WILLISTON, N.D. – Oil and gas producer WPX Energy Inc would add one or two drilling rigs in North Dakota if WTI oil prices stabilized around $65 per barrel, Chief Executive Rick Muncrief told Reuters on Friday.
The forecast falls in line with U.S. shale peers, several of whom have pointed to $65 to $70 per barrel as the range in which they would add rigs and ramp up production.
Indeed, Muncrief’s comments add to a body of evidence that the United States is now the world’s swing oil producer, able to ramp production up or down quickly.
For WPX specifically, Muncrief’s outlook is part of a broader strategy to show Wall Street that after years of bloated spending, cash flow and cost management are top priorities. It’s a focus that appears to be working: WPX’s stock is up 15 percent so far this year, compared with a nearly 3 percent rise in the S&P 500.
“If we saw some stability in oil prices around the $65 WTI level, we would probably be more apt to add rigs,” Muncrief said in an interview on the first anniversary of taking the top job at WPX.
He previously was a senior executive at Continental Resources Inc, and helped drill one of the first horizontal wells in North Dakota in 1987.
“Hopefully later in the year, we’ll see what commodity prices do, we’ll start drilling again.”
WPX currently has one drilling rig in North Dakota, where it is the state’s eleventh-largest oil producer, pumping roughly 38,000 barrels per day.
The company also operates in Colorado, where it is the largest natural gas producer, and in New Mexico’s San Juan basin.
Earlier this year, amidst the downturn in oil prices, Muncrief laid off 8 percent of WPX’s workforce, most of whom were community affairs and other support staff. He moved most of the company’s technical staff to its Tulsa headquarters.
“We just had extra people that for a smaller independent (oil producer) we just couldn’t justify,” Muncrief said.
Yet amidst those cuts, WPX is also hiring, planning to add 40 to 50 engineers and geologists.
“All jobs are not equal,” Muncrief said. “What you’re seeing is a natural transition to a more technical, operationally driven organization.”
After the hires, WPX will have 500 employees – the most anywhere – in Tulsa, followed by Colorado, New Mexico and North Dakota.
(Reporting by Ernest Scheyder; Editing by Terry Wade and Phil Berlowitz)
This article was from Reuters and was legally licensed through the NewsCred publisher network.