WPX Energy Inc. is offering $500 million of 2028 notes priced at 100% of par at 5.875% with proceeds earmarked for debt repurchases.

On June 3, the Tulsa, Okla.-based company commenced cash tender offers to purchase up to $500 million 2022, 2023 and 2024 maturities, which sit at about $70 million, $400 million and $650 million outstanding, respectively. The tender offers will expire June 30.

WPX said in a statement it intends to use proceeds from the 2028 notes offering and, if necessary, any other sources of available funds, which may include borrowings under its senior secured credit facility, to fund its cash tender offers. The company has indicated 2023 bonds will take priority, followed by 2022 and 2024, according to analysts with Tudor, Pickering, Holt & Co. (TPH).

At current strip pricing, TPH forecast WPX has about $990 million of cumulative free cash flow (FCF) through 2024 with $1.13 billion maturities over the same period.

“Assuming [the] tender goes the distance, cumulative debt maturities through 2024 of about $630 million compared to FCF screens more manageable,” TPH analysts wrote in a June 4 research notes.

Reversal of shut-ins

WPX Energy also announced a reversal of shut-in oil production in a filing with the U.S. Securities and Exchange Commission on June 3 citing a “recent recovery in oil prices.”

In the filing, WPX said 45,000 gross (30,000 net) bbl/d of production that had been shut in for May has begun to be brought back online. Further, the company now plans to exit 2020 with six rigs comprised of five in the Permian’s Delaware Basin and one in the Williston Basin. 

WPX, however, did not disclose a decision on its two-scenario capex plan for 2020.

The first scenario calls for a third-quarter restart of completions and $1.1 billion to $1.2 billion of full-year capex for an exit rate of 140,000 bbl/d of oil. Meanwhile, the second scenario includes a fourth-quarter restart, $900 million to $1 billion of capex, and an exit rate of 130,000 bbl/d of oil. 

“Our model more closely aligns with the first scenario, as we envision a July restart to completions and model fiscal-year capex of $1.12 billion for an exit oil rate of 140,400 bbl/d of oil,” TPH analysts wrote in the note.

Onshore