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.
EconomicsAfter the Paris attacks investors are focusing on central bank policy and its potential for divergence: tightened by the Fed while the ECB pursues easing.
Stock AnalysisLearn the biggest potential risks that may affect the price of Pfizer's stock, complete with a fundamental analysis and review of other external factors.
Stock AnalysisA summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
Chart AdvisorCopper prices have been under pressure lately and based on these charts it doesn't seem that it will reverse any time soon.
Options & FuturesInvesting during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
MarketsLearn how this simple calculation can help you determine a stock's earnings potential.
Stock AnalysisLearn about large changes to Berkshire Hathaway's portfolio. See why Warren Buffett has invested in a commodity company even though he does not usually do so.
Investing BasicsHeld onto a stock for too long? Selling at a loss is never ideal, but it is possible to minimize the damage. Here's how.
InvestingWe look at the meaning of two terms that often get confused, duration and maturity, to set the record straight.
EconomicsWill remaining calm and staying long present significant risks to your investment health?
Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
When a company has low working capital, it can mean one of two things. In most cases, low working capital means the business ... Read Full Answer >>
Nonprofit organizations continuously face debate over how much money they bring in that is kept in reserve. These financial ... Read Full Answer >>
A company's working capital turnover ratio can be negative when a company's current liabilities exceed its current assets. ... Read Full Answer >>
Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>