WPX

WPX Energy Inc

Energy


Presented:01/27/2017
Price:$14.28
Cap:$4.88B
Current Price:$9.43
Cap:$5.29B

Presented

Date01/27/2017
Price$14.28
Market Cap$4.88B
Ent Value$6.73B
P/E RatioN/A
Book Value$9.87
Div Yield0%
Shares O/S341.50M
Ave Daily Vol8,366,997
Short IntN/A

Current

Price$9.43
Market Cap$5.29B
WPX Energy, Inc. engages in the development and exploration of oil, natural gas liquid, and gas properties. Its basin portfolio includes Permian, Williston, and San Juan. The company was founded on April 19, 2011 and is headquartered in Tulsa, OK.

Publicly traded companies mentioned herein: Concho Resources Inc (CXO), Diamondback energy Inc (FANG), Plains All American Pipeline LP (PAA), WPX Energy Inc (WPX)

Highlights

WPX Energy (WPX) is “extremely” levered (operationally and financially), but the presenter is bullish on improvement across the board in onshore E&P (and the Permian, in particular) and is long at $14/ share. He doesn’t think rig counts can grow fast enough to take care of incremental demand near-term, and WPX should work “even at just $55 oil”. There are risks around M&A, as was seen with the Panther acquisition in early January (2017), but looking out to 2019 he sees WPX trading extremely cheaply at an EV/ EBITDA multiple of 3.5-4x. The E&P has “huge” leverage on G&A, which is why the company is under-earning at this time, and as production grows EBITDA can potentially triple. Given the setup, he intends to hold the long position for at least the next 12-24 months.

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Idea Discussion

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