Investor News

12.20.12 Concho Resources Inc. Completes Non-Core Asset Divestiture

MIDLAND, Texas--(BUSINESS WIRE)--Dec. 20, 2012-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") today announced that it has closed its previously announced divestiture of certain non-core producing properties located primarily in the Permian Basin of West Texas and Southeast New Mexico to Legacy Reserves LP (NASDAQ: LGCY) for cash consideration of approximately $520 million, subject to customary post-closing adjustments.

Proceeds from the non-core divestiture will be used to reduce outstanding borrowings under the Company's credit facility. Giving effect to these proceeds, the Company's pro forma outstanding borrowings under its credit facility as of September 30, 2012 would have been $284 million.

Tim Leach, Concho's Chairman, CEO and President, commented, "This non-core asset divestiture completes our financing strategy for the Three Rivers acquisition and represents good value for mature, producing assets. Going forward, we are well positioned to execute our growth strategy targeting a deeper inventory of high rate-of-return drilling opportunities in the Delaware Basin, New Mexico Shelf and Midland Basin."

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at www.concho.com.

Forward-Looking Statements and Cautionary Statements

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's anticipated financial condition and results, future production, and future liquidity These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

12.18.12 Concho Resources Inc. Announces Participation in Upcoming Conference

MIDLAND, Texas--(BUSINESS WIRE)--Dec. 18, 2012-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the Goldman Sachs Global Energy Conference 2013 on Tuesday, January 8th at 9:00 AM EST. The presentation will be available on Concho's website, www.concho.com.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

12.10.12 Concho Resources Inc. Schedules Fourth Quarter 2012 Conference Call for February 21, 2013

MIDLAND, Texas--(BUSINESS WIRE)--Dec. 10, 2012-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") will host a conference call on Thursday, February 21, 2013, at 9:00 a.m. CST to discuss its fourth quarter financial and operating results. Earnings are expected to be released after the market closes on Wednesday, February 20, 2013.

Individuals who would like to participate should call (866) 271-5140 (passcode: 10112096) approximately 15 minutes before the scheduled conference call time. To access the live audio webcast, please visit the investor relations section of the Company's website, www.concho.com. A replay of the call will also be available, by dialing (888) 286-8010 (passcode: 61682005) or via the Company's website, for approximately 30 days following the conference call.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are primarily focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

11.28.12 Concho Resources Inc. Announces Participation in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)--Nov. 28, 2012-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the Capital One Southcoast 2012 Energy Conference on Tuesday, December 4th at 8:40 AM CST and the Bank of America Merrill Lynch 2012 Leveraged Finance Conference on Wednesday, December 5th at 9:30 AM EST. The presentations will be available on Concho's website, www.concho.com. Additionally, the presentations will be webcast and can be accessed through the Company's website.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

11.20.12 Concho Resources Announces Management Change

MIDLAND, Texas--(BUSINESS WIRE)--Nov. 20, 2012-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") today announced that Steven H. Pruett, Senior Vice President of Corporate Development, has left the Company to pursue other career interests.

Tim Leach, Concho's Chairman, CEO and President, commented, "Steve has been a dedicated employee of Concho and we wish him the best in his future endeavors. We presently do not intend to search for a replacement for Steve, as I am confident that we have the right team to execute on our long-term plan."

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

11.07.12 Concho Resources Inc. Reports Third Quarter 2012 Financial and Operating Results, Provides 2013 Capital Budget Detail and Guidance and Agrees to Sell Non-Core Assets

MIDLAND, Texas--(BUSINESS WIRE)--Nov. 7, 2012-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") today reported financial and operating results for the three and nine months ended September 30, 2012. Highlights for the three and nine months ended September 30, 2012 include:

  • Production of 7.8 million barrels of oil equivalent ("MMBoe") for the third quarter of 2012, a 24% increase over the third quarter of 2011 and a 14% increase over the second quarter of 2012
  • Net income of $6.0 million, or $0.06 per diluted share, for the third quarter of 2012, as compared to net income of $356.2 million, or $3.44 per diluted share, in the third quarter of 2011
  • Adjusted net income1 (non-GAAP) of $99.8 million, or $0.96 per diluted share, for the third quarter of 2012, as compared to $117.8 million, or $1.14 per diluted share, for the third quarter of 2011
  • EBITDAX2 (non-GAAP) of $387.2 million for the third quarter of 2012, an 11% increase over the third quarter of 2011

1 Adjusted net income (non-GAAP) is comparable to securities analyst estimates. For an explanation of how we calculate adjusted net income (non-GAAP) and a reconciliation of net income (GAAP) to adjusted net income (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

2 For an explanation of how we calculate and use EBITDAX (non-GAAP) and a reconciliation of net income (GAAP) to EBITDAX (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

Third Quarter 2012 Financial Results

Production for the third quarter of 2012 totaled 7.8 MMBoe (4.6 million barrels of oil ("MMBbls") and 19.1 billion cubic feet of natural gas ("Bcf")), an increase of 24% as compared to 6.3 MMBoe (3.9 MMBbls and 14.7 Bcf) produced in the third quarter of 2011.

Tim Leach, Concho's Chairman, CEO and President, commented, "The third quarter was another record quarter in terms of production and cash flow. It also marked a shift for Concho to a drilling program that is now primarily horizontal. The operational and capital efficiencies realized through our horizontal program are real and have expanded our access to new high rate-of-return drilling opportunities. Nowhere is this more evident than in the Delaware Basin, where our results continue to improve. Looking forward to 2013, we are planning to allocate over half of our capital budget to the Delaware Basin and expect this core area to provide a significant source of organic growth. Lastly, we have signed a definitive agreement to sell non-core assets, which will help streamline our business and reduce our overall leverage."

For the third quarter of 2012, the Company reported net income of $6.0 million, or $0.06 per diluted share, as compared to net income of $356.2 million, or $3.44 per diluted share, for the third quarter of 2011. The Company's third quarter 2012 results were impacted by several non-cash items including: (1) a $151.6 million unrealized mark-to-market loss on commodity derivatives and (2) $0.7 million of leasehold abandonments. Excluding these items and their tax effects, the third quarter 2012 adjusted net income (non-GAAP) was $99.8 million, or $0.96 per diluted share. Excluding similar non-cash items and their tax impact, adjusted net income (non-GAAP) for the third quarter of 2011 was $117.8 million, or $1.14 per diluted share. For a description and a reconciliation of net income (GAAP) to adjusted net income (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

EBITDAX was $387.2 million in the third quarter of 2012, an increase of 11% from $349.6 million reported in the third quarter of 2011. For a description and a reconciliation of net income (GAAP) to EBITDAX (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

Oil and natural gas sales for the third quarter of 2012 increased 9% when compared to the third quarter of 2011. This increase was attributable to a 3% increase in the Company's unhedged realized oil price and a 24% increase in production in the third quarter of 2012 compared to the third quarter of 2011, which was partially offset by a 43% decrease in the Company's unhedged realized natural gas price.

Oil and natural gas production expense for the third quarter of 2012, including oil and natural gas taxes, totaled $96.7 million, or $12.39 per barrel of oil equivalent ("Boe"), a 7% decrease per Boe from the third quarter of 2011. This decrease was due primarily to lower lease operating expenses and workover costs, which averaged $7.15 per Boe in the third quarter of 2012 as compared to $7.42 per Boe in the third quarter of 2011 and to lower oil and natural gas taxes, which averaged $5.24 per Boe in the third quarter of 2012 as compared to $5.90 per Boe in the third quarter of 2011. The decrease in lease operating expenses per Boe over the third quarter 2011 is primarily due to the third quarter of 2011 including the effects of a $1.50 per Boe of costs from prior periods.

Depreciation, depletion and amortization expense ("DD&A") for the third quarter of 2012 totaled $157.6 million, or $20.19 per Boe, a 10% increase per Boe from the third quarter of 2011.

General and administrative expense ("G&A") for the third quarter of 2012 totaled $34.9 million, or $4.47 per Boe, as compared to $22.9 million, or $3.62 per Boe, in the third quarter of 2011. Cash G&A for the third quarter of 2012 totaled $26.9 million and stock-based compensation (non-cash) totaled $8.0 million. The increase in per Boe expense for the third quarter of 2012 over the third quarter of 2011 was primarily due to a 52% increase in absolute G&A expenses reflecting increased staffing across the Company, and was partially offset by a 24% increase in production.

The Company's cash flow from operating activities (GAAP) was $845.6 million for the first nine months of 2012, as compared to $779.0 million for the first nine months of 2011, an increase of 9%. Adjusted cash flows (non-GAAP), which are cash flows from operating activities (GAAP) adjusted for settlements paid on derivatives not designated as hedges, were $838.2 million for the first nine months of 2012, as compared to $701.2 million for the first nine months of 2011, an increase of 20%. For a description of the use of adjusted cash flows (non-GAAP) and for a reconciliation of cash flows from operating activities (GAAP) to adjusted cash flows (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

In the third quarter of 2012, the Company collected net cash receipts on derivatives not designated as hedges of $16.1 million and the non-cash unrealized mark-to-market loss on derivatives not designated as hedges was $151.6 million. In comparison, the Company made net cash payments of $1.8 million on derivatives not designated as hedges and reported a $387.0 million non-cash unrealized mark-to-market gain on derivatives not designated as hedges in the third quarter of 2011. To better understand the impact of the Company's derivative positions and their impact on the statements of operations, please see the "Summary Production and Operating Data" and "Derivatives Information" tables at the end of this press release.

Operations

For the quarter ended September 30, 2012, the Company commenced the drilling of or participated in a total of 213 gross wells (164 operated), 55 of which had been completed as producers, 156 of which were in progress at September 30, 2012 and 2 of which were plugged and abandoned. In addition, during the third quarter of 2012, the Company completed 133 wells that were drilled prior to the third quarter of 2012.

Currently, the Company is operating 28 drilling rigs; 5 of these rigs are drilling Yeso wells on the New Mexico Shelf, 13 are drilling in the Texas Permian and 10 are drilling in the Delaware Basin. Included in the 28 operated rigs, the Company is currently running 14 horizontal drilling rigs, including 10 in the Delaware Basin, 1 in the Texas Permian and 3 on the New Mexico Shelf.

New Mexico Shelf

During the third quarter of 2012, the Company drilled or participated in 88 wells (59 operated) on its New Mexico Shelf assets, which included both Yeso and Lower Abo wells, with a 100% success rate on the 19 wells that had been completed by September 30, 2012. In addition, during the third quarter of 2012, the Company completed 44 wells that were drilled prior to the third quarter of 2012.

Texas Permian

During the third quarter of 2012, the Company drilled or participated in 83 wells (83 operated) on its Texas Permian assets with a 100% success rate on the 30 wells that had been completed by September 30, 2012. In addition, during the third quarter of 2012, the Company completed 58 wells that were drilled prior to the third quarter of 2012.

Delaware Basin

During the third quarter of 2012, the Company drilled or participated in 42 wells (22 operated) with a 100% success rate on the 6 wells that had been completed by September 30, 2012. Of the 42 wells drilled, all were horizontal, which included 27 Bone Spring sand wells, 6 Avalon shale wells, 6 Wolfcamp shale wells and 3 Delaware sands wells. In addition, during the third quarter of 2012, the Company completed 31 wells that were drilled prior to the third quarter of 2012. The Company's net production in the third quarter of 2012 from horizontal Delaware Basin wells averaged approximately 16,000 barrels of oil equivalent per day ("Boepd"), an increase of 15% over the second quarter of 2012 and an 80% increase over the third quarter of 2011.

Non-Core Asset Sale

The Company today announced that it has signed a definitive agreement with Legacy Reserves LP (NASDAQ: LGCY) to sell certain non-core properties located primarily in the Permian Basin of West Texas and Southeast New Mexico for $520 million. The sale is expected to close by the end of the fourth quarter of 2012 and is subject to customary closing conditions and purchase price adjustments.

During the third quarter of 2012, production from these divestiture properties was approximately 5,800 Boepd (approximately 60% oil). RBC Richardson Barr served as the Company's advisor in connection with the sale.

Credit Facility

In October 2012, the Company amended its credit facility, increasing the borrowing base to $3.0 billion and maintaining the aggregate lender commitments at $2.5 billion. At September 30, 2012, the Company had borrowings outstanding under the credit facility of $804 million, and the availability under the credit facility was approximately $1.7 billion.

2013 Capital Budget

Concho's capital budget for 2013 is approximately $1.6 billion, which the Company believes will yield production in the range of 32.9 to 34.3 MMBoe. This budget contemplates operating an average of 30 drilling rigs for 2013 of which 15 will be drilling horizontally. The Company estimates that its 2013 capital budget can substantially be funded with after-tax cash flow from operations assuming (i) a NYMEX crude oil price of $85.00 per barrel and a NYMEX natural gas price of $4.00 per thousand cubic feet of natural gas ("Mcf") for the Company's unhedged production and (ii) that the Company achieves the mid-point of its 2013 production guidance. The Company intends to monitor both the direction of commodity prices and the costs of goods and services and may adjust its capital budget, and resultant estimated production and cash flows, as conditions warrant.

