What is WPX Energy Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, WPX Energy's Probability of Financial Distress (%) is 50.00%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of WPX Energy's Probability of Financial Distress (%)
For the Oil & Gas E&P subindustry, WPX Energy's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
WPX Energy's Probability of Financial Distress (%) Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, WPX Energy's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where WPX Energy's Probability of Financial Distress (%) falls into.
WPX Energy Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | 0.00 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 50.00% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
WPX Energy (WPX Energy) Business Description
Traded in Other Exchanges
N/A
Address
3500 One Williams Center, Tulsa, OK, USA, 74172-0172
WPX Energy, based in Tulsa, Oklahoma, is an unconventional oil and gas producer with acreage in the Williston Basin (Bakken), the Permian Basin, and the Rockies. At the end of 2019, the company reported net proven reserves of 528 million barrels of oil equivalent. Net production averaged 167 thousand barrels of oil equivalent per day in 2019, at a ratio of 79% liquids and 21% natural gas.
Executives
| Bryan K Guderian |
officer: EVP Business Development |
ONE WILLIAMS CENTER, SUITE 3800, TULSA OK 74172 |
| J Kevin Vann |
officer: EVP CFO |
ONE WILLIAMS CENTER, SUITE 3800, TULSA OK 74172 |
| Faulkner Stephen L Jr |
officer: VP Controller and CAO |
3500 ONE WILLIAMS CENTER, TULSA OK 74172 |
| Encap Energy Capital Fund X, L.p. |
director, 10 percent owner |
9651 KATY FREEWAY, SUITE 600, HOUSTON TX 77024 |
| Encap Partners Gp, Llc |
director, 10 percent owner |
9651 KATY FREEWAY, SUITE 600, HOUSTON TX 77024 |
| Felix Energy Investments Ii, Llc |
director, 10 percent owner |
1530 16TH STREET, SUITE 500, DENVER CO 80202 |
| Felix Investments Holdings Ii, Llc |
director, 10 percent owner |
1530 16TH STREET, SUITE 500, DENVER CO 80202 |
| Karl F Kurz |
director |
DEVON ENERGY CORP., 333 W. SHERIDAN AVE, OKLAHOMA CITY OK 73102 |
| Swanson Douglas E Jr |
director |
1100 LOUISIANA, SUITE 4900, HOUSTON TX 77002 |
| D Martin Phillips |
director |
1100 LOUISIANA STREET, SUITE 4900, HOUSTON TX 77002 |
| Kimberly S Lubel |
director |
P.O. BOX 696000, SAN ANTONIO TX 78269-6000 |
| Kelt Kindick |
director |
DEVON ENERGY CORP, 333 W SHERIDAN AVE, OKLAHOMA CITY OK 73102 |
| Valerie Williams |
director |
C/O OMNICOM GROUP INC., 280 PARK AVENUE, NEW YORK NY 10017 |
| John A Carrig |
director |
ONE WILLIAMS CENTER, SUITE 3800, TULSA OK 74172 |
| Robert Herdman |
director |
ONE WILLIAMS CENTER, SUITE 3800, TULSA OK 74172 |
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