WPX Energy: Transformation In Progress
WPX Energy: What To Expect In 2016
Richard Zeits • 10 Comments
Richard Zeits • 10 Comments
WPX Energy: A Challenging Transformation
Wed, Jul. 6, 3:53 PM
- WPX Energy (WPX +4.8%) is upgraded to Buy from Neutral with a $14.75 price target, raised from $10.50, at Goldman Sachs, which cites the completion of WPX’s recapitalization and strategic repositioning.
- The firm says WPX's recent $500M equity issuance resolves lingering investor balance sheet concerns, paving the way for the company to narrow its 1.8x discount to peers.
- Goldman notes that WPX has completed asset divestitures worth $2.5B since new leadership took over in mid-2014, transitioning its asset base to resemble its Permian peers more closely, and expects the company to enjoy peer-leading, debt adjusted oil production growth of 29% at least through 2018.
Tue, Jun. 7, 3:44 PM
- Seaport Global Securities upgrades a half-dozen energy E&P stocks - and downgrades two others - even after the group has rallied YTD, saying it is "willing to overlook higher leverage as long as the operational trajectory is notably improving."
- Noble Energy (NBL +4.2%) and Eclipse Resources (ECR +5.5%) are upgraded to Buy from Neutral, as NBL boasts "strong growth and cheap valuation relative to peers" and ERC is "among the cheapest NE gas names while offering good compression in out-year multiples."
- Seaport hikes Synergy Resources (SYRG +2.4%) to Buy from Accumulate thanks to "top-tier growth potential at >$50 oil."
- Upgraded to Accumulate from Neutral are Carrizo Oil & Gas (CRZO +4.3%), as “strong Eagle Ford returns justify return to growth,” and Concho Resources (CXO +4.6%), with “high-quality exposure to the Delaware Basin poised to garner further credit."
- The firm raises WPX Energy (WPX +0.2%) to Neutral from Sell, citing “leverage burden eased with equity, higher commodity price deck assumptions, recent operational progress."
- However, Oasis Petroleum (OAS +0.7%) is downgraded to Neutral from Buy as “NAV valuation gap has closed after a 54% move since our March 30 report," and Petroquest Energy (PQ +1.3%) is cut to Accumulate from Buy as “risk/reward upside has tempered" following a 67% move since March 30.
Mon, Jun. 6, 8:58 AM
- WPX Energy (NYSE:WPX) -1.4% premarket after announcing a public offering of 45M common shares, with an underwriters option to purchase up to an additional 6.75M shares.
- WPX says it plans to use the proceeds for general corporate purposes, which may include an acceleration of drilling and completion activities, bolt-on acreage acquisition, and midstream infrastructure in the Delaware Basin.
- WPX also says it is raising its FY 2016 production guidance to 39K-41K bbl/day of oil from previous guidance of 37K-39K bbl/day, with overall production of 77K-82K boe/day from a previous estimate of 75K-80K boe/day.
- The increase is driven by better than expected well performance and an expected increase in drilling and completion activity in the Delaware and Williston basins during H2; WPX now sees FY 2016 capex of $400M-$450M, vs. earlier guidance of $350M-$400M.
Wed, May 25, 5:48 PM
- WPX Energy (NYSE:WPX) agrees to sell its remaining transportation obligations that supported its previous operating presence in the Piceance Basin for ~$239M to the Citadel P-E firm.
- WPX says the buyout eliminates $164M in letters of credit and their associated annual interest expenses, and releases it from nearly $400M in demand obligations from 2016 through 2032.
- WPX says the deal is another in its simplification efforts while strengthening liquidity, increasing cash flow in subsequent years and freeing up future revolver capacity.
Wed, May 4, 4:32 PM
Tue, May 3, 5:35 PM
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Wed, Apr. 6, 11:57 AM
- WPX Energy (WPX +9.8%) is initiated with a Buy rating and $11 price target at Wunderlich, which believes the company has the right portfolio and team to succeed.
- WPX began trading in 2012 as a spinoff from Williams Cos. and inherited a very gassy portfolio, and new management was brought in to remake WPX and simplify the geographic focus; WPX has completed or announced $2.75B of acquisitions and $2.7B of divestitures in the last two years, paring down to just three basins - the Permian, Williston and San Juan.
- Wunderlich sees a good entry point to buy WPX shares, which it thinks are undervalued as Wall Street is skeptical of the company's ability to close the Piceance sale.
Wed, Mar. 30, 3:30 PM
- Analysts at Seaport Global upgrade seven oil and gas producers, advocating for increased exposure to select names they say should protect investors in the event of a move back toward $50/bbl, while downgrading 11 others.
- Seaport upgrades seven companies to Buy: Continental Resources (CLR +3.4%), Callon Petroleum (CPE +1.4%), Marathon Oil (MRO +1.9%), Oasis Petroleum (OAS +2.8%), Rice Energy (RICE +1.7%), Petroquest Energy (PQ +9.1%) and Lonestar Resources (OTCQX:LNREF +6.6%).
