TULSA — WPX Energy Inc. will form a master limited partnership to cash in on its mature natural gas properties in Colorado.
The new firm, WPX Energy Partners LP, will be launched next year with an initial public offering of common units, WPX announced late Thursday. It is expected to own producing assets in Colorado's Piceance Basin.
WPX's stock gained 2 cents on Friday, closing at $18.40 a share.
Jake Dollarhide, CEO of Longbow Asset Management Co. in Tulsa, said the move should bolster WPX, which is carrying a lot of debt like many other small exploration and production companies.
The company also is trying to move away from natural gas in light of continued low commodity prices.
“They're doing their best,” Dollarhide said. “They're being very aggressive in trying to get to even 30 percent liquids.”
He said selling units in a new MLP will allow WPX to monetize mature assets, providing cash to fund ongoing operations and repay debt.
“First and foremost they're looking to raise money,” Dollarhide said.