Investor News

12.29.14 Concho Resources Inc. to Participate in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company”) today announced that the Company will participate in the Goldman Sachs Global Energy Conference on Wednesday, January 7, 2015, and the BMO Energy Forum onTuesday, January 13, 2015.

The Company will refer to its January 2015 Investor Presentation, which will be available in advance of the first conference on the Investor Relations section of the Company’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 primarily focused in the Permian Basin of Southeast New Mexico and West Texas. For more information about the Company, please visit www.concho.com.

Source: Concho Resources Inc.

11.07.14 Concho Resources Inc. Announces Participation in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company” or “Concho”) today announced its upcoming participation at the Executive Oil Conference on Tuesday, November 11th at 10:30 AM CST, the Bank of America Merrill Lynch 2014 Global Energy Conference on Thursday, November 13th at 9:00 AM EST, the Ladenburg One-on-One E&P Conference on Wednesday, November 19th, the Bank of America Merrill Lynch 2014 Leveraged Finance Conference on Tuesday, December 2nd at 9:30 AM EST, and the Capital One Securities, Inc. 9th Annual Energy Conference on Thursday, December 11th at 11:40 AM CST.

The presentations will be available on Concho's website, www.concho.com. Additionally, the presentations for the Bank of America Merrill Lynch 2014 Global Energy Conference, the Bank of America Merrill Lynch 2014 Leveraged Finance Conference, and the Capital One Securities, Inc. 9th Annual Energy Conference 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 primarily focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit the Company’s website at www.concho.com.

Source: Concho Resources Inc.

11.06.14 Concho Resources Inc. Announces Resignation of A. Wellford Tabor from Its Board of Directors

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company” or “Concho”) today announced that A. Wellford Tabor has resigned from the Board of Directors and all its committees.

Timothy A. Leach , the Company’s Chairman, Chief Executive Officer and President, commented, “I would like to thank Wellford personally and on behalf of Concho for his service to our Company. Wellford has been an integral part of this Company and our team for more than 10 years, and I wish him and his family the very best into the future.”

Mr. Tabor commented, “I am extremely fortunate to have been able to partner with the Concho management team to build such a tremendous company. My involvement with Concho from startup to where the Company is today has been a very gratifying experience and I am immensely proud of what Tim and the Concho team have accomplished.”

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 the Company’s website at www.concho.com.

Source: Concho Resources Inc.

11.05.14 Concho Resources Inc. Reports Third Quarter 2014 Results and Provides 2015 Outlook

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company” or “Concho”) today reported results for the third quarter of 2014 and provided an outlook for 2015.

Highlights

  • Concho delivered record quarterly production, exceeding 10 million BOE, and achieved 23% crude oil production growth over the same quarter a year ago.
  • Production for the third quarter of 2014 averaged 113.5 MBoepd and was negatively impacted by approximately 2 MBoepd due to weather-related downtime.
  • The Company continued to deliver industry-leading well performance in the northern Delaware Basin.
  • Earnings for the third quarter of 2014 totaled $2.69 per diluted share, or $1.09 per diluted share on an adjusted basis1 (non-GAAP). This compares with earnings of $0.29 per diluted share, or $1.06 per diluted share on an adjusted basis, in the third quarter of 2013.
  • EBITDAX2 (non-GAAP) increased for the sixth consecutive quarter to $536.4 million.
  • Cash flows generated from operating activities in the first nine months of 2014 totaled $1.3 billion. Adjusted cash flows3 (non-GAAP) generated from operating activities in the first nine months of 2014 also totaled $1.3 billion, up 39% over the same period last year.
  • Concho is targeting 28% to 32% year-over-year production growth in 2015 with a $3.0 billion capital program. The Company is on track to accomplish its Two-by-Three Growth Plan to double production in 2016 over 2013.

Tim Leach , Chairman, Chief Executive Officer and President, commented, “Concho delivered strong results this quarter, even as we faced challenges from flooding in the northern Delaware Basin. Our team did a great job minimizing the production downtime that resulted from the flooding. In addition, through our implementation of enhanced drilling and completion techniques, we’re making better wells and driving efficiencies throughout our assets in the Permian Basin. Posting another quarter of successively higher production, cash flow and well results underscores our strategy to invest in high-margin, high rate-of-return projects.”

Third Quarter Operations Summary

Production for the third quarter of 2014 totaled 10.4 million barrels of oil equivalent (MMBoe), or an average of 113.5 thousand Boe per day (MBoepd), up 20% from the third quarter of 2013 and 6% from the second quarter of 2014. Production for the third quarter of 2014 consisted of 6.7 million barrels (MMBbls) of crude oil and 22.5 billion cubic feet of natural gas. Crude oil production of 6.7 MMBbls represents a 23% and a 7% increase over the third quarter of 2013 and the second quarter of 2014, respectively. The third quarter of 2014 marks the 19th consecutive quarter of crude oil production growth from continuing operations.

Heavy rainfall and flooding late in the third quarter disrupted the Company’s operations, primarily in the northern Delaware Basin, causing production downtime, road closures and drilling and completion delays. The Company estimates weather-related downtime negatively impacted third quarter production by approximately 2 MBoepd. Had such impacted production been included in third quarter’s production, the Company would have delivered production at the high end of the Company’s third quarter guidance range.

During the quarter, the Company started drilling or participated in a total of 153 gross wells, of which 123 were operated by the Company, and completed 120 gross wells. The table below summarizes the Company’s drilling activity by core area for the third quarter of 2014.

