Shares of WPX Energy are trading higher after it released second quarter earnings and raised full-year oil guidance by 4%. The firm also announced it is initiating a 24-month, $400 million share repurchase program.
After the close of trading yesterday, WPX Energy Inc. (WPX:NYSE) reported unaudited second quarter earnings for the period ending June 30, 2019. The company registered total product revenues of $558 million in Q2/19, a 7% increase over Q2/18, with the quarterly oil sales component growing by 9% in the same period. Total product revenues were $1,065 million in H2/19, up 15% over the $927 million recorded in H2/18.
Total production in Q2/19 averaged 159.6 MBoe/day, which was 28% higher than a year ago, with oil and natural gas liquids volumes comprising 79% of total volumes. Oil sales of $511 million from 97.9 Mbbl/d accounted for 92% of Q2/19 product revenues.
Cash flow from operations in H2/19, inclusive of hedge impact, increased 48% over H2/18 to $634 million. The H2/19 results included $362 million realized in Q2/19.
The report indicated income available to common stockholders of $305 million, or income of $0.72 per share on a diluted basis in Q2/19. The firm advised that the results include a $247 million recorded gain related to WPX's equity interest in the sale of the Oryx II pipeline project, and excluding the Oryx gain and other items, such as derivatives, WPX posted adjusted net income of $0.09 per share.
Additionally, WPX announced that its board of directors has authorized a plan for the company to repurchase up to $400 million of shares over the next 24 months. WPX's Chairman and CEO Rick Muncrief commented, "This accelerates our original plan to return capital to shareholders in 2021...and the current market sentiment has created favorable circumstances for an action like this, and if the market remains irrational, we will be opportunistic. . .We expect to generate $100 million to $150 million in free cash flow in the back half of this year, which will help support our repurchase program."
The company revised its 2019 full-year total production estimates to 160-165 Mboe/d in 2019, up from prior estimates of 149-161 Mboe/d, and now expects to produce 101-103 Mbbl/d of oil for full-year 2019, up from prior estimates of 96-100 Mbbl/d. The firm indicated that Q3/19 oil volumes are driving the upward revision.
WPX Energy is an independent oil and natural gas exploration and production company that focuses on exploiting, developing and growing its oil positions in the Delaware (Permian area sub-basin) and San Juan basins in Texas and New Mexico and in the Williston Basin in North Dakota. The firm states that it is engaged in the exploitation and development of long-life unconventional properties. In the company's 2018 10-K report filed with the SEC the firm lists that its portfolio of proven oil and natural gas reserves as of December 31, 2018, was 479 MMboe reflecting a mix of 61% crude oil, 21% natural gas and 18% NGLs. The company operates 657 wells in the Delaware basin and also owns interests in 808 wells operated by others, and holds approximately 130,000 net acres there. Additionally, the firm operates 323 wells in the Williston Basin and also owns interest in 87 wells operated by others, and holds 85,087 net acres in the Williston Basin.
WPX shares opened up nearly 18% higher today at $10.53 (+$1.60, +17.92%) compared to yesterday's close of $8.93. Shares have traded between $9.38-10.65 on greater than average volume. Currently shares are trading at $9.78 (+$0.85, +9.52%).
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