Of the approximately $1.6 billion capital budget, approximately $1.4 billion is dedicated to the Company's drilling program - approximately 21% will be dedicated to drilling on its New Mexico Shelf assets, approximately 54% will be dedicated to drilling horizontal projects on its Delaware Basin assets and approximately 25% will be dedicated to drilling its Texas Permian assets. Approximately 67% of the Company's drilling budget will be directed towards horizontal drilling.

The Company expects to drill or participate in a total of 631 gross wells (487 operated), which includes 186 Yeso wells, 175 Delaware Basin wells and 236 Wolfberry wells.

The remaining capital will be allocated between leasehold acquisition, geological and geophysical costs ("G&G") and facilities.

2013 Guidance

Production:
Oil equivalent (MMBoe)
32.9 - 34.3

% Oil

60% - 62%





Price differentials to NYMEX:


(excluding the effects of hedging)


Oil (Bbl)
93% - 95%

Natural gas (Mcf)
140% - 160%




Operating costs and expenses:


Lease operating expense:



Direct lease operating expense ($/Boe)
$7.50 - $8.00


Oil & natural gas taxes (% of oil and natural gas revenue)
8.25%





G&A expense:



Cash G&A expense ($/Boe)
$3.25 - $3.75


Non-cash stock based compensation ($/Boe)
$1.10 - $1.20





DD&A expense ($/Boe)
$20.00 - $22.00





Exploration, abandonments and G&G ($/Boe)
$1.50 - $2.50





Cash interest rates:



$300 million senior notes due 2017
8.63%


$600 million senior notes due 2021
7.00%


$600 million senior notes due 2022
6.50%


$600 million senior notes due 2022
5.50%


$700 million senior notes due 2023
5.50%


Remainder of debt
LIBOR + (150 - 250 bps)

Non-cash interest expense ($ in millions)
$13.5 - $15.5





Income taxes:
38%


Percent deferred of total taxes
75% - 85%




Capital expenditures ($ in billions)
$1.6


Management Additions

During the third quarter, the Company added two new officers to its management team.

Ms. Mona D. Ables, Vice President of Land

Prior to joining the Company, Ms. Ables served as East Texas Land Manager for Samson Resources Company. She began her career in 1981 with Exxon Company, USA and later served as District Landman for Matador Petroleum Company. Ms. Ables is a graduate of the University of Texas Permian Basin with a BBA in Petroleum Land Management.

Mr. Ben C. Rodgers, Vice President and Treasurer

Prior to joining the Company, Mr. Rodgers served as a Vice President in the Leveraged Finance Group in the Investment Bank at J.P. Morgan Securities and worked in the Advisory Services division at Ernst & Young. He received a BBA in Finance from Texas A&M University and a MBA with a concentration in Finance from the McCombs School of Business at the University of Texas at Austin.

Derivative Update

The Company maintains an active hedging program and added to its derivative positions in October 2012. Please see the "Derivatives Information" tables at the end of this press release for more detailed information about the Company's current derivative positions.

Conference Call Information

The Company will host a conference call on Thursday, November 8, 2012 at 9:00 a.m. Central Time to discuss the third quarter 2012 financial and operating results and the 2013 capital and budget guidance. Interested parties may listen to the conference call via the Company's website at www.concho.com or by dialing (866) 713-8562 (passcode: 92214608). A replay of the conference call will be available on the Company's website or by dialing (888) 286-8010 (passcode: 81275071).

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at www.concho.com.

Forward-Looking Statements and Cautionary Statements

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's future financial position, operations, performance, production growth, returns, divestitures, capital expenditure budget, the timing and estimated proceeds of the closing of the sale of the non-core properties, oil and natural gas reserves, number of identified drilling locations, drilling program, derivative activities, costs and other guidance. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the "Risk Factors" section of the Company's most recent Form 10-K and 10-Q filings and risks relating to declines in the prices we receive for our oil and natural gas; uncertainties about the estimated quantities of reserves; risks related to the integration of acquired assets; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; drilling and operating risks; the adequacy of our capital resources and liquidity; risks related to the concentration of our operations in the Permian Basin; the results of our hedging program; weather; litigation; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; uncertainties about our ability to replace reserves and economically develop our current reserves; competition in the oil and natural gas industry; and other important factors that could cause actual results to differ materially from those projected.

Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Concho Resources Inc.
Consolidated Balance Sheets
Unaudited

September 30, December 31,
(in thousands, except share and per share amounts) 2012 2011
Assets
Current assets:




Cash and cash equivalents
$ 291

$ 342

Accounts receivable, net of allowance for doubtful accounts:





Oil and natural gas

212,037


213,921


Joint operations and other

225,225


153,746

Derivative instruments

35,793


1,698

Deferred income taxes

-


28,793

Prepaid costs and other
23,522
12,523



Total current assets
496,868
411,023
Property and equipment:




Oil and natural gas properties, successful efforts method

9,724,422


7,347,460

Accumulated depletion and depreciation
(1,542,056 )
(1,116,545 )


Total oil and natural gas properties, net

8,182,366


6,230,915

Other property and equipment, net
97,946
59,203


Total property and equipment, net
8,280,312
6,290,118
Funds held in escrow

-


17,394
Deferred loan costs, net

80,843


65,641
Intangible asset - operating rights, net

32,263


33,425
Inventory

27,664


19,419
Noncurrent derivative instruments

6,560


7,944
Other assets
8,507
4,612
Total assets
$ 8,933,017
$ 6,849,576
Liabilities and Stockholders' Equity
Current liabilities:




Accounts payable:





Trade
$ 18,206

$ 23,341


Related parties

227


11

Bank overdrafts

40,524


39,241

Revenue payable

142,388


146,061

Accrued and prepaid drilling costs

340,245


293,919

Derivative instruments

2,015


56,218

Deferred income taxes

11,402


-

Other current liabilities
145,161
142,686



Total current liabilities
700,168
701,477
Long-term debt

3,600,983


2,080,141
Deferred income taxes

1,148,383


1,002,295
Noncurrent derivative instruments

2,141


32,254
Asset retirement obligations and other long-term liabilities

98,904


52,670
Commitments and contingencies



Stockholders' equity:




Common stock, $0.001 par value; 300,000,000 authorized; 104,666,566 and 103,756,222





shares issued at September 30, 2012 and December 31, 2011, respectively

105


104

Additional paid-in capital

1,973,774


1,925,757

Retained earnings

1,415,276


1,058,874

Treasury stock, at cost; 81,393 and 55,990 shares at September 30, 2012 and December 31,





2011, respectively
(6,717 )
(3,996 )



Total stockholders' equity
3,382,438
2,980,739
Total liabilities and stockholders' equity
$ 8,933,017
$ 6,849,576
Concho Resources Inc.
Consolidated Statements of Operations
Unaudited









Three Months Ended
Nine Months Ended




September 30,
September 30,
(in thousands, except per share amounts) 2012 2011 2012 2011










Operating revenues:








Oil sales
$ 407,062

$ 332,659

$ 1,182,022

$ 957,833

Natural gas sales
90,485
121,809
256,126
303,707


Total operating revenues
497,547
454,468
1,438,148
1,261,540
Operating costs and expenses:








Oil and natural gas production

96,666


84,050


276,505


217,285

Exploration and abandonments

6,958


3,498


27,335


4,624

Depreciation, depletion and amortization

157,621


115,730


434,940


304,899

Accretion of discount on asset retirement obligations

1,420


751


3,455


2,170

Impairments of long-lived assets

-


-


-


76

General and administrative (including non-cash based compensation of $7,959 and









$4,673 for the three months ended September 30, 2012 and 2011, respectively,









and $21,434 and $13,866 for the nine months ended September 30, 2012 and









2011, respectively

34,873


22,873


94,228


66,883

(Gain) loss on derivatives not designated as hedges
135,415
(385,222 )
(109,542 )
(296,962 )


Total operating costs and expenses
432,953
(158,320 )
726,921
298,975
Income from operations
64,594
612,788
711,227
962,565
Other income (expense):








Interest expense

(51,337 )

(32,881 )

(129,073 )

(84,201 )

Other, net
(3,114 )
(2,503 )
(4,917 )
(4,590 )


Total other expense
(54,451 )
(35,384 )
(133,990 )
(88,791 )
Income from continuing operations before income taxes

10,143


577,404


577,237


873,774

Income tax expense
(4,155 )
(221,199 )
(220,835 )
(334,000 )
Income from continuing operations

5,988


356,205


356,402


539,774
Income from discontinued operations, net of tax
-
-
-
91,188
Net income
$ 5,988
$ 356,205
$ 356,402
$ 630,962
Basic earnings per share:








Income from continuing operations
$ 0.06

$ 3.47

$ 3.46

$ 5.27

Income from discontinued operations, net of tax
-
-
-
0.88


Net income
$ 0.06
$ 3.47
$ 3.46
$ 6.15

Weighted average shares used in basic earnings per share
103,292
102,733
103,088
102,517
Diluted earnings per share:








Income from continuing operations
$ 0.06

$ 3.44

$ 3.43

$ 5.21

Income from discontinued operations, net of tax
-
-
-
0.88


Net income
$ 0.06
$ 3.44
$ 3.43
$ 6.09

Weighted average shares used in diluted earnings per share
104,040
103,696
103,898
103,613
Concho Resources Inc.
Consolidated Statements of Cash Flows
Unaudited

Nine Months Ended






September 30,
(in thousands) 2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES:



Net income
$ 356,402

$ 630,962

Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation, depletion and amortization

434,940


304,899


Impairments of long-lived assets

-


76


Accretion of discount on asset retirement obligations

3,455


2,170


Exploration and abandonments, including dry holes

15,224


807


Non-cash compensation expense

21,434


13,866


Deferred income taxes

204,804


312,199


Loss on sale of assets, net

285


3,129


Gain on derivatives not designated as hedges

(109,542 )

(296,962 )


Discontinued operations

-


(82,118 )


Other non-cash items

9,066


309

Changes in operating assets and liabilities, net of acquisitions:






Accounts receivable

(54,752 )

(125,091 )



Prepaid costs and other

(14,894 )

(8,420 )



Inventory

(8,528 )

1,204



Accounts payable

(4,919 )

(34,334 )



Revenue payable

(3,673 )

86,199



Other current liabilities
(3,666 )
(29,909 )




Net cash provided by operating activities
845,636
778,986
CASH FLOWS FROM INVESTING ACTIVITIES:




Capital expenditures on oil and natural gas properties

(2,334,246 )

(1,046,208 )

Additions to other property and equipment

(47,489 )

(29,954 )

Proceeds from the sale of assets

4,419


196,252

Funds held in escrow

17,394


-

Settlements paid on derivatives not designated as hedges
(7,485 )
(77,835 )




Net cash used in investing activities
(2,367,407 )
(957,745 )
CASH FLOWS FROM FINANCING ACTIVITIES:




Proceeds from issuance of debt

3,856,500


2,079,000

Payments of debt

(2,336,000 )

(1,949,500 )

Exercise of stock options

8,062


7,661

Excess tax benefit from stock-based compensation

18,522


23,222

Payments for loan costs

(23,926 )

(24,466 )

Purchase of treasury stock

(2,721 )

(1,946 )

Bank overdrafts
1,283
44,578




Net cash provided by financing activities
1,521,720
178,549




Net decrease in cash and cash equivalents

(51 )

(210 )
Cash and cash equivalents at beginning of period
342
384
Cash and cash equivalents at end of period
$ 291
$ 174
SUPPLEMENTAL CASH FLOWS:




Cash paid for interest and fees, net of $73 capitalized interest in 2011
$ 115,731

$ 60,752

Cash paid for income taxes
$ 18,569

$ 15,610






Concho Resources Inc.
Summary Production and Price Data
Unaudited

The following table sets forth summary information from our continuing and discontinued operations
concerning our production and operating data for the periods indicated:































Three Months Ended
Nine Months Ended






September 30,
September 30,
2012 2011 2012 2011












Production and operating data:








Net production volumes:









Oil (MBbl)

4,619


3,869


13,053


10,618


Natural gas (MMcf)

19,122


14,652


50,970


38,966


Total (MBoe)

7,806


6,311


21,548


17,112













Average daily production volumes:









Oil (Bbl)

50,207


42,054


47,639


38,894


Natural gas (Mcf)

207,848


159,258


186,022


142,732


Total (Boe)

84,848


68,597


78,643


62,682













Average prices:









