Barclays CEO Energy-Power Conference · 2018-05-14 · Barclays CEO Energy-Power Conference | September 3, 2014 8 10 years of drillable inventory Operating 5 rigs 6 -million pound

Barclays CEO Energy-Power Conference

Rick Muncrief President & CEO, WPX Energy

September 3, 2014

Disclaimer

The information contained in this summary has been prepared to assist you in making your own evaluation of the Company and does not purport to contain all of the information you may consider important in deciding whether to invest in shares of the Company’s common stock. In all cases, it is your obligation to conduct your own due diligence. All information contained herein, including any estimates or projections, is based upon information provided by the Company. Any estimates or projections with respect to future performance have been provided to assist you in your evaluation but should not be relied upon as an accurate representation of future results. No persons have been authorized to make any representations other than those contained in this summary, and if given or made, such representations should not be considered as authorized.

Certain statements, estimates and financial information contained in this summary constitute forward-looking statements or information. Such forward-looking statements or information involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from the results implied or expressed in such forward-looking statements or information. While presented with numerical specificity, certain forward-looking statements or information are based (1) upon assumptions that are inherently subject to significant business, economic, regulatory, environmental, seasonal, competitive uncertainties, contingencies and risks including, without limitation, the ability to obtain debt and equity financings, capital costs, construction costs, well production performance, operating costs, commodity pricing, differentials, royalty structures, field upgrading technology, and other known and unknown risks, all of which are difficult to predict and many of which are beyond the Company's control, and (2) upon assumptions with respect to future business decisions that are subject to change.

There can be no assurance that the results implied or expressed in such forward-looking statements or information or the underlying assumptions will be realized and that actual results of operations or future events will not be materially different from the results implied or expressed in such forward-looking statements or information. Under no circumstances should the inclusion of the forward-looking statements or information be regarded as a representation, undertaking, warranty or prediction by the Company or any other person with respect to the accuracy thereof or the accuracy of the underlying assumptions, or that the Company will achieve or is likely to achieve any particular results. The forward-looking statements or information are made as of the date hereof and the Company disclaims any intent or obligation to update publicly or to revise any of the forward-looking statements or information, whether as a result of new information, future events or otherwise. Recipients are cautioned that forward-looking statements or information are not guarantees of future performance and, accordingly, recipients are expressly cautioned not to put undue reliance on forward-looking statements or information due to the inherent uncertainty therein.

2 Barclays CEO Energy-Power Conference | September 3, 2014

Reserves Disclaimer

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. We have elected to use in this presentation “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 regarding our business 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 Portfolio Today

Barclays CEO Energy-Power Conference | September 3, 2014 4

Piceance

3,019 Bcfe Proved 11,878 Bcfe 3P 221,186 Net Acres

Williston

105 MMboe Proved 176 MMboe 3P 88,6973 Net Acres

Powder River

245 Bcfe Proved 657 Bcfe 3P 360,002 Net Acres

Apco1

22 MMboe Proved 58 MMboe 3P 385,796 Net Acres

Total Domestic

4,905 Bcfe Proved 17,211 Bcfe 3P 1,562,596 Net Acres3

Total2

San Juan

517 Bcfe Proved 1,645 Bcfe 3P 160,825 Net Acres

POWDER RIVER BASIN

PICEANCE BASIN

SAN JUAN BASIN

APPALACHIAN BASIN

WILLISTON BASIN

Natural Gas

Oil

Natural Gas and Natural Gas Liquids

Note: Acreage, proved and 3P numbers are as of 12/31/13.

1 Reflects WPX’s 69% ownership in APCO, as well as additional acreage owned by WPX. 2 Total includes other reserves and acreage not depicted on slide. 3 Includes mineral interest acreage

ARGENTINA

Appalachia

328 Bcfe Proved 1,555 Bcfe 3P 87,994 Net Acres

Recent Transactions

Transaction with Legacy Reserves to sell working interest in Piceance wells

Control an additional 26,000 net acres in the San Juan Gallup oil window

► ~75,000 net acres in the oil window

Agreed to sell mature Powder River coalbed methane acreage

Trail Ridge joint development on nearly 400 wells


Piceance Basin


More than 12,000 drillable locations

Excess infrastructure

Access to premium market

#1 Energy Producer in Colorado

Piceance Operations

Currently running 9 rigs

2nd quarter net production 691 MMcfe/d

► Natural gas 584 MMcf/d

► NGL 15.8 Mbbl/d

► Oil 2.0 Mbbl/d

Lowest-cost operator

► 34% less D&C capital cost1

► 57% less operating lifting cost2

State-of-the-art water management system

Successful Ryan Gulch 10-acre density

Exploratory efforts in the Niobrara

¹Utilizing data from eight 2012 Rulison field non-op wells 2Utilizing data from 215 Valley non-op wells – total well expense


Williston Basin

#1 Williston Producer in 1- and 2-year Cumulative Production1


10 years of drillable inventory

Operating 5 rigs

6-million-pound stimulations

¹Based on NDIC data for Middle Bakken laterals (7,500’ - 12,000’ ) drilled on 1,280 spacing units put on 1st sales since January 2011. Peer group includes companies with at least 20 wells with 365 days of production and 10 wells with 730 days of production as of 6/30/2014. WPX acquired Williston properties December 2010.

