UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 
FORM 8-K
 
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported): May 1, 2019
 
WPX Energy, Inc.
(Exact name of registrant as specified in its charter)

Delaware	 	1-35322	 	45-1836028	
(State or Other Jurisdiction of	 	(Commission File Number)	 	(I.R.S. Employer	
Incorporation)	 	 	 	Identification No.)	

3500 One Williams Center, Tulsa, Oklahoma	 	74172-0172	
(Address of Principal Executive Offices)	 	(Zip Code)	
 
Registrant’s Telephone Number, Including Area Code:   855-979-2012
 
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 
Item 2.02                         Results of Operations and Financial Condition
 
On May 1, 2019, WPX Energy, Inc. announced its financial results and operating highlights for the first quarter of 2019.  A copy of the press release is furnished as Exhibit 99.1 to this report.
 
The information furnished under this Item 2.02, including Exhibit 99.1, will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and will not be incorporated by reference into any filing under the Securities Act of 1933, except as may be set forth by specific reference in that filing.
 
Item 9.01(d)                   Financial Statements and Exhibits

Exhibit No.	 	Description	
99.1	 	Press release dated May 1, 2019	
 
1 

 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	WPX ENERGY, INC.	

 	By:	/s/ Stephen E. Brilz	
 	 	Stephen E. Brilz	
 	 	Vice President and Secretary	
 
DATED:  May 1, 2019
 
2 

 
EXHIBIT INDEX

Exhibit No.	 	Description	
99.1	 	Press release dated May 1, 2019	
 
3 

Exhibit 99.1 

	WPX Energy, Inc.
(NYSE:WPX)
www.wpxenergy.com

 
DATE: May 1, 2019

MEDIA CONTACT:
 Kelly Swan
(539) 573-4944	INVESTOR CONTACT:
 David Sullivan
(539) 573-9360	
 
WPX Energy Reports 1Q 2019 Results
 
2019 operational and capital plan on track
 
·                   Expecting to generate more than $100 million of free cash flow in 2019
 
·                   1Q cash flow from operations 88% higher vs. a year ago
 
·                   1Q Delaware oil realizations of WTI less $0.09, including basis swaps
 
·                   1Q Delaware natural gas realizations of NYMEX less $0.76, including basis swaps
 
·                   Weather in Delaware Basin reduced 1Q oil volumes by approx. 1,400 bbl/d
 
·                   2019 development capital plan unchanged
 
·                   Announced or closed $550 million in recent deals; proceeds going to balance sheet
 
TULSA, Okla. — WPX Energy (NYSE:WPX) reported an unaudited first-quarter loss from continuing operations attributable to common shareholders of $48 million, or a loss of $0.11 per share on a diluted basis. This includes $207 million in derivative losses due to an increase in forward oil prices.
 
Excluding the derivative losses and other items, WPX posted adjusted net income from continuing operations in first-quarter 2019 of $22 million, or income of $0.05 per share. A reconciliation accompanies this press release.
 
First-quarter oil volumes were 96,100 barrels per day, up nominally from the most recent quarter. Multiple storm-related power outages in the Delaware Basin reduced first-quarter oil volumes by approximately 1,400 bbl/d.
 
Planned increases in 2019 production are expected to materialize more significantly in the latter half of the year. WPX continues to expect 5-10 percent oil growth from fourth-quarter 2018 to fourth-quarter 2019.
 
“Our first-quarter results are straight down the fairway. I’m very pleased with our strong, consistent performance and our continued success on the transaction front where we’ve generated substantial returns,” says Rick Muncrief, WPX chairman and chief executive officer.
 
“WPX’s 2019 plan is right on track for delivering capital discipline, production increases and more than $100 million of free cash flow,” Muncrief added.

 
RECENT TRANSACTIONS
 
As previously announced, WPX signed transactions for three divestitures in early 2019 totaling more than $550 million in net proceeds.
 
WPX already closed the sale of its 20 percent equity interest in WhiteWater Midstream’s Agua Blanca natural gas pipeline system and the sale of a peripheral non-core position (Nine Mile Draw) in the Delaware Basin. The absence of Nine Mile Draw reduced first-quarter oil volumes by approximately 500 bbl/d.
 
The third transaction — the sale of WPX’s equity interest in the Oryx II pipeline project — is on track to close this quarter. Proceeds will be used to pay off WPX’s revolver balance.
 