Number of Wells
Drilled
(Gross)

Number of
Operated Wells
Drilled
(Gross)

Number of Wells
Completed
(Gross)

Delaware Basin 79 59

67

New Mexico Shelf 29 21

19

Texas Permian 45 43

34

Total 153 123

120

Percent Horizontal 71 % 67 %

78

%

Delaware Basin

The Company’s production in the third quarter of 2014 from horizontal wells in the Delaware Basin totaled 55.2 MBoepd, up 64% over the third quarter of 2013 and 12% over the second quarter of 2014. During the third quarter, Concho drilled 79 wells in the Delaware Basin, including 57 wells targeting the Bone Spring sands, 16 wells targeting the Wolfcamp shale, five wells targeting the Brushy Canyon and one well targeting the Avalon shale.

In addition, Concho continues to deliver industry-leading well results in the Delaware Basin. In the northern Delaware Basin, the Company has 40 new wells with at least 30 days of production as of September 30, 2014. The average peak 30-day and 24-hour rates for these 40 wells were 1,015 Boepd (73% oil) and 1,576 Boepd, respectively, from an average lateral length of 4,749 feet.

In the southern Delaware Basin, the Company has nine new wells with at least 30 days of production as of September 30, 2014, five of which are extended laterals. The average peak 30-day and 24-hour rates for these nine wells were 991 Boepd (79% oil) and 1,427 Boepd, respectively, from an average lateral length of 5,607 feet.

New Mexico Shelf

The Company’s operations on the New Mexico Shelf were previously impacted by high line pressure and insufficient gas processing capacity. With these midstream issues substantially resolved, the Company accelerated vertical development during the third quarter with the addition of two rigs. The Company added 12 new horizontal wells with at least 30 days of production as of September 30, 2014, targeting the Yeso. The average peak 30-day and 24-hour rates for these wells were 336 Boepd (85% oil) and 469 Boepd, respectively. The Yeso is a shallow oil target where we have a sizeable inventory of low cost, high return vertical and horizontal projects.

Texas Permian

Concho completed nine horizontal wells in the Midland Basin targeting the Upper Wolfcamp during the third quarter with average peak 30-day and 24-hour rates of 805 Boepd (80% oil) and 1,019 Boepd, respectively, from an average lateral length of 5,853 feet. In the Midland Basin, the Company is testing multi-zone potential targeting the Wolfcamp shale and Spraberry zones while optimizing lateral placement and completion design.

Concho is currently running 37 drilling rigs, including 24 horizontal rigs in the Delaware Basin, four (two horizontal) rigs in the New Mexico Shelf and nine (five horizontal) rigs in the Texas Permian. Concho is currently running the largest horizontal drilling program in the Permian Basin with a total of 31 horizontal rigs.

Third Quarter Financial Summary

Revenues for the third quarter of 2014 were $700.3 million, up 7% compared with the same period a year ago.

Net income for the quarter totaled $305.2 million, or $2.69 per diluted share, compared with net income of $30.4 million, or $0.29 per diluted share, in the third quarter of 2013. Net income for the third quarter of 2014 included several non-cash or non-recurring items, including a $326.2 million gain on derivatives, $14.7 million in cash receipts from commodity derivatives, a $15.5 million impairment of long-lived assets primarily relating to non-core Delaware Basin properties, $4.6 million of leasehold abandonments and a $0.8 million gain on the disposition of assets.

Excluding these items, adjusted net income4 (non-GAAP) for the third quarter of 2014 was $123.2 million, or $1.09 per diluted share, compared with adjusted net income (non-GAAP) of $111.1 million, or $1.06 per diluted share, for the third quarter of 2013.

EBITDAX5 (non-GAAP) for the third quarter of 2014 totaled $536.4 million, an increase of 18% over the third quarter of 2013.

The Company’s total realized price during the third quarter of 2014, excluding the effect of commodity derivatives, was $67.07 per Boe, compared with $75.20 per Boe during the third quarter of 2013. The lower total realized price in the 2014 period reflects lower crude oil prices and an increase in the discount of WTI-Midland to WTI-Cushing, partially offset by slightly higher natural gas prices.

Cash flows generated from operating activities in the first nine months of 2014 totaled $1.3 billion, compared with $944.6 million in the same period last year. Adjusted cash flows6 (non-GAAP), which are cash flows from operating activities adjusted for settlements on derivatives not designated as hedges, were $1.3 billion for the first nine months of 2014, as compared to $907.0 million for the same period last year, reflecting an increase of 39%.

Financial Position and Liquidity

As of September 30, 2014, Concho’s balance sheet included $98.9 million of cash and cash equivalents and total long-term debt of $3.4 billion. The Company’s net debt-to-EBITDAX7 (non-GAAP) was 1.7 times at September 30, 2014. Concho had $2.5 billion available for future borrowings under its revolving credit facility and no borrowings outstanding as of September 30, 2014.

Outlook

Due to the lingering effects of the flooding in the northern Delaware Basin at the end of the third quarter, the Company currently estimates that fourth quarter production will be negatively impacted by approximately 1.3 MBoepd. As a result, the Company expects fourth quarter production to be within the range of 122 MBoepd to 127 MBoepd. In addition, the Company expects fourth quarter lease operating expense (LOE) per Boe to be consistent with third quarter LOE per Boe due to repairs to roads and production facilities damaged by the floods.

