WPX Energy (NYSE:WPX) has completed its separation from Williams (NYSE:WMB), and starts off 2012 as a fully independent energy operator focused on the upstream. The company is geographically diversified, with operations spread across the United States and exposure to Argentina through majority ownership of an operator active in that country. (To know more about oil and gas, read Oil And Gas Industry Primer.)
Investopedia Markets: Explore the best one-stop source for financial news, quotes and insights.
WPX Energy is the former exploration and production business of Williams, which decided in 2011 to separate into separate downstream and upstream companies. Shareholders of Williams received one share of WPX Energy for every three shares they owned of the company. The shares were distributed in the final day of 2011, and WPX Energy began regular trading on January 3, 2012.
As an independent operator, WPX Energy is among the largest exploration and production companies based in the U.S. The company reported proved reserves of 4.5 Tcfe at the end of 2010, and average production of 1.3 billion cubic feet of natural gas equivalents per day in October 2011.
This makes the company slightly smaller than Southwestern Energy (NYSE:SWN), which reported proved reserves of 4.9 Tcfe at the end of 2010.
The majority of WPX Energy's proved reserves and production are in the Piceance Basin in Colorado. The company also has operations in the Powder River Basin, Mid-Continent area and San Juan Basin in New Mexico.
WPX Energy estimates that total company production in 2012 will range between 1.33 Bcfe and 1.49 Bcfe per day, up from the production of 1.25 Bcfe to 1.3 Bcfe per day expected for 2011.
WPX Energy has exposure to several popular unconventional resource plays including the Bakken and Marcellus Shale.
WPX Energy bought Bakken properties at the end of 2010 and now has 85,800 net acres under lease. The company has completed 22 wells since then and boosted its production from this play to 6,400 barrels of oil equivalent (BOE) per day.
WPX Energy has also been aggressive in the Marcellus Shale and has close to 100,000 net acres under lease across Pennsylvania. The company plans to operate six rigs in the Marcellus Shale in 2012.
Although WPX Energy is primarily focused on the onshore United States, the company owns a 69% interest in Apco Oil and Gas International (SMCAP:APAGF), which is active in Argentina.
Apco Oil and Gas International owns non-operated interests in a number of areas in Argentina and Colombia, including properties in the Neuquén Basin in Argentina. The industry is very active in parts of this basin as it explores the resource potential of shale formations found here. Exxon Mobil (NYSE:XOM) is one of these operators and was awarded two concessions in this basin in 2011.
The Bottom Line
Although WPX Energy only recently became an independent exploration and production company, this operator has been in the upstream business for years and has a large portfolio of oil and gas assets in the United States to exploit. The company's exposure to Argentina is also intriguing and should be watched closely as other operators prove up reserves in that country. (For additional reading, check out A Guide To Investing In Oil Markets.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.
Stock AnalysisStuck on oil? Take a look at these six stocks—three that present risk vs. three that offer some resiliency.
EconomicsEmerging markets have been hammered lately, but these three countries (and their large and young populations) are worth monitoring.
Stock AnalysisPepsiCo has long been known as one of the most resilient stocks throughout the broader market. Is this still the case today?
Investing BasicsTrading spot gold or gold futures, equities and options isn’t hard to learn, but the activity requires skill sets unique to these markets.
EconomicsExplore the historical relationship between interest rate increases and the price of gold, and consider what effect a fed funds rate hike might have on gold.
InvestingHow do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
SavingsSocial entrepreneurs recruit "skeptics" to team green, by providing economically efficient products and services that minimize consumers' carbon footprint.
InvestingMany global Investment banks are highly involved in the energy industry, but there are also some smaller banks and boutiques that are strong players.
Stock AnalysisThese three stocks are resilient, fundamentally sound and also pay generous dividends.
Investing NewsAre stocks cheap right now? Be wary of those who are telling you what you want to hear. Here's why.
Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>
The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>
A company's working capital ratio can be too high in the sense that an excessively high ratio is generally considered an ... Read Full Answer >>
Discounted cash flow (DCF) analysis can be a very helpful tool for analysts and investors in equity valuation. It provides ... Read Full Answer >>
When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>