CAPITAL DISCIPLINE
 
Capital spending for drilling and completions activity on operated wells in first-quarter 2019 was $279.7 million, including the utilization of two rigs in the Delaware which were released in mid-January and late March. WPX’s Delaware rig count is now at five, which will drive a lower run rate for the remainder of the year. WPX’s 2019 D&C budget for operated wells remains at $1.0-$1.1 billion.
 
Capital spending for non-op D&C activity in first-quarter 2019 was $12.9 million. WPX’s non-op D&C budget for 2019 remains at $50-$75 million.
 
Capital spending for midstream infrastructure in first-quarter 2019 was $24.6 million. WPX’s 2019 midstream budget remains at $50-$100 million.
 
During the first quarter, WPX also invested $101.9 million in land acquisitions, predominantly from the $100 million purchase of approximately 14,000 surface acres within its Stateline operations area. This was funded through proceeds from recent divestitures.
 
Clay Gaspar, WPX president and chief operating officer, said, “Our capital plan for 2019 is unchanged, as is our confidence in our execution. We’re seeing significant cost savings in the Delaware Basin, including a 17 percent decrease in our average two-mile well cost.”

 
DELAWARE BASIN HIGHLIGHTS
 
WPX’s Delaware production averaged 92.1 Mboe/d in first-quarter 2019, up 46 percent vs. 63.2 Mboe/d in the same period a year ago.
 
WPX’s average realized oil price in the Delaware was WTI less $0.09 for the quarter, including Midland basis swaps. The basis swaps increased the average realized price by $1.57 per barrel.
 
WPX’s average realized natural gas price in the Delaware was NYMEX less $0.76 for the quarter, including basis swaps which increased the average realized price by $0.55 per Mcf.
 
WPX completed 31 Delaware wells during the first quarter, predominantly in upper Wolfcamp intervals. Almost half of the completions featured lateral lengths of approximately 10,000 feet.
 
The highest 24-hour rate for the first-quarter Delaware completions was 4,943 Boe/d (53% oil) on the CBR 41-44E-5H well. Eight laterals on the CBR 41 pad have 60-day cumulative production in excess of 660,000 barrels of oil. Five laterals are in the Wolfcamp A interval. The other three are Wolfcamp XY wells.
 
Four more of the Delaware long laterals were part of the Hattie 3H pad in the River Tracts area in Reeves County, which featured wells in four different intervals (Wolfcamp A, B, D and XY) as WPX delineates acreage outside its core Stateline position.
 
The highest initial peak rate on the Hattie pad occurred on the Hattie 3-3H well in the Wolfcamp A interval which hit 4,440 Boe/d (44% oil). It has 60-day cumulative production in excess of 89,000 barrels of oil. The 30-day rates from the wells in the other intervals averaged over 2,000 Boe/d, with oil ranging from 47% in the XY to 26% in the D.
 
The second 200 MMcf/d cryogenic processing train at WPX’s 50/50 joint venture gas plant in Reeves County is now being commissioned. First volumes of wet gas are expected to be introduced into the train this month.
 
WPX also is flowing roughly 45 percent of its Delaware oil volumes on the joint venture’s Stateline crude gathering system. JV facilities are operated by Howard Energy Partners. Overall, WPX has approximately 80 percent of its Delaware oil on pipe via multiple systems.
 
“Our midstream portfolio continues to be a distinct competitive advantage for WPX, especially when you consider how we methodically assembled it going back more than three years. We strategically protected our pricing and flow assurance, which is benefitting our business today and will continue to do so,” Gaspar added.

 
WILLISTON BASIN HIGHLIGHTS
 
Williston Basin production averaged 63.1 Mboe/d in first-quarter 2019, which was 60 percent higher than 39.5 Mboe/d in the same period a year ago.
 
Basis differentials for Williston volumes strengthened considerably midway through the first quarter following market imbalances in fourth-quarter 2018. Basis differentials were closer to WTI minus $2 in February and March vs. WTI minus $10 in fourth-quarter 2018 and WTI minus $6 in January.
 
WPX completed 15 Williston wells during the first quarter, including eight wells in the Three Forks formation and seven wells in the Bakken formation. All were two-mile laterals.
 
The highest 24-hour rate for the first-quarter Williston completions was 5,628 Boe/d (81% oil) on the Young Bird 34-27HW well. The four-well Young Bird pad has 90-day cumulative production in excess of 495,000 barrels of oil.
 
Initial peak rates on the two-well Good Voice pad averaged just over 4,000 Boe/d (81% oil). The pad has 60-day cumulative production in excess of 207,000 barrels of oil.
 
