WPX Energy (NYSE: WPX) has completed the divestiture of its remaining mature coalbed methane properties in Wyoming’s Powder River Basin and has scheduled a related sale of its membership interest in Fort Union Gas Gathering LLC to close in November. The buyer of the Powder River Basin operations is Moriah Powder River LLC, and the sales price for the assets is $80 million.
Divesting the Powder River Basin operations supports the company’s de-levering plan following its acquisition of Permian Basin assets on Aug. 17. WPX has also signed an agreement to sell a North Dakota gathering system for approximately $185 million, which is expected to close in the fourth quarter. Combined, the asset sales place WPX more than half of the way toward its 2015 goal targeting $400–$500 million in divestitures by the end of the year.
Results from WPX’s Powder River Basin assets in Wyoming were classified as discontinued operations prior to the divestiture. WPX has not actively drilled in the basin since 2011.
WPX also is targeting another $400–$500 million in asset sales in 2016. Other portfolio rationalization opportunities include the monetization of additional midstream infrastructure, non-operated properties or other asset sales, along with evaluating creative options to unlock Piceance Basin value.
Global Hunter Securities analysts, in a note to investors Wednesday morning, said, “Combined with Monday's announced midstream divestiture, WPX has announced $265MM in sales since closing its acquisition of RKI in mid-August, putting the company more than halfway to its goal of $400MM–$500MM in total divestitures by year-end. Look for asset sales to continue as WPX focuses on protecting the balance sheet while it begins tackling the significant resource potential in the Delaware Basin. Other potential asset sales include the San Juan gathering system and certain non-operated properties.”