FORT WORTH, Texas—Upstream players cannot rely on commodity prices for a successful future. Instead, they will need to focus on internal operations and concentrate on the most prospective plays, Clay Gaspar, senior vice president and COO of WPX Energy Inc. (NYSE: WPX), told Hart Energy’s DUG Permian Basin Conference & Exhibition on April 4.

The Tulsa, Okla.-based firm has been through significant upheaval and a rebuilding process in recent years, a period Gaspar called WPX 1.0.

“We have made tremendous progress” in reorganizing the company and focusing on three plays—the Williston Basin in North Dakota, New Mexico’s San Juan Basin and the Permian Basin in Texas and New Mexico,” he said.

Gaspar rated the Delaware Basin “our crown jewel asset” because of a large acreage position acquired at attractive prices. He called management’s changes “a cultural lesson… we don’t want to ever do that again.”

Oil & Gas Investor named WPX Energy CEO Rick Muncrief its executive of the year in its annual excellence awards competition. Spun off by midstream operator The Williams Cos. Inc. (NYSE: WMB) in 2012, the firm’s holdings at the time were a hodgepodge of legacy natural gas assets just as gas prices were dropping.

A 2014 management change brought Muncrief to the helm from ConocoPhillips Co. (NYSE: COP). The new CEO implemented a corporate makeover that included the January bolt-on acquisition of Panther Energy, which added 18,000 acres to the WPX Delaware Basin portfolio. The firm now holds some 120,000 acres in the play rated by many industry observers as the most active in the world.

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Now, the firm is in a WPX 2.0 phase.

“The challenge is operational and financial discipline,” Gaspar said. The next step, which he called “beyond 2.0,” will prepare WPX for whatever happens to commodity prices, he said. The company will rely primarily on free cash flow to fuel its growth.

“We are opportunity rich, we have amazing opportunity,” he said, noting management wants to be ready to take advantage of any opportunity regardless of whatever the markets may be doing.

Commodity price declines “have been unnecessarily destructive in the past” because managements overused debt and allowed internal inefficiencies that left E&P firms vulnerable, Gaspar said. “You can never figure it out. You always have to be ready, looking for the next opportunity.”

WPX has moved to lock in service and supply contractors at favorable rates as part of its emphasis on cost discipline. He pointed out some 70% of the company’s drilling and completion costs for 2017 are already locked in.

“We have been focused on securing services since the second quarter of 2016 to prepare for the activity ramp. Some contracts go through 2018 while others have options to extend past 2017.”

The cost containment drive has even led to direct deals with sand mines. For frack jobs, WPX hires the horsepower, then provides its own sand to the service company to cut costs, he said. The firm also has made extensive use of hedges, which Gaspar said creates financial certainty for an active, long-term drilling program.

“We want to be as lean and mean as we possibly can,” Gaspar added. He noted producers have opportunities of scale when they are focused on attractive plays—and WPX has emerged as one of the bigger players in the Delaware.

Paul Hart can be reached at pdhart@hartenergy.com, or @twopdhart.