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12.30.13 Concho Resources Inc. Announces Participation in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)--Dec. 30, 2013-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the Goldman Sachs Global Energy Conference 2014 on Wednesday, January 8th at 10:15 AM EST, the BMO Capital Markets 11th Annual Unconventional Resource Conference on Tuesday, January 14th, and the U.S. Capital Advisors E&P Corporate Access Day on Tuesday, January 21st. The presentations 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

12.12.13 Concho Resources Inc. Responds to Severe Winter Weather Impact on Operations

MIDLAND, Texas--(BUSINESS WIRE)--Dec. 12, 2013-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company) announced today that the combined effect of two severe winter storms across the Permian Basin in late November and early December significantly impacted the Company's production. The Company experienced widespread power outages and considerable icing across all three of its core areas (New Mexico Shelf, Delaware Basin and Texas Permian).

The impact of the severe winter weather was not included in Concho's 2013 annual production guidance, as described in the Company's earnings release on November 6, 2013. The Company does not plan to adjust its production guidance; however, the unexpected impact of the severe winter storms is expected to cause 2013 annual production to fall near the low end of its guidance range.

In addition, Concho is pleased to report that the rig count additions associated with its accelerated growth plan are ahead of schedule. The Company is now running 24 rigs, of which 20 are drilling horizontally. Concho expects to add at least two additional horizontal rigs before the end of the year.

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 filing and risks relating to declines in the prices Concho receives for the Company's 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 the Company's capital resources and liquidity; risks related to the concentration of the Company's operations in the Permian Basin; the results of the Company's hedging program; weather; litigation; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; uncertainties about the Company's ability to replace reserves and economically develop the Company's 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.

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

12.09.13 Concho Resources Inc. Schedules Fourth Quarter 2013 Conference Call for February 20, 2014

MIDLAND, Texas--(BUSINESS WIRE)--Dec. 9, 2013-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") will host a conference call on Thursday, February 20, 2014, 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 19, 2014.

Individuals who would like to participate should call (877) 415-3186 (passcode: 28809385) 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: 17690036) 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

11.14.13 Concho Resources Expands Executive Management Team

MIDLAND, Texas--(BUSINESS WIRE)--Nov. 14, 2013-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") today announced several management promotions designed to add depth and structure to Concho's management team.

Joe Wright and Will Giraud, each formerly a Senior Vice President of the Company, have been promoted to Executive Vice President. "These promotions recognize Joe and Will's past contributions to the Company's success, strengthen our organizational structure and provide leadership development for the future. I look forward to working closely with Joe and Will as we continue to guide the Company's daily operations and plan for the future," Concho's Chairman, Chief Executive Officer and President Tim Leach said.

Steve Guthrie, formerly Vice President of Texas, has been promoted to Senior Vice President of Business Operations and Engineering. After serving in various operational and engineering positions with Henry Petroleum and Exxon, Mr. Guthrie joined Concho in 2004 and has held positions of increasing responsibility since that time. Mr. Guthrie is a graduate of Texas Tech University with a Bachelor of Science degree in Petroleum Engineering.

"Steve's promotion reflects his 30 years of broad industry experience, as well as the great development success of the Company's Wolfberry and Southern Delaware Basin assets under his leadership," said Mr. Wright. "As we embark on an accelerated production growth strategy, I look forward to Steve playing a broader role in the management of the Company's operations."

The Company's executive management team now consists of Tim Leach, Chairman, Chief Executive Officer and President; Joe Wright, Executive Vice President and Chief Operating Officer; Will Giraud, Executive Vice President and Chief Commercial Officer; Steve Guthrie, Senior Vice President of Business Operations and Engineering; Darin Holderness, Senior Vice President and Chief Financial Officer; and Matt Hyde, Senior Vice President of Exploration.

In addition, Clay Bateman, formerly an asset manager for the Southern Delaware Basin, has been promoted to replace Mr. Guthrie as Vice President of Texas. Mr. Bateman came to Concho in 2008 and has held various leadership roles within the Company's Texas asset teams since that time. He graduated from the University of Texas with a Bachelor of Science degree in Petroleum Engineering.

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

11.11.13 Concho Resources Inc. Announces Participation in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)--Nov. 11, 2013-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the Bank of America Merrill Lynch 2013 Global Energy Conference on Thursday, November 21st at 9:00 AM EST, the Bank of America Merrill Lynch 2013 Leveraged Finance Conference on Tuesday, December 3rd at 3:30 PM EST, and the Capital One Southcoast 8th Annual Energy Conference on Thursday, December 12th at 11:40 AM CST. 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

11.06.13 Concho Resources Inc. Announces Three Year Accelerated Growth Plan, Provides 2014 Capital Budget Detail and Guidance and Reports Third Quarter 2013 Financial and Operating Results

MIDLAND, Texas--(BUSINESS WIRE)--Nov. 6, 2013-- Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) today announced a new three-year growth plan intended to double production by 2016. In addition, the Company provided details on its 2014 capital budget and guidance and reported financial and operating results for the three and nine months ended September 30, 2013. Highlights include:

  • Accelerated growth plan that is expected to deliver annual production of over 67 million barrels of oil equivalent (“MMBoe”) in 2016 and reduce the Company’s leverage ratio (debt-to-EBITDAX) to less than 1.5x
  • 2014 capital budget of $2.3 billion and expected production growth of 18% to 22%
  • Production from continuing operations of 8.7 million barrels of oil equivalent (“MMBoe”) for the third quarter of 2013, a 19% increase over the third quarter of 2012 and a 5% increase over the second quarter of 2013
  • Net income of $30.4 million, or $0.29 per diluted share, for the third quarter of 2013, as compared to net income of $6.0 million, or $0.06 per diluted share, for the third quarter of 2012
  • Adjusted net income1 (non-GAAP) of $111.1 million, or $1.06 per diluted share, for the third quarter of 2013, as compared to $99.9 million, or $0.96 per diluted share, for the third quarter of 2012
  • EBITDAX2 (non-GAAP) of $456.4 million for the third quarter of 2013, as compared to $387.2 million for the third quarter of 2012

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

Three-Year Accelerated Growth Plan

Concho is launching an accelerated growth plan intended to double production by 2016 and strategically position the Company as the leading operator in the Permian Basin. By accelerating activity across multiple horizons in the Permian, the Company believes that it can deliver annualized organic production growth of 25% over the next three years, which is in excess of its historical average, while increasing crude oil mix and reducing leverage ratios.

“Strategically, we have significant flexibility in how we choose to execute our business. That flexibility is a direct result of the success across our assets in both the Delaware and Midland Basins,” commented Tim Leach, Concho’s Chairman, CEO and President. “The performance of our assets and depth of our inventory are compelling and suggest that we can increase our growth rate. Combined with a strong balance sheet, robust cash margin and compelling economics, we are well positioned today to accelerate growth. Our 2014 capital budget is intended to lay the groundwork for a multi-year growth plan expected to double our production while reducing our leverage ratio by 2016.”

Third Quarter 2013 Financial Results

Production from continuing operations for the third quarter of 2013 totaled 8.7 MMBoe (5.4 million barrels of oil (“MMBbls”) and 19.6 billion cubic feet of natural gas (“Bcf”)), an increase of 19% as compared to 7.3 MMBoe (4.3 MMBbls and 17.7 Bcf) produced in the third quarter of 2012 and an increase of 5% as compared to the 8.3 MMBoe (5.2 MMBbls and 18.6 Bcf) produced in the second quarter of 2013.

“The third quarter was a great example of the quality of our assets and our ability to execute,” said Tim Leach. “We had a record quarter in terms of production and cash flow. It’s hard to ignore all of the momentum that Concho has generated, especially when you consider our industry-leading well results in both the northern and southern Delaware Basin and our early success in testing the horizontal potential of our Midland Basin assets.”

For the third quarter of 2013, the Company reported net income of $30.4 million, or $0.29 per diluted share, as compared to net income of $6.0 million, or $0.06 per diluted share, for the third quarter of 2012. The Company’s third quarter 2013 results were impacted by several non-cash and unusual items including: (1) a $168.6 million loss on derivatives not designated as hedges, (2) $45.3 million in cash payments on commodity derivatives, (3) $7.6 million of leasehold abandonments and (4) $1.8 million loss on the disposition of assets, net. Adjusting for these items and their tax effects, third quarter 2013 adjusted net income (non-GAAP) was $111.1 million, or $1.06 per diluted share. Adjusting for similar non-cash and unusual items and their tax impact, adjusted net income (non-GAAP) for the third quarter of 2012 was $99.9 million, or $0.96 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 $456.4 million in the third quarter of 2013, an increase of 18% from $387.2 million reported in the third quarter of 2012 and an increase of 7% from the $424.8 million reported in the second quarter of 2013. 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 third quarter of 2013 increased 40% when compared to the third quarter of 2012. This increase was attributable to a 16% increase ($13.87 per barrel) in the Company’s unhedged realized oil price, a 6% increase ($0.31 per thousand cubic feet of natural gas (“Mcf”)) in the Company’s unhedged realized natural gas price, and a 19% increase in production from continuing operations.

Oil and natural gas production expense from continuing operations for the third quarter of 2013, including oil and natural gas taxes, totaled $120.2 million, or $13.85 per barrel of oil equivalent (“Boe”), a 15% increase per Boe from the third quarter of 2012. This increase was primarily due to (1) higher oil and natural gas taxes, which averaged $6.08 per Boe in the third quarter of 2013 as compared to $5.22 in the third quarter of 2012, as a result of higher oil and natural gas prices, and (2) higher lease operating expenses and workover costs, which averaged $7.77 per Boe in the third quarter of 2013 as compared to $6.87 per Boe in the third quarter of 2012.

Depreciation, depletion and amortization (“DD&A”) expense from continuing operations for the third quarter of 2013 totaled $200.6 million, or $23.11 per Boe, a 13% increase per Boe from the third quarter of 2012 and less than a 2% increase over the second quarter of 2013.

General and administrative expense (“G&A”) from continuing operations for the third quarter of 2013 totaled $40.8 million, or $4.70 per Boe, as compared to $35.5 million, or $4.88 per Boe, in the third quarter of 2012. Cash G&A for the third quarter of 2013 totaled $30.9 million and stock-based compensation (non-cash) totaled $9.9 million. The decrease in per Boe expense for the third quarter of 2013 over the third quarter of 2012 was primarily due to a 19% increase in production from continuing operations, and was partially offset by a 15% increase in absolute G&A expenses.

The Company’s cash flows from operating activities (GAAP) were $944.6 million for the first nine months of 2013, as compared to $845.6 million for the first nine months of 2012, an increase of 12%. Adjusted cash flows (non-GAAP), which are cash flows from operating activities (GAAP) adjusted for settlements paid on or received from derivatives not designated as hedges, were $907.0 million for the first nine months of 2013, as compared to $838.2 million for the first nine months of 2012, an increase of 8%. 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.

Operations

For the quarter ended September 30, 2013, the Company commenced the drilling of or participated in a total of 124 gross wells (90 operated). The Company had a 100% success rate on the 144 wells that were completed in the third quarter of 2013.

The table below summarizes the Company’s gross drilling activities by core area for the third quarter of 2013:


3Q 2013


Total Wells Operated Wells Completed Wells






New Mexico Shelf
33
7
47
Texas Permian
50
50
52
Delaware Basin
41
33
45
Total
124
90
144






Currently, the Company is operating 23 drilling rigs; 1 of these rigs is drilling in the New Mexico Shelf, 6 are drilling in the Texas Permian and 16 are drilling in the Delaware Basin. Of the Company’s 23 operated rigs, 18 are drilling horizontally, including 1 in the New Mexico Shelf, 2 in the Texas Permian and 15 in the Delaware Basin.

Delaware Basin

Of the 41 wells drilled in the Delaware Basin, 32 were Bone Spring sands wells, 4 were Brushy Canyon wells and 5 were Wolfcamp shale wells. The Company’s net production in the third quarter of 2013 from horizontal Delaware Basin wells averaged approximately 33,700 Boe per day, a 111% increase over the third quarter of 2012 and an increase of 6% over the second quarter of 2013.

Credit Facility

At September 30, 2013, the Company had borrowings outstanding under the credit facility of $207.6 million, and availability under the credit facility was approximately $2.3 billion.

Updated 2013 Capital Budget and Guidance

The Company now estimates that its annual 2013 production will total approximately 33.5 to 34.0 MMBoe, compared to the Company’s most recent production guidance range of approximately 33.4 to 34.8 MMBoe and that 2013 production will be over 62% crude oil, as compared to the previous guidance of 60% to 62% crude oil. The tighter range is in response to previously disclosed volume curtailment issues in the New Mexico Shelf core area due to midstream and infrastructure delays. In addition, the Company now estimates that its capital spending for 2013 will approximate $1.8 billion, as compared to most recent guidance of approximately $1.6 billion. This increase in planned capital spending for the remainder of 2013 is the result of increased activity levels in both the Midland and Delaware Basins as the Company begins its three-year accelerated growth plan.

2014 Capital Budget

Concho’s capital budget for 2014 is approximately $2.3 billion, which the Company believes will yield annual production growth in the range of 18% to 22% and allow the Company to accelerate growth beyond its average historical organic rate over the next three years.

This budget contemplates operating an average of 37 drilling rigs for 2014, of which 32 will drill horizontally. Concho estimates that its 2014 capital budget and future capital spending should allow the Company to double production in three years and concurrently reduce its leverage metrics assuming a NYMEX crude oil price of $90.00 per barrel and a NYMEX natural gas price of $4.00 per million British thermal units (“MMBtu”) for the Company’s unhedged production. 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 $2.3 billion capital budget, approximately $2 billion will be dedicated to the Company's drilling program and 90% of the Company’s drilling budget will be directed towards horizontal drilling.

The table below summarizes the Company’s 2014 drilling budget:


2014 Drilling Budget


Capital ($mm) Gross Wells Operated Rigs (Vt/Hz)






New Mexico Shelf
$152
136

0/2

Texas Permian
459
190

5/9

Delaware Basin
1,406
281

0/21

Total
$2,017
607

5/32







The remaining capital will be allocated between leasehold acquisitions, geological and geophysical (“G&G”) and facilities.

2014 Guidance

Production:
Annual Production Growth
18% - 22%
% Oil
62% - 64%


Price differentials to NYMEX ($90/Bbl; $4/MMBtu):

(excluding the effects of hedging)

Crude oil (Bbl)
93% - 95%
Natural gas (Mcf)
120% - 140%


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)
$3.50 - $4.00
Non-cash stock based compensation ($/Boe)
$1.15 - $1.25


DD&A expense ($/Boe)
$23.00 - $25.00


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


Interest expense ($ in millions)
$225 - $235


Income taxes:
39%
Percent deferred of total taxes
75% - 85%


Capital expenditures ($ in billions)
$2.3


Derivative Update

The Company maintains an active crude oil and natural gas hedging program and has continued 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 and Presentation Information

The Company will host a conference call on Thursday, November 7, 2013 at 9:00 a.m. Central Time to discuss the accelerated growth plan, 2014 budget guidance and the third quarter 2013 financial and operating results, with an accompanying presentation. Interested parties may listen to the conference call via the Company’s website at www.concho.com or by dialing (866) 713-8563 (passcode: 82695804). The presentation is also available on the Company’s website. To access the presentation, visit www.concho.com and select “Investor Relations,” then “Presentations.”

A replay of the conference call will be available on the Company’s website or by dialing (888) 286-8010 (passcode: 91613648).

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 filing and risks relating to declines in the prices Concho receives for the Company’s 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 the Company’s capital resources and liquidity; risks related to the concentration of the Company’s operations in the Permian Basin; the results of the Company’s hedging program; weather; litigation; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; uncertainties about the Company’s ability to replace reserves and economically develop the Company’s 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)

2013 2012
Assets
Current assets:





Cash and cash equivalents

$ 22


$ 2,880
Accounts receivable, net of allowance for doubtful accounts:





Oil and natural gas


277,045



198,053
Joint operations and other


277,286



202,738
Derivative instruments


872



35,942
Deferred income taxes


33,150



-
Prepaid costs and other

19,337

19,269
Total current assets

607,712

458,882
Property and equipment:





Oil and natural gas properties, successful efforts method


10,852,246



9,455,599
Accumulated depletion and depreciation

(2,176,041 )

(1,565,316 )
Total oil and natural gas properties, net


8,676,205



7,890,283
Other property and equipment, net

111,705

103,141
Total property and equipment, net

8,787,910

7,993,424
Funds held in escrow


1,964



-
Deferred loan costs, net


76,377



77,609
Intangible asset - operating rights, net


28,980



30,076
Inventory


19,894



20,611
Noncurrent derivative instruments


-



2,769
Other assets

7,864

6,066
Total assets

$ 9,530,701

$ 8,589,437
Liabilities and Stockholders’ Equity
Current liabilities:





Accounts payable:





Trade

$ 36,813


$ 31,144
Related parties


-



185
Bank overdrafts


69,444



24,275
Revenue payable


194,008



162,073
Accrued and prepaid drilling costs


323,928



351,919
Derivative instruments


71,364



1,584
Deferred income taxes


-



8,566
Other current liabilities

178,727

160,340
Total current liabilities

874,284

740,086
Long-term debt


3,588,650



3,101,103
Deferred income taxes


1,302,249



1,186,621
Noncurrent derivative instruments


24,049



12,049
Asset retirement obligations and other long-term liabilities


96,756



83,382
Stockholders’ equity:





Common stock, $0.001 par value; 300,000,000 authorized; 105,194,283 and





104,668,427 shares issued at September 30, 2013 and December 31, 2012, respectively


105



105
Additional paid-in capital


2,019,540



1,982,714
Retained earnings


1,635,777



1,490,563
Treasury stock, at cost; 125,580 and 86,861 shares at September 30, 2013 and





December 31, 2012, respectively

(10,709 )

(7,186 )
Total stockholders’ equity

3,644,713

3,466,196
Total liabilities and stockholders’ equity

$ 9,530,701

$ 8,589,437
Concho Resources Inc.
Consolidated Statements of Operations
Unaudited








Three Months Ended

Nine Months Ended



September 30,

September 30,
(in thousands, except per share amounts) 2013 2012 2013 2012












Operating revenues:











Oil sales

$ 553,068


$ 380,446


$ 1,412,887


$ 1,099,504
Natural gas sales

99,852

84,897

274,946

242,784
Total operating revenues

652,920

465,343

1,687,833

1,342,288
Operating costs and expenses:











Oil and natural gas production


120,231



87,964



328,295



251,641
Exploration and abandonments


10,992



6,958



37,797



27,335
Depreciation, depletion and amortization


200,625



148,145



557,775



408,675
Accretion of discount on asset retirement obligations


1,574



1,084



4,410



2,826
Impairments of long-lived assets


-



-



65,375



-
General and administrative (including non-cash stock-based compensation of











$9,923 and $7,959 for the three months ended September 30, 2013 and 2012,











respectively, and $25,278 and $21,434 for the nine months ended











September 30, 2013 and 2012, respectively)


40,836



35,492



125,120



95,994
(Gain) loss on derivatives not designated as hedges

168,610

135,415

157,303

(109,542 )
Total operating costs and expenses

542,868

415,058

1,276,075

676,929
Income from operations

110,052

50,285

411,758

665,359
Other income (expense):











