Strengthening Hold in oil-rich Permian Basin - Report on WPX Energy, Inc.

Jul 29, 2015, 09:35 ET from

NEW YORK, July 29, 2015 /PRNewswire/ --

ACI Association has initiated research coverage on WPX Energy, Inc. (NYSE: WPX). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.

Today, membership is open to readers on a complementary basis at the following URL:

Highlights from our WPX Report include:

  • WPX acquires RKI Exploration & Production, LLC - On July 14, 2015, oil and gas producer WPX Energy reported that it has entered into a definitive merger agreement to acquire privately held RKI Exploration & Production, LLC for $2.35 billion. The Permian Basin is categorized by several stacked reservoirs, long-lived reserves and high drilling success rates. The deal excludes RKI's Powder River basin assets in Wyoming, which it plans to divest or sell before deal close. Further, WPX aims to increase the rig count in the Permian basin to six from four by the end of the year.
  • Synergies scaled after acquisition - This acquisition would further stretch WPX's drilling inventory to c. 4,600 locations, thereby making WPX an interesting option for investors looking out for high-margin core Permian production. Another benefit of this purchase would be the owned and operated midstream systems which are integrated with E&P activity support lower costs, margin development and long-term optionality. This existing infrastructure has the capacity to support increased volumes. Adding RKI's assets would further diversify WPX's asset portfolio and accelerate liquids growth.
  • Increase in cash margins and attractive returns - This acquisition comes in-line with WPX's long term strategy, which stresses on reducing its reliance on less lucrative natural gas portfolio, as this deal would maximize its returns and margins along with the increased exposure to oil production and oil inventory instead of the earlier gas-weighted portfolio. With RKI's addition, WPX expects oil to account for c. 22% of equivalent production in 2015, 30% in 2016, and 36% in 2017 on a pro forma basis.
  • Agreement terms & funding - The release highlighted that RKI unit holders will be entitled to 40 million shares of WPX stock, valued at c. $470 million. WPX would be financing this acquisition through a combination of long-term debt, additional equity and cash on hand.

To find out how this influences our rating on WPX Energy, Inc., read the full report in its entirety here:

About ACI Association: 

Active Charter Investors Association ("ACI Association") produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. ACI Association has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

ACI Association has not been compensated; directly or indirectly; for producing or publishing this document.


The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer"). Rohit Tuli, a CFA® charter holder (the "CFA®"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on sound investment judgment and publicly available information which is believed to be reliable. The Reviewer and the CFA® have not performed any independent investigations or forensic audits to validate the information herein. Unless otherwise noted, any content outside of this document has no association with the Author, the Reviewer, or the CFA® (collectively referred to as the "Production Team") in any way. The Production Team is compensated on a fixed monthly basis and do not hold any positions of interest in any of the securities mentioned herein.


ACI Association, the Author, the Reviewer and the CFA® (collectively referred to as the "Publishers") are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted by the Publishers whatsoever for any direct, indirect or consequential loss arising from the use of this document. The Publishers expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, the Publishers do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.


This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither ACI Association nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit


ACI Association is not available to residents of Belarus, Cuba, Canada, Iran, North Korea, Sudan, Syria or Somalia. Do not send email to robottrap (at)

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.