WPX adds partner to accelerate development of Trail Ridge properties
TULSA, Oklahoma -- WPX Energy has closed an agreement to jointly develop its Trail Ridge properties with TRDC LLC, a subsidiary of Houston-based G2X Energy. The Trail Ridge development is part of WPX' s position in western Colorado' s Piceance Basin Highlands. WPX will remain as operator.
"We' re bringing value forward by accelerating the development of what has been a quiet part of our Piceance holdings," said Rick Muncrief, WPX president and CEO. "This is a creative way to generate returns that are among the best in our portfolio," he added.
WPX received approximately $40 million cash for 49% of its working interest in approximately 100 proved developed producing (PDP) Trail Ridge wells.
The working interest sold represents 27 Bcf of proved developed reserves and 46 Bcf of proved undeveloped reserves.
TRDC also has committed to a $170 million drilling carry on nearly 400 future wells and will make additional investments for its 49% working interest.
WPX will pay 28% of the Trail Ridge development and receive 51% of the production and reserves until TRDC has completed its $170 million funding commitment. This structure will generate returns for WPX comparable to its oil plays during the carry period.
Currently, the parties plan to jointly develop eight wells in 2014; 25 wells in 2015, 50 wells in 2016 and 100 wells per year in 2017 and beyond. WPX has approximately 1,300 remaining Trail Ridge drilling locations.
The joint development agreement is for the Williams Fork and Iles formations and does not include deeper opportunities in the Mancos and Niobrara shales.