WPX Energy Reports 2012 Results07:00 EST Thursday, February 28, 2013 TULSA, Okla. (Business Wire) -- WPX Energy (NYSE:WPX) today announced its unaudited operating and financial results for the fourth quarter and the year ended Dec. 31, 2012. Highlights for full-year 2012 include: 98% growth in Bakken oil production 40% growth in overall oil production 3% growth in overall NGL production 2% growth in overall natural gas production 634 Bcfe of domestic reserves additions CEO PERSPECTIVE “Our focused growth plan and rate-of-return driven strategy is delivering strong results. Production is up, Bakken well costs are down and continue to improve, and new opportunities like our Niobrara discovery are providing upside potential and future visibility for value creation at WPX,” said Ralph Hill, president and CEO. “For 2012, we maintained the strength of our balance sheet in the face of lower natural gas prices and exceeded our production goal even with ongoing pipeline bottlenecks in the Marcellus. “For 2013, our diversified portfolio of reserves gives us the opportunity to continue to grow our Bakken production and devote the majority of our capital to oil and liquids resource plays,” Hill said. “We're also committed to continuously improving the cost structure in each of our basins and gaining new efficiencies as we apply our large-scale development expertise. “Specifically, reduced drilling times positively impact our internal rates of return. Our record drilling times are 3.7 days in the Piceance Valley, 10.8 days in the Marcellus and 25 days in the Bakken. “Piceance wells originally took 30 days to drill. A decade ago they took 20. We've since reduced that by another 60 percent down to an average of 8 days for our Valley wells. This is an example of the efficiencies we can deliver in our other major operating areas,” Hill added. FULL-YEAR 2012 FINANCIAL RESULTS WPX reported an unaudited net loss attributable to WPX Energy of $223 million for full-year 2012, or a loss of $1.12 per share on a fully-diluted basis, compared with a net loss of $302 million, or a loss of $1.53 per share, in 2011. The net loss from continuing operations attributable to WPX Energy was $245 million in 2012 vs. $160 million for full-year 2011. Full-year 2012 results were impacted by a 22 percent decrease in domestic net realized natural gas prices. Higher production volumes – particularly domestic oil – together with lower asset impairments partially offset the impact of lower realized natural gas prices. Non-cash impairment charges included in continuing operations were $225 million in 2012 related to producing properties and costs of acquired unproved reserves, compared with $367 million in 2011. These charges were primarily driven by declines in forward natural gas prices. Excluding these charges and unrealized mark-to-market gains (losses), WPX had an adjusted loss from continuing operations of $123 million, or a loss of $0.62 per share on a diluted basis, in 2012 compared with adjusted income from continuing operations of $80 million, or $0.40 per share, in 2011. A reconciliation accompanies this press release. FOURTH-QUARTER 2012 FINANCIAL RESULTS WPX reported an unaudited net loss attributable to WPX Energy of $106 million for fourth-quarter 2012, or a loss of $0.53 per share on a fully-diluted basis, compared with a net loss of $338 million, or a loss of $1.71 per share, in the same period in 2011. The net loss from continuing operations attributable to WPX Energy was $105 million in fourth-quarter 2012 vs. $209 million for the fourth quarter of 2011. Oil revenues increased 56 percent quarter over quarter, but natural gas and natural gas liquids (NGL) revenues declined a combined 19 percent. Results of continuing operations were also impacted by non-cash impairment charges of $108 million in fourth-quarter 2012 and $367 million in fourth-quarter 2011. Excluding these charges and unrealized