WPX Energy Announces Third-Quarter 2012 Results

WPX Energy (NYSE:WPX) today announced its unaudited operating and
financial results for the third-quarter of 2012. Recent highlights
include:

• 
  3Q Bakken oil production increased 66% to 9,600 barrels per day from
  5,800 a year ago
  
• 
  October Bakken oil production surpassed 10,500 barrels per day
  
• 
  WPX on track to hold Bakken acreage by production; initial multi-well
  pad drilling beginning
  
• 
  Natural gas production in the Marcellus Shale rose four-fold to 65
  MMcf/d vs. 15 MMcf/d a year ago
  
• 
  Liquidity remains strong at $1.7 billion
  
• 
  Lower 3Q natural gas production vs. a year ago a result of fewer wells
  drilled due to capital discipline
  

FINANCIAL RESULTS

WPX reported an unaudited net loss attributable to WPX Energy of $64
million for third-quarter 2012, or a loss of $0.32 per share on a fully
diluted basis, compared with net income of $14 million, or $0.07 per
share, in third-quarter 2011.

The decrease in third-quarter 2012 was driven primarily by lower natural
gas and NGL commodity prices vs. the 2011 period. Revenues in the 2012
period ? not including gas management activities ? declined 24 percent
vs. third-quarter 2011, driven by significantly lower net realized
average prices for natural gas and NGL production.

Third-quarter 2012 results also were impacted by approximately $22
million in net losses on derivatives not designated as hedges, compared
with $12 million in net gains in third-quarter 2011.

Excluding unrealized mark-to-market gains (losses), WPX had an adjusted
loss from continuing operations of $47 million, or a loss of $0.23 per
share on a diluted basis, for third-quarter 2012, compared with adjusted
income from continuing operations of $14 million, or $0.07 per share on
a diluted basis, for the same period in 2011. A reconciliation is
included in the statements that accompany this press release.

For the first nine months of 2012, WPX reported an unaudited net loss
attributable to WPX Energy of $117 million, or a loss of $0.59 per share
on a diluted basis, compared with net income of $36 million, or $0.18
per share, for the same period in 2011.

In addition to lower net realized average prices for the company′s
production, results for the first nine months of 2012 were impacted by
$117 million in non-cash impairment charges stemming from a decline in
forward natural gas prices during the first half of 2012. These charges
were recorded in the first and second quarter.

As described in previous quarters this year, WPX′s accounting for costs
of certain acquired unproved reserves is based on discounted cash flows.
As a result, declines in forward commodity prices can drive impairments
in the absence of a change in the underlying reserve estimates.

Excluding the impairment charges and unrealized mark-to-market gains
(losses), WPX had an adjusted loss from continuing operations of $84
million, or a loss of $0.42 per share on a diluted basis, for the first
three quarters of 2012, compared with adjusted income from continuing
operations of $55 million, or $0.28 per share on a diluted basis, for
the same period in 2011. A reconciliation is included in the statements
that accompany this press release.

WPX′s adjusted EBITDAX (a non-GAAP measure) for third-quarter 2012 was
$230 million, compared with $337 million for the same measure a year
ago. A reconciliation is included below.

For the first three quarters of 2012, adjusted EBITDAX was $744 million,
compared with $963 million for the same period in 2011. The primary
factor affecting 2012 adjusted EBITDAX was a decrease in the company′s
domestic net realized average prices.

EBITDAX represents earnings before interest expense, income taxes,
depreciation, depletion and amortization and exploration expenses.
Adjusted EBITDAX includes adjustments for impairments, unrealized
mark-to-market gains (losses) and discontinued operations.

WPX believes that these non-GAAP measures provide useful information
regarding its ability to meet future debt service, capital expenditures
and working capital requirements.

MANAGEMENT PERSPECTIVE

'Despite a 10-year low for natural gas prices and the fall-off in NGL
prices that we saw this year, we have a resilient portfolio and we still
expect to achieve more than $1 billion dollars of adjusted EBITDAX with
the recent strengthening in natural gas prices,? said Ralph Hill,
president and CEO.

'Along those lines, we are encouraged by the recent rebound in natural
gas prices. At the appropriate time, we can be among the first and
fastest to grow gas volumes again given our low-cost, competitive
advantage in the Piceance.