- Downgraded to Sell are Whiting Petroleum (WLL +4.1%), Southwestern Energy (SWN -2.5%), WPX Energy (WPX +0.6%), Laredo Petroleum (LPI -1.1%), Jones Energy (JONE +0.9%), Northern Oil & Gas (NOG +1%), Carrizo Oil & Gas (CRZO +1.6%), Memorial Resource (MRD +2.5%), Matador Resources (MTDR -0.3%), Sanchez Energy (SN +1.6%) and PDC Energy (PDCE -0.9%).
- The firm also favors gaining leverage to the Oklahoma STACK play, thus CLR and Newfield Exploration (NFX +1.9%) have "taken the pole position away" from Permian producers Parsley Energy (PE +1.3%) and Pioneer Natural Resources (PXD +1%).
Fri, Mar. 18, 7:10 PM
- WPX Energy (NYSE:WPX) says it received $1.2B in commitments on a senior secured credit facility, at a time when many energy companies brace for a fall in credit lines.
- WPX says the facility provides clarity and a validation of its financial health, and provides ample liquidity for a post-Piceance company as it prepares to close that asset sale in Q2.
- WPX also says it had an initial borrowing base of $1.025B; the company had said in August that total commitments under its revolving credit facility had increased to $1.75B from $1.5B.
- Press release
Wed, Feb. 24, 4:44 PM
Tue, Feb. 23, 5:35 PM
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Fri, Feb. 12, 2:37 PM
- Whiting Petroleum (WLL -8.9%) may have received the toughest treatment from Moody's, but the ratings agency downgrades a total of eight of companies as part of a sweeping re-examination of oil and gas producers.
- The ratings affected companies rated Ba, or the first tier of debt Moody’s considers risky enough to be a speculative investment.
- While Moody's cut WLL's debt rating by five notches, SM Energy (SM -1.2%) and WPX Energy (WPX +3.5%) both fell four notches to B2 from Ba1, and cites the likelihood of a "dramatic increase in financial leverage in 2017” with SM's cut.
- QEP Resources (QEP -0.5%) and Energen (EGN -11.6%) fell three notches to B1 from Ba1.
- Unit Corp. (UNT +2%) fell two notches to B2 from Ba3, which Range Resources (RRC +0.7%) and Newfield Exploration (NFX +2.7%) both slipped to Ba3 from Ba1.
- Ratings for Antero Resources (AR +2.7%) and Concho Resources (CXO +2.2%) were confirmed at Ba2 and Ba1, respectively.
Thu, Feb. 11, 2:44 PM
- More dividend cuts and equity raises are coming for oil and gas stocks such as Apache (APA -4.3%), Devon Energy (DVN -5.1%), Encana (ECA -5.7%), Anadarko Petroleum (APC -6.2%) and Marathon Oil (MRO -5.1%), as management teams have become more willing to take stronger steps to strength balance sheets, Barclays believes.
- The firm views 4x debt to pre-interest cash flow as a warning sign that companies may have leverage concerns, at which roughly half of its energy coverage universe remains overlevered.
- Barclays thinks Canadian Natural Resource (CNQ -4.4%) likely will maintain its dividend, while Occidental Petroleum (OXY -0.8%) has the financial strength to maintain or even increase the dividend.
- The firm sees leveraged companies such as DVN, ECA and Range Resources (RRC -3%), and companies with large deficits including DVN and APC as most likely to consider raising equity; it also thinks MRO, WPX Energy (WPX -7.8%), Southwestern Energy (SWN -7.7%), Continental Resources (CLR +0.2%), Noble Energy (NBL -2%) and Newfield Exploration (NFX -1.2%) could issue equity; APA, CNQ, OXY, EOG Resources (EOG -0.9%) and Pioneer Natural Resources (PXD -0.3%) are considered unlikely to issue equity this year.
Tue, Feb. 9, 7:44 AM
- WPX Energy (NYSE:WPX) agrees to sell natural gas assets in Colorado's Piceance basin to privately-held Terra Energy Partners for $910M.
- WPX says the deal solidifies it as a Permian-focused company, provides a more balanced commodity mix, will enhance its liquidity, improve its capital efficiency and returns, and materially lower G&A expenses going forward.
- WPX expects oil to comprise ~50% of its future production volumes, up from ~20% during 2015.
Tue, Jan. 26, 12:45 PM
Wed, Jan. 20, 12:45 PM
WPX Energy, Inc. is an independent natural gas and oil exploration and production company, which engages in the exploitation and development of long-life unconventional properties. It focuses on exploiting natural gas reserve base and related natural gas in the Piceance Basin of the Rocky... More
Sector: Basic Materials
Industry: Independent Oil & Gas
Country: United States
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