Initial peak rates on the four-well Plenty Sweet Grass pad averaged more than 4,300 Boe/d (81% oil). The pad has 60-day cumulative production of approximately 378,000 barrels of oil.
 
1Q FINANCIAL RESULTS
 
Total product revenues of $507 million in first-quarter 2019 were $100 million higher than the same period a year ago. Quarterly oil sales grew 25 percent.
 
Higher product revenues in first-quarter 2019 vs. a year ago were offset by $207 million of net losses associated with WPX’s hedge book, resulting in the net loss from continuing operations of $48 million.
 
DD&A, general and administrative expenses, production taxes, and interest expense all declined in first-quarter 2019 on a per-Boe basis vs. a year ago.
 
Adjusted EBITDAX (a non-GAAP financial measure) increased 56 percent vs. a year ago to $312 million in first-quarter 2019. Reconciliations for non-GAAP financial measures are available in the tables that accompany this press release.

 
The weighted average gross sales price — prior to revenue deductions — was $52.35 per barrel for oil, $2.60 for natural gas and $16.81 per barrel for NGL during first-quarter 2019.
 
Over the past three years, cash flow from operations (inclusive of hedge impact) has climbed from $22 million in first-quarter 2017 to $145 million in first-quarter 2018 to $272 million in first-quarter 2019.
 
WPX’s total liquidity at the close of business on March 31, 2019, was approximately $1.15 billion, primarily from the company’s available revolver capacity.
 
1Q PRODUCTION
 
Total production volumes of 155.2 Mboe/d in first-quarter 2019 were 51 percent higher than the same period a year ago. Liquids volumes accounted for 78 percent of first-quarter 2019 production.
 
Oil volumes of 96,100 bbl/d were 46 percent higher vs. the same period a year ago, led by a 62 percent increase in the Williston Basin over the past 12 months. As previously discussed, first-quarter Delaware volumes were reduced by weather and the absence of Nile Mile Draw production.

 	 	Q1	 	4Q Sequential	 	
Average Daily Production	 	2019	 	2018	 	Change	 	2018	 	Change	 	
Oil (Mbbl/d)	 	 	 	 	 	 	 	 	 	 	 	
Delaware Basin	 	44.4	 	33.8	 	31	%	48.3	 	-8	%	
Williston Basin	 	51.7	 	32.0	 	62	%	47.7	 	8	%	
Subtotal (Mbbl/d)	 	96.1	 	65.8	 	46	%	96.0	 	0	%	
 	 	 	 	 	 	 	 	 	 	 	 	
NGLs (Mbbl/d)	 	 	 	 	 	 	 	 	 	 	 	
Delaware Basin	 	20.0	 	10.9	 	83	%	21.9	 	-9	%	
Williston Basin	 	5.4	 	4.0	 	35	%	4.4	 	23	%	
Subtotal (Mbbl/d)	 	25.4	 	14.9	 	70	%	26.3	 	-3	%	
 	 	 	 	 	 	 	 	 	 	 	 	
Natural gas (MMcf/d)	 	 	 	 	 	 	 	 	 	 	 	
Delaware Basin	 	166.4	 	111.2	 	50	%	176.9	 	-6	%	
Williston Basin	 	35.9	 	21.1	 	70	%	27.9	 	29	%	
Subtotal (MMcf/d)	 	202.3	 	132.3	 	53	%	204.8	 	-1	%	
 	 	 	 	 	 	 	 	 	 	 	 	
Total Production (Mboe/d)	 	155.2	 	102.7	 	51	%	156.4	 	-1	%	

 
WPX completed 46 gross operated wells (40 net) in its two core basins during first-quarter 2019 and participated in another three gross (1 net) non-operated wells in the Delaware Basin.
 
For the balance of 2019, WPX has 53,000 bbl/d of oil hedged with fixed price swaps at a weighted average price of $54.62 per barrel, 5,000 bbl/d with fixed price calls at a weighted average price of $54.08 per barrel, and 8,000 bbl/d with collars at a weighted average price of $50 for the floor and $60.19 for the ceiling. WPX also has 110,000 MMBtu/d of natural gas hedged at a weighted average price of $3.07 per MMBtu.
 
For 2020, WPX has 20,000 bbl/d of oil hedged with fixed price swaps at a weighted average price of $59.03 per barrel and 20,000 bbl/d with collars at a weighted average price of $53.33 for the floor and $63.48 for the ceiling.
 
THURSDAY WEBCAST
 
The company’s next webcast takes place on May 2 beginning at 10 a.m. Eastern. Investors 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 (833) 832-5123. International callers should dial (469) 565-9820. The conference identification code is 9796128.
 
