WPX Energy (WPX) Sees FY12 CapEx of $1.2Bl Highlights Spending Details
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WPX Energy (NYSE: WPX) is forecasting up to $1.2 billion in capital spending for 2012 and full-year EBITDAX of approximately $1.2 billion. A definition of EBITDAX is included at the end of this news release.
Prior to the decline in natural gas prices in 2012, Williams (NYSE: WMB) had originally forecasted a capital budget of $1.2 billion to $1.8 billion and double-digit production growth for WPX Energy.
WPX plans to add a sixth rig in the Bakken Shale at mid-year and deploy an average of five rigs in the Piceance Basin and three rigs in the Marcellus Shale in 2012. This represents a reduction of six rigs in the Piceance and four rigs in the Marcellus vs. previous plans, which equates to a more than 40 percent decrease in the company’s rig count in these basins.
Capital spending is expected to yield a 50-60 percent increase in domestic oil production and a 10-12 percent increase in NGL production.
Domestic natural gas production is expected to remain flat compared with 2011. This is based on $400 million in capital spending reductions for natural gas areas in 2012 vs. the projected 2012 capital budget from late 2011.
Under WPX’s updated capital plan, overall production for all products is expected to grow at 4 percent in 2012 on an Mcf equivalent basis, with volumes for oil and NGL converted to natural gas equivalence using a 6-to-1 ratio. In 2011, WPX averaged 1,408 MMcfe per day.
WPX is forecasting full-year EBITDAX of approximately $1.2 billion for 2012. This assumes the impact of the company’s existing hedges (detailed below) and a $3 NYMEX natural gas price.
At a $3.50 natural gas price, EBITDAX would be approximately $1.3 billion for 2012. At a $4.00 natural gas price, EBITDAX would be approximately $1.4 billion. All three EBITDAX scenarios assume a $99 per barrel oil price. A $1 change in the price of oil equates to a $5 million impact to EBITDAX.
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Prior to the decline in natural gas prices in 2012, Williams (NYSE: WMB) had originally forecasted a capital budget of $1.2 billion to $1.8 billion and double-digit production growth for WPX Energy.
WPX plans to add a sixth rig in the Bakken Shale at mid-year and deploy an average of five rigs in the Piceance Basin and three rigs in the Marcellus Shale in 2012. This represents a reduction of six rigs in the Piceance and four rigs in the Marcellus vs. previous plans, which equates to a more than 40 percent decrease in the company’s rig count in these basins.
Capital spending is expected to yield a 50-60 percent increase in domestic oil production and a 10-12 percent increase in NGL production.
Domestic natural gas production is expected to remain flat compared with 2011. This is based on $400 million in capital spending reductions for natural gas areas in 2012 vs. the projected 2012 capital budget from late 2011.
Under WPX’s updated capital plan, overall production for all products is expected to grow at 4 percent in 2012 on an Mcf equivalent basis, with volumes for oil and NGL converted to natural gas equivalence using a 6-to-1 ratio. In 2011, WPX averaged 1,408 MMcfe per day.
WPX is forecasting full-year EBITDAX of approximately $1.2 billion for 2012. This assumes the impact of the company’s existing hedges (detailed below) and a $3 NYMEX natural gas price.
At a $3.50 natural gas price, EBITDAX would be approximately $1.3 billion for 2012. At a $4.00 natural gas price, EBITDAX would be approximately $1.4 billion. All three EBITDAX scenarios assume a $99 per barrel oil price. A $1 change in the price of oil equates to a $5 million impact to EBITDAX.
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