WPX Energy and partner sell Oryx II pipeline system

WPX Energy has completed the previously announced transaction to sell the Oryx II pipeline to an unidentified buyer.

Last month, a subsidiary of WPX and its joint venture partner entered agreements to sell the project.

For WPX, the deal generated net proceeds of $350m for its 25% equity interest in the pipeline.

The company also anticipates $40m worth of savings in planned equity investments for the rest of this year as a result of the transaction.

Despite the sale of the project, WPX will continue to hold contractual rights as a shipper on the Oryx pipeline system.

The firm will use the cash generated from the transaction to pay off its revolver balance.

At the time of announcing the transaction, WPX Energy chairman and CEO Rick Muncrief said: “WPX’s opportunistic approach continues to create significant value for shareholders and generate handsome returns on our capital employed.

“We secured flow assurance and ownership interests in critical midstream projects in the Delaware Basin before constraints ever occurred. That strategy also has protected the pricing for our production in the basin.”

The Oryx II deal represents WPX’s second monetisation in the midstream business so far this year.

The completion of this transaction comes after the sale of a 20% equity interest in WhiteWater Midstream’s Agua Blanca natural gas pipeline system that services the Delaware Basin.

WPX acquired the stake in the Oryx and WhiteWater systems for $125m and earned nearly half of a billion dollars from these systems this year.

The company’s operations are primarily located in the Permian and Williston basins. Additionally, the firm holds an infrastructure portfolio in the Permian Basin.

This year, the energy company reached deals for three divestitures to obtain more than $550m in net proceeds.