'Operationally, we′re levered toward a gas price recovery, particularly
in the Piceance Basin and in Susquehanna County in the Marcellus Shale.
In the Piceance alone, we have more than 10,000 remaining gross 3P
locations.

'The pullback in our third-quarter natural gas production is a direct
result of our capital discipline and the corresponding change in our rig
count this year. As we′ve demonstrated before, we can redeploy capital
and ramp up volumes quickly as higher returns materialize.

'Our quarterly growth in the Bakken was masked by completions that were
delayed from the second quarter to the third, but our third-quarter
average production of 9,600 barrels per day has already increased 9
percent in October to 10,500 and we expect to reach our planned December
monthly exit rate.

'As a clear example of our growing efficiencies in the Bakken, we expect
to complete 14 wells in the fourth quarter, compared to 22 wells during
the first nine months of the year. The commencement of pad drilling is
on schedule and we expect those efficiencies will drive down costs in
2013.

'Overall, lower commodity prices in 2012 have been a challenge, but
we′ve maintained our strong and stable financial condition, we′re
bullish on our large resource base and we′re on target to meet our 2012
production goal of 1,380 million cubic feet equivalent per day.

'WPX has a rich resource potential, a history of efficiency and a
capital allocation strategy that is based on rates of return. Combining
our strong balance sheet with the diversity of our portfolio gives us
flexibility on when and where to drill,? Hill added.

PRODUCTION

WPX′s overall domestic and international production averaged 1,359
MMcfe/d in third-quarter 2012, down 2 percent from a year ago. This
planned decrease represents reduced development activity associated with
the steps the company announced in early 2012 in response to falling
natural gas prices.

Oil production in the Bakken Shale averaged 9,600 barrels per day in the
third quarter. This represents a 66 percent increase vs. a year ago.

Overall oil production of 17,900 barrels per day in third-quarter 2012
increased 30 percent vs. third-quarter 2011. Overall third-quarter 2012
NGL production of 28,900 barrels per day was up 1 percent over the
prior-year quarter.

Total natural gas production of 1,078 MMcf/d in third-quarter 2012
declined 5 percent vs. third-quarter 2011. The primary driver was lower
production in the Piceance, Powder River and San Juan basins in response
to decade-low gas prices and the subsequent redeployment of capital to
oil assets.

Natural gas production in the Marcellus Shale continued to improve.
Third-quarter 2012 volumes of 65 MMcf/d were up more than four-fold vs.
a year ago, despite an estimated 30 MMcf/d that was curtailed by
infrastructure challenges.

The domestic net realized average price for natural gas, inclusive of
hedges, was $3.35 per Mcf in third-quarter 2012, down 21 percent from
$4.25 per Mcf a year ago.

The domestic net realized average price for NGL was $24.43 per barrel in
third-quarter 2012, down 43 percent from $42.54 per barrel a year ago.

The net realized average price for domestic oil, inclusive of hedges,
was $82.31 per barrel in third-quarter 2012, down 3 percent from $84.75
per barrel a year ago.

Compared with the most recent quarter, the domestic net realized average
price for natural gas ? inclusive of hedges ? improved 11 percent in the
third quarter.

EXPENSES: KEY PER-UNIT COSTS REMAIN FLAT OR DECREASE EVEN WITH LOWER
3Q PRODUCTION

Through the first three quarters of 2012, overall expenses ? including
transition costs related to WPX′s spin-off ? were 9 percent lower than
the first three quarters in 2011.

On a per-unit basis, WPX′s domestic lease operating expense (LOE) in
third-quarter 2012 was $0.51 per Mcfe, which was equal to the same
period a year ago.

Domestic gathering, processing and transportation charges decreased 2
percent to $1.04 per Mcfe in third-quarter 2012 vs. $1.06 per Mcfe in
third-quarter 2011.

Taxes other than income for domestic operations decreased 36 percent to
$0.14 per Mcfe in third-quarter 2012 vs. $0.22 per Mcfe in third-quarter
2011, reflecting lower commodity prices.

Domestic general and administrative expenses (G&A) decreased 4 percent
to $0.53 per Mcfe in third-quarter 2012 vs. $0.55 per Mcfe in
third-quarter 2011.