FORM 10-Q
 
WPX plans to file its first-quarter 2019 Form 10-Q with the Securities and Exchange Commission this week. Once filed, the document will be available on the SEC and WPX websites.
 
About WPX Energy, Inc.
 
WPX is an independent energy producer with core positions in the Permian and Williston basins. WPX’s production is approximately 80 percent oil/liquids and 20 percent natural gas. The company also has an infrastructure portfolio in the Permian Basin. Visit www.wpxenergy.com for more information.
 
# # #
 
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 (GAAP)
(UNAUDITED)

 	 	2018	 	2019	 	
(Dollars in millions)	 	1st Qtr	 	2nd Qtr	 	3rd Qtr	 	4th Qtr	 	Year	 	1st Qtr	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Product revenues:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Oil sales	 	$	360	 	$	468	 	$	503	 	$	459	 	$	1,790	 	$	449	 	
Natural gas sales	 	17	 	16	 	18	 	36	 	87	 	25	 	
Natural gas liquid sales	 	30	 	36	 	33	 	49	 	148	 	33	 	
Total product revenues	 	407	 	520	 	554	 	544	 	2,025	 	507	 	
Net gain (loss) on derivatives	 	(69	)	(154	)	(139	)	443	 	81	 	(207	)	
Commodity management	 	36	 	64	 	68	 	36	 	204	 	59	 	
Other	 	—	 	—	 	1	 	(1	)	—	 	—	 	
Total revenues	 	374	 	430	 	484	 	1,022	 	2,310	 	359	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Costs and expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation, depletion and amortization	 	161	 	197	 	193	 	226	 	777	 	219	 	
Lease and facility operating	 	55	 	59	 	68	 	90	 	272	 	86	 	
Gathering, processing and transportation	 	18	 	20	 	26	 	43	 	107	 	42	 	
Taxes other than income	 	30	 	41	 	45	 	41	 	157	 	39	 	
Exploration	 	19	 	17	 	18	 	21	 	75	 	24	 	
General and administrative:	 	 	 	 	 	 	 	 	 	 	 	 	 	
General and administrative expenses	 	36	 	34	 	36	 	44	 	150	 	39	 	
Equity-based compensation	 	7	 	10	 	8	 	7	 	32	 	8	 	
Total general and administrative	 	43	 	44	 	44	 	51	 	182	 	47	 	
Commodity management	 	39	 	54	 	63	 	26	 	182	 	49	 	
Net (gain) loss on sales of assets	 	1	 	(1	)	(1	)	(2	)	(3	)	—	 	
Other-net	 	2	 	2	 	2	 	1	 	7	 	2	 	
Total costs and expenses	 	368	 	433	 	458	 	497	 	1,756	 	508	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	 	6	 	(3	)	26	 	525	 	554	 	(149	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	 	(46	)	(39	)	(38	)	(40	)	(163	)	(41	)	
Loss on extinguishment of debt	 	—	 	(71	)	—	 	—	 	(71	)	—	 	
Gain on sale of equity investment	 	—	 	—	 	—	 	—	 	—	 	126	 	
Investment income (loss) and other	 	(1	)	1	 	(2	)	(2	)	(4	)	2	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from continuing operations before income taxes	 	$	(41	)	$	(112	)	$	(14	)	$	483	 	$	316	 	$	(62	)	
Provision (benefit) for income taxes	 	(15	)	(33	)	(8	)	130	 	74	 	(14	)	
Income (loss) from continuing operations	 	$	(26	)	$	(79	)	$	(6	)	$	353	 	$	242	 	$	(48	)	
Income (loss) from discontinued operations	 	(89	)	(2	)	(1	)	1	 	(91	)	—	 	
Net income (loss)	 	$	(115	)	$	(81	)	$	(7	)	$	354	 	$	151	 	$	(48	)	
Less: Dividends on preferred stock	 	4	 	4	 	—	 	—	 	8	 	—	 	
Net income (loss) available to WPX Energy, Inc. common stockholders	 	$	(119	)	$	(85	)	$	(7	)	$	354	 	$	143	 	$	(48	)	
Amounts available to WPX Energy, Inc. common stockholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from continuing operations	 	$	(30	)	$	(83	)	$	(6	)	$	353	 	$	234	 	$	(48	)	
Income (loss) from discontinued operations	 	(89	)	(2	)	(1	)	1	 	(91	)	—	 	
Net income (loss)	 	$	(119	)	$	(85	)	$	(7	)	$	354	 	$	143	 	$	(48	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Summary of Production Volumes (1)	 	 	 	 	 	 	 	 	 	 	 	 	 	
Oil (MBbls)	 	5,920	 	7,352	 	7,670	 	8,828	 	29,769	 	8,648	 	
Natural gas (MMcf)	 	11,908	 	13,854	 	14,759	 	18,844	 	59,365	 	18,210	 	
Natural gas liquids (MBbls)	 	1,340	 	1,713	 	1,259	 	2,420	 	6,733	 	2,288	 	
Combined equivalent volumes (MBoe) (2) 	 	9,245	 	11,374	 	11,389	 	14,389	 	46,396	 	13,971	 	
Per day volumes	 	 	 	 	 	 	 	 	 	 	 	 	 	
Oil (MBbls/d)	 	65.8	 	80.8	 	83.4	 	96.0	 	81.6	 	96.1	 	
Natural gas (MMcf/d)	 	132.3	 	152.2	 	160.4	 	204.8	 	162.6	 	202.3	 	
Natural gas liquids (MBbls/d)	 	14.9	 	18.8	 	13.7	 	26.3	 	18.4	 	25.4	 	
Combined equivalent volumes (Mboe/d) (2) 	 	102.7	 	125.0	 	123.8	 	156.4	 	127.1	 	155.2	 	