2015 Capital Program

Concho is targeting year-over-year production growth of 28% to 32% in 2015 and expects to spend approximately $3.0 billion. The Company’s capital program includes $2.7 billion for drilling and completions and $300 million for facilities, leasehold acquisitions, midstream, geological and geophysical (“G&G”) and other capital. As the Company optimizes drilling and completion techniques, the development program requires fewer rigs than originally planned to achieve the Company’s Two-by-Three Growth Plan and further extends Concho’s inventory. As a result, the Company plans to operate an average of 39 drilling rigs in 2015, with 34 rigs drilling horizontal wells.

Commenting on the Company’s 2015 capital program, Mr. Leach said:

“The 2015 capital program reflects our continued execution on the Two-by-Three Growth Plan – a plan that balances high growth through the doubling of our production from 2013 to 2016 and improvement of the Company’s leverage metric. We are mindful of the significant decline in crude oil prices as we stress-test our capital program against various commodity price scenarios.

“Concho is well positioned to navigate the commodity price cycles as a result of our inventory of high rate-of-return projects, ongoing capital efficiency improvements, strong balance sheet and hedges. During times of volatility, preserving our financial strength is a high priority. Therefore, we will recalibrate our capital program and activity level if conditions warrant.”

Approximately 90% of the Company’s 2015 capital for drilling and completions will be directed to horizontal development in the Permian Basin. The Company plans to allocate approximately $1.7 billion of capital for drilling and completions in the Delaware Basin, approximately $600 million in the Texas Permian and approximately $380 million in the New Mexico Shelf.

The following table summarizes the Company’s operational and financial guidance for 2014 and 2015. The Company’s capital expenditures guidance for 2014 excludes contributions to the Company’s midstream joint venture and other capital.

2014 2015
Production
Year-over-year production growth 20% - 24% 28% - 32%
Oil mix 62% - 64% 63% - 65%
Price realizations, excluding commodity derivatives (percent of NYMEX)
Crude oil (per Bbl) 90% - 92% 90% - 93%
Natural gas (per Mcf) 120% - 140% 120% - 140%
Operating costs and expenses
Lease operating expense:
Direct lease operating expense ($/Boe) $8.00 - $8.50 $8.00 - $8.50
Oil & natural gas taxes (% of oil and natural gas revenues) 8.25% 8.25%
General and administrative (“G&A”) expense ($/Boe):
Cash G&A expense $3.50 - $4.00 $3.40 - $3.90
Non-cash stock-based compensation $1.15 - $1.25 $1.10 - $1.20
Depletion, depreciation and amortization expense ($/Boe) $23.00 - $25.00 $24.00 - $26.00
Exploration, abandonments and G&G ($/Boe) $1.50 - $2.50 $1.50 - $2.50
Interest expense ($ in millions):
Cash $210 - $215 $215 - $225
Non-cash $10 $10
Income tax rate 39% 38%
Percent deferred of total taxes 75% - 85% 75% - 85%
Capital expenditures ($ in billions) $2.6 $3.0

The Company’s guidance is forward-looking information that is subject to a number of risks and uncertainties, many of which are beyond the Company’s control. See “Forward-Looking Statements and Cautionary Statements” below. In addition, our 2015 capital program is subject to change depending upon a number of factors, including economic and industry conditions at the time of drilling and prevailing and anticipated prices for crude oil and natural gas.

Commodity Derivatives Update

The Company enters into commodity derivatives to manage its exposure to commodity price fluctuations. For calendar year 2015, Concho currently has swap contracts covering approximately 41.8 thousand barrels (MBbls) per day of expected crude oil production at a weighted average price of $87.73 per Bbl. Concho also currently has basis swap contracts covering approximately 30.5 MBbls per day of expected crude oil production at a weighted average price of $3.73 per Bbl for calendar year 2015. Please see the table under “Derivatives Information” below for more detailed information about the Company’s current derivatives positions.

Conference Call

Concho will discuss third quarter results on a conference call tomorrow, November 6, 2014, at 8:30 AM CT. To participate in the call, dial (800) 706-7745 (passcode: 68939783). The simultaneous webcast of the conference call will be available at www.concho.com. A related presentation is now posted 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: 10103075).

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 the Company’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, drilling program, 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 and analyses 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 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q 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 the Company does 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 its 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 its 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.

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.

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

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

3 For a reconciliation of cash flows from operating activities (GAAP) to adjusted cash flows (non-GAAP), please see “Supplemental Non-GAAP Financial Measures” below.

4 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.

5 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.

6 For a reconciliation of cash flows from operating activities (GAAP) to adjusted cash flows (non-GAAP), please see “Supplemental Non-GAAP Financial Measures” below.

7 Trailing twelve month debt-to-EBITDAX. 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.

Concho Resources Inc.

