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.
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, 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, Jan. 26, 12:45 PM
Wed, Jan. 20, 12:45 PM
Wed, Jan. 20, 12:38 PM
- WPX Energy (WPX -24.6%) plunges to all-time lows amid three separate trading halts after saying it added more hedges to protect cash flows and repurchased a portion of notes due in early 2017.
- WPX says ~75% of 2016 anticipated oil volumes are hedged "well above" current prices, and now has 29,380 bbl/day of oil hedged at $60.85/bbl in 2016.
- WPX also says it has reduced its long-term debt by repurchasing $68M in notes (17%) of a $400M maturity due in early 2017 at a discount to par; its next debt maturity does not occur until 2020.
Fri, Jan. 15, 5:40 PM
Dec. 31, 2015, 10:34 AM
- In a deal that allows the company to exceed its 2015 deleveraging goal, WPX Energy is selling its San Juan Basin gathering system to a fund managed by I Squared Capital for $309M. The payout consists of "$285 million cash subject to closing adjustments and a commitment estimated at $24 million in capital designated by the purchaser to expand the system to support WPXs development in the Gallup oil play."
- As part of the deal, WPX will continue operating the gathering system for at least two years, and perhaps longer. Closing is expected in Q1.
- WPX reiterates it's evaluating options (previous) for its Piceance Basin holdings, and promises to continue prioritizing debt reduction in 2016. The company currently has $3.2B in net debt, and notes its Gallup play footprint now consists of "approximately 100,000 acres with oil production exceeding 10,000 barrels per day in [Q3]."
- Four months ago: WPX selling North Dakota gathering system for $185M
Sep. 15, 2015, 5:42 PM
Aug. 6, 2015, 3:49 PM
- WPX Energy (WPX +11.9%) rallies off 52-week lows despite reporting a slightly larger than expected Q2 loss and a 60% Y/Y reduction in revenues, as its unadjusted net loss of $30M was a significant improvement over the $135M lost in the yearago period.
- Investors appear to be taking CEO Rick Muncrief's ebullient statement to heart, that “WPX today and WPX a year ago are as different as night and day... We’re building a brand new company, particularly as we add decades of new drilling opportunities through our transformative transaction to enter the Permian Basin."
- WPX's Q2 results reflect 38% Y/Y growth in oil volumes, and total liquids production hit a new high for the company, averaging 52.4K bbl/day in the quarter.
- In today's earnings conference call, WPX said it aims to sell up to $1B in assets through 2016.
Jul. 31, 2015, 5:37 PM
Jun. 23, 2015, 11:58 AM
- WPX Energy (WPX +1.6%) is maintained with an Outperform rating but a higher target price of $23, raised from $17, at Imperial Capital, which says new management is driving down costs, improving margins, realigning the organization, building a stronger balance sheet and pre-positioning the company for future success.
- The firm says WPX has redefined itself during the past three years, selling $1.4B of properties and sharpening its focus, with the latest bolt-on purchase of oil prone acreage in the San Juan Basin of New Mexico a case in point.
Jun. 4, 2015, 3:49 PM
- Deutsche Bank says it enters H2 with a neutral outlook for the energy E&P sector and a cautious medium-term view on the commodities as valuations are still above past early cycle multiples.
- Although early 2015 trends of firming WTI crude prices, improved well productivity, and greater and faster than expected cost reductions provide support for the next cycle, DB sees these factors largely priced into E&P's.
- But the firm sees selective opportunities in the group, upgrading Whiting Petroleum (WLL -3%) and Bill Barrett (BBG +0.6%) to Buy from Hold, and naming Newfield Exploration (NFX -0.3%) and Energen (EGN -1.9%) as Top Picks.
- The firm downgrades WPX Energy (WPX -3.5%), which it says faces the challenge of meeting 2016 oil growth expectations against a backdrop of declining H2 volumes as Bakken completions slow and lower cash flow in 2016, and Cimarex Energy (XEC -1.4%) on lower volume growth and FY 2016 cash margins than peers with no support from hedges.
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
Other News & PR