Oil, without derivatives (Bbl)
$ 88.13

$ 85.98

$ 90.56

$ 91.10


Oil, with derivatives (Bbl) (a)
$ 91.56

$ 83.90

$ 89.91

$ 82.75


Natural gas, without derivatives (Mcf)
$ 4.73

$ 8.31

$ 5.03

$ 7.80


Natural gas, with derivatives (Mcf) (a)
$ 4.75

$ 8.74

$ 5.04

$ 8.24


Total, without derivatives (Boe)
$ 63.74

$ 72.01

$ 66.74

$ 74.28


Total, with derivatives (Boe) (a)
$ 65.81

$ 71.73

$ 66.39

$ 70.12













Operating costs and expenses per Boe:









Lease operating expenses and workover costs
$ 7.15

$ 7.42

$ 7.30

$ 6.69


Oil and natural gas taxes
$ 5.24

$ 5.90

$ 5.53

$ 6.10


Depreciation, depletion and amortization
$ 20.19

$ 18.34

$ 20.18

$ 17.94


General and administrative
$ 4.47

$ 3.62

$ 4.37

$ 3.91













(a)

Includes the effect of cash settlements received from (paid on) commodity derivatives not designated as hedges and reported in operating costs and expenses.
The following table reflects the amounts of cash settlements received from (paid on) commodity derivatives not designated as hedges that were included in
computing average prices with derivatives and reconciles to the amount in (gain) loss on derivatives not designated as hedges as reported in the statements of operations:



























Three Months Ended
Nine Months Ended






September 30,
September 30,


(in thousands) 2012 2011 2012 2011














Gain (loss) on derivatives not designated as hedges:










Cash receipts from (payments on) oil derivatives
$ 15,859

$ (8,051 )
$ (8,374 )
$ (88,679 )



Cash receipts from natural gas derivatives

280


6,263


889


17,468



Cash payments on interest rate derivatives

-


-


-


(6,624 )



Unrealized mark-to-market gain (loss) on commodity and interest rate derivatives


(151,554 )
387,010
117,027
374,797



Gain (loss) on derivatives not designated as hedges
$ (135,415 )
$ 385,222
$ 109,542
$ 296,962


The presentation of average prices with derivatives is a non-GAAP measure as a result of including the cash receipts from (payments on) commodity derivatives that are presented in gain (loss) on derivatives not designated as hedges in the statements of operations. This presentation of average prices with derivatives is a means by which to reflect the actual cash performance of our commodity derivatives for the respective periods and presents oil and natural gas prices with derivatives in a manner consistent with the presentation generally used by the investment community.

The following table sets forth summary information from our continuing operations concerning production and operating data for the periods indicated:













Three Months Ended
Nine Months Ended






September 30,
September 30,
2012 2011 2012 2011












Production and operating data:








Net production volumes:









Oil (MBbl)

4,619


3,869


13,053


10,501


Natural gas (MMcf)

19,122


14,652


50,970


38,929


Total (MBoe)

7,806


6,311


21,548


16,989













Average daily production volumes:









Oil (Bbl)

50,207


42,054


47,639


38,465


Natural gas (Mcf)

207,848


159,258


186,022


142,596


Total (Boe)

84,848


68,597


78,643


62,231













Average prices:









Oil, without derivatives (Bbl)
$ 88.13

$ 85.98

$ 90.56

$ 91.21


Oil, with derivatives (Bbl) (a)
$ 91.56

$ 83.90

$ 89.91

$ 82.77


Natural gas, without derivatives (Mcf)
$ 4.73

$ 8.31

$ 5.03

$ 7.80


Natural gas, with derivatives (Mcf) (a)
$ 4.75

$ 8.74

$ 5.04

$ 8.25


Total, without derivatives (Boe)
$ 63.74

$ 72.01

$ 66.74

$ 74.26


Total, with derivatives (Boe) (a)
$ 65.81

$ 71.73

$ 66.39

$ 70.06













Operating costs and expenses per Boe:









Lease operating expenses and workover costs
$ 7.15

$ 7.42

$ 7.30

$ 6.72


Oil and natural gas taxes
$ 5.24

$ 5.90

$ 5.53

$ 6.07


Depreciation, depletion and amortization
$ 20.19

$ 18.34

$ 20.18

$ 17.95


General and administrative
$ 4.47

$ 3.62

$ 4.37

$ 3.94













(a)

Includes the effect of cash settlements received from (paid on) commodity derivatives not designated as hedges and reported in operating costs and expenses.
The following table reflects the amounts of cash settlements received from (paid on) commodity derivatives not designated as hedges that were included in
computing average prices with derivatives and reconciles to the amount in (gain) loss on derivatives not designated as hedges as reported in the statements of operations:



























Three Months Ended
Nine Months Ended






September 30,
September 30,


(in thousands) 2012 2011 2012 2011














Gain (loss) on derivatives not designated as hedges:










Cash receipts from (payments on) oil derivatives
$ 15,859

$ (8,051 )
$ (8,374 )
$ (88,679 )



Cash receipts from natural gas derivatives

280


6,263


889


17,468



Cash payments on interest rate derivatives

-


-


-


(6,624 )



Unrealized mark-to-market gain (loss) on commodity and interest rate derivatives



(151,554 )

387,010


117,027


374,797



Gain (loss) on derivatives not designated as hedges
$ (135,415 )
$ 385,222
$ 109,542
$ 296,962
















The presentation of average prices with derivatives is a non-GAAP measure as a result of including the cash receipts from (payments on) commodity derivatives that are presented in gain (loss) on derivatives not designated as hedges in the statements of operations. This presentation of average prices with derivatives is a means by which to reflect the actual cash performance of our commodity derivatives for the respective periods and presents oil and natural gas prices with derivatives in a manner consistent with the presentation generally used by the investment community.








Concho Resources Inc.
Supplemental Non-GAAP Financial Measures
Unaudited

The following tables provide information that the Company believes may be useful to investors who follow the practice of some industry analysts who adjust reported company net income and cash flows from operating activities to exclude certain non-cash items.

Adjusted Net Income

The following table provides a reconciliation of net income (GAAP) to adjusted net income (non-GAAP) for the three and nine months ended September 30, 2012 and 2011.











Three Months Ended
Nine Months Ended




September 30,
September 30,
(in thousands, except per share amounts) 2012 2011 2012 2011










Net income - as reported
$ 5,988

$ 356,205

$ 356,402

$ 630,962










Adjustments for certain non-cash items:








Unrealized (gain) loss on commodity and interest rate derivatives

151,554


(387,010 )

(117,027 )

(374,797 )

Impairments of long-lived assets

-


-


-


76

Leasehold abandonments

677


639


9,234


795

Discontinued operations:









Gain on sale of assets

-


-


-


(141,950 )

Tax impact (a)
(58,457 )
147,980
41,285
197,065
Adjusted net income
$ 99,762
$ 117,814
$ 289,894
$ 312,151










Adjusted basic earnings per share:








Adjusted net income per share
$ 0.97

$ 1.15

$ 2.81

$ 3.04

Weighted average shares used in adjusted basic earnings per share

103,292


102,733


103,088


102,517










Adjusted diluted earnings per share:








Adjusted net income per share
$ 0.96

$ 1.14

$ 2.79

$ 3.01

Weighted average shares used in adjusted diluted earnings per share

104,040


103,696


103,898


103,613










(a) The tax impact is computed utilizing the Company's adjusted statutory effective federal and state income tax rates. The income tax rates for the three months ended September 30, 2012 and 2011 were approximately 38.4% and 38.3%, respectively, and 38.3% and 38.2% for the nine months ended September 30, 2012 and 2011, respectively.



Adjusted Cash Flows

The following table provides a reconciliation of cash flows from operating activities (GAAP) to adjusted cash flows (non-GAAP) for the nine months ended September 30, 2012 and 2011.












Nine Months Ended








September 30,
(in thousands) 2012 2011










Cash flows from operating activities
$ 845,636

$ 778,986

Settlements paid on derivatives not designated as hedges (a)
(7,485 )
(77,835 )
Adjusted cash flows
$ 838,151
$ 701,151










(a) Amounts are presented in cash flows from investing activities for GAAP purposes.

EBITDAX

EBITDAX (as defined below) is presented herein, and reconciled from the generally accepted accounting principles ("GAAP") measure of net income because of its wide acceptance by the investment community as a financial indicator of a company's ability to internally fund exploration and development activities.

We define EBITDAX as net income, plus (1) exploration and abandonments expense, (2) depreciation, depletion and amortization expense, (3) accretion expense, (4) impairments of long-lived assets, (5) non-cash stock-based compensation expense, (6) unrealized (gain) loss on derivatives not designated as hedges, (7) loss on sale of assets, (8) interest expense, (9) federal and state income taxes on continuing operations and (10) similar items listed above that are presented in discontinued operations. EBITDAX is not a measure of net income or cash flows as determined by GAAP.

Our EBITDAX measure (which includes continuing and discontinued operations) provides additional information which may be used to better understand our operations. EBITDAX is one of several metrics that we use as a supplemental financial measurement in the evaluation of our business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of our operating performance. Certain items excluded from EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic cost of depreciable assets, none of which are components of EBITDAX. EBITDAX, as used by us, may not be comparable to similarly titled measures reported by other companies. We believe that EBITDAX is a widely followed measure of operating performance and is one of many metrics used by our management team, and by other users, of our consolidated financial statements. For example, EBITDAX can be used to assess our operating performance and return on capital in comparison to other independent exploration and production companies without regard to financial or capital structure, and to assess the financial performance of our assets and our company without regard to capital structure or historical cost basis.

The following table provides a reconciliation of net income to EBITDAX for the three and nine months ended September 30, 2012 and 2011:










Three Months Ended
Nine Months Ended




September 30,
September 30,
(in thousands) 2012 2011 2012 2011










Net income
$ 5,988
$ 356,205

$ 356,402

$ 630,962

Exploration and abandonments

6,958

3,498


27,335


4,624

Depreciation, depletion and amortization

157,621

115,730


434,940


304,899

Accretion of discount on asset retirement obligations

1,420

751


3,455


2,170

Impairments of long-lived assets

-

-


-


76

Non-cash stock-based compensation

7,959

4,673


21,434


13,866

Unrealized (gain) loss on derivatives not designated as hedges

151,554

(387,010 )

(117,027 )

(374,797 )

Loss on sale of assets, net

217

1,674


285


3,129

Interest expense

51,337

32,881


129,073


84,201

Income tax expense on continuing operations

4,155

221,199


220,835


334,000

Discontinued operations
-
-
-
(83,306 )
EBITDAX
$ 387,209
$ 349,601
$ 1,076,732
$ 919,824














Concho Resources Inc.
Costs Incurred
Unaudited

The table below provides the costs incurred for the three and nine months ended September 30, 2012 and 2011.

Costs incurred for oil and natural gas producing activities (a)
























Three Months Ended
Nine Months Ended




September 30,
September 30,
(in thousands) 2012 2011 2012 2011










Property acquisition costs:








Proved
$ 690,158
$ -
$ 855,773
$ 69,148

Unproved

349,903

42,432

411,110

117,772
Exploration

223,569

138,170

567,065

410,089
Development
187,759
233,062
574,541
567,547

Total costs incurred for oil and natural gas properties
$ 1,451,389
$ 413,664
$ 2,408,489
$ 1,164,556










(a) The costs incurred for oil and natural gas producing activities includes the following amounts of asset retirement obligations:















Three Months Ended
Nine Months Ended




September 30,
September 30,

(in thousands) 2012 2011 2012 2011











Proved property acquisition costs
$ 26,986
$ -
$ 29,113
$ 148

Exploration costs

1,185

198

2,452

838

Development costs
5,019
1,342
8,302
2,094


Total asset retirement obligations
$ 33,190
$ 1,540
$ 39,867
$ 3,080








Concho Resources Inc.
Derivatives Information
Unaudited

The table below provides data associated with the Company's derivatives at November 7, 2012.











































Fourth Quarter


















2012

2013

2014

2015

2016

2017



















Oil Swaps:

Volume (Bbl)


4,151,500


13,330,000


7,283,000


1,076,000


429,000


168,000

NYMEX price (Bbl) (a)

$ 95.51

$ 95.77

$ 91.93

$ 86.69

$ 88.31

$ 87.00



















Natural Gas Swaps:

Volume (MMBtu)


75,000


-


-


-


-


-

NYMEX price (MMBtu) (b)

$ 6.54


-


-


-


-


-



















(a) The index prices for the oil contracts are based on the NYMEX - West Texas Intermediate monthly average futures price.
(b) The index prices for the natural gas contracts are based on the NYMEX - Henry Hub last trading day of the month futures price.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

11.05.12 Concho Resources Inc. Announces Participation in Upcoming Conference

MIDLAND, Texas--(BUSINESS WIRE)--Nov. 5, 2012-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the Stephens Fall Investment Conference on Tuesday, November 13th at 1:00 PM EST. The presentation will be available on Concho's website, www.concho.com. Additionally, the presentation will be webcast and can be accessed through the Company's website.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

09.11.12 Concho Resources Inc. Schedules Third Quarter 2012 Conference Call for November 8, 2012

MIDLAND, Texas--(BUSINESS WIRE)--Sep. 11, 2012-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") will host a conference call on Thursday, November 8, 2012, at 9:00 a.m. CT to discuss its third quarter financial and operating results. Earnings are expected to be released after the market closes on Wednesday, November 7, 2012.