Consolidated Balance Sheets
Unaudited
September 30, December 31,
(in thousands, except share and per share amounts) 2014 2013
Assets
Current assets:
Cash and cash equivalents $ 98,864 $ 21
Accounts receivable, net of allowance for doubtful accounts:
Oil and natural gas 256,214 223,790
Joint operations and other 338,362 247,945
Derivative instruments 41,859 590
Deferred income taxes - 30,069
Prepaid costs and other 35,742 18,460
Total current assets 771,041 520,875
Property and equipment:
Oil and natural gas properties, successful efforts method 13,048,470 11,215,373
Accumulated depletion and depreciation (3,100,046 ) (2,384,108 )
Total oil and natural gas properties, net 9,948,424 8,831,265
Other property and equipment, net 117,244 114,783
Total property and equipment, net 10,065,668 8,946,048
Deferred loan costs, net 70,886 73,048
Intangible asset - operating rights, net 27,519 28,615
Inventory 15,829 19,682
Noncurrent derivative instruments 45,016 966
Other assets 42,136 1,930
Total assets $ 11,038,095 $ 9,591,164
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable - trade $ 33,499 $ 13,936
Bank overdrafts - 36,718
Revenue payable 190,793 177,617
Accrued and prepaid drilling costs 493,280 318,296
Derivative instruments 1,027 53,701
Deferred income taxes 2,504 -
Other current liabilities 170,239 156,600
Total current liabilities 891,342 756,868
Long-term debt 3,378,483 3,630,421
Deferred income taxes 1,521,582 1,334,653
Noncurrent derivative instruments - 14,088
Asset retirement obligations and other long-term liabilities 102,910 97,185
Stockholders’ equity:
Common stock, $0.001 par value; 300,000,000 authorized; 113,271,013 and
105,222,765 shares issued at September 30, 2014 and December 31, 2013, respectively 113 105
Additional paid-in capital 3,010,524 2,027,162
Retained earnings 2,149,845 1,741,566
Treasury stock, at cost; 175,378 and 127,305 shares at September 30, 2014 and
December 31, 2013, respectively (16,704 ) (10,884 )
Total stockholders’ equity 5,143,778 3,757,949
Total liabilities and stockholders’ equity $ 11,038,095 $ 9,591,164

Concho Resources Inc.
Consolidated Statements of Operations
Unaudited
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands, except per share amounts) 2014 2013 2014 2013
Operating revenues:
Oil sales $ 575,611 $ 553,068 $ 1,696,240 $ 1,412,887
Natural gas sales 124,652 99,852 369,684 274,946
Total operating revenues 700,263 652,920 2,065,924 1,687,833
Operating costs and expenses:
Oil and natural gas production 140,725 120,231 402,593 328,295
Exploration and abandonments 16,982 10,992 70,645 37,797
Depreciation, depletion and amortization 256,765 200,625 715,602 557,775
Accretion of discount on asset retirement obligations 1,769 1,574 5,162 4,410
Impairments of long-lived assets 15,476 - 15,476 65,375
General and administrative (including non-cash stock-based compensation of
$13,465 and $9,923 for the three months ended September 30, 2014 and
2013 respectively, and $34,672 and $25,278 for the nine months ended
September 30, 2014 and 2013, respectively) 52,763 40,836 150,048 125,120
(Gain) loss on derivatives not designated as hedges (326,229 ) 168,610 (125,907 ) 157,303
Total operating costs and expenses 158,251 542,868 1,233,619 1,276,075
Income from operations 542,012 110,052 832,305 411,758
Other income (expense):
Interest expense (52,601 ) (55,995 ) (164,124 ) (162,180 )
Loss on extinguishment of debt - - (4,316 ) (28,616 )
Other, net 2,155 (1,941 ) (6,833 ) (1,806 )
Total other expense (50,446 ) (57,936 ) (175,273 ) (192,602 )
Income from continuing operations before income taxes 491,566 52,116 657,032 219,156
Income tax expense (186,363 ) (21,695 ) (248,753 ) (86,023 )
Income from continuing operations 305,203 30,421 408,279 133,133
Income from discontinued operations, net of tax - - - 12,081
Net income $ 305,203 $ 30,421 $ 408,279 $ 145,214
Basic earnings per share:
Income from continuing operations $ 2.70 $ 0.29 $ 3.74 $ 1.27
Income from discontinued operations, net of tax - - - 0.12
Net income $ 2.70 $ 0.29 $ 3.74 $ 1.39
Diluted earnings per share:
Income from continuing operations $ 2.69 $ 0.29 $ 3.73 $ 1.27
Income from discontinued operations, net of tax - - - 0.11
Net income $ 2.69 $ 0.29 $ 3.73 $ 1.38

Concho Resources Inc.
Consolidated Statements of Cash Flows
Unaudited
Nine Months Ended
September 30,
(in thousands) 2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 408,279 $ 145,214
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization 715,602 557,775
Accretion of discount on asset retirement obligations 5,162 4,410
Impairments of long-lived assets 15,476 65,375
Exploration and abandonments, including dry holes 56,626 13,159
Non-cash stock-based compensation expense 34,672 25,278
Deferred income taxes 219,502 75,808
Loss on disposition of assets, net 8,697 1,717
(Gain) loss on derivatives not designated as hedges (125,907 ) 157,303
Discontinued operations - (12,250 )
Other non-cash items 11,207 17,020
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable (75,963 ) (113,226 )
Prepaid costs and other (19,317 ) (1,866 )
Inventory 3,058 434
Accounts payable 18,500 4,407
Revenue payable 13,176 44,983
Other current liabilities (234 ) (40,897 )
Net cash provided by operating activities 1,288,536 944,644
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures on oil and natural gas properties (1,754,835 ) (1,426,349 )
Additions to property, equipment and other assets (25,267 ) (21,311 )
Proceeds from the disposition of assets 1,122 15,212
Contribution to equity method investment (30,050 ) -
Funds held in escrow - (1,964 )
Settlements paid on derivatives not designated as hedges (26,174 ) (37,684 )
Net cash used in investing activities (1,835,204 ) (1,472,096 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 1,578,000 3,283,875
Payments of debt (1,828,000 ) (2,798,400 )
Exercise of stock options 4,660 2,304
Excess tax benefit from stock-based compensation 12,049 9,244
Net proceeds from issuance of common stock 931,989 -
Payments for loan costs (10,649 ) (14,075 )
Purchase of treasury stock (5,820 ) (3,523 )
Bank overdrafts (36,718 ) 45,169
Net cash provided by financing activities 645,511 524,594
Net increase (decrease) in cash and cash equivalents 98,843 (2,858 )
Cash and cash equivalents at beginning of period 21 2,880
Cash and cash equivalents at end of period $ 98,864 $ 22

