R I C K M U N C R I E F , C H A I R M A N & C E O A U G U S T 6 , 2 0 1 9
WPX Delivering As Planned 2Q COMPANY HIGHLIGHTS CFFO increased 48% 1H 2019 vs. 1H 2018 ▪ 2Q Delaware oil realizations of WTI plus $0.23 including Midland ▪ basis swaps Received proceeds from Oryx II monetization ▪ Second 200 MMCF/D train came online at Delaware JV plant ▪ SECOND HALF 2019 Reaffirming existing 2019 CAPEX guidance ▪ Raising full-year oil guidance by 4% and full-year total volume ▪ guidance by 5% Projecting free cash flow in 3Q and 4Q 1 ▪ ACCELERATING RETURN OF CAPITAL Returning capital to shareholders in the form of a stock ▪ repurchase program Initiating program to repurchase up to $400MM of shares over ▪ the next 24 months 1. Free cash flow includes CFFO (excluding working capital changes) minus DC&F, non operated and midstream opportunities capital. 2
A Lookback Since RKI Acquisition F R E E P R O D U C T I O N N E T L E V E R A G E 1 C A S H F L O W 2 , 3 GROWTH PER DEBT ADJUSTED SHARE 4 5 $150 30% $100 ESTIMATED 4 NET DEBT/ADJ. EBITDAX RANGE 3 $50 20% $MM 3 $0 -$50 2 10% -$100 1 -$150 0% - -$200 2 2016 2019E 2016 2019E 3 2016 2019E 68% 51% $200MM+ INCREASE IN PRODUCTION GROWTH INCREASE IN FREE CASH FLOW REDUCTION IN TRAILING PER DEBT ADJ. SHARE SINCE 2016 SINCE 2016 12-MONTH NET LEVERAGE SINCE 2016 1. Net debt/trailing 12-month EBITDAX. 2. 2016 free cash flow is based on cash flow from operating activities of $268 million plus net working capital changes of $82 million less capital expenditures incurred of $500 million. The capital expenditures incurred exclude $84 million of land acquisitions. 3. 2019 FCST free cash flow is based on estimated CFFO less forecasted capital expenditures including operated and non-operated drilling and completions, facilities and midstream opportunities. Estimated CFFO is based on forecasted adjusted EBITDAX further adjusted for other items such as interest and stock-based compensation. 4. Annual production growth that is normalized for any changes in debt or equity. This metric monitors a company’s ability to g row production responsibly in a shareholder friendly manner. Share price based on YE 2016 and held constant. 3
OPERATIONS C L A Y G A S P A R , P R E S I D E N T & C H I E F O P E R A T I N G O F F I C E R
Pecos State Test Benefitting Both Basins Project description Contiguous 806 ft core running from bottom of 3 rd Bone Spring through Wolfcamp B • Equipped with microseismic geophones and external pressure & temperature • gauges Applied learnings to first Williston pads Strategically placed to monitor fracs during completion, overall well performance & • Lower well costs • drainage through life of the well Improved