WPX Energy Scales 52-Week High on Streamlining Initiatives

Shares of WPX Energy, Inc. WPX scaled a new 52-week high of $13.70 in Wednesday's trading session before closing slightly lower at $13.55. The stock has delivered a one-year return of about 81.6%.

Over the past 52 weeks, WPX Energy's shares have ranged from a low of $2.53 on Jan 20, 2016 to a high of $13.70 on Sep 7, 2016. The average volume of shares traded over the last three months is approximately 9.7 million.

What's Driving the Stock?

Due to the volatile commodity price environment, WPX Energy's management has decided to streamline its portfolio, improve the existing cost structure and focus on core areas. The company plans to lower costs by reducing drilling time, efficient use of pad design and completion activities, and negotiating lower costs for vendor goods and services.

As a result of these initiatives, cash operating expenses of the company per barrel of oil equivalent are expected in the range of $9.25–$10.75, down from its earlier projection of $10.00–$11.50. These initiatives will help the company boost its margins.

WPX ENERGY INC Price and Consensus

WPX ENERGY INC Price and Consensus | WPX ENERGY INC Quote

Further, WPX Energy is focused on building a strong portfolio of assets which will continue to boost its performance. The company continues to evaluate existing assets and divest underperforming ones. Ongoing investments in its core assets in the Delaware, Williston and San Juan basins will help the company enhance production and build its reserves. WPX Energy has narrowed its drilling and completion budget guidance for 2016 to the range of $400 million to $450 million from the earlier forecast of $350 million to $450 million.

WOX Energy's focus on oil has started to yield results. The company's projected drillable locations in the oil-rich Delaware Basin have increased from 3,600 to nearly 5,500. This will further support oil-focused production growth. Oil revenues in the second quarter accounted for nearly 80% of WPX Energy's total product revenue.

Zacks Rank & Key Picks

WPX Energy carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the same space include Matador Resources Company MTDR, EXCO Resources Inc. XCO and Halcón Resources Corporation HK. Matador Resources sports a Zacks Rank #1 (Strong Buy), while both EXCO Resources and Halcón Resources carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

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