Entering text into the input field will update the search result below

WPX Energy Will Double Its Cash Flow Over The Next 2 Years

Dec. 02, 2018 9:35 PM ETWPX Energy, Inc. (WPX)3 Comments
Todd Akin profile picture
Todd Akin


  • WPX Energy still grew production and earned a decent profit despite growing pains negatively affecting the oil & gas industry.
  • The company expects to double cash flow in the next two years as it moves to manufacturing mode that will now be accompanied by added takeaway capacity in the Permian.
  • Therefore, the recent stock price pullback from around $20 represents a buying opportunity here around $13.

WPX Energy (NYSE:WPX) still earned net income of $29 million in the third quarter of 2018 and has grown production 54% year over year despite seeing third-party processing disruptions and delays in bringing large multi-well pads on-line (due to poor weather).

These issues are temporary and should be resolved in the coming quarters. But it is encouraging to see these positive results for WPX, even with transitory issues weighing on the oil & gas sector, and points to its ability to execute in challenging times.

With optimizations in completions becoming more advanced, takeaway capacity being added, and the company's indifference to sub-$55 WTI prices, the recent pullback in shares is now posing a buying opportunity.

Cash Flow Will Double In Two Years Through More Advanced Completions Designs And Added Takeaway

WPX has always been concerned with finding the optimal completion techniques, i.e., experimenting with proppant types, proppant sources, perforations, fluid movement, and spacing strategies for its wells.

The company is continuing its evolution in the E&P space of finding better ways to stimulate rock. This knowledge, which is coming now in real-time from measurable data provided by fiber optics and tracers (as opposed to substantially longer lag times before using outdated methods), is understandably being closely guarded by WPX.

(Source: WPX Energy)

Investors will have to stay tuned for these results. But if WPX is correct in its assumptions on the viability of these completions and applies them to newer, larger pads, production should continue to rise in 2019 and 2020, and a double in cash flow will occur. These cash flow prospects are more than triple the amount that sectors outside of energy can offer, the company said. Here is how WPX phrased its ambitious cash flow goals for the future:

WPX has the capacity to deliver growth and

This article was written by

Todd Akin profile picture
Graduated from the University of Houston- Downtown with a degree in Finance. My site, Wallstreetstocksolutions.com, focuses on portfolio management and unique investment opportunities.

Analyst’s Disclosure: I am/we are long GUSH. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (3)

gladysz profile picture
This equity has been a "promising story" for almost ten years but has yet to show any real fruits from this "promise". I have been long for 7-8 years and it has been a real portfolio laggard, with the income I generate via covered calls the only partially redeeming aspect.

I hope this seeking alpha contributor is correct in calling a turning point. There have dozens of other analysts issuing periodic buy recommendations, and no significant appreciation.
why hold? pump and dump. buy at 13 and sell at 20. simple. follows oil prices everytime.
Building a new headquarters a sign of impending Doom
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.