mark-to-market gains (losses), WPX had an adjusted loss from continuing operations of $39 million, or a loss of $0.20 per share on a diluted basis, for fourth-quarter 2012, compared with adjusted income from continuing operations of $24 million, or $0.12 per share, for the same period in 2011. A reconciliation accompanies this press release. ADJUSTED EBITDAX WPX's adjusted EBITDAX (a non-GAAP measure) for full-year 2012 was $1 billion, compared with approximately $1.3 billion for the same measure in 2011. For fourth-quarter 2012, WPX had adjusted EBITDAX of $256 million, compared with $336 million for the same period in 2011. The difference in year-over-year adjusted EBITDAX is primarily the result of lower commodity prices in 2012 vs. 2011, partially offset by higher production volumes. EBITDAX (non-GAAP)   Full Year   Fourth Quarter2012   20112012   2011millionsmillionsmillionsmillions Net income (loss) ($211) ($292) ($104) ($335) Interest expense $102 $117 $25 $20 Provision (benefit) for income taxes ($111) ($74) ($40) ($104) Depreciation, depletion and amortization $966 $902 $247 $232 Exploration expenses $83 $126 $23 $26 EBITDAX $829 $779 $151 ($161)   Impairments $225 $367 $108 $367 Unrealized MTM (gains) losses ($32) $11 ($4) $1 (Income) Loss from discontinued operations ($22) $142 $1 $129 Adjusted EBITDAX$1,000$1,299$256$336   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. PRODUCTION WPX's overall domestic and international production climbed 4 percent in 2012 to an average of 1,386 MMcfe/d, excluding volumes for discontinued operations in the Barnett Shale and Arkoma Basin which were sold in 2012. The production increase was led by 40 percent growth in oil production, 3 percent growth in NGL production and 2 percent growth in natural gas production. NGL growth was curbed in late 2012 due to reduced ethane recovery rates. Average Daily Production   Full Year     4Q   2012   2011   Change 2012   2011   Change Natural gas (MMcf/d)     Piceance Basin 673 679 -1 % 637 686 -7 % Marcellus Shale 63 15 320 % 71 27 163 % Powder River Basin 208 226 -8 % 195 229 -15 % San Juan Basin 132 135 -2 % 138 119 16 % International 19 20 -5 % 19 21 -10 % Other   10   10   0 % 10   9   10 % Subtotal (MMcf/d) 1,105 1,085 2 % 1,070 1,091 -2 %   Oil (Mbbl/d) Bakken Shale 9.5 4.8 98 % 11.4 6.4 78 % Piceance 2.3 2.3 0 % 2.0 2.2 -9 % International 6.0 5.6 7 % 5.8 5.9 -2 % Other   0.2   0.2   12 % 0.2   0.3   -24 % Subtotal (Mbbl/d) 18.0 12.9 40 % 19.4 14.8 31 %   NGLs (Mbbl/d) Piceance 27.5 27.1 1 % 23.1 27.1 -15 % International 0.5 0.5 0 % 0.5 0.4 25 % Other   0.9   0.5   80 % 1.4   0.5   180 % Subtotal (Mbbl/d) 28.9 28.1 3 % 25.0 28.0 -11 %   Total Production (MMcfe/d) 1,386   1,331   4 % 1,336   1,348   -1 %   Oil production in the Bakken Shale increased to an average of 11,400 barrels per day in the fourth quarter. This represents a 78 percent increase vs. the same period a year ago. The company's 2012 exit rate in December was slightly higher, at 11,600 barrels per day or 12,700 barrels of oil equivalent per day. For the full-year, Bakken oil production increased 98 percent over 2011, growing from an average of 4,800 barrels per day to an average of 9,500 barrels per day. Piceance production remained nearly flat year-over-year, despite a decrease in drilling and development. However, the basin's total volumes from more than 4,100 wells continue to drive approximately 60 percent of WPX's overall production. Natural gas production in the Marcellus Shale rose significantly in 2012. Fourth-quarter 2012 volumes of 71 MMcf/d were up 163 percent vs. a year ago. For the full-year, Marcellus production was up 320 percent vs. 2011 despite ongoing reliability issues with a third-party gathering system. At year-end 2012, approximately 30 MMcf/d of Marcellus gas remained curtailed by infrastructure constraints. WPX's total overall natural gas production increased 2 percent in 2012 to 