Domestic depreciation, depletion and amortization expenses (DD&A)
increased 4 percent to $1.98 per Mcfe in third-quarter 2012 vs. $1.90
per Mcfe in third-quarter 2011, reflecting a decline in the 12-month
average commodity price used in the calculation of the company′s DD&A
rate.

CASH AND LIQUIDITY

Net cash provided by operating activities for the first nine months of
2012 was $589 million, including $148 million in the third quarter.

At Sept. 30, 2012, WPX had approximately $240 million in cash and cash
equivalents ? including $31 million for international operations.

The company′s total liquidity at the end of the third quarter was
approximately $1.7 billion, including an undrawn $1.5 billion revolving
credit agreement.

GUIDANCE FOR PRODUCTION, ADJUSTED EBITDAX AND CAPITAL SPENDING

WPX is re-affirming its 2012 production goal of 1,380 million cubic feet
equivalent per day at year-end, which consists of 1.1 billion cubic feet
per day of natural gas, 18,100 barrels per day of oil and 29,400 barrels
per day of natural gas liquids.

For full-year 2012, WPX expects adjusted EBITDAX of $1 billion to $1.05
billion. WPX′s original estimate of $1.175 billion at the beginning of
the year assumed the impact of existing hedges and plan commodity prices
of $3 NYMEX natural gas, $99 per barrel oil and $51 per barrel NGL.

For the first nine months of 2012, WPX made approximately $1.12 billion
of capital investments in its domestic operations, including $320
million in the third quarter. These investments are predominantly in the
Bakken Shale, Piceance Basin and Marcellus Shale where the company
generates its highest returns.

For full-year 2012, WPX expects $1.45 billion to $1.5 billion of total
capital spending, including amounts for land purchases in oil-focused
properties that are expected to close prior to year-end.

DEVELOPMENT ACTIVITY

For the first nine months of 2012, WPX domestic operations participated
in 421 gross (309 net) wells, including 121 gross (93 net) in the third
quarter. These figures represent the number of wells that were completed
and began commercial delivery of production.

Highlights for the company′s operated wells in its core growth areas are
provided below. The balance of gross (net) wells is accounted for in
non-operated interests, as well as WPX′s own properties in the San Juan
and Powder River basins.

In the liquids-rich Piceance Basin, WPX completed 204 gross (185 net)
wells during the first three quarters of 2012. WPX expects to continue
to operate five rigs in this area for the remainder of 2012. WPX is
currently nearing total depth on its first horizontal well in the
Niobrara formation to explore the Piceance Basin′s deeper gas potential.

WPX also continues to improve drilling times in the Piceance, drilling a
Valley well in a record 3.8 days. WPX′s average drilling time in the
Valley for 2012 is approximately nine days per well.

In the Bakken Shale, WPX completed 22 gross (18 net) wells through the
first three quarters of the year. WPX expects to complete 14 gross (10
net) wells on its Bakken acreage in the fourth quarter.

The George Evans/Mason infill density science unit was completed during
the third quarter as planned. These wells were drilled on WPX′s first
multi-well pad sites in the area, averaging 26 days per well. All seven
wells ? four in the Bakken and three in the Three Forks ? in the
1,280-acre unit are on production.

During the infill drilling, WPX successfully recovered 372 feet of
continuous core through the entire Bakken and Three Forks formations,
along with portions of the Lodgepole and Birdbear formations. This is a
valuable step in targeting the most geologically productive zones,
understanding ways to optimize completion designs and evaluating the
feasibility of increasing the number of drilling locations and the
company′s reserves potential.

WPX has finished converting its rig fleet in the Bakken Shale to five
new fit-for-purpose rigs. Going forward, the majority of drilling will
be on multi-well pad sites.

In the Marcellus Shale, WPX completed 28 gross (23 net) wells during the
first three quarters of 2012. WPX currently has two fit-for-purpose rigs
in Susquehanna County.

Efficiencies continue to be reflected in Marcellus drilling times. WPX′s
new record drilling time in the area is 11.4 days, which was set in the
third quarter. The company also has reduced its completion costs in
Susquehanna County by 35 percent since the fourth quarter of 2011.

