Oil and NGL Boost Proved Reserves at WPX Energy to 5.26 TCFE

Tuesday, Feb 07, 2012

WPX Energy (NYSE:WPX) announced today that its total proved reserves as of Dec. 31, 2011, increased to a company high of nearly 5.3 trillion cubic feet equivalent – up approximately 9 percent vs. 2010.

“We will continue to capitalize on our in-house opportunities in the Bakken and the liquids-rich Piceance Basin to reap the benefit of oil and gas liquids in our revenues and production results.”

Approximately 77 percent of WPX’s 2011 total proved reserves are natural gas and 23 percent natural gas liquids (NGL) and crude oil. At year-end 2010, natural gas accounted for 83 percent of the company’s reserves using a standard ratio of 6-to-1 to convert oil and NGL to natural gas equivalent.

Oil and gas liquids are rapidly taking a more prominent space in our portfolio, becoming the primary driver for reserves growth,” CEO Ralph Hill said.

“We will continue to capitalize on our in-house opportunities in the Bakken and the liquids-rich Piceance Basin to reap the benefit of oil and gas liquids in our revenues and production results.

“For 2011, we replaced our domestic production for all commodities at a rate of 188 percent. For liquids alone, we replaced 488 percent of our crude and gas liquids production,” Hill added.

Domestically, WPX added 931 billion cubic feet equivalent of proved reserves in 2011 through drilling – up more than 76 percent vs. 2010 drilling additions of 528 Bcfe. Internationally, reserves were 32.5 million barrels of oil equivalent – down slightly from 33.5 in 2010.

Reserves growth in the U.S. was driven by oil and NGL additions. Reserves for these products were up 51 percent vs. a year ago – from 120 million barrels of oil and NGL in 2010 to 181 million barrels in 2011.

The percentage of reserves in the proved developed category for 2011 was 59 percent – up slightly from 58 percent for the same ratio for proved developed vs. total proved reserves a year ago.

WPX’s oil and NGL production in the U.S. rose 43 percent from 24,400 barrels per day in 2010 to 34,900 barrels per day in 2011. Oil production more than tripled in the Bakken Shale where WPX has five rigs under contract on its acreage.

Overall domestic production in the U.S. rose approximately 9.5 percent from 1,234 MMcfe/d in 2010 to 1,351 MMcfe/d in 2011. The 2011 figure represents enough production to meet the energy needs of almost 6 million homes per day. The company’s natural gas production rose approximately 5 percent in 2011.

International production contributed an additional 20 MMcf/d of natural gas, 503 barrels of NGL per day and 5,607 barrels per day of oil in 2011 – up approximately 4 percent from 2010.

Overall, domestic and international operations yielded 41,000 barrels per day of oil and NGL production in 2011.

Last year, WPX invested $1.455 billion in drilling and development. In 2010, the company invested $988 million for drilling and development.

In 2011, WPX participated in the drilling of 815 gross wells in the United States, achieving a drilling success rate of 99 percent. In 2010, the company participated in 1,162 domestic gross wells. The company’s 2011 domestic drilling finding and development cost was $1.56 per Mcfe, compared with $1.95 a year ago.

Approximately 99 percent of WPX’s year-end 2011 U.S. proved reserves estimates were audited by Netherland, Sewell & Associates, Inc. Their judgment determined that the company’s estimates are, in the aggregate, reasonable and have been prepared in accordance with the Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information promulgated by the Society of Petroleum Engineers (SPE standards).

One hundred percent of proved reserves estimates for international properties were audited by Ralph E. Davis and Associates. The majority of WPX’s international interests come via its 69 percent ownership interest in Apco Oil and Gas International.

Proved reserves are estimated quantities that geological and engineering data demonstrate with reasonable certainty to be recoverable in the future from known reservoirs under the Security and Exchange Commission pricing provisions, existing operating methods and government regulations.

Figures for reserves and production in 2010 were originally reported at the wellhead on an Mcf equivalent basis. For 2011, WPX distinguished reserves and production by individual product in addition to the equivalent basis. Volumes for oil and NGL were converted to natural gas equivalence using a 6-to-1 ratio.

Source: Business Wire

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