Concho Resources Inc.
Summary Production and Price Data
Unaudited

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

Three Months Ended Nine Months Ended
September 30, September 30,
2014 2013 2014 2013
Production and operating data:
Net production volumes:
Oil (MBbl) 6,689 5,417 18,764 15,376
Natural gas (MMcf) 22,513 19,593 63,798 56,006
Total (MBoe) 10,441 8,683 29,397 24,710
Average daily production volumes:
Oil (Bbl) 72,707 58,880 68,733 56,322
Natural gas (Mcf) 244,707 212,967 233,692 205,150
Total (Boe) 113,492 94,375 107,682 90,514
Average prices:
Oil, without derivatives (Bbl) $ 86.05 $ 102.10 $ 90.40 $ 91.89
Oil, with derivatives (Bbl) (a) $ 88.19 $ 92.89 $ 89.33 $ 89.12
Natural gas, without derivatives (Mcf) $ 5.54 $ 5.10 $ 5.79 $ 4.91
Natural gas, with derivatives (Mcf) (a) $ 5.56 $ 5.33 $ 5.70 $ 5.00
Total, without derivatives (Boe) $ 67.07 $ 75.20 $ 70.28 $ 68.31
Total, with derivatives (Boe) (a) $ 68.48 $ 69.98 $ 69.39 $ 66.78
Operating costs and expenses per Boe:
Lease operating expenses and workover costs $ 8.26 $ 7.77 $ 8.17 $ 7.59
Oil and natural gas taxes $ 5.21 $ 6.08 $ 5.53 $ 5.70
Depreciation, depletion and amortization $ 24.58 $ 23.11 $ 24.35 $ 22.57
General and administrative $ 5.06 $ 4.70 $ 5.11 $ 5.06
(a) Includes the effect of cash receipts from (payments on) derivatives not designated as hedges:
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands) 2014 2013 2014 2013
Cash receipts from (payments on) derivatives not designated as hedges:
Oil derivatives $ 14,271 $ (49,864 ) $ (20,067 ) $ (42,528 )
Natural gas derivatives 446 4,589 (6,107 ) 4,844
Total $ 14,717 $ (45,275 ) $ (26,174 ) $ (37,684 )
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 loss on derivatives not designated as hedges in the statements of operations. This presentation of average prices with derivatives is a means by which to reflect the actual cash performance of our commodity derivatives for the respective periods and presents oil and natural gas prices with derivatives in a manner consistent with the presentation generally used by the investment community.

Concho Resources Inc.

Supplemental Non-GAAP Financial Measures

Unaudited

The following tables provide information that the Company believes may be useful to investors who follow the practice of some industry analysts who adjust reported company net income and cash flows from operating activities to exclude certain non-cash 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) 2014 2013 2014 2013
Net income - as reported $ 305,203 $ 30,421 $ 408,279 $ 145,214
Adjustments for certain non-cash and unusual items:
(Gain) loss on derivatives not designated as hedges (326,229 ) 168,610 (125,907 ) 157,303
Cash receipts from (payments on) derivatives not designated as hedges 14,717 (45,275 ) (26,174 ) (37,684 )
Impairments of long-lived assets 15,476 - 15,476 65,375
Leasehold abandonments 4,618 7,578 19,756 13,828
Loss on extinguishment of debt - - 4,316 28,616
(Gain) loss on disposition of assets, net (760 ) 1,849 8,697 1,717
Discontinued operations:
Gain on disposition of assets - - - (19,599 )
Tax impact (a) 110,151 (52,043 ) 39,146 (81,098 )
Adjusted net income $ 123,176 $ 111,140 $ 343,589 $ 273,672
Adjusted earnings per share:
Basic $ 1.09 $ 1.06 $ 3.15 $ 2.61
Diluted $ 1.09 $ 1.06 $ 3.14 $ 2.61
Effective tax rates 37.7 % 39.2 % 37.7 % 38.7 %
(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) 2014 2013
Cash flows from operating activities $ 1,288,536 $ 944,644
Settlements paid on derivatives not designated as hedges (a) (26,174 ) (37,684 )
Adjusted cash flows $ 1,262,362 $ 906,960
(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 (GAAP) to EBITDAX (non-GAAP) for the periods indicated:

Twelve
Months
Three Months Ended Nine Months Ended Ended
September 30, September 30, September 30,
(in thousands) 2014 2013 2014 2013 2014
Net income $ 305,203 $ 30,421 $ 408,279 $ 145,214 $ 514,068
Exploration and abandonments 16,982 10,992 70,645 37,797 142,397
Depreciation, depletion and amortization 256,765 200,625 715,602 557,775 930,435
Accretion of discount on asset retirement obligations 1,769 1,574 5,162 4,410 6,799
Impairments of long-lived assets 15,476 - 15,476 65,375 15,476
Non-cash stock-based compensation 13,465 9,923 34,672 25,278 44,472
(Gain) loss on derivatives not designated as hedges (326,229 ) 168,610 (125,907 ) 157,303 (159,558 )
Cash receipts from (payments on) derivatives not
designated as hedges 14,717 (45,275 ) (26,174 ) (37,684 ) (20,831 )
(Gain) loss on disposition of assets, net (760 ) 1,849 8,697 1,717 8,248
Interest expense 52,601 55,995 164,124 162,180 220,525
Loss on extinguishment of debt - - 4,316 28,616 4,316
Income tax expense from continuing operations 186,363 21,695 248,753 86,023 280,967
Discontinued operations - - - (12,081 ) -
EBITDAX $ 536,352 $ 456,409 $ 1,523,645 $ 1,221,923 $ 1,987,314

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) 2014 2013 2014 2013
Property acquisition costs:
Proved $ 37,732 $ - $ 60,359 $ 2,376
Unproved 71,915 13,991 107,985 58,832
Exploration 469,290 229,082 1,136,211 779,026
Development 204,938 197,696 609,780 593,006
Total costs incurred for oil and natural gas properties $ 783,875 $ 440,769 $ 1,914,335 $ 1,433,240
(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) 2014 2013 2014 2013
Exploration costs $ 730 $ 535 $ 1,850 $ 2,089
Development costs 4,721 1,801 6,025 9,163
Total asset retirement obligations $ 5,451 $ 2,336 $ 7,875 $ 11,252

Concho Resources Inc.
Derivatives Information
Unaudited

The table below provides data associated with the Company’s derivatives at November 5, 2014:

Fourth Quarter 2014 2015 2016 2017
Oil Swaps: (a)
Volume (Bbl) 4,633,000 15,262,000 9,349,000 168,000
Price (Bbl) $ 92.49 $ 87.73 $ 90.57 $ 87.00
Oil Basis Swaps: (b)
Volume (Bbl) 3,956,000

11,139,500

- -
Price (Bbl) $ (1.07 ) $ (3.73 ) $ - $ -
Natural Gas Swaps: (c)
Volume (MMBtu) 2,053,000 23,725,000 - -
Price (MMBtu) $ 4.24 $ 4.16 $ - $ -
Natural Gas Collars: (d)
Volume (MMBtu) 5,520,000 - - -
Ceiling Price (MMBtu) $ 4.40 $ - $ - $ -
Floor Price (MMBtu) $ 3.85 $ - $ - $ -
Natural Gas Basis Swaps: (e)
Volume (MMBtu) 2,053,000 5,475,000 - -
Price (MMBtu) $ (0.11 ) $ (0.13 ) $ - $ -
(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.

09.11.14 Concho Resources Inc. Schedules Third Quarter 2014 Conference Call for November 6, 2014

MIDLAND, Texas--(BUSINESS WIRE)--Sep. 11, 2014-- Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) will host a conference call on Thursday, November 6, 2014, at 8:30 AM CST to discuss third quarter financial and operating results. Earnings are expected to be released after the market closes on Wednesday, November 5, 2014.

Individuals who would like to participate should call (800) 706-7745 (passcode: 68939783) 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: 10103075) 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.
Megan P. Hays, 432-685-2533
Director of Investor Relations

08.28.14 Concho Resources Inc. Announces Participation in Upcoming Conference

MIDLAND, Texas--(BUSINESS WIRE)--Aug. 28, 2014-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the Barclays CEO Energy-Power Conference on Thursday, September 4th at 8:25 AM EDT. 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
or
Megan P. Hays, 432-685-2533
Director of Investor Relations

08.07.14 Concho Resources Inc. Announces Participation in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)--Aug. 7, 2014-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the Tuohy Brothers 5th Annual Energy Conference on Tuesday, August 12th, EnerCom’s The Oil & Gas Conference 19 on Tuesday, August 19th at 9:15 AM MDT and the Simmons 2014 European Energy Conference on Wednesday, August 27th at 9:45 AM BST. The presentations will be available on Concho's website, www.concho.com. Additionally, the presentation for EnerCom’s The Oil & Gas Conference 19 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
or
Megan P. Hays, 432-685-2533
Director of Investor Relations

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

MIDLAND, Texas, Aug 06, 2014 (BUSINESS WIRE) -- Concho Resources Inc. CXO, -0.65% (“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:

2q14 table

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 .............................................................................................................................................................     12,280,195     11,215,373
  Accumulated depletion and depreciation .......................................................................................................................................................................................     (2,833,157)     (2,384,108)
    Total oil and natural gas properties, net ..................................................................................................................................................................................     9,447,038     8,831,265
  Other property and equipment, net ...............................................................................................................................................................................................     116,974     114,783
    Total property and equipment, net ..........................................................................................................................................................................................     9,564,012     8,946,048
Deferred loan costs, net .....................................................................................................................................................................................................................     73,303     73,048
Intangible asset - operating rights, net ...............................................................................................................................................................................................     27,884     28,615
Inventory ...........................................................................................................................................................................................................................................     14,096     19,682
Noncurrent derivative instruments .....................................................................................................................................................................................................     -     966
Other assets .......................................................................................................................................................................................................................................     22,454     1,930
  Total assets ...................................................................................................................................................................................................................................   $ 10,755,663   $ 9,591,164
Liabilities and Stockholders’ Equity
Current liabilities:            
  Accounts payable - trade...............................................................................................................................................................................................................   $ 50,685   $ 13,936
  Bank overdrafts ............................................................................................................................................................................................................................     -     36,718
  Revenue payable ...........................................................................................................................................................................................................................     195,288     177,617
  Accrued and prepaid drilling costs ...............................................................................................................................................................................................     410,726     318,296
  Derivative instruments...................................................................................................................................................................................................................     162,479     53,701
  Other current liabilities .................................................................................................................................................................................................................     164,119     156,600
      Total current liabilities .......................................................................................................................................................................................................     983,297     756,868
Long-term debt ..................................................................................................................................................................................................................................     3,379,138     3,630,421
Deferred income taxes........................................................................................................................................................................................................................     1,415,624     1,334,653
Noncurrent derivative instruments .....................................................................................................................................................................................................     63,185     14,088
Asset retirement obligations and other long-term liabilities ...............................................................................................................................................................     99,085     97,185
Stockholders’ equity:            
  Common stock, $0.001par value; 300,000,000 authorized; 113,139,212 and            
    105,222,765 shares issued at June 30, 2014 and December 31, 2013, respectively ..............................................................................................................     113     105
  Additional paid-in capital ..............................................................................................................................................................................................................     2,986,105     2,027,162
  Retained earnings .........................................................................................................................................................................................................................     1,844,642     1,741,566
  Treasury stock, at cost; 167,108 and 127,305 shares at June 30, 2014 and December 31,            
    2013, respectively ..................................................................................................................................................................................................................     (15,526)     (10,884)
      Total stockholders’ equity..................................................................................................................................................................................................     4,815,334     3,757,949
  Total liabilities and stockholders’ equity .......................................................................................................................................................................................   $ 10,755,663   $ 9,591,164
                   

 

Concho Resources Inc.
Consolidated Statements of Operations
Unaudited
                             
                             
        Three Months Ended  

Six Months

Ended

        June 30   June 30
(in thousands, except per share amounts)     2014     2013     2014     2013
                             
Operating revenues:                        
  Oil sales .............................................................................................................................................................................................................................................   $ 580,772   $ 466,611   $ 1,120,629   $ 859,819
  Natural gas sales ................................................................................................................................................................................................................................     123,930     96,175     245,032     175,094
    Total operating revenues ..................................................................................................................................................................................................................     704,702     562,786     1,365,661     1,034,913
Operating costs and expenses:                        
  Oil and natural gas production ...........................................................................................................................................................................................................     134,944     107,219     261,868     208,064
  Exploration and abandonments ..........................................................................................................................................................................................................     28,288     8,398     53,663     26,805
  Depreciation, depletion and amortization ...........................................................................................................................................................................................     237,445     188,730     458,837     357,150
  Accretion of discount on asset retirement obligations ........................................................................................................................................................................     1,722     1,442     3,393     2,836
  Impairments of long-lived assets........................................................................................................................................................................................................     -     65,375     -     65,375
  General and administrative (including non-cash stock-based compensation of                        
    $9,775 and $8,588 for the three months ended June 30, 2014 and 2013,                        
    respectively, and $21,207 and $15,355 for the six months ended                        
    June 30, 2014 and 2013, respectively)..............................................................................................................................................................................................     49,535     40,991     97,285     84,284
  (Gain) loss on derivatives not designated as hedges ...........................................................................................................................................................................     164,707     (70,324)     200,322     (11,307)
    Total operating costs and expenses ..................................................................................................................................................................................................     616,641     341,831     1,075,368     733,207
Income from operations ....................................................................................................................................................................................................................     88,061     220,955     290,293     301,706
Other income (expense):                        
  Interest expense .................................................................................................................................................................................................................................     (55,388)     (54,079)     (111,523)     (106,185)
  Loss on extinguishment of debt..........................................................................................................................................................................................................     (4,316)     (28,616)     (4,316)     (28,616)
  Other, net ...........................................................................................................................................................................................................................................     (9,529)     244     (8,988)     135
    Total other expense ..........................................................................................................................................................................................................................     (69,233)     (82,451)     (124,827)     (134,666)
Income from continuing operations before income taxes .................................................................................................................................................................     18,828     138,504     165,466     167,040
  Income tax expense ...........................................................................................................................................................................................................................     (7,059)     (53,351)     (62,390)     (64,328)
Income from continuing operations ..................................................................................................................................................................................................     11,769     85,153     103,076     102,712
Income (loss) from discontinued operations, net of tax ....................................................................................................................................................................     -     (453)     -     12,081
Net income ........................................................................................................................................................................................................................................   $ 11,769   $ 84,700   $ 103,076   $ 114,793
Basic earnings per share:                        
  Income from continuing operations ...................................................................................................................................................................................................   $ 0.11   $ 0.81   $ 0.96   $ 0.98
  Income (loss) from discontinued operations, net of tax .....................................................................................................................................................................     -     -     -     0.12
    Net income .......................................................................................................................................................................................................................................   $ 0.11   $ 0.81   $ 0.96   $ 1.10
Diluted earnings per share:                        
  Income from continuing operations ...................................................................................................................................................................................................   $ 0.11   $ 0.81   $ 0.96   $ 0.98
  Income (loss) from discontinued operations, net of tax .....................................................................................................................................................................     -     -     -     0.11
    Net income ......................................................................................................................................................................................................................................   $ 0.11   $ 0.81   $ 0.96   $ 1.09
                             


