WPX Energy (WPX) Sells San Juan Natural Gas Assets For $169M
Zacks Investment Research | Dec 21, 2017 08:24PM ET
WPX Energy Inc. (NYSE:WPX) announced the divestiture of natural gas assets in northern San Juan basin for $169 million. The company will continue oil operations in the Gallup play, as the transaction only included non-operated properties in the basin.
The divestiture of non-core assets will help the company focus on core operation, strengthen balance sheet and expand operation in resource rich regions.
Transformation of WPX Energy
WPX Energy has transformed itself from a natural gas focused company to an oil focused company. At the end of 2015, natural gas contributed 67% of its product volumes. At the end of third-quarter 2017, oil and NGL volumes contributed nearly 70% of total production.
In less than two years, WPX Energy completed more than 10 major transactions, including $2.7 billion in divestitures. WPX Energy exited the Piceance Basin, the Marcellus Shale, the Powder River Basin and South America,. The company sold several firm transportation agreements to focus on oil development in the Delaware, Williston Basin and San Juan Gallup Sandstone.
The current divestiture is a part of the company’s plan to monetize non-core assets and focus more on productive oil business. WPX Energy aims to triple operating margin and increase oil production five-fold through the transformation strategy.
Oil Prices Recovering
Oil Prices are recovering gradually from the historic low and expected to improve from the current levels. The upward revision in the energy prices will have a positive on the performance of Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) . The companies are currently displaying a positive revision in earnings estimates in 2017 and 2018.
Price Movement
Shares of WPX Energy have gained 47.2% in the last six months outperforming the Zacks Investment Research
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