WPX to invest heavily in Piceance field

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TULSA, OKLA. I WPX Energy (NYSE: WPX) has announced its 2014 capital plan of $1.47 billion (midpoint), with approximately 85 percent of spending allocated to Williston, Piceance and San Juan Gallup development.
The 2014 highlights are scheduled to include: 39 percent planned increase in domestic oil volumes; 62 Williston Basin oil wells (gross) planned — an increase of 25 percent versus 2013; 29 San Juan Gallup oil wells planned — nearly doubling 2013 activity; Recent transactions increase Gallup oil acreage by 40 percent to 43,000 acres; 285 natural gas wells (gross) planned in the Piceance field, including up to 10 Niobrara wells; and 6 percent expected exit rate growth in the Piceance field versus the 2013 exit rate.
WPX expects these investments to drive an estimated 2014 December exit rate of 1,310 MMcfe/d in total production, which is 5 percent higher than its 2013 exit rate. Oil and liquids are expected to account for 25 percent of WPX’s 2014 exit rate.
The 2014 plan represents a 20 percent capital increase versus 2013 spending, driven by larger investments in domestic oil drilling. More than half of WPX’s planned 2014 investments are in domestic oil properties.
WPX expects to drill 376 gross operated wells in 2014 by deploying an average of 15 to 16 rigs. Compared with 2013, this represents a two-rig increase in the Piceance field for a total of nine rigs, an increase of one rig in the Williston for a total of five, and an increase of one rig in the San Juan Gallup for a total of two.
“Increased oil volumes, efficient development of our resource base and enhanced balance sheet flexibility will help drive increased cash flows and better overall results,” said Jim Bender, president and chief executive officer.
“As for our production outlook, we plan to grow domestic oil by nearly 40 percent and our Piceance exit rate by 6 percent. However, this is offset by the production decline in long-lived natural gas assets and the impact of lower ethane recovery rates on NGL volumes,” Bender said.
WPX is forecasting total production on an equivalent basis of 1,246 MMcfe/d to 1,259 MMcfe/d for full-year 2014, with a December exit rate that represents a 5 percent increase over the 2013 exit rate.
While total production levels for 2014 are expected to remain flat compared to total 2013 production levels, domestic oil volumes are expected to increase nearly 40 percent.