1,105 MMcf/d, but declined 2 percent in the fourth quarter vs. the same period a year ago reflecting the company's capital discipline in reducing natural gas drilling and completion activity. Total NGL production increased 3 percent to 28,900 barrels per day in 2012 but declined in the fourth quarter by 11 percent due to reduced ethane recovery. The domestic net realized average price for natural gas, inclusive of hedges, was $3.38 per Mcf in 2012, down 22 percent from $4.32 per Mcf a year ago. The net realized average price for domestic oil, inclusive of hedges, was $85.58 per barrel in 2012, up slightly from $85.30 per barrel a year ago. The domestic net realized average price for NGL was $28.56 per barrel in 2012, down 29 percent from $40.17 per barrel a year ago. EXPENSES WPX's domestic expenses were approximately 15 percent lower for full-year 2012 than in 2011, primarily driven by lower gas management expenses. The following expenses represent per-unit expenses related to the company's domestic production. Domestic Expenses   Per-Unit Basis2012   2011 Lease operating $ 0.52 $ 0.51 Gathering, processing & transportation $ 1.04 $ 1.05 Taxes other than income $ 0.18 $ 0.24 General & administrative $ 0.56 $ 0.57 DD&A $ 1.93 * $ 1.89   * Reflects a decline in the 12-month average commodity price that isused to calculate the company's DD&A rate. The impact is $31 MM.CASH AND LIQUIDITY At Dec. 31, 2012, WPX had approximately $153 million in cash and cash equivalents – including $35 million for international operations. The company's total liquidity at the end of the year was approximately $1.65 billion, including an undrawn $1.5 billion revolving credit agreement. DEVELOPMENT ACTIVITY In 2012, WPX participated in 548 gross (367 net) wells in the United States, including 102 gross (53 net) wells in the fourth quarter. This figure represents the number of wells that were completed and began commercial delivery of production. WPX did not have any dry holes in 2012. Highlights for the company's operated wells in its primary areas are provided below, as well as those for WPX's new opportunities. 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 240 gross (209 net) wells in 2012, including 23 gross (19 net) in the fourth quarter. During 2012, WPX set new record times in the Piceance, drilling a well on its Valley acreage in 3.7 days and a well on its Highlands acreage in 7.7 days. In the oil-rich Bakken Shale, WPX completed 41 gross (27 net) wells in 2012, including 14 gross (10 net) in the fourth quarter. WPX continues to improve its drilling and completion costs in the Bakken, particularly with the shift to multi-well development pads. The company's recent Bakken well costs are down 10 to 20 percent through fewer drilling days and completion efficiencies. With the benefit of pad drilling, WPX drilled a recent well in 2013 – the Blackhawk 1-12 HW – in 25 days, which is the company's record in the basin. In the Marcellus Shale, WPX completed 54 gross (33 net) wells in 2012, including 11 gross (9 net) in the fourth quarter. The majority of this activity took place in Susquehanna County. At year-end, 25 gross wells were awaiting completion and nine wells were awaiting pipeline connection. Since the third quarter, WPX has shaved another half-day off its record drilling time in the Marcellus. The company's new best time is 10.8 days, which was achieved in January 2013. Also in 2013, on Jan. 22 WPX announced a natural gas discovery in western Colorado's Niobrara formation that was drilled, cored and completed in 2012. The Niobrara discovery well has registered an average production rate of 10.6 million cubic feet per day over its first 60 days, despite being substantially choked back. WPX has the lease rights to approximately 180,000 net acres of the Niobrara/Mancos shale play in western Colorado. Over time, the Niobrara discovery has the potential to more than double the company's proved, probable and possible (3P) reserves. 2012 PROVED RESERVES Yesterday, WPX announced that its domestic proved reserves at Dec. 31, 2012, were nearly 4.5 trillion cubic feet equivalent based on 2012 commodity price averages. The company added 634 Bcfe of proved domestic reserves in 2012 through drilling. Including international reserves of 159 billion cubic feet equivalent, WPX had total proved reserves of 4.65 Tcfe. WPX's press release about its 2012 proved reserves is available at www.wpxenergy.com, including an alternate scenario whereby 2012 domestic proved reserves were 19 percent higher at 5,339 Bcfe using 2011 SEC pricing. TODAY'S CONFERENCE CALL WPX management will discuss its 2012 results and 2013 outlook during a webcast starting at 10 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 (866) 510-0676. International callers should dial (617) 597-5361. The participant passcode for both lines is 69817966. A replay will be available on WPX's website for one year following the event. Form 10-K WPX plans to file its 2012 Form 10-K with the Securities and Exchange Commission later today. 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.aspx 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.                       WPX Energy, Inc.Consolidated (UNAUDITED)   2011 2012 (Dollars in millions)   1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Year   1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   YTD   Revenues: Product revenues: Natural gas sales $ 408 $ 423 $ 440 $ 423 $ 1,694 $ 357 $ 312 $ 331 $ 364 $ 1,364 Oil and condensate sales 52 83 84 93 312 106 122 118 145 491 Natural gas liquid sales   85       107       110       106       408     93       78       65       63       299   Total product revenues 545 613 634 622 2,414 556 512 514 572 2,154 Gas management 408 337 347 336 1,428 337 187 186 239 949 Net gain (loss) on derivatives not designated as hedges 2 6 12 9 29 14 71 (22 ) 15 78 Other   3       3       2       3       11     3       5       (1 )     1       8   Total revenues 958 959 995 970 3,882 910 775 677 827 3,189   Costs and expenses: Lease and facility operating 63 61 70 68 262 67 67 68 81 283 Gathering, processing and transportation 112 121 130 124 487 135 120 124 127 506 Taxes other than income 30 43 32 29 134 30 25 23 33 111 Gas management, including charges for unutilized pipeline capacity 417 344 359 351 1,471 355 194 200 247 996 Exploration 12 14 74 26 126 19 19 22 23 83 Depreciation, depletion and amortization 207 224 239 232 902 228 248 243 247 966 Impairment of producing properties and costs of acquired unproved reserves - - - 367 367 52 65 - 108 225 General and administrative 67 63 70 75 275 68 71 67 81 287 Other-net   1       4       (1 )     (4 )     -     5       (2 )     5       4       12   Total costs and expenses 909 874 973 1,268 4,024 959 807 752 951 3,469   Operating income (loss)498522(298)(142)(49)(32)(75)(124)(280)   Interest expense (49 ) (48 ) - (20 ) (117 ) (26 ) (26 ) (25 ) (25 ) (102 ) Interest capitalized 4 4 - 1 9 2 3 2 1 8 Investment income and other   6       6       7       7       26     10       8       7       5       30     Income (loss) from continuing operations before income taxes $ 10 $ 47 $ 29 $ (310 ) $ (224 ) $ (63 ) $ (47 ) $ (91 ) $ (143 ) $ (344 ) Provision (benefit) for income taxes   3       17       10       (104 )     (74 )   (25 )     (18 )     (28 )     (40 )     (111 ) Income (loss) from continuing operations$7$30$19$(206)$(150)$(38)$(29)$(63)$(103)$(233) Income (loss) from discontinued operations   (8 )     (2 )     (3 )     (129 )     (142 )   (2 )     23       2       (1 )     22   Net income (loss)$(1)$28$16$(335)$(292)$(40)$(6)$(61)$(104)$(211) Less: Net income attributable to noncontrolling interests   2       3       2       3       10     3       4       3       2       12   Net income (loss) attributable to WPX Energy$(3)   $25     $14     $(338)   $(302)$(43)   $(10)   $(64)   $(106)   $(223)                                                 Adjusted EBITDAXReconciliation to net income (loss): Net income (loss) $ (1 ) $ 28 $ 16 $ (335 ) $ (292 ) $ (40 ) $ (6 ) $ (61 ) $ (104 ) $ (211 ) Interest expense 49 48 - 20 117 26 26 25 25 102 Provision (benefit) for income taxes 3 17 10 (104 ) (74 ) (25 ) (18 ) (28 ) (40 ) (111 ) Depreciation, depletion and amortization (a) 207 224 239 232 902 228 248 243 247 966 Exploration expenses   12       14       74       26       126     19       19       22       23       83   EBITDAX270331339(161)779208269201151829 Impairment of producing properties and costs of acquired unproved reserves - - - 367 367 52 65 - 108 225 Unrealized MTM (gains) losses 18 (3 ) (5 ) 1 11 1 (60 ) 31 (4 ) (32 ) (Income) loss from discontinued operations   8       2       3       129       142     2       (23 )     (2 )     1       (22 ) Adjusted EBITDAX$296     $330     $337     $336     $1,299   $263     $251     $230     $256     $1,000     (a) Includes depreciation and amortization reported in general and administrative expense                       WPX Energy, Inc.Domestic Segment (UNAUDITED)   2011 2012 (Dollars in millions)   1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Year   1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   YTD   Revenues: Product revenues: Natural gas sales $ 404 $ 419 $ 436 $ 419 $ 1,678 $ 353 $ 307 $ 327 $ 359 $ 1,346 Oil and condensate sales 34 63 62 67 226 80 95 87 114 376 Natural gas liquid sales   84       106       109       105       404     92       77       65       62       296   Total product revenues 522 588 607 591 2,308 525 479 479 535 2,018 Gas management 408 337 347 336 1,428 337 187 186 239 949 Net gain (loss) on derivatives not designated as hedges 2 6 12 9 29 14 71 (22 ) 15 78 Other   2       2       1       2       7     3       4       (1 )     1       7   Total revenues 934 933 967 938 3,772 879 741 642 790 3,052   Costs and expenses: Lease and facility operating 58 55 63 59 235 61 60 60 70 251 Gathering, processing and transportation 112 121 130 124 487 135 120 124 125 504 Taxes other than income 27 37 26 23 113 25 18 17 27 87 Gas management, including charges for unutilized pipeline capacity 417 344 359 351 1,471 355 194 200 247 996 Exploration 11 13 74 25 123 14 16 19 23 72 Depreciation, depletion and amortization 202 219 233 226 880 222 242 236 239 939 Impairment of producing properties and costs of acquired unproved reserves - - - 367 367 52 65 - 108 225 General and administrative 64 61 67 71 263 65 68 64 76 273 Other-net   -       4       (2 )     (5 )     (3 )   5       -       4       3       12   Total costs and expenses 891 854 950 1,241 3,936 934 783 724 918 3,359   Operating income (loss)437917(303)(164)(55)(42)(82)(128)(307)   Interest expense (49 ) (48 ) - (20 ) (117 ) (26 ) (26 ) (25 ) (25 ) (102 ) Interest capitalized 4 4 - 1 9 2 3 2 1 8 Investment income and other   1       2       2       1       6     2       -       1       -       3     Income (loss) from continuing operations before income taxes$(1)   $37     $19     $(321)   $(266)$(77)   $(65)   $(104)   $(152)   $(398)                                                                                             Summary of Production Volumes(1) Natural gas (MMcf) 92,473 95,207 102,615 98,485 388,780 101,346 102,163 97,310 96,664 397,483 Oil (MBbls) 384 714 736 816 2,651 948 1,123 1,076 1,247 4,394 Natural gas liquids (MBbls) 2,425 2,527 2,567 2,539 10,057 2,746 2,779 2,613 2,254 10,392 Combined equivalent volumes (MMcfe)(2) 109,331 114,655 122,430 118,614 465,030 123,511 125,574 119,443 117,670 486,198   (1) Excludes production from our Arkoma Basin and Barnett Shale operations which were classified as discontinued operations and comprised less than 6 percent of our total production. (2) Oil and natural gas liquids were converted to MMcfe using the ratio of one barrel of oil, condensate or natural gas liquids to six thousand cubic feet of natural gas.                                                                                             