WPX Energy cites low natural gas prices in reporting 2012 loss
BY ROD WALTON World Staff Writer
Friday, March 01, 2013
3/01/13 at 7:38 AM
WPX Energy Inc. lowered drilling expenses and raised production but still suffered net losses for the fourth quarter and all of 2012 due to lower natural gas prices, the Tulsa-based company reported Thursday.
The fourth-quarter net loss totaled $106 million, while the full year was $223 million in the red, although both results were improvements over the same periods in 2011.
WPX was hit hard by a 22 percent decrease in domestic natural gas prices.
CEO Ralph Hill highlighted the company's 98 percent quarterly growth in oil production in the Bakken Shale of the Northern Great Plains, as well as an overall 634 billion cubic feet equivalent addition in domestic reserves last year. WPX also lowered its domestic expenses by 15 percent compared with 2011 costs.
"Our focused growth plan and rate-of-return driven strategy is delivering strong results," Hill said in a statement. "Production is up, Bakken well costs are down and continue to improve, and new opportunities like our Niobrara (shale in Colorado) discovery are providing upside potential and future visibility for value creation at WPX."
The company's Bakken oil production climbed to an average of 11,400 barrels per day in the fourth quarter. The production mix shifted toward oil with an overall 40 percent growth in that production, followed by 2 percent in natural gas and 3 percent in natural gas liquids, which was curbed due to reduced ethane recovery rates, the company reported.
WPX's realized average net price for natural gas fell to $3.38 per thousand cubic feet last year, compared with $4.32 in 2011. Natural gas liquids prices dropped 29 percent, while oil rose 28 cents per barrel above the previous year's average.
Non-cash impairment charges totaled $225 million for WPX last year. The accounting write-downs, booked due to low natural gas prices, were based on the carrying value of producing properties and the costs of acquired unproved reserves, according to the release.
WPX ended 2012 with $153 million in cash and cash equivalents.
The company also has an untapped $1.5 billion revolving credit agreement available.
Williams Cos. Inc. spun off its exploration and production unit to form WPX in late 2011.
WPX holds drilling properties throughout the U.S. and, through its 69 percent stake in Apco Oil and Gas International, wells in Colombia and Argentina.
WPX Energy Inc. earnings
|
2012 |
2011 |
2012 |
2011 |
|
4Q |
4Q |
Full-year |
Full-year |
| Revenue |
$827M |
$970M |
$3.19B |
$3.88B |
| Net income (loss) |
($106M) |
($338M) |
($223M) |
($302M) |
| Net per share (loss) |
($0.53) |
($1.71) |
($1.12) |
($1.53) |
Original Print Headline: Low natural gas prices cited for losses at WPX
Rod Walton 918-581-8457
rod.walton@tulsaworld.com
