WPX Energy completed the sale of its operations in northeast Pennsylvania, including the release of certain firm transportation capacity, to Southwestern Energy Company.
WPX has received nearly $600 million in cash this year through completing two sales – this one involving Marcellus Shale operations and the exit of its international interests in Argentina and Colombia. WPX also is released from approximately $25 million per year in annual transport obligations.
“We have a long-term strategy to build returns, margins and cash flow,” said Rick Muncrief, WPX president and chief executive officer. “In the near-term, there’s obviously going to be a lot of effort aimed at driving down controllable costs. We’re evaluating everything as we position the company for a rebound in commodity prices,” Muncrief added. The sale to Southwestern Energy Company includes physical operations covering approximately 46,700 net acres in the Marcellus Shale, roughly 50 million cubic feet per day of net natural gas production and 63 operated horizontal wells. The assets are primarily located in Susquehanna County, Pa.
WPX’s remaining operations in the Marcellus Shale primarily consist of its physical operations in Westmoreland County in southwestern Pennsylvania and additional firm transport capacity under Transco’s Northeast Supply Link project. These assets also are targeted for divestiture.
Since May of last year, WPX entered into six significant agreements to narrow the company’s business focus, increase scalability of core assets, bring value forward and further strengthen its balance sheet.
WPX has closed five of the six transactions. The sole agreement outstanding involves the sale of its Powder River Basin operations. If the agreement does not successfully close in February, either party will have the option to terminate the transaction.