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WPX ENERGY, INC.

2019 ANNUAL REPORT

F E L L O W S T O C K H O L D E R S

WPX Energy, Inc. | 2019 Annual Report 1

We do a lot of great things at WPX

and throughout our industry as we

make the production of energy safer,

smarter and more sustainable. Today,

energy remains widely accessible

and vastly affordable for millions and

millions of people on the planet.

We wholeheartedly embrace our

responsibility — socially and financially —

to deliver meaningful results. Consider

what we’ve accomplished since we

became an independent company,

completing more than $10 billion of M&A

activity to shift our business to higher-

margin, higher-return products and areas.

We transformed our company in a way

that’s second to none in our sector. In fact,

transforming is quite possibly what we

do best. We’re decisive forward thinkers,

savvy creators of shareholder value and

innovative developers of infrastructure.

In 2019, WPX shares closed the year

up 21 percent vs. an average decline

of 13 percent for our peer group.

We also increased net income by 70

percent to $256 million and raised cash

flow from operations by 42 percent

to $1.26 billion, even as commodity

price realizations declined.

Our oil sales topped $2 billion for the first

time. Producing a single barrel of oil is

a marvel in and of itself when you think

about the application of science and

the coordination of complex logistics.

In 2019, we produced nearly 38 million

barrels, up 27 percent vs. the prior year.

Our natural gas production increased

32 percent, enough to meet the energy

needs of some 1.2 million homes per day.

This was aided by reduced flaring and

increased gas capture from the millions

of dollars we invested in new pipes,

compression and processing capacity.

We also kept our capital spending right

where we said it would be — about

$1.3 billion — and generated free

cash flow of $101 million in the

back half of the year. Free cash flow

is a non-GAAP measure generally

representing cash flow from operations

excluding working capital changes

less incurred capital expenditures.

With a new year, however, comes new

challenges. As I write this letter, factors

beyond our control continue to evolve.

The turbulence in global energy demand

and the financial markets requires a

thoughtful response. The strength

of our balance sheet, our revolver

capacity, our commodity hedges,

and our track record for managing

difficult days gives us an edge.

Richard E. Muncrief Chairman and CEO

We embrace our

responsibility — socially

and financially — to deliver

meaningful results.

HISTORIC TIMES

What we’re witnessing in early 2020 is

without question — historic. The effects

of COVID-19 on the global economy,

combined with the geopolitical showdown

for market share in oil, have been swift,

severe and seemingly unprecedented.

I can tell you that we are significantly better

positioned than most of our peers to work

through these events. In 2020, we have

95,978 barrels per day of oil hedged with

fixed price swaps at a weighted average

price of $56.27 per barrel and another

20,000 bbl/d with fixed price collars at

a weighted average floor of $53.33.

Our team also has an experienced

hand when it comes to withstanding

headwinds. We’ve overcome market

challenges before by staying disciplined,

maintaining positive relationships with

our service providers, cutting capital,

and smartly adjusting our drilling

plans. We will do the same in 2020.

WPX, today, has become an

outperformance story specifically

because of this very approach. We also

paid down nearly $300 million of debt

last year and reshaped our debt towers

saving roughly $4 million per year in

interest. Our next significant maturity

($406 million) does not occur until 2023.

Fitch upgraded WPX to investment-grade

in March 2020 following the close of

our acquisition of Felix Energy in a cash

and stock transaction. Moody’s and S&P

also reaffirmed our credit ratings while

many in our sector were downgraded

following the collapse in oil prices and

the economic impact from COVID-19.

We benefitted from the timing of our

acquisition, purchasing Felix during a

down cycle in the M&A market. This is

typical of our approach to either get

ahead of the market — as we did when we

purchased RKI Exploration in 2015 — or

to seize opportunities in a trough.

With the acquisition, WPX reached

150,000 barrels per day of oil. This

provides revenue assurance and

equips WPX to remain laser-focused

on generating free cash flow.

All of this is driven by an effective strategy,

a bias for action and being disciplined

enough to wait for home runs when

singles and doubles are perhaps more

at the ready. We also possess the power

of a world-class portfolio in the two best

oil producing basins in the Lower 48.

Our success is driven

by our discipline, an

effective strategy and a

bias for action.

S T O C K H O L D E R L E T T E R

2 WPX Energy, Inc. | 2019 Annual Report

SHREWDLY OPPORTUNISTIC

If you’re interested in the consensus

on WPX, the analysts say that we’re

positioning ourselves as a larger,

long-term player; are widely respected

and recognized for execution; and

are adept at taking advantage of the

M&A environment as it shifts.

