No. 9 (tie) WPX: Strong mix of assets likely to help spinoff succeed [Tulsa World, Okla.]By Robert Evatt, Tulsa World, Okla.McClatchy-Tribune Information Services
Sept. 16-- WPX Energy Inc., a new company that was spun off from Williams Cos. Inc. last year, has already hit a rough patch -- it posted a six-month loss of $53 million in the first six months of its fiscal year.
But that hasn't stopped local analysts such as Phillip Bell, vice president of Financial Planning Resources Inc., from seeing long-term possibilities with its stock.
"In broad terms, we feel companies that control pipelines will do well, since the prices and demand for energy will go up," he said.
Bell said WPX was created with a strong mix of energy holdings.
"A lot of the quality assets of Williams have been shifted to WPX," he said. "Based on the amount of muscle they've shifted to it, we believe it will do well."
Oil prices have already begun to rebound into the $90 to $100 per barrel range, and the company hasn't been shy about increasing production. In particular, WPX's Bakken Shale properties now average 9,500 barrels per day, up 83 percent from last year.
Jim Huntzinger, chief investment officer for BOK Financial Corp., said the company plans to spend $1.2 billion in capital expansion, with the majority of that going toward oil. At the same time, they're working to control costs by making its Bakken rigs capable of faster multi-well pad drilling, which will save between $500,000 to $1 million per well.
Additionally, natural gas prices have started to rebound. That may also help the company through its rough patch, as WPX officials blamed the loss on a decline in prices for the commodity.
As with most energy companies, the main risk to WPX in the near term is the potential for falling energy prices.
Address: One Williams Center, Tulsa, OK, 74172-0172
Chairman: William G. Lowrie
President/CEO: Ralph A. Hill
Symbol (Exchange): WPX (NYSE)
Operation: An independent natural gas and oil exploration and production company.
Robert Evatt 918-581-8447
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