WPX Energy Adds Acreage in Gallup Oil Play
Purchase increases position to approximately 100,000 acres
TULSA, Okla.--(BUSINESS WIRE)--
WPX Energy (NYSE: WPX) has completed the purchase of another 14,300 net
acres in the San Juan Basin’s Gallup oil window from an undisclosed
seller for approximately $26 million.
The acreage purchase represents an estimated 100 gross drilling
locations, boosting WPX’s tally in the San Juan Gallup to approximately
WPX now owns or controls approximately 100,000 acres in the core of the
Gallup oil window where it has spud more than 100 wells following a
successful discovery in early 2013.
Since then, WPX has lowered its drilling times on Gallup wells by 75
percent. The company recently drilled two Gallup wells in less than
eight days each. During the second quarter, WPX is averaging 9.8 days
per well so far.
“We’re very pleased with the productivity of our Gallup wells and our
ongoing improvements in drilling times and cost reductions,” says Rick
Muncrief, president and chief executive officer.
“This acquisition reflects our confidence in our ability to achieve $4
million well costs and estimated ultimate recoveries of 450,000 barrels
of oil equivalent per well,” Muncrief added.
WPX’s overall drilling and completion costs are down 24 percent on its
Gallup wells this year compared to its average in 2014. The company
reported first quarter Gallup oil volumes of 8,100 barrels per day.
WPX also is increasing its returns in the oil development through the
construction of company owned and operated oil, gas and water gathering
systems and has taken steps to lower the basis differential on its
Gallup oil sales from roughly $13 per barrel to approximately $8 to $10
About WPX Energy, Inc.
WPX Energy develops and operates oil and gas producing properties
in North Dakota, New Mexico and Colorado. The company has a long history
of innovation and stakeholder engagement, recognized through more than
40 local, state, federal and industry awards.
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.
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Source: WPX Energy Inc