early production • Permanent DAS-DTS fiberoptic installation • 2 0 1 9 2 0 1 8 Applied learnings to first Delaware pad (CBR 41-44) Coring additional 1,240 ft in Stateline from 2 nd Bone Spring to Improved completion/cluster design • • Fine tuned well spacing, landing targets, and artificial lift 3 rd Bone Spring bench for CBR 10 L O W E R C O S T S M O R E E F F I C I E N T DELAWARE DAYS FROM SPUD DELAWARE 2-MILE WELL COSTS WILLISTON 2-MILE WELL COSTS WILLISTON DAYS FROM SPUD TO RIG RELEASE (2-MILE) TO RIG RELEASE (2-MILE) 5% 14% 31% 22% 28 13 7.5 20 7.0 AVG. DAYS FROM SPUD AVG. DAYS FROM SPUD 16 WELL COST $MM WELL COST $MM 24 10 6.5 12 6.0 8 20 7 4 5.5 16 0 4 5.0 2Q 2018 2Q 2019 2Q 2018 2Q 2019 2018 Avg. 2Q 2019 2018 Avg. 2Q 2019 5
Delaware Activity 2019 1 H 2 0 1 9 F I R S T S A L E S WPX ACTIVITY BY AREA 2 H 2 0 1 9 F I R S T S A L E S RUSTLER SAND RUSTLER SAND STATELINE HALEY STATELINE HALEY BREAKS LAKES BREAKS LAKES RUSTLER BREAKS 3RD BONE 3RD BONE 5 1 5 SPRING SPRING UPPER UPPER 19 4 5 5 16 2 2 6 WOLFCAMP STATELINE WOLFCAMP LOWER LOWER HALEY 1 2 4 1 WOLFCAMP WOLFCAMP SAND Total 25 6 9 7 LAKES Total 21 2 2 6 S T A T E L I N E A C T I V I T Y 1H: 53% 2H: 68% 2 H 2 0 1 9 F I R S T S A L E S 1 H 2 0 1 9 F I R S T S A L E S R U S T L E R B R E A K S Average lateral length of ~7,650’ Average lateral length of ~7,700’ • • A C T I V I T Y 1H: 13% 2H: 6.5% Average wells per visit ~2.1 wells Average wells per visit ~2.8 wells • • S A N D L A K E S A C T I V I T Y 83% of completions were in Upper 100% of completions will be in Upper • • 1H: 19% 2H: 6.5% Wolfcamp benches and 3BS Wolfcamp benches and 3BS H A L E Y A C T I V I T Y Completed wells in 8 different benches • Will complete wells in 6 different benches • 1H: 15% 2H: 19% 53% of activity in Stateline 68% of activity will be in Stateline • • R I G C O U N T 1H: ~5.6 RIGS 2H: 5 RIGS Upper Wolfcamp includes Wolfcamp XY and A Lower Wolfcamp includes Wolfcamp B,C, & D 6
Delaware Midstream Continues to Drive Value DELA WA RE OIL DELA WA RE GA S $66.00 $3.50 WPX REALIZED PRICE INC. COMMODITY MGMT UPLIFT 2 $64.00 $3.00 $62.00 $2.50 N Y M E X $60.00 $2.00 $58.00 $1.50 $56.00 $1.00 $54.00 $0.50 $52.00 $0.00 $50.00 -$0.50 Apr-19 May-19 June-19 Apr-19 May-19 Jun-19 STRONG 2Q DELAWARE PRICE REALIZATIONS $60.05 $2.05 $2.99 2Q’19 AVG. REALIZED 2Q’19 AVG. REALIZED 2Q’19 AVG. REALIZED OIL PRICE INCLUDING BASIS HEDGES GAS PRICE INCLUDING BASIS HEDGES GAS PRICE INCLUDING BASIS HEDGES & COMMODITY MANAGEMENT UPLIFT 1. Realized prices includes basis hedges. 7 2. Commodity management uplift represents the combination of WPX realized price and the net margin from utilizing excess capacity over production volumes.