Individuals who would like to participate should call (866) 713-8562 (passcode: 92214608) approximately 15 minutes before the scheduled conference call time. To access the live audio webcast, please visit the investor relations section of the Company's website, http://www.concho.com. A replay of the call will also be available, by dialing (888) 286-8010 (passcode: 81275071) or via the Company's website, for approximately 30 days following the conference call.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are primarily focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at http://www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

09.03.12 Concho Resources Inc. Announces Participation in Upcoming Conference

MIDLAND, Texas--(BUSINESS WIRE)--Sep. 13, 2012-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at IPAA OGIS San Francisco on Wednesday, September 26th at 8:55 AM PDT. The presentation will be available on Concho's website, http://www.concho.com. Additionally, the presentation will be webcast and can be accessed through the Company's website.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at http://www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

08.28.12 Concho Resources Inc. Announces Participation in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)--Aug. 28, 2012-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the Barclays CEO Energy-Power Conference on Tuesday, September 4th at 3:05 PM EDT, the Goldman Sachs Global Natural Resources Conference on Wednesday, September 12th at 3:00 PM BST, the Barclays European High Yield and Leveraged Finance Conference 2012 on Thursday, September 13th at 12:45 PM BST, and the Deutsche Bank 2012 Energy Conference on Wednesday, September 19th. The presentations will be available on Concho's website, http://www.concho.com. Additionally, the Barclays CEO Energy-Power Conference presentation will be webcast and can be accessed through the Company's website.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at http://www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

08.14.12 Concho Resources Inc. Announces Pricing of Senior Unsecured Notes

MIDLAND, Texas--(BUSINESS WIRE)--Aug. 14, 2012-- Concho Resources Inc. (NYSE: CXO) ("Concho") today announced that it has priced an offering of $700 million aggregate principal amount of its senior unsecured notes due 2023. The notes will bear interest at a rate of 5.500% per annum and will be issued at par. Concho intends to use the net proceeds from the offering to repay a portion of the outstanding balance under its credit facility. Concho expects to close the sale of the notes on August 17, 2012, subject to the satisfaction of customary closing conditions.

J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc. and Wells Fargo Securities, LLC are acting as joint book-running managers for the senior unsecured notes offering. The offering is being made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission website at http://www.sec.gov. Alternatively, the underwriters will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting J.P. Morgan Securities LLC, 383 Madison Avenue, 3rd Floor, New York, NY, 10179, Attention: Syndicate Desk, or by calling (800) 245-8812; or Merrill Lynch, Pierce, Fenner & Smith Incorporated, 222 Broadway 7th Floor, New York, NY, 10038, Attention: Syndicate Operations, or by calling (800) 294-1322; or Barclays Capital Inc. c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by sending an email to Barclaysprospectus@broadridge.com or by calling (888) 603-5847; or Wells Fargo Securities, LLC at 550 South Tryon Street, 7th Floor, MAC D1086-070, Charlotte, NC 28202, by calling (800) 326-5897 or by sending an email to cmclientsupport@wellsfargo.com.

This announcement is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. A registration statement, as amended, relating to the securities has been filed and became effective September 9, 2009.

Forward-Looking Statements and Cautionary Statements

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's future financial position, liquidity and capital resources, operations, performance, business strategy, returns, capital expenditure budgets, oil and natural gas reserves, number of identified drilling locations, the timing and success of specific projects, outcomes and effects of litigation, claims and disputes, potential financing, levels of production, drilling program, derivative activities, costs and other guidance included in this press release. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the "Risk Factors" section of the Company's most recent Form 10-K filing and risks relating to sustained or further declines in the prices we receive for our oil and natural gas; uncertainties about the estimated quantities of oil and natural gas reserves; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; drilling and operating risks; the adequacy of our capital resources and liquidity including, but not limited to, access to additional borrowing capacity under our credit facility; difficult and adverse conditions in the domestic and global capital and credit markets; risks related to the concentration of our operations in the Permian Basin of Southeast New Mexico and West Texas; potential financial losses or earnings reductions from our commodity price risk management program; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; risks and liabilities associated with acquired properties or businesses; uncertainties about our ability to successfully execute our business and financial plans and strategies; uncertainties about our ability to replace reserves and economically develop our current reserves; general economic and business conditions, either internationally or domestically or in the jurisdictions in which we operate; competition in the oil and natural gas industry; uncertainty concerning our assumed or possible future results of operations; our existing indebtedness; and other important factors that could cause actual results to differ materially from those projected.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

08.14.12 Concho Resources Inc. Announces Proposed Offering of Senior Unsecured Notes

MIDLAND, Texas--(BUSINESS WIRE)--Aug. 14, 2012-- Concho Resources Inc. (NYSE: CXO) ("Concho") today announced that it intends, subject to market conditions, to publicly offer $400 million aggregate principal amount of senior unsecured notes due 2023. The senior unsecured notes will be fully and unconditionally guaranteed by all of Concho's current subsidiaries. Concho intends to use the net proceeds from the offering to repay a portion of the outstanding balance under its credit facility.

J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc. and Wells Fargo Securities, LLC will act as joint book-running managers for the senior unsecured notes offering. The offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission ("SEC") website at http://www.sec.gov. Alternatively, the underwriters will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting J.P. Morgan Securities LLC, 383 Madison Avenue, 3rd Floor, New York, NY, 10179, Attention: Syndicate Desk, or by calling (800) 245-8812; or Merrill Lynch, Pierce, Fenner & Smith Incorporated, 222 Broadway 7th Floor, New York, NY, 10038, Attention: Syndicate Operations, or by calling (800)294-1322; or Barclays Capital Inc. c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by sending an email to Barclaysprospectus@broadridge.com or by calling (888) 603-5847; or Wells Fargo Securities, LLC at 550 South Tryon Street, 7th Floor, MAC D1086-070, Charlotte, NC 28202, by calling (800) 326-5897 or by sending an email to cmclientsupport@wellsfargo.com.

This announcement is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. A registration statement, as amended, relating to the securities has been filed and became effective September 9, 2009.

Forward-Looking Statements and Cautionary Statements

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's future financial position, liquidity and capital resources, operations, performance, business strategy, returns, capital expenditure budgets, oil and natural gas reserves, number of identified drilling locations, the timing and success of specific projects, outcomes and effects of litigation, claims and disputes, potential financing, levels of production, drilling program, derivative activities, costs and other guidance included in this press release. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the "Risk Factors" section of the Company's most recent Form 10-K filing and risks relating to sustained or further declines in the prices we receive for our oil and natural gas; uncertainties about the estimated quantities of oil and natural gas reserves; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; drilling and operating risks; the adequacy of our capital resources and liquidity including, but not limited to, access to additional borrowing capacity under our credit facility; difficult and adverse conditions in the domestic and global capital and credit markets; risks related to the concentration of our operations in the Permian Basin of Southeast New Mexico and West Texas; potential financial losses or earnings reductions from our commodity price risk management program; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; risks and liabilities associated with acquired properties or businesses; uncertainties about our ability to successfully execute our business and financial plans and strategies; uncertainties about our ability to replace reserves and economically develop our current reserves; general economic and business conditions, either internationally or domestically or in the jurisdictions in which we operate; competition in the oil and natural gas industry; uncertainty concerning our assumed or possible future results of operations; our existing indebtedness; and other important factors that could cause actual results to differ materially from those projected.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

08.06.12 Concho Resources Inc. Reports Second Quarter 2012 Financial and Operating Results

MIDLAND, Texas--(BUSINESS WIRE)--Aug. 6, 2012-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") today reported financial and operating results for the three and six months ended June 30, 2012. Highlights for the three and six months ended June 30, 2012 include:

  • Production of 6.8 million barrels of oil equivalent ("MMBoe") for the second quarter of 2012, a 22% increase over the second quarter of 2011
  • Net income of $319.3 million, or $3.07 per diluted share, for the second quarter of 2012, as compared to net income of $232.2 million, or $2.24 per diluted share, in the second quarter of 2011
  • Adjusted net income1 (non-GAAP) of $80.5 million, or $0.78 per diluted share, for the second quarter of 2012, as compared to $113.2 million, or $1.09 per diluted share, for the second quarter of 2011
  • EBITDAX2 of $327.4 million for the second quarter of 2012, a 5% increase over the second quarter of 2011

1 Adjusted net income (non-GAAP) is comparable to securities analyst estimates. For an explanation of how we calculate adjusted net income (non-GAAP) and a reconciliation of net income (GAAP) to adjusted net income (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

2 For an explanation of how we calculate and use EBITDAX (non-GAAP) and a reconciliation of net income (GAAP) to EBITDAX (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

The Company closed its previously announced acquisition of the oil and natural gas assets of Three Rivers Operating Company ("Three Rivers") on July 2, 2012, paying a total of approximately $1.0 billion in cash funded by the Company's revolving credit facility. Accordingly, results from the Three Rivers acquisition did not contribute to the Company's second quarter results.

Second Quarter 2012 Financial Results

Production for the second quarter of 2012 totaled 6.8 MMBoe (4.2 million barrels of oil ("MMBbls") and 15.6 billion cubic feet of natural gas ("Bcf")), an increase of 22% as compared to 5.6 MMBoe (3.5 MMBbls and 12.3 Bcf) produced in the second quarter of 2011. During the second quarter of 2012, the Company estimates that production was negatively impacted by 3,000 barrels of oil equivalent per day ("Boepd") due to scheduled and unscheduled maintenance and expansion work at two gas processing plants and a compression station in southeast New Mexico.

Tim Leach, Concho's Chairman, CEO and President commented, "The Permian Basin continues to be one of the most attractive and profitable oil basins in the country. The recent acquisition of assets from Three Rivers was our most strategic acquisition since Marbob and reinforced Concho's significant presence in the Permian Basin. The unprecedented level of activity across the Permian Basin during the first half of 2012 has certainly introduced new challenges; however, I am confident that given our scale and continued success in our core areas, like the Delaware Basin, our capital budget and production guidance for the year remains on track."

For the second quarter of 2012, the Company reported net income of $319.3 million, or $3.07 per diluted share, as compared to net income of $232.2 million, or $2.24 per diluted share, for the second quarter of 2011. The Company's second quarter 2012 results were impacted by several non-cash items including: (1) a $394.8 million unrealized mark-to-market gain on commodity derivatives and (2) $8.4 million of leasehold abandonments. Excluding these items and their tax effects, the second quarter 2012 adjusted net income (non-GAAP) was $80.5 million, or $0.78 per diluted share. Excluding similar non-cash items and their tax impact, adjusted net income (non-GAAP) for the second quarter of 2011 was $113.2 million, or $1.09 per diluted share. For a description and a reconciliation of net income (GAAP) to adjusted net income (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

EBITDAX was $327.4 million in the second quarter of 2012, an increase of 5% from $310.7 million reported in the second quarter of 2011. For a description and a reconciliation of net income (GAAP) to EBITDAX (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

Oil and natural gas sales from continuing operations for the second quarter of 2012 decreased 3% when compared to the second quarter of 2011. This decrease was attributable to a 12% decrease in the Company's unhedged realized oil price and a 46% decrease in the Company's unhedged realized natural gas price, which was substantially offset by a 22% increase in production in the second quarter of 2012 compared to the second quarter of 2011. In addition, oil sales were adversely impacted by a temporary widening of the Midland-to-Cushing basis differential, which averaged approximately $5.00 per barrel during the second quarter of 2012. Today, the Midland-to-Cushing basis differential has returned to historical levels of less than $1.00 per barrel. Finally, natural gas price realizations were adversely impacted by the decline in natural gas liquids and residue gas prices.

Oil and natural gas production expense from continuing operations for the second quarter of 2012, including oil and natural gas taxes, totaled $87.7 million, or $12.85 per barrel of oil equivalent ("Boe"), a 3% increase per Boe from the second quarter of 2011. This increase was due primarily to higher lease operating expenses and workover costs, which averaged $7.52 per Boe in the second quarter of 2012 as compared to $5.97 per Boe in the second quarter of 2011, which was partially offset by lower oil and natural gas taxes, which averaged $5.33 per Boe in the second quarter of 2012 as compared to $6.51 per Boe in the second quarter of 2011. The increase in lease operating expenses per Boe over the second quarter 2011 is primarily due to an increase in workover costs and cost of services, including labor related expenses.

Depreciation, depletion and amortization expense ("DD&A") from continuing operations for the second quarter of 2012 totaled $141.5 million, or $20.73 per Boe, a 17% increase per Boe from the second quarter of 2011.

