How Are Oil Companies Coping With Slump In Crude? WPX CEO Explains

The recent decline in oil prices is severely affecting oil exploration and production firms. Shares of WPX Energy Inc WPX, which has major oil positions in Williston Basin in North Dakota and the San Juan Basin in the Southwest, have declined by more than 50 percent in the last six months alone.

Rick Muncrief, WPX Energy president & CEO, was on CNBC Monday to discuss how oil companies are coping with the slump in oil prices.

Cutting Costs

"This energy renaissance we have been enjoying here in the country – both natural gas and crude oil – is truly phenomenal," Muncrief said. "And so I think companies in our industry in general, what we have done is we have done a nice job I think in adjusting. You have seen [...] cutting Capex. That's the first thing we have done and companies are, I think, being very prudent in slowing the capital spend down."

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Muncrief continued, "And in our company for instance, we have plans to go to the end of the year with planned of $1.7 billion. We've new capital projects. We have peeled that back to about $725 million – so a pretty drastic cut. But with our company, it was really a good opportunity for us to get some things right structurally and to address capital allocation. And that's exactly what we are doing."

Oil Prices To Remain Under Pressure In Near-Term

On whether the slump in oil prices is likely to continued, Muncrief said, "Well, I think prices will be under pressure for the next couple of months. You have several factors: you have the storage; you have some of the new productions still coming on. However, I think a lot of companies are deferring their completions until later in the year – maybe even the first part of 2016 – and so we will see how it all plays out.

"Refinery maintenance, we are entering that season. Second-half of the year, I think looks a little more robust on pricing front. But, sure, near-term I think we are going to see some pressure," Muncrief concluded.