Realized average price per unit, including the impact of hedges (1) Natural gas (per Mcf) $ 4.37 $ 4.41 $ 4.25 $ 4.25 $ 4.32 $ 3.48 $ 3.01 $ 3.35 $ 3.71 $ 3.38 Oil (per barrel) $ 87.13 $ 87.51 $ 84.75 $ 83.10 $ 85.30 $ 84.54 $ 83.89 $ 82.31 $ 90.76 $ 85.58 Natural gas liquids (per barrel) $ 34.84 $ 41.90 $ 42.54 $ 41.14 $ 40.17 $ 33.46 $ 27.96 $ 24.43 $ 28.12 $ 28.56   (1) Excludes our Arkoma Basin and Barnett Shale operations, which were classified as discontinued operations.                                               Expenses per Mcfe (1) Lease and facility operating $ 0.52 $ 0.48 $ 0.51 $ 0.51 $ 0.51 $ 0.50 $ 0.47 $ 0.51 $ 0.60 $ 0.52 Gathering, processing and transportation $ 1.02 $ 1.06 $ 1.06 $ 1.04 $ 1.05 $ 1.09 $ 0.95 $ 1.04 $ 1.06 $ 1.04 Taxes other than income $ 0.24 $ 0.33 $ 0.22 $ 0.19 $ 0.24 $ 0.20 $ 0.15 $ 0.14 $ 0.23 $ 0.18 Depreciation, depletion and amortization $ 1.84 $ 1.92 $ 1.90 $ 1.91 $ 1.89 $ 1.80 $ 1.93 $ 1.98 $ 2.02 $ 1.93 General and administrative $ 0.58 $ 0.53 $ 0.55 $ 0.60 $ 0.57 $ 0.52 $ 0.54 $ 0.53 $ 0.65 $ 0.56   (1) Excludes our Arkoma Basin and Barnett Shale operations, which were classified as discontinued operations.                                               Unutilized pipeline capacity Total unutilized pipeline capacity in gas management expense $ 10 $ 7 $ 9 $ 9 $ 35 $ 11 $ 12 $ 12 $ 11 $ 46                       WPX Energy, Inc.International Segment (UNAUDITED)   2011 2012 (Dollars in millions)   1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Year   1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   YTD   Revenues: Product revenues: Natural gas sales $ 4 $ 4 $ 4 $ 4 $ 16 $ 4 $ 5 $ 4 $ 5 $ 18 Oil and condensate sales 18 20 22 26 86 26 27 31 31 115 Natural gas liquid sales   1     1     1     1     4   1     1       -     1     3 Total product revenues 23 25 27 31 106 31 33 35 37 136 Gas management - - - - - - - - - - Net gain (loss) on derivatives not designated as hedges - - - - - - - - - - Other   1     1     1     1     4   -     1       -     -     1 Total revenues 24 26 28 32 110 31 34 35 37 137   Costs and expenses: Lease and facility operating 5 6 7 9 27 6 7 8 11 32 Gathering, processing and transportation - - - - - - - - 2 2 Taxes other than income 3 6 6 6 21 5 7 6 6 24 Gas management, including charges for unutilized pipeline capacity - - - - - - - - - - Exploration 1 1 - 1 3 5 3 3 - 11 Depreciation, depletion and amortization 5 5 6 6 22 6 6 7 8 27 Impairment of producing properties and costs of acquired unproved reserves - - - - - - - - - - General and administrative 3 2 3 4 12 3 3 3 5 14 Other-net   1     -     1     1     3   -     (2 )     1     1     - Total costs and expenses 18 20 23 27 88 25 24 28 33 110   Operating income (loss)6655226107427   Interest expense - - - - - - - - - - Interest capitalized - - - - - - - - - - Investment income and other   5     4     5     6     20   8     8       6     5     27   Income (loss) from continuing operations before income taxes$11   $10   $10   $11   $42$14   $18     $13   $9   $54                                                                                             Summary of Net Production Volumes (1) Natural gas (MMcf) 1,826 1,940 1,726 1,896 7,389 1,737 1,726 1,861 1,737 7,061 Oil (MBbls) 473 509 529 542 2,054 507 562 573 536 2,178 Natural gas liquids (MBbls) 44 47 55 37 183 45 44 45 47 181 Combined equivalent volumes (MMcfe)(2) 4,926 5,280 5,231 5,373 20,810 5,052 5,362 5,569 5,235 21,218   (1) Reflects approximately 69 percent of Apco's production (which corresponds to our ownership interest in Apco) and other minor directly held interests. (2) Oil and natural gas liquids were converted to MMcfe using the ratio of one barrel of oil, condensate or natural gas liquids to six thousand cubic feet of natural gas.                       