That characterization is accurate,

with plenty of evidence from 2019

as we closed the year with 29 buy

ratings, 3 holds and 1 sell. Of course,

the seeds that produce fruit have to

be planted, grown and harvested.

Timing is everything, right?

Some of our 2019 success traces

back to 2017 and 2018 when we

leveraged our oil and gas volumes to

acquire minority interests in Permian

pipelines. We dedicated certain

volumes on the Whitewater and Oryx II

pipes while investing approximately

$125 million in the projects.

We monetized those investments

for half a billion dollars in 2019 while

retaining our flow assurance and

saving roughly $40 million in additional

capital requirements. Our remaining

infrastructure boasts other attractive

possibilities, too, through our various

natural gas and water systems.

We’re also known for our ability to

accelerate and execute on our plans.

In 2014, we laid out a plan to triple our

cash operating margins over five years

by shifting how and where we deployed

capital. We accomplished that goal

nearly two years ahead of schedule.

In February 2019, we introduced a

framework for returning capital to

shareholders starting in 2021. Before

the end of October, we had bought

back 5.7 million shares of our common

stock. Given the opportunity in our

stock price in early 2020, we also

repurchased additional shares.

We also unveiled a new five-year vision for

shareholders in late 2019 that enhances

what WPX offers investors, including our

goals to further reduce our leverage down

to 1x, reducing our base decline rate

and increasing our free cash flow yield.

Meeting these five-year targets is the

benchmark for any investment we

make. Weeks after we debuted this

vision, we inked the Felix acquisition,

which is accretive on all important

metrics — earnings per share, cash

flow per share, return on capital

employed and net asset value.

We’re known for our ability

to execute on our plans

ahead of schedule.



RISK MANAGEMENT

Disclosure and transparency aren’t

buzzwords. They’re foundational for any

company that prizes its reputation and

ability to attract talent. More than ever,

they speak to the underlying strength of

your value proposition to stakeholders.

I take that to heart. Our executive

team takes it to heart. Our board takes

it to heart. And our employees take

it to heart. At WPX, we want to show

leadership in the activities that are

material to our business. Our charge is

to earn and retain your trust. Our track

record speaks to that commitment.

Nearly a decade ago, WPX was one

of the first energy producers to

voluntarily disclose details about

hydraulic fracturing on a national

registry (FracFocus) even before states

required this data. Since then, we’ve

disclosed data for more than 2,500

of our natural gas and oil wells.

In the same vein, we published our first

ESG report last year. It wasn’t expansive,

but it was a place to start and a way to

engage in the broader discussion about

responsible energy development in the

midst of changes in climate, investor

expectations and public sentiment.

Our second edition, available on our

website, covers topics ranging from our

relationship with indigenous peoples

to how we inspect for archeological

artifacts prior to drilling. We also

joined a Dark Skies Initiative in 2019

to support research by the McDonald

Observatory in West Texas.

Our 2020 focus will entail more

formalization of our internal ESG

structure and more comprehensive

development of our quantitative

data reporting. It also means

continuing to intentionally evolve

the culture of the company and the

behaviors that contribute to it.

That’s why we rewrote our company’s

core values, emphasizing our desire

to constantly analyze outcomes to

deliver improvement. There is progress.

In the Permian Basin, we increased

the amount of produced water we

recycled by 57 percent last year.

Proactively discussing the tact

we take to run our business and

manage its associated risks should

increase our appeal to generalist and

socially conscious investors. We also

believe there’s value in working with

others, which is why we’ve joined a

coalition of 19 other companies in

the Permian Strategic Partnership.


Our 2020 focus will entail

more formalization of our

internal ESG structure.


ETHICS & INNOVATION

Everything we’re accomplishing

starts with the courage and creativity

of our people. They’re delivering

incredible things, many that never

make a press release but are essential

to our business. At the end of 2019,

women comprised 37 percent of our

workforce; minorities 22 percent.

In the Williston Basin, we recently

celebrated five straight years without an

employee lost-time-accident. That’s no

small task, coupled with the challenges

of navigating North Dakota winters.

On the technical side, we deployed a

fiber-optic cable and several downhole

pressure gauges on a well in the Permian

to monitor different reservoirs. This

technology allows us to actively assess

fracture treatments while experimenting

with different design variables.

We also have a new innovation team

staffed with reservoir, business

intelligence and data science engineers.

One of these individuals pioneered

our drone program, which has grown

to eight certified pilots in just a year.

This gives us more eyes to identify

fugitive emissions, allowing us to

make repairs faster than before.

Our community engagement, which is

employee-led vs. company directed,

was recognized with the 2019

Community Impact Award presented

by the Oklahoma Business Ethics

Consortium. This is the second award

OK Ethics has presented to WPX.