(1)            Excludes activity classified as discontinued operations.
(2)            Mboe are calculated using the ratio of six Mcf to one barrel of oil.

Realized average price per unit (1)	 	 	 	 	 	 	 	 	 	 	 	 	 	
Oil (per barrel)	 	$	60.91	 	$	63.63	 	$	65.52	 	$	52.05	 	$	60.14	 	$	51.92	 	
Natural gas (per Mcf)	 	$	1.44	 	$	1.12	 	$	1.22	 	$	1.90	 	$	1.46	 	$	1.36	 	
Natural gas liquids (per barrel)	 	$	22.14	 	$	20.94	 	$	26.68	 	$	20.14	 	$	21.97	 	$	14.47	 	

(1)            Excludes activity classified as discontinued operations.

Expenses per Boe (1)	 	 	 	 	 	 	 	 	 	 	 	 	 	
Depreciation, depletion and amortization	 	$	17.38	 	$	17.31	 	$	17.01	 	$	15.68	 	$	16.75	 	$	15.68	 	
Lease and facility operating	 	$	5.97	 	$	5.20	 	$	5.92	 	$	6.25	 	$	5.85	 	$	6.13	 	
Gathering, processing and transportation	 	$	1.93	 	$	1.79	 	$	2.29	 	$	2.95	 	$	2.30	 	$	2.98	 	
Taxes other than income	 	$	3.21	 	$	3.67	 	$	3.96	 	$	2.83	 	$	3.39	 	$	2.79	 	
General and administrative:	 	 	 	 	 	 	 	 	 	 	 	 	 	
General and administrative expenses	 	$	3.84	 	$	3.06	 	$	3.17	 	$	3.00	 	$	3.22	 	$	2.81	 	
Equity-based compensation	 	0.80	 	0.83	 	0.68	 	0.55	 	0.70	 	0.56	 	
Total general and administrative	 	$	4.64	 	$	3.89	 	$	3.85	 	$	3.55	 	$	3.92	 	$	3.37	 	
Interest expense	 	$	4.95	 	$	3.43	 	$	3.36	 	$	2.75	 	$	3.51	 	$	2.95	 	

(1)            Excludes activity classified as discontinued operations.

 
WPX Energy, Inc.
Reconciliation of NON-GAAP Measures
(UNAUDITED)

