wpx energy inc (WPX) Snapshot

Six Fayette County families filed a civil lawsuit in Allegheny County on June 14, 2013 claiming nearby natural gas wells are a nuisance that have diminished their ability to use their property. The families, who reside in Springhill and Nicholson townships, claim in the 63-page lawsuit that Chevron Corp., Williams Cos. and WPX Energy Inc., which own, operate and maintain several gas wells in the area, "adversely impacted" their "quality of life and enjoyment of property." They are seeking unspecified damages for the effects of toxic chemicals, noise, odor and damage to their properties from a dozen gas wells and a compressor station near their property. The lawsuit filed on behalf of David and Linda Headley; Joseph and Mildred Bezjak; Benjamin Sr. and Lori Groover; Elzie and Mary Lavery; Robert E. Nicklow Sr.; and Albert Stronko, states that the companies began drilling operations in 2005. By 2011, the wells began to leak and efforts by the companies to fix the problems failed. The properties sit around a three-mile stretch that has been part of a bitter feud between the families and the gas companies working there. Two families, including lead plaintiff David Headley, have been in and out of court fighting allegations they accosted workers, even bringing guns to work sites. The families have claimed they were reacting to gun-toting security workers who had spent weeks intimidating their families after they complained of environmental and contractual violations. The DEP cited Atlas last year for a corroded, leaky tank on Headley's property. It also cited Laurel Mountain Midstream, a subsidiary of Williams, for pipeline work that spilled 300 to 1,000 gallons of bentonite, a clay that can smother aquatic life, into the stream bed along his land. Noise from a compressor station run by Laurel Mountain forced the Groovers to abandon their residence in June 2009. They have since moved to another building on their property. Speer said he decided to treat the lawsuit as a nuisance complaint because the companies are making "unreasonable use" of the plaintiffs' properties.

WPX Energy, Inc. announced that it now plans to employ seven drilling rigs in western Colorado's Piceance Basin for the remainder of 2013, up from its previously announced five-rig drilling plan. The increased development activity is expected to add an incremental 1.9 billion cubic feet equivalent of production throughout the remainder of 2013, increasing the basin's exit rate from 701 MMcfe/d to 730 MMcfe/d at year-end. This is in line with the higher end of WPX's guidance of 1,261 MMcfe/d to 1,295 MMcfe/d for 2013. The benefit of increased drilling in 2013 will be more fully realized in 2014 given the timing of drilling and well completions. Next year, the additional wells could add up to 15 Bcfe in additional cumulative production. Approximately $60 million of capital is associated with adding two rigs this year. The increase is in line with WPX's overall range of $1 billion to $1.2 billion for 2013 capital spending.

WPX Energy, Inc. reported unaudited consolidated earnings results for the first quarter ended March 31, 2013. For the quarter, the company reported net loss attributable to company was $116 million or $0.58 basic and diluted loss per share on total revenue of $631 million against net loss attributable to company of $43 million or $0.22 basic and diluted loss per share on total revenue of $910 million a year ago. Operating loss was $158 million and loss from continuing operations before income taxes was $176 million against operating loss of $49 million and loss from continuing operations before income taxes of $63 million a year ago. Loss from continuing operations was $113 million or $0.58 loss per share against $38 million or $0.21 loss per share a year ago. Adjusted net loss from continuing operations was $51 million versus a loss of $7 million in the first quarter of 2012. Net cash provided by operating activities was $143 million and capital expenditures were $271 million against net cash provided by operating activities of $252 million and capital expenditures of $428 million a year ago. EBITDAX was $100 million and adjusted EBITDAX was $203 million against EBITDAX of $208 million and adjusted EBITDAX of $263 million a year ago. The primary factors contributing to the quarter-over-quarter decrease in adjusted EBITDAX were lower domestic net realized average prices, inclusive of hedges, and lower volumes for both natural gas and NGL. For the quarter, the company reported total natural gas production of 1,021 MMcf/d decreased 10% vs. the prior-year period and 5% vs. fourth-quarter 2012. This was expected given WPX's disciplined approach to gas development in a lower commodity price environment. The company announced actively executing 2013 plan to grow oil production, drive cost improvements, remain ready for accelerated natural gas drilling if the price recovery continues, and to build the body of data on Niobrara gas discovery that has the potential to more than double 3P reserves.