WPX Energy posts second-quarter loss
TULSA — WPX Energy met projected oil production volumes during the second quarter of 2020 but posted negative results driven by hedge value-related losses, the company reported Wednesday.
It posted a net loss of $414 million, or 74 cents per share, on revenues of $33 million for the quarter.
In the second quarter of 2019, it had posted net earnings of $305 million, or 72 cents per share, on revenues of $695 million.
If the value change in WPX’s hedges for the quarter are backed out (that value dropped by $275 million as market commodity values climbed), officials said the company actually earned a net income for the period of $69 million, or 12 cents per share.
Wall Street analysts had expected the company to post earnings of 2 cents per share, company officials said Wednesday.
“Our proactive risk mitigation strategy that included work on bolstering our balance sheet and building an industry-leading hedge book gives us flexibility, revenue certainty and stability in our development program against the unusual backdrop caused by COVID-19,” Rick Muncrief, WPX’s CEO, stated in the earnings announcement. “This benefits us not only in 2020, but in 2021 and 2022 as we think about the cadence of how to optimize our resources, manage capital requirements and enhance our free cash flow capabilities.”
The company’s second-quarter 2020 earnings before interest, taxes, depreciation, amortization and exploration costs (EBITDAX) was $400 million, and its free cash flow during the quarter was $166 million.
Its second-quarter 2019 EBITDAX was $347 million, but it had a negative $33 million in free cash flow then.
The company’s reported quarterly oil volume from wells in west Texas and North Dakota of 123,700 barrels per day exceeded the market’s prediction of 123,500 barrels per day.
Total oil, natural gas and natural gas liquids production equaled 207,000 barrels of oil (equivalent) per day in second-quarter 2020, up 5% compared to the first quarter of the year.
While commodity prices remain significantly lower than last year, WPX has hedged more than 111,000 barrels per day of oil at more than $53 per barrel in 2020, officials said.
“I am grateful for our resilient employees and service providers who quickly and safely ramped down activity and stayed ready to get back to work. Our teams are a differentiating factor in our success,” Muncrief said.
WPX employs 600 people, including 400 at its headquarters in Tulsa.