WPX to receive approximately $350 million in net proceeds for its 25% interest in Oryx II
TULSA, Okla.--(BUSINESS WIRE)-- A subsidiary of WPX Energy (NYSE: WPX) and its joint venture partner in the Oryx II pipeline have signed agreements to sell the project. Closing is expected in the second quarter.
Upon close, WPX expects net proceeds of approximately $350 million for its 25 percent equity interest after adjusting for debt financing related to Oryx II.
In addition, WPX expects to save approximately $40 million in planned equity investments for the balance of the year due to the sale.
WPX is retaining its contractual rights as a shipper on Oryx and plans to deploy proceeds from the transaction to its balance sheet.
WPX also is reevaluating the timetable for its plan to return capital to shareholders, originally targeted for 2021. Projected free cash flow from WPX’s operations in 2019 may accelerate action, with a decision expected in the latter half of this year.
“WPX’s opportunistic approach continues to create significant value for shareholders and generate handsome returns on our capital employed,” said Rick Muncrief, chairman and chief executive officer.
“We secured flow assurance and ownership interests in critical midstream projects in the Delaware Basin before constraints ever occurred. That strategy also has protected the pricing for our production in the basin,” said Muncrief.
The Oryx system is a regional crude oil pipeline transport network that supports the Northern Delaware Basin. It consists of more than 500 miles of pipe that include a significant presence in the Stateline area of Texas and New Mexico. Oryx II is one component of the overall system.
The Oryx II transaction is WPX’s second midstream monetization this year. WPX already closed on the previously announced sale of its 20 percent equity interest in WhiteWater Midstream’s Agua Blanca natural gas pipeline system. WPX remains a shipper on that system, as well.
WPX invested approximately $125 million in its equity positions in the Oryx and Whitewater midstream systems, primarily in 2017 and 2018. The investments generated approximately half of a billion dollars in net proceeds this year, pending the close of the Oryx II sale.
“I extend our sincere congratulations to the Oryx management team and their financial sponsors at Quantum Energy Partners and Post Oak Energy Capital for their highly successful project,” Muncrief added. “We look forward to working with the new owners as a shipper on this valuable infrastructure.”
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 .
Source: WPX Energy Inc