General and administrative expense ("G&A") from continuing operations for the second quarter of 2012 totaled $32.0 million, or $4.69 per Boe, as compared to $22.6 million, or $4.06 per Boe, in the second quarter of 2011. Cash G&A for the second quarter of 2012 totaled $24.6 million and stock-based compensation (non-cash) totaled $7.4 million. The increase in per Boe expense for the second quarter of 2012 over the second quarter of 2011 was primarily due to a 41% increase in absolute G&A expenses reflecting increased staffing across the Company, and was partially offset by a 22% increase in production.

The Company's cash flow from operating activities (GAAP) was $611.0 million for the first six months of 2012, as compared to $485.8 million for the first six months of 2011, an increase of 26%. Adjusted cash flows (non-GAAP), which are cash flows from operating activities (GAAP) adjusted for settlements paid on derivatives not designated as hedges, were $587.3 million for the first six months of 2012, as compared to $409.8 million for the first six months of 2011, an increase of 43%. For a description of the use of adjusted cash flows (non-GAAP) and for a reconciliation of cash flows from operating activities (GAAP) to adjusted cash flows (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

In the second quarter of 2012, the Company collected net cash receipts on derivatives not designated as hedges of $8.3 million and the non-cash unrealized mark-to-market gain on derivatives not designated as hedges was $394.8 million. In comparison, the Company made net cash payments of $47.8 million on derivatives not designated as hedges and reported a $192.6 million non-cash unrealized mark-to-market gain on derivatives not designated as hedges in the second quarter of 2011. To better understand the impact of the Company's derivative positions and their impact on the statements of operations, please see the "Summary Production and Operating Data" and "Derivatives Information" tables at the end of this press release.

Operations

For the quarter ended June 30, 2012, the Company commenced the drilling of or participated in a total of 221 gross wells (186 operated), 84 of which had been completed as producers and 137 of which were in progress at June 30, 2012. In addition, during the second quarter of 2012, the Company completed 139 wells that were drilled prior to the second quarter of 2012.

Currently, the Company is operating 37 drilling rigs; 7 of these rigs are drilling Yeso wells on the New Mexico Shelf, 19 are drilling in the Texas Permian, 10 are drilling in the Delaware Basin and 1 rig is drilling Lower Abo wells in the New Mexico Shelf. Included in the 37 operated rigs, the Company is currently running 15 horizontal drilling rigs, including 10 in the Delaware Basin, 1 in the Texas Permian and 4 on the New Mexico Shelf.

For the remainder of 2012, the Company expects to operate an average of approximately 33 rigs, including 13 horizontal drilling rigs. Of the total 33 rigs, 7 will drill Yeso wells in the New Mexico Shelf, 17 will drill in the Texas Permian and 9 will drill in the Delaware Basin. The Company expects this level of activity is sufficient to invest the remainder of its $1.5 billion annual capital budget and produce 28.7 to 29.8 MMBoe in 2012 as previously guided.

New Mexico Shelf

During the second quarter of 2012, the Company drilled or participated in 93 wells (78 operated) on its New Mexico Shelf assets, which included both Yeso and Lower Abo wells, with a 100% success rate on the 47 wells that had been completed by June 30, 2012. In addition, during the second quarter of 2012, the Company completed 60 wells that were drilled prior to the second quarter of 2012.

At June 30, 2012, on its New Mexico Shelf assets, the Company had identified 2,470 drilling locations, including locations associated with the Three Rivers acquisition, with proved undeveloped reserves attributable to 680 of such locations. Of these 2,470 drilling locations, 1,559 target the Yeso formation vertically, 369 target the Yeso formation horizontally, 111 target the Lower Abo formation and the remaining drilling locations target other objectives.

Texas Permian

During the second quarter of 2012, the Company drilled or participated in 89 wells (88 operated) on its Texas Permian assets with a 100% success rate on the 31 wells that had been completed by June 30, 2012. In addition, during the second quarter of 2012, the Company completed 57 wells that were drilled prior to the second quarter of 2012.

At June 30, 2012, on its Texas Permian assets, the Company had identified 5,772 drilling locations, including locations associated with the Three Rivers acquisition, with proved undeveloped reserves attributable to 1,786 of such locations. Of these 5,772 drilling locations, 2,064 target the Wolfberry play through 40-acre spacing, 2,629 target the Wolfberry play on 20-acre spacing, 927 target the Wolfcamp vertically in Irion and Schleicher Counties and the remaining drilling locations target other objectives. The Company recently began testing a horizontal Cline shale exploration concept in the northern Midland Basin and as of June 30, 2012, had not included any potential drilling locations across its approximately 74,000 gross (51,000 net) acres in Terry and Hockley Counties.

Delaware Basin

During the second quarter of 2012, the Company drilled or participated in 39 wells (20 operated) with a 100% success rate on the 6 wells that had been completed by June 30, 2012. Of the 39 wells drilled, all were horizontal, which included 30 Bone Spring sand wells, 1 Avalon shale well, 5 Wolfcamp shale wells and 3 Delaware sands wells. In addition, during the second quarter of 2012, the Company completed 22 wells that were drilled prior to the second quarter of 2012. The Company's net production in the second quarter of 2012 from horizontal Delaware Basin wells averaged approximately 13,850 Boepd, an increase of 12% over the first quarter of 2012 and a 147% increase over the second quarter of 2011.

At June 30, 2012, on its Delaware Basin assets, the Company had identified 2,375 drilling locations, including the locations associated with the Three Rivers acquisition, with proved undeveloped reserves attributable to 195 of such locations. Substantially all of the 2,375 drilling locations target horizontal objectives in the northern Delaware Basin. The Company has excluded all 364 vertical Wolfbone play drilling locations in the southern Delaware Basin, which were previously identified as of December 31, 2011. The Company recently began testing a horizontal Wolfcamp shale exploration concept in the southern Delaware Basin and as of June 30, 2012, had not included any potential drilling locations across its approximately 140,000 gross (125,000 net) acres in the southern Delaware Basin. Currently, the Company has completed 3 horizontal Wolfcamp shale wells on its acreage in Reeves County and expects to drill another 7 horizontal wells on its acreage in both Reeves and Pecos Counties during 2012.

Liquidity

At June 30, 2012, the Company had $427 million of indebtedness outstanding under its $2.5 billion credit facility. Pro forma for the closing of the Three Rivers acquisition on July 2, 2012, the Company's outstanding borrowings under the credit facility would have been $1.4 billion on June 30, 2012, leaving approximately $1.1 billion available to be borrowed.

Derivative Update

The Company maintains an active hedging program and added to its derivative positions in July 2012. Please see the "Derivatives Information" tables at the end of this press release for more detailed information about the Company's current derivative positions.

Conference Call Information

The Company will host a conference call on Tuesday, August 7, 2012 at 9:00 a.m. Central Time to discuss the second quarter 2012 financial and operating results. Interested parties may listen to the conference call via the Company's website at http://www.concho.com or by dialing (800) 638-5439 (passcode: 79957631). A replay of the conference call will be available on the Company's website or by dialing (888) 286-8010 (passcode: 75490323).

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at http://www.concho.com.

Forward-Looking Statements and Cautionary Statements

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's future financial position, operations, performance, production growth, returns, capital expenditure budget, oil and natural gas reserves, number of identified drilling locations, drilling program, derivative activities, costs and other guidance. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the "Risk Factors" section of the Company's most recent Form 10-K and 10-Q filings and risks relating to declines in the prices we receive for our oil and natural gas; uncertainties about the estimated quantities of reserves; risks related to the integration of acquired assets; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; drilling and operating risks; the adequacy of our capital resources and liquidity; risks related to the concentration of our operations in the Permian Basin; the results of our hedging program; weather; litigation; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; uncertainties about our ability to replace reserves and economically develop our current reserves; competition in the oil and natural gas industry; and other important factors that could cause actual results to differ materially from those projected.

Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.





Concho Resources Inc.

Consolidated Balance Sheets

Unaudited







June 30,
December 31,
(in thousands, except share and per share amounts) 2012 2011
Assets
Current assets:



Cash and cash equivalents
$ 710

$ 342
Accounts receivable, net of allowance for doubtful accounts:


Oil and natural gas

167,138


213,921
Joint operations and other

208,353


153,746
Derivative instruments

126,723


1,698
Deferred income taxes

-


28,793
Prepaid costs and other
12,144
12,523
Total current assets
515,068
411,023
Property and equipment:


Oil and natural gas properties, successful efforts method

8,279,969


7,347,460
Accumulated depletion and depreciation
(1,388,180 )
(1,116,545 )
Total oil and natural gas properties, net

6,891,789


6,230,915
Other property and equipment, net
99,590
59,203
Total property and equipment, net
6,991,379
6,290,118
Funds held in escrow
50,000


17,394
Deferred loan costs, net

72,281


65,641
Intangible asset - operating rights, net

32,651


33,425
Inventory

25,749


19,419
Noncurrent derivative instruments

63,029


7,944
Other assets
8,152
4,612
Total assets
$ 7,758,309
$ 6,849,576
Liabilities and Stockholders' Equity
Current liabilities:


Accounts payable:


Trade
$ 29,361

$ 23,341
Related parties

540


11
Bank overdrafts

33,528


39,241
Revenue payable

133,808


146,061
Accrued and prepaid drilling costs

319,601


293,919
Derivative instruments

-


56,218
Deferred income taxes

45,076


-
Other current liabilities
137,171
142,686
Total current liabilities
699,085
701,477
Long-term debt

2,523,366


2,080,141
Deferred income taxes

1,120,593


1,002,295
Noncurrent derivative instruments

-


32,254
Asset retirement obligations and other long-term liabilities

59,700


52,670
Commitments and contingencies


Stockholders' equity:


Common stock, $0.001 par value; 300,000,000 authorized; 104,386,021 and 103,756,222 shares issued at June 30, 2012 and December 31, 2011, respectively



104


104
Additional paid-in capital

1,952,735


1,925,757
Retained earnings

1,409,288


1,058,874

Treasury stock, at cost; 79,643 and 55,990 shares at June 30, 2012 and December 31, 2011, respectively


(6,562 )
(3,996 )
Total stockholders' equity
3,355,565
2,980,739
Total liabilities and stockholders' equity
$ 7,758,309
$ 6,849,576





Concho Resources Inc.

Consolidated Statements of Operations

Unaudited











Three Months Ended
Six Months Ended


June 30,
June 30,
(in thousands, except per share amounts) 2012 2011 2012 2011








Operating revenues:







Oil sales
$ 361,313

$ 342,747

$ 774,960

$ 625,174
Natural gas sales
71,483
103,485
165,641
181,898
Total operating revenues
432,796
446,232
940,601
807,072
Operating costs and expenses:







Oil and natural gas production

87,689


69,577


179,839


133,235
Exploration and abandonments

14,398


400


20,377


1,126
Depreciation, depletion and amortization

141,450


98,881


277,319


189,169
Accretion of discount on asset retirement obligations

1,047


715


2,035


1,419
Impairments of long-lived assets

-


76


-


76

General and administrative (including non-cash stock-based compensation of $7,347 and $4,725 for the three months ended June 30, 2012 and 2011, respectively, and $13,475 and $9,193 for the six months ended June 30, 2012 and 2011, respectively)



31,968


22,618


59,355


44,010
(Gain) loss on derivatives not designated as hedges
(403,050 )
(144,882 )
(244,957 )
88,260
Total operating costs and expenses
(126,498 )
47,385
293,968
457,295
Income from operations
559,294
398,847
646,633
349,777
Other income (expense):







Interest expense

(41,899 )

(21,660 )

(77,736 )

(51,320 )
Other, net
(535 )
(1,735 )
(1,803 )
(2,087 )
Total other expense
(42,434 )
(23,395 )
(79,539 )
(53,407 )
Income from continuing operations before income taxes

516,860


375,452


567,094


296,370
Income tax expense
(197,563 )
(143,270 )
(216,680 )
(112,801 )
Income from continuing operations

319,297


232,182


350,414


183,569
Income from discontinued operations, net of tax
-
-
-
91,188
Net income
$ 319,297
$ 232,182
$ 350,414
$ 274,757
Basic earnings per share:







Income from continuing operations
$ 3.10

$ 2.26

$ 3.40

$ 1.79
Income from discontinued operations, net of tax
-
-
-
0.89
Net income per share
$ 3.10
$ 2.26
$ 3.40
$ 2.68
Weighted average shares used in basic earnings per share
103,114
102,569
102,984
102,407
Diluted earnings per share:







Income from continuing operations
$ 3.07

$ 2.24

$ 3.38

$ 1.77
Income from discontinued operations, net of tax
-
-
-
0.88
Net income per share
$ 3.07
$ 2.24
$ 3.38
$ 2.65
Weighted average shares used in diluted earnings per share
103,880
103,638
103,825
103,570




Concho Resources Inc.