Interest expense


(55,995 )


(51,337 )


(162,180 )


(129,073 )
Loss on extinguishment of debt


-



-



(28,616 )


-
Other, net

(1,941 )

(3,114 )

(1,806 )

(4,917 )
Total other expense

(57,936 )

(54,451 )

(192,602 )

(133,990 )
Income (loss) from continuing operations before income taxes


52,116



(4,166 )


219,156



531,369

Income tax (expense) benefit



(21,695 )

995

(86,023 )

(204,327 )
Income (loss) from continuing operations


30,421



(3,171 )


133,133



327,042
Income from discontinued operations, net of tax

-

9,159

12,081

29,360
Net income

$ 30,421

$ 5,988

$ 145,214

$ 356,402
Basic earnings per share:











Income (loss) from continuing operations

$ 0.29


$ (0.03 )

$ 1.27


$ 3.17
Income from discontinued operations, net of tax

-

0.09

0.12

0.29
Net income

$ 0.29

$ 0.06

$ 1.39

$ 3.46
Diluted earnings per share:











Income (loss) from continuing operations

$ 0.29


$ (0.03 )

$ 1.27


$ 3.15
Income from discontinued operations, net of tax

-

0.09

0.11

0.28
Net income

$ 0.29

$ 0.06

$ 1.38

$ 3.43
Concho Resources Inc.
Consolidated Statements of Cash Flows
Unaudited






Nine Months Ended



September 30,
(in thousands) 2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:





Net income

$ 145,214


$ 356,402
Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation, depletion and amortization


557,775



408,675
Accretion of discount on asset retirement obligations


4,410



2,826
Impairments of long-lived assets


65,375



-
Exploration and abandonments, including dry holes


13,159



15,224
Non-cash stock-based compensation expense


25,278



21,434
Deferred income taxes


75,808



203,107
Loss on disposition of assets, net


1,717



285
(Gain) loss on derivatives not designated as hedges


157,303



(109,542 )
Discontinued operations


(12,250 )


28,591
Other non-cash items


17,020



9,066
Changes in operating assets and liabilities, net of acquisitions and dispositions:





Accounts receivable


(113,226 )


(54,752 )
Prepaid costs and other


(1,866 )


(14,894 )
Inventory


434



(8,528 )
Accounts payable


4,407



(4,919 )
Revenue payable


44,983



(3,673 )
Other current liabilities

(40,897 )

(3,666 )
Net cash provided by operating activities

944,644

845,636
CASH FLOWS FROM INVESTING ACTIVITIES:





Capital expenditures on oil and natural gas properties


(1,426,349 )


(2,334,246 )
Additions to other property and equipment


(21,311 )


(47,489 )
Proceeds from the disposition of assets


15,212



4,419
Funds held in escrow


(1,964 )


17,394
Settlements paid on derivatives not designated as hedges

(37,684 )

(7,485 )
Net cash used in investing activities

(1,472,096 )

(2,367,407 )
CASH FLOWS FROM FINANCING ACTIVITIES:





Proceeds from issuance of debt


3,283,875



3,856,500
Payments of debt


(2,798,400 )


(2,336,000 )
Exercise of stock options


2,304



8,062
Excess tax benefit from stock-based compensation


9,244



18,522
Payments for loan costs


(14,075 )


(23,926 )
Purchase of treasury stock


(3,523 )


(2,721 )
Bank overdrafts

45,169

1,283
Net cash provided by financing activities

524,594

1,521,720
Net decrease in cash and cash equivalents


(2,858 )


(51 )
Cash and cash equivalents at beginning of period

2,880

342
Cash and cash equivalents at end of period

$ 22

$ 291




















Concho Resources Inc.
Summary Production and Price Data
Unaudited

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



Three Months Ended Nine Months Ended






September 30,
September 30,
2013 2012 2013 2012











Production and operating data from continuing and discontinued operations:

Net production volumes:









Oil (MBbl)

5,417


4,619

15,376


13,053


Natural gas (MMcf)

19,593


19,122

56,006


50,970


Total (MBoe)

8,683


7,806

24,710


21,548













Average daily production volumes:









Oil (Bbl)

58,880


50,207

56,322


47,639


Natural gas (Mcf)

212,967


207,848

205,150


186,022


Total (Boe)

94,375


84,848

90,514


78,643













Average prices:









Oil, without derivatives (Bbl)
$ 102.10

$ 88.13
$ 91.89

$ 90.56


Oil, with derivatives (Bbl) (a)
$ 92.89

$ 91.56
$ 89.12

$ 89.91


Natural gas, without derivatives (Mcf)
$ 5.10

$ 4.73
$ 4.91

$ 5.03


Natural gas, with derivatives (Mcf) (a)
$ 5.33

$ 4.75
$ 5.00

$ 5.04


Total, without derivatives (Boe)
$ 75.20

$ 63.74
$ 68.31

$ 66.74


Total, with derivatives (Boe) (a)
$ 69.98

$ 65.81
$ 66.78

$ 66.39













Operating costs and expenses per Boe:









Lease operating expenses and workover costs
$ 7.77

$ 7.15
$ 7.59

$ 7.30


Oil and natural gas taxes
$ 6.08

$ 5.24
$ 5.70

$ 5.53


Depreciation, depletion and amortization
$ 23.11

$ 20.19
$ 22.57

$ 20.18


General and administrative
$ 4.70

$ 4.47
$ 5.06

$ 4.37













(a) Includes the effect of cash settlements received from (paid on) commodity derivatives not designated as hedges:










Three Months Ended
Nine Months Ended






September 30,
September 30,


(in thousands) 2013 2012 2013 2012














Cash receipts from (payments on) derivatives not designated as hedges:



Oil derivatives
$ (49,864 )
$ 15,859
$ (42,528 )
$ (8,374 )



Natural gas derivatives
4,589
280
4,844
889




Total
$ (45,275 )
$ 16,139
$ (37,684 )
$ (7,485 )
















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 our statements of cash flows. 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 the Company’s continuing operations concerning production and operating data for the periods indicated:



Three Months Ended Nine Months Ended






September 30,
September 30,
2013 2012 2013 2012











Production and operating data from continuing operations:






Net production volumes:









Oil (MBbl)

5,417


4,312

15,376


12,141


Natural gas (MMcf)

19,593


17,740

56,006


48,151


Total (MBoe)

8,683


7,269

24,710


20,166













Average daily production volumes:









Oil (Bbl)

58,880


46,870

56,322


44,310


Natural gas (Mcf)

212,967


192,826

205,150


175,734


Total (Boe)

94,375


79,008

90,514


73,599













Average prices:









Oil, without derivatives (Bbl)
$ 102.10

$ 88.23
$ 91.89

$ 90.56


Oil, with derivatives (Bbl) (a)
$ 92.89

$ 91.91
$ 89.12

$ 89.87


Natural gas, without derivatives (Mcf)
$ 5.10

$ 4.79
$ 4.91

$ 5.04


Natural gas, with derivatives (Mcf) (a)
$ 5.33

$ 4.80
$ 5.00

$ 5.06


Total, without derivatives (Boe)
$ 75.20

$ 64.02
$ 68.31

$ 66.56


Total, with derivatives (Boe) (a)
$ 69.98

$ 66.24
$ 66.78

$ 66.19













Operating costs and expenses per Boe:









Lease operating expenses and workover costs
$ 7.77

$ 6.87
$ 7.59

$ 7.00


Oil and natural gas taxes
$ 6.08

$ 5.22
$ 5.70

$ 5.48


Depreciation, depletion and amortization
$ 23.11

$ 20.38
$ 22.57

$ 20.26


General and administrative
$ 4.70

$ 4.88
$ 5.06

$ 4.76













(a) Includes the effect of cash settlements received from (paid on) commodity derivatives not designated as hedges:








Three Months Ended
Nine Months Ended






September 30,
September 30,


(in thousands) 2013 2012 2013 2012














Cash receipts from (payments on) derivatives not designated as hedges:



Oil derivatives
$ (49,864 )
$ 15,859
$ (42,528 )
$ (8,374 )



Natural gas derivatives
4,589
280
4,844
889




Total
$ (45,275 )
$ 16,139
$ (37,684 )
$ (7,485 )
















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 our statements of cash flows. 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 and unusual items.

Adjusted Net Income

The following table provides a reconciliation of net income (GAAP) to adjusted net income (non-GAAP) for the periods indicated:


Three Months Ended Nine Months Ended


September 30,
September 30,
(in thousands, except per share amounts) 2013 2012 2013 2012







Net income - as reported
$ 30,421

$ 5,988

$ 145,214

$ 356,402








Adjustments for certain non-cash and unusual items:







(Gain) loss on derivatives not designated as hedges

168,610


135,415


157,303


(109,542 )
Cash receipts from (payments on) derivatives not designated as hedges

(45,275 )

16,139


(37,684 )

(7,485 )
Impairments of long-lived assets

-


-


65,375


-
Leasehold abandonments

7,578


677


13,828


9,234
Loss on extinguishment of debt

-


-


28,616


-
Loss on disposition of assets, net

1,849


217


1,717


285
Discontinued operations:







Gain on disposition of assets

-


-


(19,599 )

-
Tax impact (a)
(52,043 )
(58,540 )
(81,098 )
41,176
Adjusted net income
$ 111,140
$ 99,896
$ 273,672
$ 290,070








Adjusted earnings per share:







Basic
$ 1.06

$ 0.97

$ 2.61

$ 2.81
Diluted
$ 1.06

$ 0.96

$ 2.61

$ 2.79








Effective tax rates

39.2 %

38.4 %

38.7 %

38.3 %








(a) The tax impact is computed utilizing the Company's adjusted statutory effective federal and state income tax rates shown in the table above.

Adjusted Cash Flows

The following table provides a reconciliation of cash flows from operating activities (GAAP) to adjusted cash flows (non-GAAP) for the periods indicated:


Nine Months Ended


September 30,
(in thousands) 2013 2012




Cash flows from operating activities
$ 944,644

$ 845,636
Settlements paid on derivatives not designated as hedges (a)
(37,684 )
(7,485 )
Adjusted cash flows
$ 906,960
$ 838,151




(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.

The Company defines EBITDAX as net income, plus (1) exploration and abandonments expense, (2) depreciation, depletion and amortization expense, (3) accretion expense, (4) impairment of long-lived assets (5) non-cash stock-based compensation expense, (6) (gain) loss on derivatives not designated as hedges, (7) cash receipts from (payments on) derivatives not designated as hedges, (8) (gain) loss on disposition of assets, net, (9) interest expense, (10) loss on extinguishment of debt, (11) federal and state income taxes on continuing operations and (12) 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.

The Company’s EBITDAX measure (which includes continuing and discontinued operations) provides additional information which may be used to better understand the Company’s operations. EBITDAX is one of several metrics that the Company uses as a supplemental financial measurement in the evaluation of its business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of 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 the Company, may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDAX is a widely followed measure of operating performance and is one of many metrics used by the Company’s management team, and by other users, of the Company’s consolidated financial statements. For example, EBITDAX can be used to assess the Company’s 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 the Company’s assets and the Company without regard to capital structure or historical cost basis.

The following table provides a reconciliation of net income to EBITDAX for the periods indicated:


Three





Months









Ended
Three Months Ended
Nine Months Ended


June 30,
September 30,
September 30,
(in thousands) 2013 2013 2012 2013 2012










Net income
$ 84,700

$ 30,421

$ 5,988

$ 145,214

$ 356,402
Exploration and abandonments

8,398


10,992


6,958


37,797


27,335
Depreciation, depletion and amortization

188,730


200,625


148,145


557,775


408,675
Accretion of discount on asset retirement obligations

1,442


1,574


1,084


4,410


2,826
Impairments of long-lived assets

65,375


-


-


65,375


-
Non-cash stock-based compensation

8,588


9,923


7,959


25,278


21,434
(Gain) loss on derivatives not designated as hedges

(70,324 )

168,610


135,415


157,303


(109,542 )
Cash receipts from (payments on) derivatives not









designated as hedges

1,575


(45,275 )

16,139


(37,684 )

(7,485 )
(Gain) loss of disposition of assets, net

(137 )

1,849


217


1,717


285
Interest expense

54,079


55,995


51,337


162,180


129,073
Loss on extinguishment of debt

28,616


-


-


28,616


-
Income tax expense (benefit) from continuing operations

53,351


21,695


(995 )

86,023


204,327
Discontinued operations
453
-
14,962
(12,081 )
43,402
EBITDAX
$ 424,846
$ 456,409
$ 387,209
$ 1,221,923
$ 1,076,732




















Concho Resources Inc.
Costs Incurred
Unaudited

The table below provides the costs incurred for the periods indicated:

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



Three Months Ended Nine Months Ended




September 30,
September 30,
(in thousands) 2013 2012 2013 2012









Property acquisition costs:








Proved
$ -
$ 690,158
$ 2,376
$ 855,773

Unproved

13,991

349,903

58,832

411,110
Exploration

229,082

223,569

779,026

567,065
Development
197,696
187,759
593,006
574,541

Total costs incurred for oil and natural gas properties
$ 440,769
$ 1,451,389
$ 1,433,240
$ 2,408,489










(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) 2013 2012 2013 2012











Exploration costs
$ 535
$ 1,185
$ 2,089
$ 2,452

Development costs
1,801
5,019
9,163
8,302


Total asset retirement obligations
$ 2,336
$ 6,204
$ 11,252
$ 10,754















Concho Resources Inc.
Derivatives Information
Unaudited

The table below provides data associated with the Company’s derivatives at November 6, 2013:



Fourth Quarter






2013
2014
2015
2016
2017











Oil Swaps: (a)

Volume (Bbl)

4,764,000


15,565,000


12,092,000

429,000

168,000

Price (Bbl)
$ 96.08

$ 91.96

$ 86.82
$ 88.31
$ 87.00











Oil Basis Swaps: (b)

Volume (Bbl)

3,404,000


9,475,000


-

-

-

Price (Bbl)
$ (1.12 )
$ (0.46 )
$ -
$ -
$ -











Natural Gas Swaps: (c)

Volume (MMBtu)

6,992,000


-


-

-

-

Price (MMBtu)
$ 4.25

$ -

$ -
$ -
$ -











Natural Gas Collars: (d)

Volume (MMBtu)

-


21,900,000


-

-

-

Ceiling Price (MMBtu)
$ -

$ 4.40

$ -
$ -
$ -

Floor Price (MMBtu)
$ -

$ 3.85

$ -
$ -
$ -











Natural Gas Basis Swaps: (e)

Volume (MMBtu)

6,440,000


-


-

-

-

Price (MMBtu)
$ (0.15 )
$ -

$ -
$ -
$ -











(a) The index prices for the oil contracts are based on the NYMEX – West Texas Intermediate (“WTI”) monthly average futures price.
(b) The basis differential price is between Midland – WTI and Cushing – WTI.
(c) The index prices for the natural gas price swaps are based on the NYMEX – Henry Hub last trading day futures price.
(d) The index prices for the natural gas collars are based on the El Paso Permian delivery point.
(e) The basis differential price is between the El Paso Permian delivery point and NYMEX-Henry Hub delivery point.

Source: Concho Resources Inc.

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

10.25.13 Concho Resources Announces Resignation of W. Howard Keenan, Jr. from Its Board of Directors

MIDLAND, Texas--(BUSINESS WIRE)--Oct. 25, 2013-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") today announced that W. Howard Keenan, Jr., a member of the Company's Board of Directors ("Board") since its formation, has resigned from the Board and all its committees. The Company intends to confer the honorary title of "Founding Director" on Mr. Keenan in recognition of his service and contributions to the Company.

Timothy A. Leach, the Company's Chairman, Chief Executive Officer and President, commented, "I would like to thank Howard personally and on behalf of Concho for his long-standing service to our company. Howard helped build and guide Concho from its infancy into a large, widely-held public company and for that we are immensely grateful."

W. Howard Keenan, Jr. commented, "Concho has been one of my proudest professional accomplishments and one of Yorktown Energy Partners' most successful investments. While I greatly enjoy my involvement with the Company, the level of business activity at Yorktown and its portfolio companies makes this the right time to step away from Concho. I have been and remain an enthusiastic and supportive Concho stockholder."

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

09.03.13 Concho Resources Inc. Schedules Third Quarter 2013 Conference Call for November 7, 2013

MIDLAND, Texas--(BUSINESS WIRE)--Sep. 3, 2013-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") will host a conference call on Thursday, November 7, 2013, at 9:00 a.m. CST to discuss its third quarter financial and operating results. Earnings are expected to be released after the market closes on Wednesday, November 6, 2013.

Individuals who would like to participate should call (866) 713-8563 (passcode: 82695804) 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: 91613648) 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

08.29.13 Concho Resources Inc. Announces Participation in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)--Aug. 29, 2013-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the Barclays CEO Energy-Power Conference on Wednesday, September 11th at 10:25 AM EDT, the Deutsche Bank dbAccess Energy Conference on Wednesday, September 25th, and the Executive Oil Conference on Tuesday, October 15th at 10:30 AM CDT. The presentations will be available on Concho's website, 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 www.concho.com.

Source: Concho Resources Inc.

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

08.07.13 Concho Resources Inc. Reports Second Quarter 2013 Financial and Operating Results

MIDLAND, Texas--(BUSINESS WIRE)--Aug. 7, 2013-- Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) today reported financial and operating results for the three and six months ended June 30, 2013. Highlights for the three months ended June 30, 2013 include:

  • Production from continuing operations of 8.3 million barrels of oil equivalent (“MMBoe”) for the second quarter of 2013, a 30% increase over the second quarter of 2012 and a 7% increase over the first quarter of 2013
  • Net income of $84.7 million, or $0.81 per diluted share, for the second quarter of 2013, as compared to net income of $319.3 million, or $3.07 per diluted share, for the second quarter of 2012
  • Adjusted net income1 (non-GAAP) of $102.5 million, or $0.98 per diluted share, for the second quarter of 2013, as compared to $80.5 million, or $0.78 per diluted share, for the second quarter of 2012
  • EBITDAX2 (non-GAAP) of $424.8 million for the second quarter of 2013, as compared to $327.4 million for the second quarter of 2012

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

Second Quarter 2013 Financial Results

Production from continuing operations for the second quarter of 2013 totaled 8.3 MMBoe (5.2 million barrels of oil (“MMBbls”) and 18.6 billion cubic feet of natural gas (“Bcf”)), an increase of 30% as compared to 6.4 MMBoe (3.9 MMBbls and 14.9 Bcf) produced in the second quarter of 2012 and an increase of 7% as compared to the 7.7 MMBoe (4.8 MMBbls and 17.8 Bcf) produced in the first quarter of 2013.

“Our performance during the second quarter of 2013 was exceptional and highlights the quality of our assets across the resource-rich Delaware and Midland Basins,” commented Tim Leach, Concho’s Chairman, CEO and President. “Our Delaware Basin asset is now our largest producing core area, a milestone that took just a little over two years to achieve. Production from our horizontal Delaware Basin grew 37% over the previous quarter driven by our industry-leading well results in both the northern and southern Delaware Basin. We have also drilled some of the industry’s best horizontal wells in our core Wolfberry position in the Midland Basin and will expand that activity through the rest of the year.”

For the second quarter of 2013, the Company reported net income of $84.7 million, or $0.81 per diluted share, as compared to net income of $319.3 million, or $3.07 per diluted share, for the second quarter of 2012. The Company’s second quarter 2013 results were impacted by several non-cash and unusual items including: (1) a $68.7 million unrealized mark-to-market gain on commodity derivatives, (2) a $65.4 million impairment of long-lived assets primarily relating to non-core natural gas New Mexico Shelf properties, (3) $2.9 million of leasehold abandonments and (4) a $28.6 million loss on the extinguishment of debt. Excluding these items and their tax effects, second quarter 2013 adjusted net income (non-GAAP) was $102.5 million, or $0.98 per diluted share. Excluding similar non-cash and unusual items and their tax impact, adjusted net income (non-GAAP) for the second quarter of 2012 was $80.5 million, or $0.78 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 $424.8 million in the second quarter of 2013, an increase of 30% from $327.4 million reported in the second quarter of 2012 and an increase of 25% from the $340.7 million reported in the first quarter of 2013. 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 2013 increased 40% when compared to the second quarter of 2012. This increase was attributable to a 5% increase ($4.28 per barrel) in the Company’s unhedged realized oil price, a 13% increase ($0.59 per Mcf) in the Company’s unhedged realized natural gas price, and a 30% increase in production from continuing operations.

Oil and natural gas production expense from continuing operations for the second quarter of 2013, including oil and natural gas taxes, totaled $107.2 million, or $12.93 per barrel of oil equivalent (“Boe”), a 1% increase per Boe from the second quarter of 2012. This increase was due primarily to higher oil and natural gas taxes, which averaged $5.68 per Boe in the second quarter of 2013 as compared to $5.27 in the second quarter of 2012, as a result of higher oil and natural gas prices. This was partially offset by lower lease operating expenses and workover costs, which averaged $7.25 per Boe in the second quarter of 2013 as compared to $7.57 per Boe in the second quarter of 2012.

Depreciation, depletion and amortization (“DD&A”) expense from continuing operations for the second quarter of 2013 totaled $188.7 million, or $22.75 per Boe, a 9% increase per Boe from the second quarter of 2012. This increase in the Company’s DD&A rate is primarily driven by higher cost, exploratory horizontal drilling activity in the Delaware Basin.

In the second quarter of 2013, the Company recognized a $65.4 million impairment of long-lived assets on non-core, natural gas properties in the New Mexico Shelf asset. The impairment of these assets was primarily due to downward adjustments to the economically recoverable proved reserves associated with declines in well performance and a reduction in estimated realized natural gas prices.

General and administrative expense (“G&A”) from continuing operations for the second quarter of 2013 totaled $41.0 million, or $4.94 per Boe, as compared to $32.5 million, or $5.09 per Boe, in the second quarter of 2012. Cash G&A for the second quarter of 2013 totaled $32.4 million and stock-based compensation (non-cash) totaled $8.6 million. The decrease in per Boe expense for the second quarter of 2013 over the second quarter of 2012 was primarily due to a 30% increase in production from continuing operations, and was partially offset by a 26% increase in absolute G&A expenses.

In the second quarter of 2013, the Company tendered for and subsequently redeemed all of the $300 million 8.625% senior notes due 2017 at a premium to par. In part to finance this tender and redemption, the Company completed the issuance of an $850 million add-on offering to the Company’s 5.5% senior notes due in 2023 at 103.75 percent of par (resulting in a 4.884% yield) with the remaining proceeds used to repay amounts outstanding under its credit facility. As a result of the tender and redemption, the Company recognized a loss on the extinguishment of debt of $28.6 million.

The Company’s cash flows from operating activities (GAAP) were $487.1 million for the first six months of 2013, as compared to $611.0 million for the first six months of 2012, a decrease of 20%. Adjusted cash flows (non-GAAP), which are cash flows from operating activities (GAAP) adjusted for settlements paid on or received from derivatives not designated as hedges, were $494.7 million for the first six months of 2013, as compared to $587.3 million for the first six months of 2012, a decrease of 16%. 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 2013, the Company collected net cash receipts on derivatives not designated as hedges of $1.6 million and the non-cash unrealized mark-to-market gain on derivatives not designated as hedges was $68.7 million. In comparison, the Company collected net cash receipts of $8.3 million on derivatives not designated as hedges and reported an $394.8 million non-cash unrealized mark-to-market gain on derivatives not designated as hedges in the second quarter of 2012. 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 Price Data” and “Derivatives Information” tables at the end of this press release.

Operations

For the quarter ended June 30, 2013, the Company commenced the drilling of or participated in a total of 196 gross wells (144 operated). The Company had a 100% success rate on the 245 wells that were completed in the second quarter of 2013.

The table below summarizes the Company’s gross drilling activities by core area for the second quarter of 2013:


2Q 2013


Total Wells Operated Wells Completed Wells








New Mexico Shelf
74

39

96

Texas Permian
70

70

91
Delaware Basin
52

35

58
Total
196

144

245









Currently, the Company is operating 25 drilling rigs; 1 of these rigs is drilling in the New Mexico Shelf, 11 are drilling in the Texas Permian and 13 are drilling in the Delaware Basin. Of the Company’s 25 operated rigs, 18 are drilling horizontally, including 1 in the New Mexico Shelf, 4 in the Texas Permian and 13 in the Delaware Basin.

Delaware Basin

Of the 52 wells drilled in the Delaware Basin, 42 were Bone Spring sands wells, 2 were Avalon shale wells and 8 were Wolfcamp shale wells. The Company’s net production in the second quarter of 2013 from horizontal Delaware Basin wells averaged approximately 31,700 Boepd, a 128% increase over the second quarter of 2012 and an increase of 37% over the first quarter of 2013.

Credit Facility

At June 30, 2013, the Company had borrowings outstanding under the credit facility of $76.1 million, and availability under the credit facility was approximately $2.4 billion.

Derivative Update

The Company maintains an active crude oil and natural gas hedging program and has continued 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.

Guidance Update

The Company is adjusting its full-year 2013 DD&A guidance to reflect increased capital allocation to its exploratory drilling activity in the Delaware Basin. The revised guidance range for full-year 2013 DD&A is $22.00 to $24.00 per Boe.

Conference Call and Presentation Information

The Company will host a conference call on Thursday, August 8, 2013 at 9:00 a.m. Central Time to discuss the second quarter 2013 financial and operating results, with an accompanying presentation. Interested parties may listen to the conference call via the Company’s website at www.concho.com or by dialing (800) 299-8538 (passcode: 42836569). The presentation is available on the Company’s website. To access the presentation, visit www.concho.com and select “Investor Relations,” then “Presentations.”

A replay of the conference call will be available on the Company’s website or by dialing (888) 286-8010 (passcode: 75921452).

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 filing and risks relating to declines in the prices Concho receives for the Company’s 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 the Company’s capital resources and liquidity; risks related to the concentration of the Company’s operations in the Permian Basin; the results of the Company’s hedging program; weather; litigation; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; uncertainties about the Company’s ability to replace reserves and economically develop the Company’s 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)

2013 2012
Assets
Current assets:




Cash and cash equivalents
$ 47


$ 2,880
Accounts receivable, net of allowance for doubtful accounts:




Oil and natural gas

224,228



198,053
Joint operations and other

278,787



202,738
Derivative instruments

17,359



35,942
Prepaid costs and other
19,009

19,269
Total current assets
539,430

458,882
Property and equipment:




Oil and natural gas properties, successful efforts method

10,422,837



9,455,599
Accumulated depletion and depreciation
(1,979,566 )

(1,565,316 )
Total oil and natural gas properties, net

8,443,271



7,890,283
Other property and equipment, net
105,551

103,141
Total property and equipment, net
8,548,822

7,993,424
Deferred loan costs, net

79,687



77,609
Intangible asset - operating rights, net

29,345



30,076
Inventory

21,178



20,611
Noncurrent derivative instruments

17,955



2,769
Other assets
6,987

6,066

Total assets

$

9,243,404


$

8,589,437

Liabilities and Stockholders’ Equity
Current liabilities:




Accounts payable:




Trade
$ 19,982


$ 31,144
Related parties

455



185
Bank overdrafts

59,019



24,275
Revenue payable

161,987



162,073
Accrued and prepaid drilling costs

441,904



351,919
Derivative instruments

6,186



1,584
Deferred income taxes

210



8,566
Other current liabilities
153,366

160,340
Total current liabilities
843,109

740,086
Long-term debt

3,457,770



3,101,103
Deferred income taxes

1,248,508



1,186,621
Noncurrent derivative instruments

334



12,049
Asset retirement obligations and other long-term liabilities

94,417



83,382
Stockholders’ equity:




Common stock, $0.001 par value; 300,000,000 authorized; 105,121,742 and 104,668,427 shares issued at June 30, 2013 and December 31, 2012, respectively



105



105
Additional paid-in capital

2,004,300



1,982,714
Retained earnings

1,605,356



1,490,563

Treasury stock, at cost; 123,350 and 86,861 shares at June 30, 2013 and December 31, 2012, respectively


(10,495 )

(7,186 )
Total stockholders’ equity
3,599,266

3,466,196
Total liabilities and stockholders’ equity
$ 9,243,404

$ 8,589,437









Concho Resources Inc.
Consolidated Statements of Operations
Unaudited







Three Months Ended


Six Months Ended


June 30,


June 30,
(in thousands, except per share amounts) 2013 2012 2013 2012












Operating revenues:











Oil sales
$ 466,611


$ 335,095



$ 859,819


$ 719,058
Natural gas sales
96,175

68,066


175,094

157,887
Total operating revenues
562,786

403,161


1,034,913

876,945
Operating costs and expenses:











Oil and natural gas production

107,219



82,100




208,064



163,677
Exploration and abandonments

8,398



14,398




26,805



20,377
Depreciation, depletion and amortization

188,730



133,267




357,150



260,530
Accretion of discount on asset retirement obligations

1,442



901




2,836



1,742
Impairments of long-lived assets

65,375



-




65,375



-

General and administrative (including non-cash stock-based compensation of $8,588 and $7,347 for the three months ended June 30, 2013 and 2012, respectively, and $15,355 and $13,475 for the six months ended June 30, 2013 and 2012, respectively)



40,991



32,523




84,284



60,502
Gain on derivatives not designated as hedges
(70,324 )

(403,050 )


(11,307 )

(244,957 )
Total operating costs and expenses
341,831

(139,861 )


733,207

261,871
Income from operations
220,955

543,022


301,706

615,074
Other income (expense):











Interest expense

(54,079 )


(41,899 )



(106,185 )


(77,736 )
Loss on extinguishment of debt

(28,616 )


-




(28,616 )


-
Other, net
244

(535 )


135

(1,803 )
Total other expense
(82,451 )

(42,434 )


(134,666 )

(79,539 )
Income from continuing operations before income taxes

138,504



500,588




167,040



535,535
Income tax expense
(53,351 )

(191,707 )


(64,328 )

(205,322 )
Income from continuing operations

85,153



308,881




102,712



330,213
Income (loss) from discontinued operations, net of tax
(453 )

10,416


12,081

20,201
Net income
$ 84,700

$ 319,297


$ 114,793

$ 350,414
Basic earnings per share:











Income from continuing operations
$ 0.81


$ 3.00



$ 0.98


$ 3.20
Income (loss) from discontinued operations, net of tax
-

0.10


0.12

0.20
Net income
$ 0.81

$ 3.10


$ 1.10

$ 3.40
Diluted earnings per share:











Income from continuing operations
$ 0.81


$ 2.97



$ 0.98


$ 3.18
Income (loss) from discontinued operations, net of tax
-

0.10


0.11

0.20
Net income
$ 0.81

$ 3.07


$ 1.09

$ 3.38




















Concho Resources Inc.
Consolidated Statements of Cash Flows
Unaudited





Six Months Ended


June 30,
(in thousands) 2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:




Net income
$ 114,793


$ 350,414
Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation, depletion and amortization

357,150



260,530
Accretion of discount on asset retirement obligations

2,836



1,742
Impairments of long-lived assets

65,375



-
Exploration and abandonments, including dry holes

5,412



11,539
Non-cash stock-based compensation expense

15,355



13,475
Deferred income taxes

50,346



201,398

(Gain) loss on sale of assets, net



(132 )


68
Gain on derivatives not designated as hedges

(11,307 )


(244,957 )
Discontinued operations

(12,250 )


18,243
Other non-cash items

14,330



5,837
Changes in operating assets and liabilities, net of acquisitions and dispositions:




Accounts receivable

(55,577 )


7,425
Prepaid costs and other

(661 )


(3,160 )
Inventory

(647 )


(6,385 )
Accounts payable

(11,972 )


6,549
Revenue payable

12,962



(12,253 )
Other current liabilities
(58,884 )

500
Net cash provided by operating activities
487,129

610,965
CASH FLOWS FROM INVESTING ACTIVITIES:




Capital expenditures on oil and natural gas properties

(880,653 )


(949,059 )
Additions to other property and equipment

(9,900 )


(45,701 )
Proceeds from the sale of assets

15,434



4,419
Funds held in escrow

-



(32,606 )
Settlements received from (paid on) derivatives not designated as hedges
7,591

(23,624 )
Net cash used in investing activities
(867,528 )

(1,046,571 )
CASH FLOWS FROM FINANCING ACTIVITIES:




Proceeds from issuance of debt

2,548,475



1,776,500
Payments of debt

(2,194,500 )


(1,333,500 )
Exercise of stock options

2,068



3,110
Excess tax benefit from stock-based compensation

4,163



10,393
Payments for loan costs

(14,075 )


(12,250 )
Purchase of treasury stock

(3,309 )


(2,566 )
Bank overdrafts
34,744

(5,713 )
Net cash provided by financing activities
377,566

435,974
Net increase (decrease) in cash and cash equivalents

(2,833 )


368
Cash and cash equivalents at beginning of period
2,880

342
Cash and cash equivalents at end of period
$ 47

$ 710













Concho Resources Inc.
Summary Production and Price Data
Unaudited












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





















Three Months Ended


Six Months Ended








June 30,


June 30,
2013 2012 2013 2012















Production and operating data from continuing and discontinued operations:

Net production volumes:















Oil (MBbl)


5,192


4,220



9,959


8,434



Natural gas (MMcf)


18,615


15,619



36,413


31,848



Total (MBoe)


8,295


6,823



16,028


13,742



















Average daily production volumes:















Oil (Bbl)


57,055


46,374



55,022


46,341



Natural gas (Mcf)


204,560


171,637



201,177


174,989



Total (Boe)


91,148


74,980



88,552


75,506



















Average prices:















Oil, without derivatives (Bbl)

$ 89.87

$ 85.62


$ 86.34

$ 91.89



Oil, with derivatives (Bbl) (a)

$ 90.13

$ 87.51


$ 87.07

$ 89.01



Natural gas, without derivatives (Mcf)

$ 5.17

$ 4.58


$ 4.81

$ 5.20



Natural gas, with derivatives (Mcf) (a)

$ 5.18

$ 4.60


$ 4.82

$ 5.22



Total, without derivatives (Boe)

$ 67.85

$ 63.43


$ 64.57

$ 68.45



Total, with derivatives (Boe) (a)

$ 68.04

$ 64.65


$ 65.04

$ 66.73



















Operating costs and expenses per Boe:















Lease operating expenses and workover costs

$ 7.25

$

7.52




$ 7.48

$ 7.40



Oil and natural gas taxes

$ 5.68

$ 5.33


$ 5.50

$ 5.68



Depreciation, depletion and amortization

$ 22.75

$ 20.73


$ 22.29

$ 20.19



General and administrative

$ 4.94

$ 4.69


$ 5.26

$ 4.32



















(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 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) 2013 2012 2013 2012





















Gain on derivatives not designated as hedges:
















Cash receipts from (payments on) oil derivatives

$ 1,320

$ 7,963


$ 7,336

$ (24,233 )




Cash receipts from natural gas derivatives


255


324



255


609




Unrealized mark-to-market gain on commodity derivatives



68,749

394,763


3,716

268,581




Gain on derivatives not designated as hedges

$ 70,324

$ 403,050


$ 11,307

$ 244,957
























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 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 the Company’s continuing operations concerning production and operating data for the periods indicated:





















Three Months Ended


Six Months Ended








June 30,


June 30,
2013 2012 2013 2012















Production and operating data from continuing operations:










Net production volumes:















Oil (MBbl)


5,192


3,915



9,959


7,829



Natural gas (MMcf)


18,615


14,872



36,413


30,411



Total (MBoe)


8,295


6,394



16,028


12,898



















Average daily production volumes:















Oil (Bbl)


57,055


43,022



55,022


43,016



Natural gas (Mcf)


204,560


163,429



201,177


167,093



Total (Boe)


91,148


70,260



88,552


70,865



















Average prices:















Oil, without derivatives (Bbl)

$ 89.87

$ 85.59


$ 86.34

$ 91.85



Oil, with derivatives (Bbl) (a)

$ 90.13

$ 87.63


$ 87.07

$ 88.75



Natural gas, without derivatives (Mcf)

$ 5.17

$ 4.58


$ 4.81

$ 5.19



Natural gas, with derivatives (Mcf) (a)

$ 5.18

$ 4.60


$ 4.82

$ 5.21



Total, without derivatives (Boe)

$ 67.85

$ 63.05


$ 64.57

$ 67.99



Total, with derivatives (Boe) (a)

$ 68.04

$ 64.35


$ 65.04

$ 66.16



















Operating costs and expenses per Boe:















Lease operating expenses and workover costs

$ 7.25

$ 7.57


$ 7.48

$ 7.07



Oil and natural gas taxes

$ 5.68

$ 5.27


$ 5.50

$ 5.62



Depreciation, depletion and amortization

$ 22.75

$ 20.85


$ 22.29

$ 20.20



General and administrative

$ 4.94

$ 5.09


$ 5.26

$ 4.68



















(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 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) 2013 2012 2013 2012





















Gain on derivatives not designated as hedges:
















Cash receipts from (payments on) oil derivatives

$ 1,320

$ 7,963


$ 7,336

$ (24,233 )




Cash receipts from natural gas derivatives


255


324



255


609




Unrealized mark-to-market gain on commodity derivatives



68,749

394,763


3,716

268,581




Gain on derivatives not designated as hedges

$ 70,324

$ 403,050


$ 11,307

$ 244,957
























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 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 and unusual items.

Adjusted Net Income

The following table provides a reconciliation of net income (GAAP) to adjusted net income (non-GAAP) for the periods indicated:














Three Months Ended


Six Months Ended






June 30,


June 30,
(in thousands, except per share amounts) 2013 2012 2013 2012
















Net income - as reported

$ 84,700


$ 319,297



$ 114,793


$ 350,414
















Adjustments for certain non-cash and unusual items:














Unrealized gain on commodity derivatives


(68,749 )


(394,763 )



(3,716 )


(268,581 )


Impairments of long-lived assets


65,375



-




65,375



-


Leasehold abandonments


2,940



8,437




7,327



8,557


Loss on extinguishment of debt


28,616



-




28,616



-


Discontinued operations:















(Gain) loss on sale of assets


764



-




(19,599 )


-


Tax impact (a)

(11,144 )

147,577


(30,031 )

99,329
Adjusted net income

$ 102,502

$ 80,548


$ 162,765

$ 189,719
















Adjusted earnings per share:












Basic

$ 0.98


$ 0.78



$ 1.55


$ 1.84


Diluted

$ 0.98


$ 0.78



$ 1.55


$ 1.83
















(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 and six months ended June 30, 2013 and 2012 were 38.5%, 38.2%, 38.5% and 38.2%, 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 periods indicated:







Six Months Ended



June 30,
(in thousands) 2013 2012






Cash flows from operating activities

$ 487,129

$ 610,965
Settlements received from (paid on) derivatives not designated as hedges (a)

7,591

(23,624 )
Adjusted cash flows

$ 494,720

$ 587,341






(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.