WPX Energy, Inc.Reconciliation- Adjusted Income (Loss) from Continuing Operations (UNAUDITED)   2011 2012 (Dollars in millions, except per share amounts)   1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   Year   1st Qtr   2nd Qtr   3rd Qtr   4th Qtr   YTD   Income (loss) from continuing operations attributable to WPX Energy, Inc. available to common stockholders $ 5     $ 27     $ 17     $ (209 )   $ (160 ) $ (41 )   $ (33 )   $ (66 )   $ (105 )   $ (245 ) Income (loss) from continuing operations - diluted earnings per share $ 0.03     $ 0.13     $ 0.09     $ (1.06 )   $ (0.81 ) $ (0.21 )   $ (0.17 )   $ (0.33 )   $ (0.53 )   $ (1.23 ) Adjustments: Impairment of producing properties and costs of acquired unproved reserves $ - $ - $ - $ 367 $ 367 $ 52 $ 65 $ - $ 108 $ 225 Unrealized MTM (gains) losses $ 18     $ (3 )   $ (5 )   $ 1     $ 11   $ 1     $ (60 )   $ 31     $ (4 )   $ (32 ) Total adjustments $ 18 $ (3 ) $ (5 ) $ 368 $ 378 $ 53 $ 5 $ 31 $ 104 $ 193 Less tax effect for above items $ (7 )   $ 1     $ 2     $ (135 )   $ (138 ) $ (19 )   $ (2 )   $ (12 )   $ (38 )   $ (71 ) Adjusted income (loss) from continuing operations available to common stockholders $ 16     $ 25     $ 14     $ 24     $ 80   $ (7 )   $ (30 )   $ (47 )   $ (39 )   $ (123 ) Adjusted diluted earnings (loss) per common share $ 0.08     $ 0.13     $ 0.07     $ 0.12     $ 0.40   $ (0.04 )   $ (0.15 )   $ (0.23 )   $ (0.20 )   $ (0.62 ) Weighted-average shares -diluted - millions (1) 197.1 197.1 197.1 197.1 197.1 198.1 198.9 199.1 199.2 198.8   (1) For comparative purposes and to provide a more meaningful calculation for weighted average shares, we have assumed the amount of common stock issued at December 31, 2011 to be outstanding for all 2011 periods presented.     WPX Energy, Inc.Consolidated Statement of Operations(Unaudited)                   Three months ended December 31,Year ended December 31,2012     20112012     2011(Millions, except per share amounts) Revenues: Product revenues: Natural gas sales $ 364 $ 423 $ 1,364 $ 1,694 Oil and condensate sales 145 93 491 312 Natural gas liquid sales   63     106     299     408   Total product revenues 572 622 2,154 2,414 Gas management 239 336 949 1,428 Net gain (loss) on derivatives not designated as hedges 15 9 78 29 Other   1     3     8     11   Total revenues 827 970 3,189 3,882 Costs and expenses: Lease and facility operating 81 68 283 262 Gathering, processing and transportation 127 124 506 487 Taxes other than income 33 29 111 134 Gas management, including charges for unutilized pipeline capacity 247 351 996 1,471 Exploration 23 26 83 126 Depreciation, depletion and amortization 247 232 966 902 Impairment of costs of producing properties and costs of acquired unproved reserves 108 367 225 367 General and administrative 81 75 287 275 Other - net   4     (4 )   12     -   Total costs and expenses 951 1,268 3,469 4,024   Operating income (loss) (124 ) (298 ) (280 ) (142 ) Interest expense (25 ) (20 ) (102 ) (117 ) Interest capitalized 1 1 8 9 Investment income and other   5     7     30     26   Income (loss) from continuing operations before income taxes (143 ) (310 ) (344 ) (224 ) Provision (benefit) for income taxes   (40 )   (104 )   (111 )   (74 ) Income (loss) from continuing operations (103 ) (206 ) (233 ) (150 ) Income (loss) from discontinued operations   (1 )   (129 )   22     (142 ) Net income (loss) (104 ) (335 ) (211 ) (292 ) Less: Net income attributable to noncontrolling interests   2     3     12     10   Net income (loss) attributable to WPX Energy $ (106 ) $ (338 ) $ (223 ) $ (302 )   Amounts attributable to WPX Energy, Inc.:Basic and diluted earnings (loss) per common share: Income (loss) from continuing operations $ (0.53 ) $ (1.06 ) $ (1.23 ) $ (0.81 ) Income (loss) from discontinued operations   (0.00 )   (0.65 )   0.11     (0.72 ) Net income (loss) $ (0.53 ) $ (1.71 ) $ (1.12 ) $ (1.53 )   Weighted-average shares 199.2 197.1 198.8 197.1     WPX Energy, Inc.Consolidated Balance Sheet(Unaudited)       December 31, 2012December 31, 2011ASSETS(Dollars in millions, except per share amounts) Current assets: Cash and cash equivalents $ 153 $ 526 Accounts receivable, net of allowance of $11 at December 31, 2012 and $ 13 at December 31, 2011 443 509 Deferred income taxes 17 - Derivative assets 58 506 Inventories 66 73 Other   35     60   Total current assets 772 1,674 Investments 145 125 Properties and equipment (successful efforts method of accounting) 13,339 12,199 Less: Accumulated depreciation, depletion and amortization   (4,923 )   (3,977 ) Properties and equipment, net 8,416 8,222 Derivative assets 2 10 Other noncurrent assets   121     401   Total assets $ 9,456   $ 10,432     LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 509 $ 702 Accrued and other current liabilities 203 186 Deferred income taxes - 116 Derivative liabilities   14     152   Total current liabilities 726 1,156 Deferred income taxes 1,401 1,556 Long-term debt 1,508 1,503 Derivative liabilities 1 7 Asset retirement obligations 316 283 Other noncurrent liabilities 133 168   Equity: Stockholders' equity: Preferred Stock (100 million shares authorized at $0.01 par value; no shares issued) - - Common Stock (2 billion shares authorized at $0.01 par value; 199.3 million shares issued at December 31, 2012 and 197.1 million shares issued at December 31, 2011) 2 2 Additional paid-in-capital 5,487 5,457 Accumulated deficit (223 ) - Accumulated other comprehensive income   2     219   Total stockholders' equity 5,268 5,678 Noncontrolling interests in consolidated subsidiaries   103     81   Total equity   5,371     5,759   Total liabilities and equity $ 9,456   $ 10,432           WPX Energy, Inc.Consolidated Statement of Cash Flows(Unaudited)   Year ended December 31,20122011(Millions)Operating Activities Net income (loss) $ (211 ) $ (292 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation, depletion and amortization 973 951 Deferred income tax benefit (160 ) (176 ) Provision for impairment of properties and equipment (including certain exploration expenses) 288 694 Amortization of stock-based awards 28 5 (Gain) loss on sale of assets (42 ) (1 ) Cash provided (used) by operating assets and liabilities: Accounts receivable 68 (100 ) Inventories 7 3 Margin deposits and customer margin deposits payable (5 ) (18 ) Other current assets 7 (11 ) Accounts payable (128 ) 131 Accrued and other current liabilities 12 10 Changes in current and noncurrent derivative assets and liabilities (32 ) 8 Other, including changes in other noncurrent assets and liabilities   (11 )   2   Net cash provided by operating activities   794     1,206     Investing Activities Capital expenditures (a) (1,521 ) (1,572 ) Proceeds from sale of assets 310 15 Purchases of investments (2 ) (12 ) Other   9     13   Net cash used in investing activities   (1,204 )   (1,556 )   Financing Activities Proceeds from common stock 3 - Proceeds from long-term debt 6 1,502 Proceeds from revolver debt 50 - Payments of revolver debt (50 ) - Contribution from noncontrolling interest 10 - Excess tax benefit of stock based awards 13 - Net increase in notes payable to Williams - 159 Net changes in Williams' net investment - (777 ) Revolving debt facility costs - (30 ) Other   5     (15 ) Net cash provided by (used in) financing activities   37     839     Net increase (decrease) in cash and cash equivalents (373 ) 489 Cash and cash equivalents at beginning of period   526     37   Cash and cash equivalents at end of period $ 153   $ 526     ________ (a) Increase to properties and equipment $ (1,449 ) $ (1,641 ) Changes in related accounts payable   (72 )   69   Capital expenditures $ (1,521 ) $ (1,572 ) WPX EnergyMedia Contact:Kelly Swan, 539-573-4944orInvestor Contact:David Sullivan, 539-573-9360