Consolidated Statements of Cash Flows

Unaudited







Six Months Ended


June 30,
(in thousands) 2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES:



Net income
$ 350,414

$ 274,757
Adjustments to reconcile net income to net cash provided by operating activities:



Depreciation, depletion and amortization

277,319


189,169
Impairments of long-lived assets

-


76
Accretion of discount on asset retirement obligations

2,035


1,419
Exploration and abandonments, including dry holes

11,539


168
Non-cash compensation expense

13,475


9,193
Deferred income taxes

202,559


101,967
Loss on sale of assets, net

68


1,455
(Gain) loss on derivatives not designated as hedges

(244,957 )

88,260
Discontinued operations

-


(82,118 )
Other non-cash items

5,837


(2,321 )
Changes in operating assets and liabilities, net of acquisitions:



Accounts receivable

7,425


(105,761 )
Prepaid costs and other

(3,160 )

(3,734 )
Inventory

(6,385 )

(10,868 )
Accounts payable

6,549


(29,488 )
Revenue payable

(12,253 )

66,164
Other current liabilities
500
(12,491 )
Net cash provided by operating activities
610,965
485,847
CASH FLOWS FROM INVESTING ACTIVITIES:



Capital expenditures on oil and natural gas properties

(949,059 )

(677,172 )
Additions to other property and equipment

(45,701 )

(24,981 )
Proceeds from the sale of assets

4,419


196,252
Funds held in escrow

(32,606 )

-
Settlements paid on derivatives not designated as hedges
(23,624 )
(76,047 )
Net cash used in investing activities
(1,046,571 )
(581,948 )
CASH FLOWS FROM FINANCING ACTIVITIES:



Proceeds from issuance of debt

1,776,500


1,645,000
Payments of debt

(1,333,500 )

(1,569,000 )
Exercise of stock options

3,110


7,140
Excess tax benefit from stock-based compensation

10,393


21,117
Payments for loan costs
(12,250 )

(24,466 )
Purchase of treasury stock

(2,566 )

(1,720 )
Bank overdrafts
(5,713 )
18,043
Net cash provided by financing activities
435,974
96,114
Net increase in cash and cash equivalents

368


13
Cash and cash equivalents at beginning of period
342
384
Cash and cash equivalents at end of period
$ 710
$ 397
SUPPLEMENTAL CASH FLOWS:



Cash paid for interest and fees, net of $73 capitalized interest in 2011
$ 67,528

$ 32,069
Cash paid for income taxes
$ 12,982

$ 14,322






Concho Resources Inc.

Summary Production and Price Data

Unaudited











The following table sets forth summary information from our continuing and discontinued operations concerning our production and operating data for the periods indicated:















Three Months Ended
Six Months Ended




June 30,
June 30,
2012 2011 2012 2011










Production and operating data:







Net production volumes:







Oil (MBbl)

4,220

3,522


8,434


6,749
Natural gas (MMcf)

15,619

12,307


31,848


24,314
Total (MBoe)

6,823

5,573


13,742


10,801










Average daily production volumes:







Oil (Bbl)

46,374

38,703


46,341


37,287
Natural gas (Mcf)

171,637

135,242


174,989


134,331
Total (Boe)

74,980

61,244


75,506


59,675










Average prices:







Oil, without derivatives (Bbl)
$ 85.62
$ 97.32

$ 91.89

$ 94.03
Oil, with derivatives (Bbl) (a)
$ 87.51
$ 83.57

$ 89.01

$ 82.09
Natural gas, without derivatives (Mcf)
$ 4.58
$ 8.41

$ 5.20

$ 7.48
Natural gas, with derivatives (Mcf) (a)
$ 4.60
$ 8.90

$ 5.22

$ 7.94
Total, without derivatives (Boe)
$ 63.43
$ 80.07

$ 68.45

$ 75.60
Total, with derivatives (Boe) (a)
$ 64.65
$ 72.48

$ 66.73

$ 69.18










Operating costs and expenses per Boe:







Lease operating expenses and workover costs
$ 7.52
$ 5.97

$ 7.40

$ 6.28
Oil and natural gas taxes
$ 5.33
$ 6.51

$ 5.69

$ 6.21
Depreciation, depletion and amortization
$ 20.73
$ 17.74

$ 20.18

$ 17.71
General and administrative
$ 4.69
$ 4.06

$ 4.32

$ 4.07

(a)

Includes the effect of cash settlements received from (paid on) commodity derivatives not designated as hedges and reported in operating costs and expenses. The following table reflects the amounts of cash settlements received from (paid on) commodity derivatives not designated as hedges that were included in computing average prices with derivatives and reconciles to the amount in gain (loss) on derivatives not designated as hedges as reported in the statements of operations:










Three Months Ended
Six Months Ended




June 30,
June 30,


(in thousands) 2012 2011 2012 2011












Gain (loss) on derivatives not designated as hedges:









Cash receipts from (payments on) oil derivatives
$ 7,963
$ (48,398 )
$ (24,233 )
$ (80,628 )


Cash receipts from natural gas derivatives

324

6,076


609


11,205


Cash payments on interest rate derivatives

-

(5,429 )

-


(6,624 )


Unrealized mark-to-market gain (loss) on commodity and interest rate derivatives


394,763
192,633
268,581
(12,213 )


Gain (loss) on derivatives not designated as hedges
$ 403,050
$ 144,882
$ 244,957
$ (88,260 )














The presentation of average prices with derivatives is a non-GAAP measure as a result of including the cash receipts from (payments on) commodity derivatives that are presented in gain (loss) on derivatives not designated as hedges in the statements of operations. This presentation of average prices with derivatives is a means by which to reflect the actual cash performance of our commodity derivatives for the respective periods and presents oil and natural gas prices with derivatives in a manner consistent with the presentation generally used by the investment community.










The following table sets forth summary information from our continuing operations concerning production and operating data for the periods indicated:















Three Months Ended
Six Months Ended




June 30,
June 30,
2012 2011 2012 2011










Production and operating data:







Net production volumes:







Oil (MBbl)

4,220

3,522


8,434


6,632
Natural gas (MMcf)

15,619

12,307


31,848


24,277
Total (MBoe)

6,823

5,573


13,742


10,678










Average daily production volumes:







Oil (Bbl)

46,374

38,703


46,341


36,641
Natural gas (Mcf)

171,637

135,242


174,989


134,127
Total (Boe)

74,980

61,244


75,506


58,995










Average prices:







Oil, without derivatives (Bbl)
$ 85.62
$ 97.32

$ 91.89

$ 94.27
Oil, with derivatives (Bbl) (a)
$ 87.51
$ 83.57

$ 89.01

$ 82.11
Natural gas, without derivatives (Mcf)
$ 4.58
$ 8.41

$ 5.20

$ 7.49
Natural gas, with derivatives (Mcf) (a)
$ 4.60
$ 8.90

$ 5.22

$ 7.95
Total, without derivatives (Boe)
$ 63.43
$ 80.07

$ 68.45

$ 75.58
Total, with derivatives (Boe) (a)
$ 64.65
$ 72.48

$ 66.73

$ 69.08










Operating costs and expenses per Boe:







Lease operating expenses and workover costs
$ 7.52
$ 5.97

$ 7.40

$ 6.31
Oil and natural gas taxes
$ 5.33
$ 6.51

$ 5.69

$ 6.17
Depreciation, depletion and amortization
$ 20.73
$ 17.74

$ 20.18

$ 17.72
General and administrative
$ 4.69
$ 4.06

$ 4.32

$ 4.12

(a)

Includes the effect of cash settlements received from (paid on) commodity derivatives not designated as hedges and reported in operating costs and expenses. The following table reflects the amounts of cash settlements received from (paid on) commodity derivatives not designated as hedges that were included in computing average prices with derivatives and reconciles to the amount in gain (loss) on derivatives not designated as hedges as reported in the statements of operations:




















Three Months Ended
Six Months Ended




June 30,
June 30,


(in thousands) 2012 2011 2012 2011












Gain (loss) on derivatives not designated as hedges:









Cash receipts from (payments on) oil derivatives
$ 7,963
$ (48,398 )
$ (24,233 )
$ (80,628 )


Cash receipts from natural gas derivatives

324

6,076


609


11,205


Cash payments on interest rate derivatives

-

(5,429 )

-


(6,624 )


Unrealized mark-to-market gain (loss) on commodity and interest rate derivatives


394,763
192,633
268,581
(12,213 )


Gain (loss) on derivatives not designated as hedges
$ 403,050
$ 144,882
$ 244,957
$ (88,260 )














The presentation of average prices with derivatives is a non-GAAP measure as a result of including the cash receipts from (payments on) commodity derivatives that are presented in gain (loss) on derivatives not designated as hedges in the statements of operations. This presentation of average prices with derivatives is a means by which to reflect the actual cash performance of our commodity derivatives for the respective periods and presents oil and natural gas prices with derivatives in a manner consistent with the presentation generally used by the investment community.











Concho Resources Inc.
Supplemental Non-GAAP Financial Measures
Unaudited










The following tables provide information that the Company believes may be useful to investors who follow the practice of some industry analysts who adjust reported company net income and cash flows from operating activities to exclude certain non-cash items.

Adjusted Net Income

The following table provides a reconciliation of net income (GAAP) to adjusted net income (non-GAAP) for the three and six months ended June 30, 2012 and 2011.













Three Months Ended
Six Months Ended



June 30,
June 30,

(in thousands, except per share amounts) 2012 2011 2012 2011










Net income - as reported
$ 319,297

$ 232,182

$ 350,414

$ 274,757










Adjustments for certain non-cash items:








Unrealized (gain) loss on commodity and interest rate derivatives

(394,763 )

(192,633 )

(268,581 )

12,213

Impairments of long-lived assets

-


76


-


76

Leasehold abandonments

8,437


30


8,557


156

Discontinued operations:








Gain on sale of assets

-


-


-


(141,950 )

Tax impact (a)
147,577
73,545
99,329
49,341

Adjusted net income
$ 80,548
$ 113,200
$ 189,719
$ 194,593










Adjusted basic earnings per share:








Adjusted net income per share
$ 0.78

$ 1.10

$ 1.84

$ 1.90

Weighted average shares used in adjusted basic earnings per share

103,114


102,569


102,984


102,407










Adjusted diluted earnings per share:








Adjusted net income per share
$ 0.78

$ 1.09

$ 1.83

$ 1.88

Weighted average shares used in adjusted diluted earnings per share

103,880


103,638


103,825


103,570









(a)

The tax impact is computed utilizing the Company's statutory effective federal and state income tax rates. The income tax rates for the three months ended June 30, 2012 and 2011 were both approximately 38.2%, and 38.2% and 38.1% for the six months ended June 30, 2012 and 2011, respectively.

Adjusted Cash Flows

The following table provides a reconciliation of cash flows from operating activities (GAAP) to adjusted cash flows (non-GAAP) for the six months ended June 30, 2012 and 2011.






Six Months Ended


June 30,
(in thousands) 2012 2011




Cash flows from operating activities
$ 610,965

$ 485,847
Settlements paid on derivatives not designated as hedges (a)
(23,624 )
(76,047 )
Adjusted cash flows
$ 587,341
$ 409,800




(a) Amounts are presented in cash flows from investing activities for GAAP purposes.

EBITDAX

EBITDAX (as defined below) is presented herein, and reconciled from the generally accepted accounting principles ("GAAP") measure of net income because of its wide acceptance by the investment community as a financial indicator of a company's ability to internally fund exploration and development activities.

We define EBITDAX as net income, plus (1) exploration and abandonments expense, (2) depreciation, depletion and amortization expense, (3) accretion expense, (4) impairments of long-lived assets, (5) non-cash stock-based compensation expense, (6) bad debt expense, (7) unrealized (gain) loss on derivatives not designated as hedges, (8) (gain) loss on sale of assets, net, (9) interest expense, (10) federal and state income taxes on continuing operations and (11) similar items listed above that are presented in discontinued operations. EBITDAX is not a measure of net income or cash flows as determined by GAAP.

Our EBITDAX measure (which includes continuing and discontinued operations) provides additional information which may be used to better understand our operations. EBITDAX is one of several metrics that we use as a supplemental financial measurement in the evaluation of our business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of our operating performance. Certain items excluded from EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic cost of depreciable assets, none of which are components of EBITDAX. EBITDAX, as used by us, may not be comparable to similarly titled measures reported by other companies. We believe that EBITDAX is a widely followed measure of operating performance and is one of many metrics used by our management team, and by other users, of our consolidated financial statements. For example, EBITDAX can be used to assess our operating performance and return on capital in comparison to other independent exploration and production companies without regard to financial or capital structure, and to assess the financial performance of our assets and our company without regard to capital structure or historical cost basis.

