WPX Energy to sell Piceance basin assets in US for $910m

WPX Energy has signed an agreement to sell its wholly-owned subsidiary WPX Energy Rocky Mountain to Terra Energy Partners in a transaction worth $910m.

The acquired assets comprising about 200,000 net acre position in the Piceance Basin of Colorado, contain about two trillion ft³ equivalent of hydrocarbon reserves and an inventory of low-risk drilling locations.

The assets also include deep rights across about 150,000 net acres prospective for the upcoming horizontal Mancos-Niobrara play.

Terra will also receive WPX’s natural gas hedges with a current in-the-money value of over $90m in order to support cash flow in 2016 and 2017.

The divestiture, which is expected to conclude in the second quarter of 2016, will boost WPX’s liquidity and improve its capital efficiency.

The latest move follows WPX’s acquisition of assets in August 2015 in the Permian Basin where it has about 94,000 acres representing more than 670,000 prospective net effective acres.

Upon completion of the sale, WPX will have a portfolio with acreage in the core of two prolific oil-dominant areas, which include the Permian’s Delaware Basin and North Dakota’s Williston Basin.

The company will also have a position in the San Juan Basin.

WPX Energy president and CEO Rick Muncrief said: "Our bias for action and being opportunistic won’t change.

"We will pursue our very best investment options and continually evaluate how to optimise our assets."

The company said it has executed about $5.5bn in transactions in the past 21 months.

Terra Energy Partners CEO Michael Land said: "The Piceance Basin is an area that we know well and one that we believe offers considerable upside potential through focused management."