Williston Continues to Drive Strong Production Growth

Production exceeds 2Q target ► Oil production up 53% 2Q ’14

vs. 2Q ’13

► Oil production up 21% 2Q ’14 vs. 1Q ’14

Increased proppant completions ► Positive initial results from

moderate 25% increase of proppant

► Doubling proppant to 6 MM pounds in remaining 2014 wells

Currently capturing up to ~90% of gas volumes

► Placed 1st liquid capture skid on new Glenn Fox 3-well pad

Downspacing creating additional inventory and NAV

► 199 locations added

► 10 years of drillable locations using 2014 run rate


Average 30-day IP: 1,176 bo/d Middle Bakken

1,095 bo/d Three Forks


1-Yr and 2-Yr Cumulative Production per Well1 (Based on productive days)

Average 365-day cumulative production per well of 140.9 Mbo, 64% higher than the peer average

Average 730-day cumulative production per well of 224.2 Mbo, 62% higher than the peer average

WPX is #1 in Middle Bakken Cumulative Production

Peer 2-Yr Cumulative Production per Well

Peer 1-Yr Cumulative Production per Well

WPX 2-Yr Cumulative Production per Well

WPX 1-Yr Cumulative Production per Well

0.00

50,000.00

100,000.00

150,000.00

200,000.00

250,000.00

WP

X

ZAV

AN

NA

SLA

WSO

N

WH

ITIN

G

BU

RLI

NG

TON

QEP

EN

ERG

Y

SM E

NER

GY

MA

RA

THO

N

NEW

FIEL

D

CO

NTI

NEN

TAL

EOG

RES

OU

RC

ES

DEN

BU

RY

ON

SHO

RE

HES

S

OA

SIS

HU

NT

ZEN

ERG

Y

XTO

EN

ERG

Y

HR

C O

PER

ATI

NG

PET

RO

-HU

NT

MU

REX

PET

RO

LEU

M

OX

Y U

SA

SAM

SON

RES

OU

RC

ES

Peer 2-Yr Avg Peer 1-Yr Avg

¹Based on NDIC data for Middle Bakken laterals (7,500’ - 12,000’ ) drilled on 1,280 spacing units put on 1st sales since January 2011. Peer group includes companies with at least 20 wells with 365 days of production and 10 wells with 730 days of production as of 6/30/2014. WPX acquired Williston properties December 2010.

San Juan Basin

#1 Returns in the WPX Portfolio


Rapidly growing oil production

Diversified product mix

Over 30 years’ experience

San Juan Gallup Accelerating Production Growth

Production exceeds 2Q target



Development program advancing

► 2Q oil production 25% higher than target, 3.0 Mbo/d vs. 2.4 Mbo/d

► Reduced well cost to $5.2MM, targeting $4.8MM by year-end

► Average 2014 30-day IP is 626 boe/d vs. 2013 average of 474 boe/d

► Total net sales since January 2013 project inception exceeds 875 Mboe, or 697 Mbo

Efficiencies driving accelerated development

► Increasing spuds from 29 to 40, while maintaining same rig count

► Currently two rigs running, plus top-setting rig


2308 09A #146H FIRST SALES: 4/21/2014 AVG. 30 DAY IP: 481 BOPD

WPX-Drilling Horizontal Oil Wells

WPX-Completed Horizontal Oil Wells

WPX Acreage (Shallow/Deep Rights)

2307 13L #174H FIRST SALES: 4/24/2014 AVG. 30 DAY IP: 456 BOPD

2306 06L #239H FIRST SALES: 3/9/2014 AVG. 30-DAY IP: 420 BOPD


2308 09A #145H FIRST SALES: 4/16/2014 AVG . 30 DAY IP: 426 BOPD

2307 13L #238H FIRST SALES: 5/4/2014 AVG. 30 DAY IP: 392 BOPD

2307 12E #169H FIRST SALES: 5/5/2014 AVG. 30 DAY IP: 495 BOPD




2308 16I #148H FIRST SALES: 5/29/2014 AVG. 30 DAY IP: 576 BOPD

2306 19M #190H FIRST SALES: 6/20/2014 AVG. 30 DAY IP: 498 BOPD

2206 02H #226H FIRST SALES: 6/17/2014 AVG. 30 DAY IP: 676 BOPD

2206 02H #272H FIRST SALES: 7/9/2014

0

10

20

30

40

50

60

70

0 100 200 300 400 500 600

Avg

Gro

ss C

um

ula

tive

Oil

Pro

du

ctio

n (

Mb

bl)

Days

2013 Spuds

2014 Spuds

13 Wells 15 Wells

San Juan Gallup 2014 Well Performance Exceeding 2013


Improving oil production in 2014

► Average gross cumulative oil production grew by ~40%

► First 140 days of production

~40% increase in Oil Production

Western Prices Have Increased Relative to Eastern Locations


-2.00

-1.50

-1.00

-0.50

0.00

0.50

2007 to 2010 2011 to Now 3 Yr Fwd 2007 to 2010 2011 to Now 3 Yr Fwd

($1.74)

($0.18) ($0.15)

$0.33

($0.21)

($1.26)

West Basis Strengthening1 East Basis Weakening2

$ p

er M

MB

tu

3 3

1 Northwest Wyoming/Rocky Mountain basis 2 Dominion South basis 3 3-year average strip price as of 8/28/2014

Strong Western Supply/Demand Fundamentals Through 2019

2.0 Bcf/d demand increase

through 2019

Northwest


through 2019

Southwest


through 2019

Mexico

Demand +2.0

Bcf/d

Demand +0.5

Bcf/d

Demand +1.8

Bcf/d

Rockies and San Juan Basin

production flat to declining

through 2019


Significant Excess Transportation Capacity Advantages the Rockies

Average Daily Volume Average Daily Capacity CIG Cash Basis

14.0

12.0

10.0

8.0

6.0

4.0

2.0

0.0

Bcf

/d

$/M

MB

tu

$1.50

$1.00

$.50

$.00

-$.50

-$1.00

-$1.50

Rockies Outflows and Capacity


.Source: Bentek Energy & WPX Energy

~5Bcf per day of excess capacity out of the Rockies

Creates running room for production growth

Fundamentals support strong basis

NW Pipe Rockies Basis

NW Pipe Rockies basis peaks at $18.72/MMBtu on Feb. 6 , 2014

Our Transport Costs are Decreasing while Northeast Producers’ are Increasing


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2014 2017 2014 2017 2014 2017

Tran

spo

rtat

ion

Co

sts

($/M

M)

Northeast Producer 2 WPX Northeast Producer 1

1 Includes demand obligations related to Rockies sale/resale agreement 2 Gross firm transportation obligations taken from Producer’s 10-K, company presentations and publicly available data

2

2

1,2

Hedging Overview


Balance of 2014 1 2015

Volume/Day Average Price Volume/Day Average Price

Natural Gas (MMBtu)

Fixed Price Swaps2 315,000 $4.19 272,055 $4.31

Costless Collars 190,000 $4.04 - $4.66 50,000 $4.00 - $4.50

Natural Gas Basis (MMBtu)

Dominion Basis Swaps 57,500 ($0.73)

MidCon Basis Swaps 30,000 ($0.19) 12,500 ($0.16)

Rockies Basis Swaps 142,500 ($0.15) 150,000 ($0.11)

San Juan Basis Swaps 255,000 ($0.15) 75,000 ($0.10)

SoCal Basis Swaps 72,500 $0.13 20,000 $0.18

Crude Oil (bbl)

Fixed Price Swaps2 14,975 $96.01 20,236 $94.88

Natural Gas Liquids (bbl)3

Ethane Swaps 3,279 $0.29

Propane Swaps 492 $1.17

Isobutane Swaps 656 $1.37

Normal Butane Swaps 656 $1.34

Natural Gasoline Swaps 1,639 $2.06

1 Balance of 2014 is September - December. 2 In connection with several natural gas and crude oil swaps, we entered into swaptions with the swap counterparties granting the counterparty the right, but not the obligation, to enter into an underlying swap with us in the future. 3 All Natural Gas Liquids swaps are priced at Mont Belvieu.

As of 8/28/2014

Shifting to Pure Play E&P Mindset

“We are building one culture, one organization, one mission.”


More Nimble

View Asset Base in

New Way

Focus on Profitability

Greater Risk

Tolerance

Documents

Barclays CEO Energy-Power Conference · 2018-05-14 · Barclays CEO Energy-Power Conference | September 3, 2014 8 10 years of drillable inventory Operating 5 rigs 6 -million pound