The Company defines EBITDAX as net income, plus (1) exploration and abandonments expense, (2) depreciation, depletion and amortization expense, (3) accretion expense, (4) impairment of long-lived assets (5) non-cash stock-based compensation expense, (6) unrealized (gain) loss on derivatives not designated as hedges, (7) (gain) loss on sale of assets, (8) interest expense, (9) loss on extinguishment of debt, (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.

The Company’s EBITDAX measure (which includes continuing and discontinued operations) provides additional information which may be used to better understand the Company’s operations. EBITDAX is one of several metrics that the Company uses as a supplemental financial measurement in the evaluation of its business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of 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 the Company, may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDAX is a widely followed measure of operating performance and is one of many metrics used by the Company’s management team, and by other users, of the Company’s consolidated financial statements. For example, EBITDAX can be used to assess the Company’s 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 the Company’s assets and the Company without regard to capital structure or historical cost basis.

The following table provides a reconciliation of net income to EBITDAX for the periods indicated:










Three Months
Ended



Three Months Ended

Six Months Ended



March 31,

June 30,

June 30,
(in thousands) 2013 2013 2012 2013 2012















Net income

$ 30,093


$ 84,700


$ 319,297


$ 114,793


$ 350,414
Exploration and abandonments


18,407



8,398



14,398



26,805



20,377
Depreciation, depletion and amortization


168,420



188,730



133,267



357,150



260,530
Accretion of discount on asset retirement obligations


1,394



1,442



901



2,836



1,742
Impairments of long-lived assets


-



65,375



-



65,375



-
Non-cash stock-based compensation


6,767



8,588



7,347



15,355



13,475
Unrealized gain on derivatives not designated as hedges


65,033



(68,749 )


(394,763 )


(3,716 )


(268,581 )
(Gain) loss of sale of assets, net


5



(137 )


(827 )


(132 )


68
Interest expense


52,106



54,079



41,899



106,185



77,736
Loss on extinguishment of debt


-



28,616



-



28,616



-
Income tax expense from continuing operations


10,977



53,351



191,707



64,328



205,322
Discontinued operations

(12,534 )

453

14,185

(12,081 )

28,440
EBITDAX

$ 340,668

$ 424,846

$ 327,411

$ 765,514

$ 689,523































Concho Resources Inc.
Costs Incurred
Unaudited

The table below provides the costs incurred for the periods indicated:

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





















Three Months Ended


Six Months Ended





June 30,


June 30,
(in thousands) 2013 2012 2013 2012















Property acquisition costs:













Proved
$ 652

$ 5,568


$ 2,537

$ 165,615


Unproved

16,945


21,851



44,841


61,207
Exploration

283,254


159,013



549,944


343,496
Development
220,588

192,051


395,310

386,782


Total costs incurred for oil and natural gas properties
$ 521,439

$ 378,483


$ 992,632

$ 957,100















(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) 2013 2012 2013 2012

















Exploration costs
$ 820

$ 469


$ 1,554

$ 1,267


Development costs
5,832

3,239


7,362

3,283



Total asset retirement obligations
$ 6,652

$ 3,708


$ 8,916

$ 4,550



















Concho Resources Inc.
Derivatives Information
Unaudited

The table below provides data associated with the Company’s derivatives at August 7, 2013:







2013








Third Quarter Fourth Quarter Total Remaining

2014

2015

2016

2017























Oil Swaps: (a)




Volume (Bbl)


4,537,000



4,214,000



8,751,000



13,603,000



10,948,000


429,000


168,000


Price (Bbl)

$ 95.52


$ 95.28


$ 95.40


$ 91.30


$ 86.62

$ 88.31

$ 87.00























Oil Basis Swaps: (b)




Volume (Bbl)


3,680,000



3,404,000



7,084,000



3,635,000



-


-


-


Price (Bbl)

$ (1.11 )

$ (1.12 )

$ (1.12 )

$ (0.55 )

$ -

$ -

$ -























Natural Gas Swaps: (c)




Volume (MMBtu)


6,992,000



6,992,000



13,984,000



-



-


-


-


Price (MMBtu)

$ 4.25


$ 4.25


$ 4.25


$ -


$ -

$ -

$ -























Natural Gas Collars: (d)




Volume (MMBtu)


-



-



-



21,900,000



-


-


-


Price (MMBtu)

$ -


$ -


$ -


$ 3.85 - 4.40


$ -

$ -

$ -























Natural Gas Basis Swaps: (e)




Volume (MMBtu)


6,440,000



6,440,000



12,880,000



-



-


-


-


Price (MMBtu)

$ (0.15 )

$ (0.15 )

$ (0.15 )

$ -


$ -

$ -

$ -























(a)
The index prices for the oil contracts are based on the NYMEX – West Texas Intermediate (“WTI”) monthly average futures price.
(b)
The basis differential price is between Midland – WTI and Cushing – WTI.
(c)
The index prices for the natural gas price swaps are based on the NYMEX – Henry Hub last trading day futures price.
(d)
The index prices for the natural gas collars are based on the El Paso Permian delivery point.
(e)
The basis differential price is between the El Paso Permian delivery point and NYMEX-Henry Hub delivery point.

Source: Concho Resources Inc.

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

07.31.13 Concho Resources Inc. Announces Participation in Upcoming Conference

MIDLAND, Texas--(BUSINESS WIRE)--Jul. 31, 2013-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at EnerCom's The Oil & Gas Conference 18 on Tuesday, August 13th at 9:15 AM MDT. 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

07.01.13 Concho Resources Announces Management Addition

MIDLAND, Texas--(BUSINESS WIRE)--Jul. 1, 2013-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") today announced that it has appointed Brenda R. Schroer as the Company's Vice President and Chief Accounting Officer. Previously, Ms. Schroer was with Ernst & Young LLP since 1999, including her most recent position as Americas Oil & Gas Sector Resident within the professional practice group. She received a Bachelor of Business Administration in Accounting from West Texas A&M University, received a Master of Science in Accounting from Texas A&M University and is a certified public accountant.

Darin Holderness, Concho's Senior Vice President and Chief Financial Officer, commented, "I have always been impressed with Brenda when working with her in the past and am excited to add someone with her level of financial and accounting experience to our team."

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

06.17.13 Concho Resources Inc. Schedules Second Quarter 2013 Conference Call for August 8, 2013

MIDLAND, Texas--(BUSINESS WIRE)--Jun. 17, 2013-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") will host a conference call on Thursday, August 8, 2013, at 9:00 a.m. CDT to discuss its second quarter financial and operating results. Earnings are expected to be released after the market closes on Wednesday, August 7, 2013.

Individuals who would like to participate should call (800) 299-8538 (passcode: 42836569) 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: 75921452) 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

06.06.13 Concho Resources Inc. Reports Second Quarter 2014 Financial and Operating Results

MIDLAND, Texas--(BUSINESS WIRE)--Aug. 6, 2014-- Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) today reported financial and operating results for the second quarter and first half of 2014. Highlights for the second quarter of 2014 include:

  • Average production totaled 107.8 thousand barrels of oil equivalent per day (“MBoepd”) for the second quarter of 2014, at the high end of its previously announced quarterly guidance range of 104 - 108 MBoepd
  • Announced third quarter 2014 production guidance range of 113 - 116 MBoepd
  • Added 31 new wells in the northern Delaware Basin with strong average 30-day and 24-hour peak rates of 931 and 1,420 Boepd, respectively
  • Entered into agreements to acquire approximately 13,000 net acres for $95 million in the northern Delaware Basin1
  • Net income of $11.8 million, or $0.11 per diluted share, for the second quarter of 2014, as compared to net income of $84.7 million, or $0.81 per diluted share, for the second quarter of 2013
  • Adjusted net income2 (non-GAAP) of $113.8 million, or $1.04 per diluted share, for the second quarter of 2014, as compared to $102.5 million, or $0.98 per diluted share, for the second quarter of 2013
  • EBITDAX3 (non-GAAP) of $504.0 million for the second quarter of 2014, a 19% increase over the second quarter of 2013

1 Includes agreements entered into through August 6, 2014.

2 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.

3 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.

Second Quarter 2014 Financial Results

Production for the second quarter of 2014 totaled 9.8 million barrels of oil equivalent (“MMBoe”) (6.2 million barrels of oil (“MMBbls”) and 21.5 billion cubic feet of natural gas (“Bcf”)), an increase of 18% as compared to 8.3 MMBoe (5.2 MMBbls of crude oil and 18.6 Bcf of natural gas) produced in the second quarter of 2013. Sequentially, Concho’s average daily production in the second quarter of 2014 increased 6% as compared to the previous quarter of 101.6 MBoepd.

“The second quarter was another exceptional quarter, demonstrating the strength of our team as we continue to execute on our Two-by-Three Growth Plan, which calls for doubling our production in three years,” commented Tim Leach, Chairman, Chief Executive Officer and President. “The advantage of running one of the Permian Basin’s largest horizontal operations is translating into operational efficiencies and improved returns. We are focusing on optimizing our well design and stimulation techniques. Efficiencies of scale and drilling and completion optimization are driving greater capital productivity as well as industry-leading well performance across the Permian Basin.”