The following table provides a reconciliation of net income to EBITDAX for the three and six months ended June 30, 2012 and 2011:









Three Months Ended
Six Months Ended



June 30,
June 30,
(in thousands) 2012 2011 2012 2011









Net income

$ 319,297

$ 232,182

$ 350,414

$ 274,757
Exploration and abandonments


14,398


400


20,377


1,126
Depreciation, depletion and amortization


141,450


98,881


277,319


189,169
Accretion of discount on asset retirement obligations


1,047


715


2,035


1,419
Impairments of long-lived assets


-


76


-


76
Non-cash stock-based compensation


7,347


4,725


13,475


9,193
Unrealized (gain) loss on derivatives not designated as hedges


(394,763 )

(192,633 )

(268,581 )

12,213
(Gain) loss on sale of assets, net


(827 )

1,431


68


1,455
Interest expense


41,899


21,660


77,736


51,320

Income tax expense on continuing operations




197,563


143,270


216,680


112,801
Discontinued operations

-
-
-
(83,306 )
EBITDAX

$ 327,411
$ 310,707
$ 689,523
$ 570,223







Concho Resources Inc.

Costs Incurred

Unaudited

The table below provides the costs incurred for the three and six months ended June 30, 2012 and 2011.

Costs incurred for oil and natural gas producing activities (a)


















Three Months Ended
Six Months Ended



June 30,
June 30,
(in thousands) 2012 2011 2012 2011









Property acquisition costs:







Proved
$ 5,568
$ 3,230
$ 165,615
$ 69,148
Unproved

21,851

18,132

61,207

75,340
Exploration

159,013

181,353

343,496

271,919
Development
192,051
140,768
386,782
334,485
Total costs incurred for oil and natural gas properties
$ 378,483
$ 343,483
$ 957,100
$ 750,892


















(a) The costs incurred for oil and natural gas producing activities includes the following amounts of asset retirement obligations:













Three Months Ended
Six Months Ended



June 30,
June 30,

(in thousands) 2012 2011 2012 2011










Proved property acquisition costs
$ 77
$ -
$ 2,127
$ 148

Exploration costs

469

320

1,267

640

Development costs
3,239
757
3,283
752

Total
$ 3,785
$ 1,077
$ 6,677
$ 1,540











Concho Resources Inc.

Derivatives Information

Unaudited


















The table below provides data associated with the Company's derivatives at August 6, 2012.





















2012












Third
Quarter


Fourth
Quarter


Total
2013
2014
2015
2016
2017

















Oil Swaps:
















Volume (Bbl)

4,044,500

3,676,500

7,721,000

12,215,000

6,043,000

1,076,000

429,000

168,000

NYMEX price (Bbl) (a)
$ 96.15
$ 96.01
$ 96.08
$ 96.01
$ 91.99
$ 86.69
$ 88.31
$ 87.00

















Natural Gas Swaps:
















Volume (MMBtu)

75,000

75,000

150,000

-

-

-

-

-

NYMEX price (MMBtu) (b)
$ 6.54
$ 6.54
$ 6.54

-

-

-

-

-

















(a) The index prices for the oil contracts are based on the NYMEX - West Texas Intermediate monthly average futures price.
(b) The index prices for the natural gas contracts are based on the NYMEX - Henry Hub last trading day of the month futures price.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

08.01.12 Concho Resources Inc. Announces Participation in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)--Aug. 1, 2012-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the Tudor, Pickering, Holt & Co. Hotter 'N Hell Conference 2012 on Thursday, August 9th, Enercom's The Oil and Gas Conference 17 on Monday, August 13th at 2:45 PM MT, and the Simmons 2012 European Energy Conference Thursday, August 30th at 9:45 AM BST. The presentations will be available on Concho's website, http://www.concho.com. Additionally, the Enercom presentation will be webcast and can be accessed through the Company's website.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at http://www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

05.31.12 Concho Resources Inc. Increases Credit Facility to $2.5 Billion

MIDLAND, Texas--(BUSINESS WIRE)--May. 31, 2012-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced that the Company amended its credit facility, increasing the aggregate lender commitments from $2.0 billion to $2.5 billion, equal to its $2.5 billion borrowing base. At March 31, 2012, Concho had approximately $185 million outstanding under its credit facility.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at http://www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

05.24.12 Concho Resources Inc. Schedules Second Quarter 2012 Conference Call for August 7, 2012

MIDLAND, Texas--(BUSINESS WIRE)--May. 24, 2012-- Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) will host a conference call on Tuesday, August 7, 2012, at 9:00 a.m. CT to discuss its second quarter financial and operating results. Earnings are expected to be released after the market closes on Monday, August 6, 2012.

Individuals who would like to participate should call (800) 638-5439 (passcode: 79957631) approximately 15 minutes before the scheduled conference call time. To access the live audio webcast, please visit the investor relations section of the Company's website, www.concho.com. A replay of the call will also be available, by dialing (888) 286-8010 (passcode: 75490323) or via the Company's website, for approximately 30 days following the conference call.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company’s operations are primarily focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho’s website at www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy

05.22.12 Concho Resources Inc. Announces the Appointment of New Officers

MIDLAND, Texas--(BUSINESS WIRE)--May. 22, 2012-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") today announced the promotion of two new officers to its management team:

Mr. L. Price Moncrief, Vice President of Capital Markets and Strategy

Mr. Moncrief has been employed by the Company since November 2010 as the Company's Director of Corporate Development. He has over 10 years of industry and energy investment banking experience. Mr. Moncrief earned a Bachelor of Science degree in Business Administration from Washington & Lee University and an MBA from the University of Texas at Austin.

Mr. M. Ray Peterson, Vice President of Drilling

Mr. Peterson has been employed by the Company since April 2011 as the Company's Drilling Manager. He has over 34 years of industry experience, including serving as CEO of two contract drilling companies. He earned a Bachelor of Science degree from New Mexico State University and an MBA from Georgia State University.

Tim Leach, Concho's Chairman, CEO and President, commented, "Price and Ray play key roles for the Company and I value both of their opinions and insight. These well-deserved promotions reflect their increasing contributions, as well as the Company's overall expansion."

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at http://www.concho.com.

Source: Concho Resources Inc.

Concho Resources Inc.
Steven H. Pruett, 432-683-7443
Senior Vice President of Corporate Development

05.13.12 Concho Resources Inc. to Acquire Oil & Gas Assets in the Permian Basin

MIDLAND, Texas--(BUSINESS WIRE)--May. 13, 2012-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") today announced that it has entered into a definitive agreement to acquire all the oil and natural gas assets of Three Rivers Operating Company and certain affiliated entities (collectively, "Three Rivers") for $1.0 billion in cash. Three Rivers is a privately-held exploration and production company with approximately 310,000 gross (200,000 net) acres in the Permian Basin, including large positions in the Company's core northern Delaware Basin play, the Midland Basin Wolfberry play, and the emerging southern Midland Basin horizontal Wolfcamp and Cline shale plays.

Highlights of the Three Rivers Acquisition:

  • Estimated proved reserves of approximately 58 million barrels of oil equivalent (50% oil and 55% proved developed) as of April 1, 2012
  • Estimated current net production of 7,000 barrels of oil equivalent per day
  • Adds approximately 380 identified horizontal drilling locations in the Delaware Basin, almost all of which are unproved, and over 1,100 vertical drilling locations in the Midland Basin, of which over 740 are unproved
  • Represents a 42% increase to net acreage in the Midland Basin and a 23% increase to net acreage in the northern Delaware Basin
  • Approximately 65% of the acreage is held by production

"We are pleased to announce our largest and most strategic transaction since the Marbob acquisition nearly two years ago," commented Timothy A. Leach, Concho's Chairman, CEO and President. "Three Rivers represents a material consolidation opportunity within the proven core of the Delaware Basin, a continued expansion into the horizontal Wolfcamp and Cline shale plays in the southern Midland Basin, and a complementary addition to our core Yeso play. Combined with our existing portfolio, these assets give the Company nearly 750,000 net acres across the Permian Basin, with exposure to some of the most exciting oil plays in the U.S. This acquisition is expected to be immediately accretive to earnings, discretionary cash flow, production and reserves on a per share basis and provides an additional platform to significantly grow our production in the Permian Basin. We look forward to accelerating development on these assets and executing the same strategy of delivering return-driven, high-margin growth to our shareholders over the next several years."

Concho intends to finance the acquisition with borrowings under its $2.0 billion credit facility, which had approximately $1.8 billion available to be borrowed at March 31, 2012. In addition, the Company plans to divest $200 million to $400 million of certain non-core assets from the acquisition and its existing assets over the next nine months. In connection with the acquisition, the Company has entered into crude oil swaps on 2.4 million barrels of oil at a weighted average price of $92.90 per barrel for the remainder of 2012 through 2017. Please see the "Derivatives Information" table at the end of this press release for more detailed information about the Company's current derivative positions.

J.P. Morgan acted as the Company's lead financial advisor, BMO Capital Markets acted as a financial advisor and Vinson & Elkins LLP represented the Company in connection with the transaction.

The acquisition is expected to close in July 2012, subject to regulatory approval and other customary closing conditions, and is subject to certain preferential rights to purchase and other customary purchase price adjustments.

Conference Call Information

The Company will host a conference call to discuss the acquisition with analysts, investors and other interested parties on Monday, May 14, 2012 at 10:00 a.m. Central Time. Individuals who would like to participate should call (866) 362-4666 (passcode: 22619627) approximately 15 minutes before the scheduled conference call time. To access the live audio webcast, please visit the investor relations section of the Company's website, http://www.concho.com. A replay of the call will also be available, by dialing (888) 286-8010 (passcode: 51646372) or via the Company's website, for approximately 30 days following the conference call.

Financial and Operational Guidance






Acquisition Impact



2H 2012 FY 2013
Production:





Oil equivalent (MMBoe)

1.2 - 1.3

4.6 - 5.1
% Oil

45% - 55%

50% - 60%






Operating costs and expenses:





Direct lease operating expense ($/Boe)

$10.00 - $11.00

$8.00 - $10.00






Capital expenditures ($ in millions)

$145

$425






About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at http://www.concho.com.

Forward-Looking Statements and Cautionary Statements

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the completion of the transaction and the Company's future financial position, operations, performance, production growth, returns, capital expenditure budgets, oil and natural gas reserves, number of identified drilling locations, drilling program, derivative activities, costs and other guidance. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the "Risk Factors" section of the Company's most recent Form 10-K and 10-Q filings and risks relating to declines in the prices we receive for our oil and natural gas; uncertainties about the estimated quantities of reserves; risks related to the integration of acquired assets; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; drilling and operating risks; the adequacy of our capital resources and liquidity; risks related to the concentration of our operations in the Permian Basin; the results of our hedging program; weather; litigation; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; uncertainties about our ability to replace reserves and economically develop our current reserves; competition in the oil and natural gas industry; and other important factors that could cause actual results to differ materially from those projected.

Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Concho Resources Inc.
Derivatives Information
Unaudited

The table below provides data associated with the Company's derivatives at May 13, 2012.













2012


















Second

Fourth

























Quarter

Third Quarter



Quarter

Total



2013

2014

2015

2016

2017
























































Oil Swaps


























Volume (Bbl)


3,949,500


3,876,500


3,539,500


11,365,500


12,031,000


4,513,000


1,076,000


429,000


168,000
NYMEX price (Bbl) (a)

$ 95.27

$ 96.39

$ 96.23

$ 95.95

$ 96.08

$ 92.85

$ 86.69

$ 88.31

$ 87.00




























Natural Gas Swaps


























Volume (MMBtu)


75,000


75,000


75,000


225,000


-


-


-


-


-
NYMEX price (MMBtu) (b)

$ 6.54

$ 6.54

$ 6.54

$ 6.54


-


-


-


-


-

(a) The index prices for the oil contracts are based on the NYMEX-West Texas Intermediate monthly average futures price.

(b) The index prices for the natural gas contracts are based on the NYMEX-Henry Hub last trading day of the month futures price.

Source: Concho Resources Inc.