Williston: Continued Outperformance 2Q 2019 WELL RESULTS 2019 OPERATIONS DELIVERING ON RESULTS 120 MINOT GRADY DELORES SAND 100 1 2019 WELLS OUTPERFORMING TYPE CURVE CUMULATIVE OIL (MBBLS) 80 2 LOWER YEAR-OVER-YEAR WELL COSTS 60 3 SETTING NEW PRODUCTION RECORDS 40 20 0 0 10 20 30 40 50 NORMALIZED DAYS ON PRODUCTION 5,862 SETTING PRODUCTION RECORDS 24-HOUR INITIAL PRODUCTION MINOT GRADY 26-35HD BARRELS OF OIL EQUIVALENT PER DAY 8
FINANCIALS K E V I N V A N N , C H I E F F I N A N C I A L O F F I C E R
2019 Updated Full-Year Guidance 2019 CAPITAL GUIDANCE BY QUARTER 2019 CAPITAL GUIDANCE $450 $400 $350 • AS PLANNED, 55% OF FULL-YEAR $300 CAPITAL SPENT IN 1H 2019 $250 $MM • REITERATING FULL-YEAR CAPITAL $200 GUIDANCE $150 • $1,100 - $1,275MM $100 $50 $0 1QA 2QA 3QE 4QE D&C Infrastructure Land Other Capex Range Guidance 2019 OIL PRODUCTION AND FIRST SALES GUIDANCE BY QUARTER 2019 PRODUCTION GUIDANCE 120 50 40 • RAISING FULL-YEAR PRODUCTION 110 GUIDANCE BY 5% FIRST SALES MBBL/D 30 • 160 -165 MBOE/D 100 20 • RAISING FULL-YEAR OIL PRODUCTION GUIDANCE BY 4% 90 10 • 101 -103 MBBL/D 80 0 1QA 2QA 3QE 4QE Oil Oil Range Guidance First Sales Note: Land funded with sales proceeds, excluded from FY capital guidance of $1.1-1.275B 10
2Q 2019 Results 21% GROWTH IN OIL VOLUMES 2Q’19 vs. 2Q’18 18% GROWTH IN ADJ. EBITDAX 2Q’19 vs. 2Q’18 2Q YTD 2019 2018 2019 2018 Average Daily Production Oil (Mbbl/d) 97.9 80.8 97.0 73.3 Gas (MMcf/d) 205.9 152.2 204.1 142.3 NGLs (Mbbl/d) 27.4 18.8 26.4 16.9 Equivalent (MBOE/d) 159.6 125.0 157.4 113.9 Adjusted EBITDAX $ 339 $ 287 $ 651 $ 487 Adjusted Net Income (Loss) $ 37 $ 23 $ 59 $ 0 from Continuing Operations Capital Expenditures $ 341 $ 355 $ 766 $ 705 Note: Adjusted EBITDAX and adjusted net income are non-GAAP measures. A reconciliation to relevant GAAP measures is provided in this presentation. 11
Positioned for Sustainable Value Creation OUR PORTFOLIO PERMIAN - WILLISTON - MIDSTREAM OUR DRIVE STRONG EXECUTION - CREATE OPPORTUNITIES - REMAIN DISCIPLINED OUR FOCUS FINANCIAL DISCIPLINE - OIL GROWTH - VALUE CREATION 12
APPENDIX
2019 Full-Year Guidance Capital Plan Production FY 2019 Avg. Price Differentials 2 FY 2019 Oil Mbbl/d 101 – 103 Oil – WTI per barrel ($2.00) – ($3.00) Natural Gas MMcf/d 205 – 210 NYMEX – Nat. Gas (Mcf) ($1.25) – ($1.75) NGL Mbbl/d 25 – 27 Total MBOE/d 160 – 165 Net Realized Price 3 FY 2019 NGL – % of WTI 20% – 25% Capital Plan ($ in Millions) FY 2019 Expenses FY 2019 D&C / Facilities Capital $1,000 – $1,100 $ per BOE D&C Non-Operated $50 – $75 Lease & Facility Operating $6.10 – $6.30 Midstream Opportunities $50 – $100 GP&T $3.00 – $3.50 Total Development Capital $1,100 – $1,275 DD&A $15.00 – $16.00 G&A – Cash $2.40 – $2.60 Land Capital 1 $100 G&A – Non-Cash $0.60 – $0.70 Exploration $1.25 – $1.50 Interest Expense $2.55 – $2.65 Production Tax 7% – 9% Tax Provision 4 21% – 25% 1. Land capital is funded with proceeds from asset sales in 2019. 2. Average price differentials for oil and natural gas exclude hedges, but include basis differential and revenue adjustments. 14 3. Percentage of realized price ranges for NGLs excludes hedges, but includes basis differential and revenue adjustments. 4. Rate does not reflect any potential valuation allowance or other adjustments to deferred tax assets.
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