TODAY′S CONFERENCE CALL

WPX management will discuss third-quarter results during a webcast
starting at 9:30 a.m. Eastern today. Participants can access the audio
and the slides for the event via the homepage at www.wpxenergy.com.

A limited number of phone lines also will be available at (800)
992-7413. The passcode is 3084847.International callers should
dial (719) 325-2282 and use the same passcode. A replay will be
available on the company′s website for one year following the event.

Form 10-Q

WPX plans to file its third-quarter Form 10-Q with the Securities and
Exchange Commission this week. Once filed, the document will be
available on both the SEC and WPX websites.

About WPX Energy, Inc.

WPX Energy is an exploration and production company focused on
developing its significant oil and gas reserves, particularly in the
liquids-rich Piceance Basin, the Bakken and Three Forks oil shales and
the Marcellus Shale. WPX also has domestic operations in the San Juan
and Powder River basins, as well as a 69 percent interest in Apco Oil
and Gas International. Go to http://www.wpxenergy.com/investors/subscribe-to-email/
to join our e-mail list.

This press release includes 'forward-looking statements? within the
meaning of the Private Securities Litigation Reform Act of 1995.All
statements, other than statements of historical facts, included in this
press release that address activities, events or developments that the
company expects, believes or anticipates will or may occur in the future
are forward-looking statements. Such statements are subject to a number
of assumptions, risks and uncertainties, many of which are beyond the
control of the company.Statements regarding future drilling and
production are subject to all of the risks and uncertainties normally
incident to the exploration for and development and production of oil
and gas.These risks include, but are not limited to, the
volatility of oil, natural gas and NGL prices; uncertainties inherent in
estimating oil, natural gas and NGL reserves; drilling risks;
environmental risks; and political or regulatory changes.Investors
are cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ
materially from those projected in the forward-looking statements.The
forward-looking statements in this press release are made as of the date
of this press release, even if subsequently made available by WPX Energy
on its website or otherwise.WPX Energy does not undertake and
expressly disclaims any obligation to update the forward-looking
statements as a result of new information, future events or otherwise.Investors are urged to consider carefully the disclosure in our
filings with the Securities and Exchange Commission, available from us
at WPX Energy, Attn:Investor Relations, P.O. Box 21810, Tulsa,
Okla., 74102, or from the SEC′s website at www.sec.gov.

Additionally, the SEC requires oil and gas companies, in filings made
with the SEC, to disclose proved reserves, which are those quantities of
oil and gas, which, by analysis of geoscience and engineering data, can
be estimated with reasonable certainty to be economically producible ?
from a given date forward, from known reservoirs, under existing
economic conditions, operating methods, and governmental regulations.
The SEC permits the optional disclosure of probable and possible
reserves. From time to time, we elect to use 'probable? reserves and
'possible? reserves, excluding their valuation. The SEC defines
'probable? reserves as 'those additional reserves that are less certain
to be recovered than proved reserves but which, together with proved
reserves, are as likely as not to be recovered.? The SEC
defines'possible? reserves as 'those additional reserves that are less
certain to be recovered than probable reserves.? The Company has applied
these definitions in estimating probable and possible reserves.
Statements of reserves are only estimates and may not correspond to the
ultimate quantities of oil and gas recovered. Any reserve estimates
provided in this presentation that are not specifically designated as
being estimates of proved reserves may include estimated reserves not
necessarily calculated in accordance with, or contemplated by, the SEC"s
reserves reporting guidelines. Investors are urged to consider closely
the disclosure in our SEC filings that may be accessed through the SEC′s
website at www.sec.gov.

The SEC′s rules prohibit us from filing resource estimates. Our
resource estimations include estimates of hydrocarbon quantities for (i)
new areas for which we do not have sufficient information to date to
classify as proved, probable or even possible reserves, (ii) other areas
to take into account the low level of certainty of recovery of the
resources and (iii) uneconomic proved, probable or possible reserves.
Resource estimates do not take into account the certainty of resource
recovery and are therefore not indicative of the expected future
recovery and should not be relied upon. Resource estimates might never
be recovered and are contingent on exploration success, technical
improvements in drilling access, commerciality and other factors.