 	 	2018	 	2019	 	
(Dollars in millions, except per share amounts)	 	1st Qtr	 	2nd Qtr	 	3rd Qtr	 	4th Qtr	 	Year	 	1st Qtr	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Reconciliation of adjusted income (loss) from continuing operations available to common stockholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from continuing operations available to WPX Energy, Inc. common stockholders - reported	 	$	(30	)	$	(83	)	$	(6	)	$	353	 	$	234	 	$	(48	)	
Pre-tax adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (gain) loss on sales of assets and equity investment	 	$	1	 	$	(1	)	$	(1	)	$	(2	)	$	(3	)	$	(126	)	
Loss on extinguishment of debt	 	$	—	 	$	71	 	$	—	 	$	—	 	$	71	 	$	—	 	
Net (gain) loss on derivatives	 	$	69	 	$	154	 	$	139	 	$	(443	)	$	(81	)	$	207	 	
Net cash received (paid) related to settlement of derivatives	 	$	(55	)	$	(78	)	$	(85	)	$	(19	)	$	(237	)	$	9	 	
Total pre-tax adjustments	 	$	15	 	$	146	 	$	53	 	$	(464	)	$	(250	)	$	90	 	
Less tax effect for above items	 	$	(3	)	$	(33	)	$	(13	)	$	107	 	$	58	 	$	(20	)	
Impact of state deferred tax rate change	 	$	(4	)	$	—	 	$	—	 	$	(1	)	$	(5	)	$	—	 	
Impact of tax valuation allowance (annual effective tax rate method)	 	$	—	 	$	—	 	$	—	 	$	2	 	$	2	 	$	1	 	
Impact of state related adjustment	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	(1	)	
Adjustment for estimated annual effective tax rate method	 	$	—	 	$	(7	)	$	(5	)	$	12	 	$	—	 	$	—	 	
Total adjustments, after tax	 	$	8	 	$	106	 	$	35	 	$	(344	)	$	(195	)	$	70	 	
Adjusted income (loss) from continuing operations available to common stockholders	 	$	(22	)	$	23	 	$	29	 	$	9	 	$	39	 	$	22	 	
Reconciliation of adjusted diluted income (loss) per common share:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from continuing operations - diluted earnings per share - reported	 	$	(0.07	)	$	(0.21	)	$	(0.01	)	$	0.83	 	$	0.57	 	$	(0.11	)	
Impact of adjusted diluted weighted-average shares	 	$	—	 	$	0.01	 	$	—	 	$	—	 	$	—	 	$	—	 	
Pretax adjustments (1):	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net (gain) loss on sales of assets and equity investment	 	$	—	 	$	—	 	$	—	 	$	—	 	$	(0.01	)	$	(0.30	)	
Loss on extinguishment of debt	 	$	—	 	$	0.18	 	$	—	 	$	—	 	$	0.17	 	$	—	 	
Net (gain) loss on derivatives	 	$	0.17	 	$	0.38	 	$	0.33	 	$	(1.04	)	$	(0.20	)	$	0.49	 	
Net cash received (paid) related to settlement of derivatives	 	$	(0.13	)	$	(0.20	)	$	(0.20	)	$	(0.06	)	$	(0.57	)	$	0.02	 	
Total pretax adjustments	 	$	0.04	 	$	0.36	 	$	0.13	 	$	(1.10	)	$	(0.61	)	$	0.21	 	
Less tax effect for above items	 	$	(0.02	)	$	(0.08	)	$	(0.04	)	$	0.26	 	$	0.14	 	$	(0.05	)	
Impact of state tax rate change	 	$	(0.01	)	$	—	 	$	—	 	$	—	 	$	(0.01	)	$	—	 	
Impact of tax valuation allowance (annual effective tax rate method)	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	
Impact of state related adjustment	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	$	—	 	
Adjustment for estimated annual effective tax rate method	 	$	—	 	$	(0.02	)	$	(0.01	)	$	0.03	 	$	—	 	$	—	 	
Total adjustments, after-tax	 	$	0.01	 	$	0.26	 	$	0.08	 	$	(0.81	)	$	(0.48	)	$	0.16	 	
Adjusted diluted income (loss) per common share	 	$	(0.06	)	$	0.06	 	$	0.07	 	$	0.02	 	$	0.09	 	$	0.05	 	
Reported diluted weighted-average shares (millions)	 	398.6	 	400.0	 	414.0	 	424.0	 	411.7	 	421.0	 	
Effect of dilutive securities due to adjusted income (loss) from continuing operations available to common stockholders	 	—	 	3.1	 	3.7	 	—	 	—	 	2.6	 	
Adjusted diluted weighted-average shares (millions)	 	398.6	 	403.1	 	417.7	 	424.0	 	411.7	 	423.6	 	

(1) Per share impact is based on adjusted diluted weighted-average shares.