The organization found that our

effectiveness is driven by the “strong

collaborative bond between the company

and its employees, with structure and

programs that encourage community

service and charity, while giving

employees the freedom to plug in at a

place or places of their choosing.”

This bottom-up approach inspires

initiative and helps incubate new ideas

civically and in the workplace. At WPX,

relationships are core to who we are, and

we’re always listening to our employees,

investors and neighbors. It’s important

to us, and we know it’s important to you.

Richard E. Muncrief

Chairman and CEO

March 30, 2020


At WPX, relationships are

core to who we are.


DIRECTORS

JOHN A. CARRIGIndependent Director

Former President & COO

ConocoPhillips

ROBERT K. HERDMANIndependent Director

Managing Director

Kalorama Partners LLC

KELT KINDICKLead Independent Director

Advisory Partner & Former CFO

Bain & Company, Inc.

KARL F. KURZIndependent Director

Former Managing Director

CCMP Capital Advisors LLC

HENRY E. LENTZIndependent Director

Former Managing Director

Lazard Fréres & Co.

WILLIAM G. LOWRIE Independent Director

Former Deputy CEO, BP Amoco PLC

Retiring from WPX Board in May

KIMBERLY S. LUBELIndependent Director

Former President, CEO and Chairman

CST Brands, Inc.

RICHARD E. MUNCRIEF, CHAIRMANInside Director

CEO

WPX Energy, Inc.

D. MARTIN PHILLIPSIndependent Director

Managing Partner

EnCap Investments

DOUGLAS E. SWANSON, JR.Independent Director

Managing Partner

EnCap Investments

VALERIE M. WILLIAMSIndependent Director

Former Partner

Ernst & Young, LLP

DAVID F. WORKIndependent Director

Former Executive

BP Amoco Corp.

SENIOR LEADERSHIP

RICHARD E. MUNCRIEFChief Executive Officer

DENNIS C. CAMERONExecutive Vice President and

General Counsel

CLAY M. GASPARPresident and

Chief Operating Officer

BRYAN K. GUDERIANExecutive Vice President,

Business Development

ANGELA E. KOUPLENSr. Vice President,

Administration & CIO

J. KEVIN VANNExecutive Vice President and

Chief Financial Officer

COMMITTEES

Audit

John Carrig (Chair)

Karl Kurz

Valerie Williams

Compensation

Henry Lentz (Chair)

Robert Herdman

Kimberly Lubel

Douglas Swanson

Nominating, Governance, Environmental, Public Policy

Kelt Kindick (Chair)

Kimberly Lubel

D. Martin Phillips

David Work

B O A R D O F D I R E C T O R S A N D S E N I O R L E A D E R S H I P


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Annual Meeting

Stockholders are invited to our annual meeting at

9:30 a.m. Central Daylight Time on May 21, 2020,

Robert J. LaFortune Studio, Tulsa Performing

Arts Center, 110 E 2nd St, Tulsa, OK 74103.

Internet

Company information is available at www.wpxenergy.com.

Inquiries

A stockholder may obtain a free copy of our 2019 Annual

Report or Form 10-K, which was filed with the SEC, by

contacting our investor relations group. Call David Sullivan

at 539-573-9360 or 855-979-2012. Direct your written

inquiries to investor relations at our headquarters

address below.

Corporate Headquarters

3500 One Williams Center, Tulsa, OK 74172

Phone: 855-979-2012

Transfer Agent and Registrar

Computershare

P.O. Box 30170, College Station, TX 77842-3170

800-884-4225 or 781-575-2879

Website: www.computershare.com

Send overnight mail to:

Computershare

211 Quality Circle, Suite 210, College Station, TX 77845

Auditors

Ernst & Young, LLP

1700 One Williams Center, Tulsa, OK 74172

Corporate Governance

Our Code of Business Conduct, the charters for our Board

Committees, and our Corporate Governance Guidelines

are available on our website at www.wpxenergy.com.

Equal Opportunity

The Company is an Equal Employment Opportunity

(EEO) employer and does not discriminate in any

employer/employee relations based on race, color,

religion, sex, sexual orientation, national origin, age,

genetic information, disability or veteran’s status.

Forward-Looking Statements

Certain matters discussed in this report, except

historical information, include forward-looking

statements. Although WPX believes such statements

are based on reasonable assumptions, no assurance

can be given that every objective will be achieved.

For more detail, see the disclosure beginning

on page 23 of the Form 10-K in this report.

WPX Energy Securities

WPX Energy common stock began trading on the

New York Stock Exchange on Jan. 3, 2012,

under the ticker symbol WPX.

On March 30, 2020, there were 559,364,806 shares of

common stock issued, outstanding and entitled to vote.

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