WPX Energy expands in Delaware basin with new acquisition

Oil and gas company WPX Energy has acquired 120,000 net acres in Delaware basin that would increase its Permian operations and facilitate its key financial metrics and margin expansion.

The acquisition comprises variety of assets that includes 6,500 barrels of oil equivalent per day (boe/d) (55% oil) of existing production from 23 producing wells (17 horizontals), two drilled but uncompleted horizontal laterals and 18,100 net acres located within Reeves, Loving, Ward and Winkler counties in Texas.

It also includes 920 gross undeveloped locations in the geologic sweet spot of the Delaware Basin.

The company expects that this acquisition will be immediately accretive and facilitate its deleveraging progress without expanding its 2017 budget.

The acquisition will increase WPX’s rig count in the Permian to seven.

The sellers of the property are Panther Energy Company II and Carrier Energy Partners.

Under the agreement, WPX needs to pay $775m in 60 days through a combination of proceeds from an equity issuance and cash on hand.

WPX chairman, president and chief executive officer Rick Muncrief said: “In just 18 months, WPX has firmly established itself as a leader in the Delaware Basin.

“The acquisition leverages our experience to create long-term shareholder value, further builds our inventory of core acreage and accelerates our oil growth with cash on hand and operating cash flow without adding incremental debt.”

Now on a pro-forma basis, WPX targets 30% oil growth and 25% overall production growth this year and intends to produce 52,000boe/d to 56,000boe/d in 2017.

WPX is one of the largest US producers based on total assets and focuses on Permian, Williston and San Juan basins. It has conducted nearly $6bn in transactions since mid-2014.