Reconciliation of Adjusted EBITDAX	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) - reported	 	$	(115	)	$	(81	)	$	(7	)	$	354	 	$	151	 	$	(48	)	
Interest expense	 	46	 	39	 	38	 	40	 	163	 	41	 	
Provision (benefit) for income taxes	 	(15	)	(33	)	(8	)	130	 	74	 	(14	)	
Depreciation, depletion and amortization	 	161	 	197	 	193	 	226	 	777	 	219	 	
Exploration expenses	 	19	 	17	 	18	 	21	 	75	 	24	 	
EBITDAX	 	96	 	139	 	234	 	771	 	1,240	 	222	 	
Net (gain) loss on sales of assets and equity investment	 	1	 	(1	)	(1	)	(2	)	(3	)	(126	)	
Loss on extinguishment of debt	 	—	 	71	 	—	 	—	 	71	 	—	 	
Net (gain) loss on derivatives	 	69	 	154	 	139	 	(443	)	(81	)	207	 	
Net cash received (paid) related to settlement of derivatives	 	(55	)	(78	)	(85	)	(19	)	(237	)	9	 	
(Income) loss from discontinued operations	 	89	 	2	 	1	 	(1	)	91	 	—	 	
Adjusted EBITDAX	 	$	200	 	$	287	 	$	288	 	$	306	 	$	1,081	 	$	312	 	

 
WPX Energy, Inc.
Consolidated Statements of Operations
(Unaudited)

 	 	Three months ended March 31,	 	
 	 	2019	 	2018	 	
 	 	(Millions, except per share amounts)	 	
Revenues:	 	 	 	 	 	
Product revenues:	 	 	 	 	 	
Oil sales	 	$	449	 	$	360	 	
Natural gas sales	 	25	 	17	 	
Natural gas liquid sales	 	33	 	30	 	
Total product revenues	 	507	 	407	 	
Net gain (loss) on derivatives	 	(207	)	(69	)	
Commodity management	 	59	 	36	 	
Other	 	—	 	—	 	
Total revenues	 	359	 	374	 	
Costs and expenses:	 	 	 	 	 	
Depreciation, depletion and amortization	 	219	 	161	 	
Lease and facility operating	 	86	 	55	 	
Gathering, processing and transportation	 	42	 	18	 	
Taxes other than income	 	39	 	30	 	
Exploration	 	24	 	19	 	
General and administrative (including equity-based compensation of $8 million and $7 million for the respective periods)	 	47	 	43	 	
Commodity management	 	49	 	39	 	
Other - net	 	2	 	3	 	
Total costs and expenses	 	508	 	368	 	
 	 	 	 	 	 	
Operating income (loss)	 	(149	)	6	 	
Interest expense	 	(41	)	(46	)	
Gain on sale of equity investment	 	126	 	—	 	
Investment income (loss) and other	 	2	 	(1	)	
Income (loss) from continuing operations before income taxes	 	(62	)	(41	)	
Provision (benefit) for income taxes	 	(14	)	(15	)	
Income (loss) from continuing operations	 	(48	)	(26	)	
Income (loss) from discontinued operations	 	—	 	(89	)	
Net income (loss)	 	(48	)	(115	)	
Less: Dividends on preferred stock	 	—	 	4	 	
Net income (loss) available to WPX Energy, Inc. common stockholders	 	$	(48	)	$	(119	)	
 	 	 	 	 	 	
Amounts available to WPX Energy, Inc. common stockholders:	 	 	 	 	 	
Income (loss) from continuing operations	 	$	(48	)	$	(30	)	
Income (loss) from discontinued operations	 	—	 	(89	)	
Net income (loss)	 	$	(48	)	$	(119	)	
 	 	 	 	 	 	
Basic earnings (loss) per common share:	 	 	 	 	 	
Income (loss) from continuing operations	 	$	(0.11	)	$	(0.07	)	
Income (loss) from discontinued operations	 	—	 	(0.23	)	
Net income (loss)	 	$	(0.11	)	$	(0.30	)	
 	 	 	 	 	 	
Basic weighted-average shares	 	421.0	 	398.6	 	
 	 	 	 	 	 	
Diluted earnings (loss) per common share:	 	 	 	 	 	
Income (loss) from continuing operations	 	$	(0.11	)	$	(0.07	)	
Income (loss) from discontinued operations	 	—	 	(0.23	)	
Net income (loss)	 	$	(0.11	)	$	(0.30	)	
 	 	 	 	 	 	
Diluted weighted-average shares	 	421.0	 	398.6	 	

 
WPX Energy, Inc.
Consolidated Balance Sheets
(Unaudited)

 	 	March 31,
2019	 	December 31,
2018	 	
ASSETS	 	(Millions)	 	
Current assets:	 	 	 	 	 	
Cash and cash equivalents	 	$	6	 	$	3	 	
Accounts receivable, net of allowance	 	538	 	405	 	
Derivative assets	 	69	 	174	 	
Inventories	 	52	 	48	 	
Assets classified as held for sale	 	—	 	79	 	
Other	 	38	 	30	 	
Total current assets	 	703	 	739	 	
Investments	 	168	 	167	 	
Properties and equipment (successful efforts method of accounting)	 	10,370	 	9,949	 	
Less: Accumulated depreciation, depletion and amortization	 	(2,917	)	(2,683	)	
Properties and equipment, net	 	7,453	 	7,266	 	
Derivative assets	 	23	 	4	 	
Other noncurrent assets	 	124	 	27	 	
Total assets	 	$	8,471	 	$	8,203	 	
 	 	 	 	 	 	