Concho Resources Inc.
Price Moncrief, 432-683-7443
Director, Corporate Development

05.02.12 Concho Resources Inc. Reports First Quarter 2012 Financial and Operating Results

MIDLAND, Texas--(BUSINESS WIRE)--May. 2, 2012-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") today reported financial and operating results for the three months ended March 31, 2012. Highlights for the three months ended March 31, 2012 include:

  • Production from continuing operations of 6.9 million barrels of oil equivalent ("MMBoe") for the first quarter of 2012, an increase of 36% over the first quarter of 2011 and a 6% increase over the fourth quarter of 2011
  • Net income of $31.1 million, or $0.30 per diluted share, for the first quarter of 2012, as compared to net income of $42.6 million, or $0.42 per diluted share, in the first quarter of 2011
  • Adjusted net income (non-GAAP)1 of $109.3 million, or $1.05 per diluted share, for the first quarter of 2012, as compared to $81.3 million, or $0.79 per diluted share, in the first quarter of 2011
  • EBITDAX (non-GAAP)2 of $362.1 million for the first quarter of 2012, a 40% increase over the first quarter of 2011

1 Adjusted net income (non-GAAP) is comparable to securities analyst estimates. For an explanation of how we calculate adjusted net income (non-GAAP) and a reconciliation of net income (GAAP) to adjusted net income (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

2 For an explanation of how we calculate and use EBITDAX (non-GAAP) and a reconciliation of net income (GAAP) to EBITDAX (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

First Quarter 2012 Financial Results

Production for the first quarter of 2012 totaled 6.9 MMBoe (4.2 million barrels of oil ("MMBbls") and 16.2 billion cubic feet of natural gas ("Bcf")), an increase of 32% as compared to 5.2 MMBoe (3.2 MMBbls of oil and 12.0 Bcf of natural gas) produced in the first quarter of 2011.

Timothy A. Leach, Concho's Chairman, CEO and President, commented, "This year is off to a strong start; Concho had outstanding production growth during the first three months of 2012. Today, we are running 37 drilling rigs, of which eleven are horizontal - the most in Concho history. The Permian renaissance continues to evolve in a manner that is positive for Concho. For the remainder of this year, we will focus on capital efficiency in all of our areas of operation, but with a particular emphasis on the emerging Delaware Basin."

For the first quarter of 2012, the Company reported net income of $31.1 million, or $0.30 per diluted share, as compared to net income for the first quarter of 2011 of $42.6 million, or $0.42 per diluted share. The Company's first quarter 2012 results were impacted by several non-cash items, including a $126.2 million unrealized mark-to-market loss on commodity derivatives. Excluding this item and its tax effects, the first quarter 2012 adjusted net income (non-GAAP) was $109.3 million, or $1.05 per diluted share. Excluding similar non-cash items and a gain on the sale of assets and their tax impact, adjusted net income (non-GAAP) for the first quarter of 2011 was $81.3 million, or $0.79 per diluted share. For a description and a reconciliation of net income (GAAP) to adjusted net income (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

EBITDAX was $362.1 million in the first quarter of 2012, an increase of 40% from $259.5 million reported in the first quarter of 2011. For a description and a reconciliation of net income (GAAP) to EBITDAX (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

Oil and natural gas sales from continuing operations for the first quarter of 2012 increased 41% when compared to the first quarter of 2011. This increase was attributable to the 36% increase in production and the 8% increase in the Company's unhedged realized oil price, which was slightly offset by the 11% decrease in the Company's unhedged realized natural gas price in the first quarter of 2012 compared to the first quarter of 2011.

Oil and natural gas production expense from continuing operations for the first quarter of 2012, including oil and natural gas taxes, totaled $92.2 million, or $13.32 per barrel of oil equivalent ("Boe"), a 7% increase per Boe from the first quarter of 2011. This increase was due primarily to higher lease operating expenses and workover costs, which averaged $7.28 per Boe in the first quarter of 2012 as compared to $6.67 per Boe in the first quarter of 2011, and higher oil and natural gas taxes, which averaged $6.04 per Boe in the first quarter of 2012 as compared to $5.80 per Boe in the first quarter of 2011. The increase in lease operating expenses per Boe over the first quarter 2011 is primarily due to an increase in the cost of services, including labor related expenses. The per Boe lease operating expense for the first quarter 2012 decreased 9% over the fourth quarter 2011 lease operating expense of $8.03 per Boe.

Depreciation, depletion and amortization expense ("DD&A") from continuing operations for the first quarter of 2012 totaled $135.9 million, or $19.64 per Boe, an 11% increase per Boe from the first quarter of 2011.

General and administrative expense ("G&A") from continuing operations for the first quarter of 2012 totaled $27.4 million, or $3.96 per Boe, as compared to $21.4 million, or $4.19 per Boe, in the first quarter of 2011. Cash G&A for the first quarter of 2012 totaled $21.3 million and stock-based compensation (non-cash) totaled $6.1 million. The decrease in per Boe expense for the first quarter of 2012 over the first quarter of 2011 was primarily due to increased production, offset in part by a 28% increase in absolute G&A expenses primarily due to increased staffing across the Company, which is needed to support the growth of the Company.

The Company's cash flow from operating activities (GAAP) was $345.9 million in the first quarter of 2012, as compared to $165.5 million in the first quarter of 2011, an increase of 109%. Adjusted cash flows (non-GAAP), which are cash flows from operating activities (GAAP) adjusted for settlements paid on derivatives not designated as hedges, were $314.0 million for the first quarter of 2012, as compared to $137.2 million for the first quarter of 2011, an increase of 129%. For a description of the use of adjusted cash flows (non-GAAP) and for a reconciliation of cash flows from operating activities (GAAP) to adjusted cash flows (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

In the first quarter of 2012, the Company made net cash payments on derivatives not designated as hedges of $31.9 million and the non-cash unrealized mark-to-market loss on derivatives not designated as hedges was $126.2 million. In comparison, the Company made net cash payments of $28.3 million on derivatives not designated as hedges and had a $204.8 million non-cash unrealized mark-to-market loss on derivatives not designated as hedges in the first quarter of 2011. To better understand the impact of the Company's derivative positions and their impact on the statements of operations, please see the "Summary Production and Operating Data" and "Derivatives Information" tables at the end of this press release.

Operations

During the first quarter of 2012, the Company commenced the drilling of or participated in a total of 210 gross wells (172 operated), 66 of which had been completed as producers, all of which were successful, and 144 of which were in progress at March 31, 2012. In addition, during the first quarter of 2012, the Company completed 113 wells that were drilled prior to 2012.

As of May 2, the Company had 37 drilling rigs operating in the Permian Basin; 9 of these rigs are drilling Yeso wells in the New Mexico Shelf, 1 is drilling Lower Abo wells in the New Mexico Shelf, 19 are drilling Wolfberry wells in the Texas Permian, 1 is drilling in the Northern Midland Basin in the Texas Permian, 7 are drilling in the Delaware Basin, which includes Delaware sands, Avalon shale, Bone Spring sands, Wolfcamp shale and Pennsylvanian shale. Included in the 37 operated rigs, the Company is currently running 11 horizontal drilling rigs, including 7 in the Delaware Basin, 3 on the New Mexico Shelf and 1 in the Texas Permian.

New Mexico Shelf

During the first quarter of 2012, the Company drilled 106 wells (85 operated) on its New Mexico Shelf assets, which included both Yeso and Lower Abo wells, with a 100% success rate on the 48 wells that had been completed by March 31, 2012. Of the 106 wells drilled, 10 were horizontal, which included 8 Yeso wells and 2 Lower Abo wells. In addition, during the first quarter of 2012, the Company completed 48 wells that were drilled prior to the first quarter of 2012.

Texas Permian

During the first quarter of 2012, the Company drilled 76 wells (71 operated) on its Texas Permian assets with a 100% success rate on the 16 wells that had been completed by March 31, 2012. Of the 76 wells drilled, we drilled 1 horizontal Cline shale well. In addition, during the first quarter of 2012, the Company completed 50 wells that were drilled prior to the first quarter of 2012.

Delaware Basin

During the first quarter of 2012, the Company drilled 28 wells (16 operated) on its Delaware Basin assets with a 100% success rate on the 2 wells that had been completed by March 31, 2012. Of the 28 wells drilled, 25 wells were horizontal, which included 15 Bone Spring sand wells, 4 Avalon shale wells, 5 Wolfcamp shale wells and 1 Delaware sands well. In addition, during the first quarter of 2012, the Company completed 15 wells that were drilled prior to the first quarter of 2012. The Company's net production in the first quarter of 2012 from horizontal Delaware Basin wells averaged approximately 12,400 barrels of oil equivalent per day ("Boepd"), an increase of 9% over the fourth quarter of 2011 and a 210% increase over the first quarter of 2011.

Liquidity

At March 31, 2012, the Company's total debt balance was approximately $2.3 billion, of which $185 million was indebtedness outstanding under the Company's credit facility. The Company's total commitments under its credit facility are $2.0 billion, leaving approximately $1.8 billion available to be borrowed at March 31, 2012. The borrowing base for the Company's assets is $2.5 billion.

Derivative Update

The Company maintains an active hedging program and continues to add to its derivative positions. Please see the "Derivatives Information" table at the end of this press release for more detailed information about the Company's current derivative positions.

Conference Call Information

The Company will host a conference call on Thursday, May 3, 2012, at 9:00 a.m. CT to discuss its first quarter financial and operating results. Interested parties may listen to the conference call via the Company's website at http://www.concho.com or by dialing (800) 901-5226 (passcode: 90559182). A replay of the conference call will be available on the Company's website or by dialing (888) 286-8010 (passcode: 29334342)

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho's website at http://www.concho.com.

Forward-Looking Statements and Cautionary Statements

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's future financial position, liquidity and capital resources, operations, performance, production growth, acquisitions, returns, capital expenditure budgets, oil and natural gas reserves, number of identified drilling locations, drilling program, derivative activities, costs and other guidance included in this press release. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the "Risk Factors" section of the Company's most recent Form 10-K filing and risks relating to declines in the prices we receive for our oil and natural gas; uncertainties about the estimated quantities of reserves; risks related to the integration of acquired assets; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; drilling and operating risks; the adequacy of our capital resources and liquidity; risks related to the concentration of our operations in the Permian Basin; the results of our hedging program; weather; litigation; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; uncertainties about our ability to replace reserves and economically develop our current reserves; competition in the oil and natural gas industry; our existing indebtedness; and other important factors that could cause actual results to differ materially from those projected.

Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

Concho Resources Inc.
Consolidated Balance Sheets
Unaudited

March 31, December 31,
(in thousands, except share and per share amounts) 2012 2011
Assets
Current assets:





Cash and cash equivalents

$ 606


$ 342
Accounts receivable, net of allowance for doubtful accounts:





Oil and natural gas


222,253



213,921
Joint operations and other


192,552



153,746
Derivative instruments


-



1,698
Deferred income taxes


47,579



28,793
Prepaid costs and other

11,501

12,523
Total current assets

474,491

411,023
Property and equipment:





Oil and natural gas properties, successful efforts method


7,919,692



7,347,460
Accumulated depletion and depreciation

(1,249,959 )

(1,116,545 )
Total oil and natural gas properties, net


6,669,733



6,230,915
Other property and equipment, net

77,036

59,203
Total property and equipment, net

6,746,769

6,290,118
Funds held in escrow


-



17,394
Deferred loan costs, net


72,985



65,641
Intangible asset - operating rights, net


33,038



33,425
Inventory


12,184



19,419
Noncurrent derivative instruments


14



7,944
Other assets

7,128

4,612
Total assets

$ 7,346,609

$ 6,849,576
Liabilities and Stockholders' Equity
Current liabilities:





Accounts payable:





Trade

$ 11,480


$ 23,341
Related parties


145



11
Bank overdrafts


70,158



39,241
Revenue payable


177,783



146,061
Accrued and prepaid drilling costs


360,224



293,919
Derivative instruments


116,959



56,218
Other current liabilities

131,062

142,686
Total current liabilities

867,811

701,477
Long-term debt


2,281,752



2,080,141
Deferred income taxes


1,026,869



1,002,295
Noncurrent derivative instruments


88,066



32,254
Asset retirement obligations and other long-term liabilities


56,388



52,670
Commitments and contingencies





Stockholders' equity:





Common stock, $0.001 par value; 300,000,000 authorized; 104,093,681 and 103,756,222





shares issued at March 31, 2012 and December 31, 2011, respectively


104



104
Additional paid-in capital


1,941,662



1,925,757
Retained earnings


1,089,991



1,058,874

Treasury stock, at cost; 74,273 and 55,990 shares at March 31, 2012 and December 31, 2011, respectively



(6,034 )

(3,996 )
Total stockholders' equity

3,025,723

2,980,739
Total liabilities and stockholders' equity

$ 7,346,609

$ 6,849,576
Concho Resources Inc.
Consolidated Statements of Operations
Unaudited

Three Months Ended



March 31,
(in thousands, except per share amounts) 2012 2011
Operating revenues:



Oil sales

$ 413,647


$ 282,427
Natural gas sales

94,158

78,413
Total operating revenues

507,805

360,840
Operating costs and expenses:





Oil and natural gas production


92,150



63,658
Exploration and abandonments


5,979



726
Depreciation, depletion and amortization


135,869



90,288
Accretion of discount on asset retirement obligations


988



704
General and administrative (including non-cash stock-based compensation of $6,128 and $4,468





for the three months ended March 31, 2012 and 2011, respectively)


27,387



21,392
Loss on derivatives not designated as hedges

158,093

233,142
Total operating costs and expenses

420,466

409,910
Income (loss) from operations

87,339

(49,070 )
Other income (expense):





Interest expense


(35,837 )