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WPX Energy sells Energy Rocky Mountain for $910 million

Staff writer |
WPX Energy signed an agreement to sell its wholly owned subsidiary WPX Energy Rocky Mountain to Terra Energy Partners for $910 million.

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The parties expect to close the sale in the second quarter. Additionally, Terra is assuming approximately $100 million in transportation obligations in exchange for more than $90 million of WPX’s natural gas hedge value.

WPX will retain more than $110 million in additional hedge gains, which will be realized throughout the year.

The divestiture will greatly enhance WPX’s liquidity, significantly improve its capital efficiency and returns, and materially lower general and administrative expenses going forward.

The move solidifies WPX as a Permian-focused company and provides a more balanced commodity mix given the pro forma exposure to oil and natural gas.

WPX expects oil to comprise approximately half of its future production volumes, up from roughly 20 percent during 2015. On a per-barrel equivalent basis, WPX’s 2016 cash operating costs (LOE, GP&T and operating taxes) are not expected to change materially following the divestiture.

Upon closing, WPX will have a premier portfolio with acreage in the core of two prolific oil-dominant areas – the Permian’s Delaware Basin and North Dakota’s Williston Basin – along with a leading position in the San Juan Basin.

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