Wednesday, May 14, 2014

WPX Energy Inc: Higher Natural Gas Prices Solve Most Problems


Since its spinoff from Williams Companies (NYSE: WMB  ) , WPX Energy (NYSE: WPX  ) has struggled with low natural gas prices and weak production numbers. Surprising to some in the market, the company reported a large first-quarter profit that smashed low estimates even though the company didn't achieve any surprise production numbers. In fact, the production numbers beat forecasts while still showing year-over-year and sequential declines.

The results for WPX Energy were solid based on factors beyond the company's control and show how the market is bigger than any management team. Despite the shift of capital spending to oil, WPX Energy still obtains nearly 80% of production from natural gas. Along with a company like Chesapeake Energy (NYSE: CHK  ) , higher natural gas prices will solve most of the ailments that these companies have faced in the last couple of years.

Read the full article here.


Disclosure: Long WPX. Please review the disclaimer page for more details. 



No comments: