Will Average Seven Rigs for Balance of Year
TULSA, Okla. – WPX Energy (NYSE:WPX) today announced that it now plans to employ seven drilling rigs in western Colorado’s Piceance Basin for the remainder of 2013, up from its previously announced five-rig drilling plan.
The increased development activity is expected to add an incremental 1.9 billion cubic feet equivalent of production throughout the remainder of 2013, increasing the basin’s exit rate from 701 MMcfe/d to 730 MMcfe/d at year-end. This is in line with the higher end of WPX’s guidance of 1,261 MMcfe/d to 1,295 MMcfe/d for 2013.
The benefit of increased drilling in 2013 will be more fully realized in 2014 given the timing of drilling and well completions. Next year, the additional wells could add up to 15 Bcfe in additional cumulative production.
Approximately $60 million of capital is associated with adding two rigs this year. The increase is in line with WPX’s overall range of $1 billion to $1.2 billion for 2013 capital spending.
“Now’s the right time for us to accelerate our natural gas production and the Piceance is the right place to start,” said Ralph A. Hill, WPX’s president and chief executive officer. “Natural gas prices are stronger, and this helps lay the groundwork for our 2014 development.
“WPX has a unique position in the Piceance. We have everything in place there to be among the first and fastest to increase our production. We have the permits, favorable processing contracts, take-away transportation capacity and large-scale, low-cost, efficiency driven operations to yield attractive returns.” Hill added.
The additional drilling this year will target the company’s reserves in the Williams Fork formation where WPX has developed more than 4,100 tight sands wells. The company’s record drilling time for a Williams Fork well in the Piceance Valley is 3.7 days.
As previously announced, WPX continues to plan to drill a total of four horizontal Niobrara wells in the Piceance during 2013 to begin delineation of the company’s Niobrara discovery. Over its first 150 days, WPX’s Niobrara discovery well has produced 1.25 billion cubic feet of natural gas. The discovery well is currently producing 5.5 MMcf/d at a flowing tubing pressure of about 3,000 pounds per square inch.
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.
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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.