LIABILITIES AND EQUITY	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	
Accounts payable	 	$	683	 	$	514	 	
Accrued and other current liabilities	 	190	 	178	 	
Derivative liabilities	 	137	 	23	 	
Total current liabilities	 	1,010	 	715	 	
Deferred income taxes	 	188	 	201	 	
Long-term debt, net	 	2,470	 	2,485	 	
Derivative liabilities	 	29	 	14	 	
Other noncurrent liabilities	 	526	 	487	 	
 	 	 	 	 	 	
Equity:	 	 	 	 	 	
Stockholders’ equity:	 	 	 	 	 	
Preferred stock (100 million shares authorized at $0.01 par value; no shares outstanding)	 	—	 	—	 	
Common stock (2 billion shares authorized at $0.01 par value; 422.3 million shares and 420.6 million shares issued and outstanding at March 31, 2019 and December 31, 2018)	 	4	 	4	 	
Additional paid-in-capital	 	7,729	 	7,734	 	
Accumulated deficit	 	(3,485	)	(3,437	)	
Total stockholders’ equity	 	4,248	 	4,301	 	
Total liabilities and equity	 	$	8,471	 	$	8,203	 	

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

 	 	Three Months ended March 31,	 	
 	 	2019	 	2018	 	
 	 	(Millions)	 	
Operating Activities(a)	 	 	 	 	 	
Net income (loss)	 	$	(48	)	$	(115	)	
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	 	 	 	 	 	
Depreciation, depletion and amortization	 	219	 	168	 	
Deferred income tax (provision) benefit	 	(13	)	(43	)	
Provision for impairment of properties and equipment (including certain exploration expenses)	 	20	 	20	 	
Gain on sale of investments	 	(126	)	—	 	
Net (gain) loss on derivatives	 	207	 	69	 	
Net settlements related to derivatives	 	9	 	(55	)	
Amortization of stock-based awards	 	8	 	8	 	
Net (gain) loss on sales of assets including discontinued operations	 	—	 	151	 	
Cash provided by (used in) operating assets and liabilities:	 	 	 	 	 	
Accounts receivable	 	(137	)	(21	)	
Inventories	 	(4	)	(8	)	
Other current assets	 	(6	)	6	 	
Accounts payable	 	197	 	28	 	
Accrued and other current liabilities	 	(37	)	(48	)	
Liabilities accrued in prior years for retained transportation and gathering contracts related to discontinued operations	 	(8	)	(10	)	
Other, including changes in other noncurrent assets and liabilities	 	(9	)	(5	)	
Net cash provided by (used in) operating activities (a)	 	272	 	145	 	
 	 	 	 	 	 	
Investing Activities(a)	 	 	 	 	 	
Capital expenditures(b)	 	(451	)	(321	)	
Proceeds from sales of assets and investments	 	228	 	699	 	
Purchase of or contributions to investments	 	(18	)	(16	)	
Distribution from equity method investments	 	4	 	—	 	
Net cash provided by (used in) investing activities (a)	 	(237	)	362	 	
 	 	 	 	 	 	
Financing Activities	 	 	 	 	 	
Proceeds from common stock	 	1	 	1	 	
Dividends paid on preferred stock	 	—	 	(4	)	
Borrowings on credit facility	 	609	 	138	 	
Payments on credit facility	 	(625	)	(138	)	
Taxes paid for shares withheld	 	(15	)	(11	)	
Other	 	1	 	—	 	
Net cash provided by (used in) financing activities	 	(29	)	(14	)	
 	 	 	 	 	 	
Net increase (decrease) in cash and cash equivalents and restricted cash	 	6	 	493	 	
Cash and cash equivalents and restricted cash at beginning of period	 	18	 	201	 	
Cash and cash equivalents and restricted cash at end of period	 	$	24	 	$	694	 	

	
(a) Amounts reflect continuing and discontinued operations unless otherwise noted.	 	 	 	 	 	
(b) Increase to properties and equipment	 	$	(425	)	$	(349	)	
Changes in related accounts payable and accounts receivable	 	(26	)	28	 	
Capital expenditures	 	$	(451	)	$	(321	)