For the second quarter of 2014, the Company reported net income of $11.8 million, or $0.11 per diluted share, as compared to net income of $84.7 million, or $0.81 per diluted share, for the second quarter of 2013. The Company’s second quarter 2014 results were impacted by several non-cash and unusual items including: (1) a $164.7 million loss on derivatives not designated as hedges, (2) $26.1 million in cash payments on commodity derivatives, (3) $11.2 million of leasehold abandonments, (4) a $4.3 million loss on extinguishment of debt and (5) a $9.6 million loss on disposition of assets. Excluding these items and their tax effects, second quarter 2014 adjusted net income (non-GAAP) was $113.8 million, or $1.04 per diluted share. Excluding similar non-cash and unusual items and their tax effects, adjusted net income (non-GAAP) for the second quarter of 2013 was $102.5 million, or $0.98 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 (non-GAAP) was $504.0 million in the second quarter of 2014, an increase of 19% from $424.8 million in the second quarter of 2013. 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 second quarter of 2014 totaled $704.7 million and increased 25% compared to oil and natural gas sales of $562.8 million for the second quarter of 2013. The increase was attributable to an 18% increase in production in the second quarter of 2014 compared to the second quarter of 2013, and a 4% and 12% increase in the Company’s unhedged realized oil and gas price, respectively, in the second quarter of 2014 compared to the second quarter of 2013.

Oil and natural gas production expense for the second quarter of 2014, including oil and natural gas taxes, totaled $134.9 million, or $13.76 per barrel of oil equivalent (“Boe”), a 6% increase per Boe from the second quarter of 2013. This increase was due primarily to higher lease operating expenses (“LOE”) and workover costs, which averaged $8.15 per Boe in the second quarter of 2014 as compared to $7.25 per Boe in the second quarter of 2013.

Depreciation, depletion and amortization expense (“DD&A”) for the second quarter of 2014 totaled $237.4 million, or $24.20 per Boe, a 6% increase per Boe from the second quarter of 2013.

General and administrative expense (“G&A”) for the second quarter of 2014 totaled $49.5 million, or $5.05 per Boe, as compared to $41.0 million, or $4.94 per Boe, in the second quarter of 2013. Cash G&A expenses for the second quarter of 2014 totaled $39.8 million. The increase in per Boe expense for the second quarter of 2014 over the second quarter of 2013 was primarily due to an increase in staffing across the company, and was partially offset by an 18% increase in production.

The Company’s cash flow from operating activities (GAAP) was $854.7 million for the first six months of 2014, as compared to $487.1 million for the first six months of 2013, an increase of 75%. Adjusted cash flows (non-GAAP), which are cash flows from operating activities (GAAP) adjusted for settlements on derivatives not designated as hedges, were $813.8 million for the first six months of 2014, as compared to $494.7 million for the first six months of 2013, an increase of 65%. 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.

Operations

For the quarter ended June 30, 2014, the Company started drilling or participated in a total of 134 gross wells (107 operated) and completed 107 wells as producers. The table below summarizes the Company’s gross drilling activities by core area for the second quarter of 2014:


2Q 2014



Total Wells Operated Wells Completed Wells
Delaware Basin

75


60


48
New Mexico Shelf

24


12


29
Texas Permian

35

35

30
Total

134

107

107









% Horizontal

78 %

79 %

68 %

The Company currently is operating 34 drilling rigs; 17 of these rigs are drilling in the northern Delaware Basin, 6 are drilling in the southern Delaware Basin, 2 are drilling in the New Mexico Shelf and 9 are drilling in the Texas Permian. Of the Company’s 34 operated rigs, 30 are drilling horizontally, including 17 in the northern Delaware Basin, 6 in the southern Delaware Basin, 2 in the New Mexico Shelf and 5 in the Texas Permian.

Delaware Basin

Of the 75 wells drilled in the Delaware Basin during the second quarter of 2014, 53 were Bone Spring sands wells, 14 were Wolfcamp shale wells, 5 were Brushy Canyon wells and 3 were Avalon shale wells. The Company’s net production in the second quarter of 2014 from horizontal Delaware Basin wells averaged approximately 49.1 MBoepd, a 55% increase over the second quarter of 2013 and an increase of 16% over the first quarter of 2014.

In the northern Delaware Basin, 31 new wells had at least 30 days of production by the end of the second quarter of 2014 and set new average production-rate records with an average 30-day rate of 931 Boepd (81% oil) and an average 24-hour peak rate of 1,420 Boepd from an average lateral length of 5,034 feet.

In the southern Delaware Basin, 8 new wells had at least 30 days of production by the end of the second quarter of 2014, with an average 30-day rate of 1,093 Boepd (81% oil) and an average 24-hour peak rate of 1,301 Boepd from an average lateral length of 5,401 feet.

Derivative Update

The Company maintains an active crude oil and natural gas hedging program and has continued 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.

Guidance Update

For the third quarter of 2014, the Company expects production to average between 113 - 116 MBoepd.

Following the close of Concho’s equity offering in May 2014 and subsequent repayment of borrowings under the credit facility, the Company’s full-year 2014 cash interest expense guidance range has been reduced to $210 - $215 million and the Company’s non-cash interest expense guidance has been reduced to $10 million.

In the second quarter of 2014, the average discount on the Midland-to-Cushing West Texas Intermediate (“WTI”) oil basis differential was approximately $8.37 per Bbl. The average discount for the months of July and August was $6.60 and $10.58 per Bbl, respectively. The Company’s unhedged crude oil realization during the third quarter of 2014 is expected to be 88% - 90% of NYMEX crude oil. As a result of the widening of the Midland-to-Cushing WTI oil differential in the second and third quarters of 2014, the Company’s full-year 2014 unhedged crude oil realization guidance range has been reduced to 90% - 92% of NYMEX crude oil.

Conference Call and Presentation Information

The Company will host a conference call on Thursday, August 7, 2014, at 8:30 a.m. CDT to further discuss information regarding second quarter 2014 financial and operating results. Interested parties may listen to the conference call via the Company’s website at www.concho.com or by dialing (866) 318-8619 (passcode: 39034276). The earnings presentation is also available on the Company’s website. To access the presentation, visit www.concho.com and select “Investor Relations,” then “Presentations.”

A replay of the conference call will be available on the Company’s website or by dialing (888) 286-8010 (passcode: 39351777).

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 fact, 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. Forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's future financial position, operations, performance, business strategy, capital expenditure budget, liquidity and capital resources, the timing and success of specific projects, outcomes and effects of litigation, claims and disputes, derivative activities and potential financing. The words “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “could, “may,” “foresee,” “plan,” “goal” or other similar expressions are intended to identify forward-looking statements, which generally are not historical in nature. However, the absence of these words does not mean that the statements are not forward-looking. 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 Form 10-Q filings and risks relating to declines in the prices the Company receives for its oil and natural gas; uncertainties about the estimated quantities of oil and natural gas reserves; drilling and operating risks, including risks related to properties where we do not serve as the operator and risks related to hydraulic fracturing activities; the adequacy of the Company’s capital resources and liquidity including, but not limited to, access to additional borrowing capacity under our credit facility; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; difficult and adverse conditions in the domestic and global capital and credit markets; risks related to the concentration of the Company’s operations in the Permian Basin of Southeast New Mexico and West Texas; disruptions to, capacity constraints in or other limitations on the pipeline systems that deliver the Company’s oil, natural gas liquids and natural gas and other processing and transportation considerations; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; potential financial losses or earnings reductions from the Company’s commodity price management program; risks related to the integration of acquired assets; uncertainties about the Company’s ability to successfully execute our business and financial plans and strategies; uncertainties about the Company’s ability to replace reserves and economically develop its current reserves; general economic and business conditions; competition in the oil and natural gas industry; uncertainty concerning the Company’s assumed or possible future results of operations; and other important factors that could cause actual results to differ materially from those projected.

We may use the terms “unproved reserves,” “resource potential,” “EUR” per well and “upside potential” to describe estimates of potentially recoverable hydrocarbons that the U.S. Securities and Exchange Commission (“SEC”) rules prohibit from being included in filings with the SEC. These are based on analogy to the Company’s existing models applied to additional acres, additional zones and tighter spacing and are the Company’s internal estimates of hydrocarbon quantities that may be potentially discovered through exploratory drilling or recovered with additional drilling or recovery techniques. These quantities may not constitute “reserves” within the meaning of the Society of Petroleum Engineer’s Petroleum Resource Management System or SEC rules. EUR estimates, resource potential and drilling locations have not been fully risked by Company management and are inherently more speculative than proved reserves estimates. Actual locations drilled and quantities that may be ultimately recovered from the Company’s interests could differ substantially. There is no commitment by the Company to drill all of the drilling locations which have been attributed to these quantities. Factors affecting ultimate recovery include the scope of our ongoing drilling program, which will be directly affected by the availability of capital, drilling and production costs, availability of drilling services and equipment, drilling results, lease expirations, transportation constraints, regulatory approvals and other factors; and actual drilling results, including geological and mechanical factors affecting recovery rates. Estimates of unproved reserves, resource potential, per well EUR and upside potential may change significantly as development of the Company’s oil and natural gas assets provide additional data. Our production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or drilling cost increases.

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) 2014 2013
Assets
Current assets:





Cash and cash equivalents

$ 365,488


$ 21
Accounts receivable, net of allowance for doubtful accounts:





Oil and natural gas


273,789



223,790
Joint operations and other


315,766



247,945
Derivative instruments


-



590
Deferred income taxes


76,089



30,069
Prepaid costs and other

22,782

18,460
Total current assets

1,053,914

520,875
Property and equipment:





Oil and natural gas properties, successful efforts method