WPX Energy (WPX) Boosts FY16 Oil Production Outlook

WPX Energy (NYSE: WPX) announced that it is increasing its full-year oil production guidance to an average of 39 to 41 Mbbl/day, up 5 percent from previous guidance of 37 to 39 Mbbl/day.

Guidance for total equivalent production is up 3 percent to 77 to 82 Mboe/day from a previous estimate of 75 to 80 Mboe/d.

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 the second half of 2016.

WPX’s previously announced plan to add a third rig in the Delaware Basin is scheduled to occur in October, along with new plans to complete 15 to 20 drilled but uncompleted wells in the Williston Basin beginning in August.

Despite the planned increase in activity, the company’s updated drilling and completion budget for 2016 – $400 million to $450 million – remains within the original guidance range of $350 million to $450 million.

Additionally, WPX is initiating an expansion of its owned and operated midstream infrastructure in the Delaware Basin with the addition of a crude oil gathering system. This infrastructure supports the company’s large contiguous acreage position in the Stateline area of the basin.

WPX plans to commission the crude line in 2017. Once in service, the new infrastructure will improve oil differentials for the company’s production in the Delaware Basin. WPX’s existing infrastructure in the basin is comprised of natural gas gathering and water gathering and transfer lines.

“We are well positioned to leverage our operational momentum in ways that can accelerate and enhance the value we deliver to stockholders,” said Rick Muncrief, president and chief executive officer. “The steps we’re taking to increase activity in our world-class assets are consistent with our emphasis on remaining opportunistic.”

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