107  )
Less: Net income (loss)
attributable to                 (2    )    3           5         10    
noncontrolling interests
Net income (loss)              $ (114  )   $ (64   )     $ (212  )   $ (117  )
attributable to WPX Energy
                                                                     
Amounts attributable to WPX
Energy, Inc.:
Basic and diluted earnings
(loss) per common share:
Income (loss) from             $ (0.57 )   $ (0.33 )     $ (1.06 )   $ (0.70 )
continuing operations
Income (loss) from              -         0.01        -         0.11  
discontinued operations
Net income (loss)              $ (0.57 )   $ (0.32 )     $ (1.06 )   $ (0.59 )
                                                                     
Weighted-average shares          200.7       199.1         200.3       198.7
(millions)



WPX Energy, Inc.
Consolidated Balance Sheet
(Unaudited)
                                                              
                                                September 30,     December 31,
                                                2013            2012
ASSETS                                          (Millions)
Current assets:
Cash and cash equivalents                       $  108            $  153
Accounts receivable, net of allowance of $8
at September 30, 2013 and $11 at December 31,      390               443
2012
Deferred income taxes                              33                17
Derivative assets                                  44                58
Inventories                                        74                66
Other                                             45              35      
Total current assets                               694               772
Investments                                        161               145
Properties and equipment (successful efforts       14,115            13,339
method of accounting)
Less: Accumulated depreciation, depletion and     (5,580  )        (4,923  )
amortization
Properties and equipment, net                      8,535             8,416
Derivative assets                                  13                2
Other noncurrent assets                           120             121     
Total assets                                    $  9,523         $  9,456   
                                                                  
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable                                $  518            $  509
Accrued and other current liabilities              180               203
Deferred income taxes                              -                 -
Derivative liabilities                            28              14      
Total current liabilities                          726               726
Deferred income taxes                              1,348             1,401
Long-term debt                                     1,776             1,508
Derivative liabilities                             7                 1
Asset retirement obligations                       355               316
Other noncurrent liabilities                       126               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; 200.7 million shares issued       2                 2
at September 30, 2013 and 199.3 million
shares issued at December 31, 2012)
Additional paid-in-capital                         5,508             5,487
Accumulated deficit                                (435    )         (223    )
Accumulated other comprehensive income (loss)     (1      )        2       
Total stockholders' equity                         5,074             5,268
Noncontrolling interests in consolidated          111             103     
subsidiaries
Total equity                                      5,185           5,371   
Total liabilities and equity                    $  9,523         $  9,456   

                                                            
                                                                 
WPX Energy, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
                                                                 
                                               Nine months ended September 30,
                                               2013            2012
                                               (Millions)
Operating Activities
Net income (loss)                              $  (207  )        $  (107    )
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation, depletion and amortization          699               727
Deferred income tax provision (benefit)           (67   )           (90     )
Provision for impairment of properties and
equipment (including certain exploration          64                160
expenses)
Amortization of stock-based awards                24                22
Gain on sale of assets                            (5    )           (42     )
Cash provided (used) by operating assets and
liabilities:
Accounts receivable                               55                128
Inventories                                       (5    )           2
Margin deposits and customer margin deposits      (2    )           (5      )
payable
Other current assets                              (11   )           9
Accounts payable                                  (5    )           (142    )
Accrued and other current liabilities             (32   )           (20     )
Changes in current and noncurrent derivative      18                (28     )
assets and liabilities
Other, including changes in other noncurrent     (8    )          (25     )
assets and liabilities
Net cash provided by operating activities        518             589     
                                                                 
Investing Activities
Capital expenditures (a)                          (843  )           (1,165  )
Proceeds from sale of assets                      10                310
Purchases of investments                          (3    )           (2      )
Other                                            -               3       
Net cash used in investing activities            (836  )          (854    )
                                                                 
Financing Activities
Proceeds from common stock                        4                 2
Proceeds from long-term debt                      -                 6
Borrowings on credit facility                     605               -
Payments on credit facility                       (335  )           -
Other                                            (1    )          (29     )
Net cash provided by (used in) financing         273             (21     )
activities
                                                                 
Net increase (decrease) in cash and cash          (45   )           (286    )
equivalents
Cash and cash equivalents at beginning of        153             526     
period
Cash and cash equivalents at end of period     $  108           $  240     
                                                                 
______
(a) Increase to properties and equipment       $  (864  )        $  (1,073  )
Changes in related accounts payable              21              (92     )
Capital expenditures                           $  (843  )        $  (1,165  )

Contact:

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