Concho Resources Inc.
Consolidated Statements of Cash Flows
Unaudited
                     
            Six Months Ended
            June 30,
(in thousands)   2014   2013
CASH FLOWS FROM OPERATING ACTIVITIES:            
  Net income.............................................................................................................................................................................................................................................   $ 103,076   $ 114,793
  Adjustments to reconcile net income to net cash provided by operating activities:            
    Depreciation, depletion and amortization ............................................................................................................................................................................................     458,837     357,150
    Accretion of discount on asset retirement obligations ........................................................................................................................................................................     3,393     2,836
    Impairments of long-lived assets.........................................................................................................................................................................................................     -     65,375
    Exploration and abandonments, including dry holes ..........................................................................................................................................................................     41,762     5,412
    Non-cash stock-based compensation expense ....................................................................................................................................................................................     21,207     15,355
    Deferred income taxes ........................................................................................................................................................................................................................     34,951     50,346
    (Gain) loss on disposition of assets, net..............................................................................................................................................................................................     9,457     (132)
    (Gain) loss on derivatives not designated as hedges ..........................................................................................................................................................................     200,322     (11,307)
    Discontinued operations .....................................................................................................................................................................................................................     -     (12,250)
    Other non-cash items .........................................................................................................................................................................................................................     9,418     14,330
  Changes in operating assets and liabilities, net of acquisitions and dispositions:            
      Accounts receivable .........................................................................................................................................................................................................................     (83,061)     (55,577)
      Prepaid costs and other ....................................................................................................................................................................................................................     (6,154)     (661)
      Inventory .........................................................................................................................................................................................................................................     4,782     (647)
      Accounts payable ............................................................................................................................................................................................................................     36,626     (11,972)
      Revenue payable ..............................................................................................................................................................................................................................     17,671     12,962
      Other current liabilities ....................................................................................................................................................................................................................     2,441     (58,884)
        Net cash provided by operating activities .....................................................................................................................................................................................     854,728     487,129
CASH FLOWS FROM INVESTING ACTIVITIES:            
  Capital expenditures on oil and natural gas properties ...........................................................................................................................................................................     (1,054,000)     (880,653)
  Additions to property, equipment and other assets.................................................................................................................................................................................     (20,456)     (9,900)
  Proceeds from the disposition of assets ................................................................................................................................................................................................     394     15,434
  Contribution to equity method investment..............................................................................................................................................................................................     (10,050)     -
  Settlements received from (paid on) derivatives not designated as hedges ............................................................................................................................................     (40,891)     7,591
        Net cash used in investing activities .............................................................................................................................................................................................     (1,125,003)     (867,528)
CASH FLOWS FROM FINANCING ACTIVITIES:            
  Proceeds from issuance of debt .............................................................................................................................................................................................................     1,578,000     2,548,475
  Payments of debt ...................................................................................................................................................................................................................................     (1,828,000)     (2,194,500)
  Exercise of stock options ......................................................................................................................................................................................................................     1,289     2,068
  Excess tax benefit from stock-based compensation ...............................................................................................................................................................................     4,000     4,163
  Net proceeds from issuance of common stock ......................................................................................................................................................................................     932,455     -
  Payments for loan costs.........................................................................................................................................................................................................................     (10,642)     (14,075)
  Purchase of treasury stock ....................................................................................................................................................................................................................     (4,642)     (3,309)
  Bank overdrafts .....................................................................................................................................................................................................................................     (36,718)     34,744
        Net cash provided by financing activities .....................................................................................................................................................................................     635,742     377,566
        Net increase (decrease) in cash and cash equivalents ...................................................................................................................................................................     365,467     (2,833)
Cash and cash equivalents at beginning of period .................................................................................................................................................................................     21     2,880
Cash and cash equivalents at end of period ...........................................................................................................................................................................................   $ 365,488   $ 47
                     

 

Concho Resources Inc.

Summary Production and Price Data

Unaudited


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

  

            Three Months Ended   Six Months Ended
            June 30,   June 30,
            2014   2013   2014   2013
                                 
Production and operating data:                        
  Net production volumes:                        
    Oil (MBbl) ......................................................................................................................................................................................................................................................     6,229     5,192     12,075     9,959
    Natural gas (MMcf) .....................................................................................................................................................................................................................................     21,485     18,615     41,285     36,413
    Total (MBoe) ................................................................................................................................................................................................................................................     9,810     8,295     18,956     16,028
                                 
  Average daily production volumes:                        
    Oil (Bbl) ..........................................................................................................................................................................................................................................................     68,451     57,055     66,713     55,022
    Natural gas (Mcf) .........................................................................................................................................................................................................................................     236,099     204,560     228,094     201,177
    Total (Boe) ....................................................................................................................................................................................................................................................     107,801     91,148     104,729     88,552
                                 
  Average prices:                        
    Oil, without derivatives (Bbl) .....................................................................................................................................................................................................................   $ 93.24   $ 89.87   $ 92.81   $ 86.34
    Oil, with derivatives (Bbl) (a) .....................................................................................................................................................................................................................   $ 89.29   $ 90.13   $ 89.96   $ 87.07
    Natural gas, without derivatives (Mcf) ....................................................................................................................................................................................................   $ 5.77   $ 5.17   $ 5.94   $ 4.81
    Natural gas, with derivatives (Mcf) (a) ....................................................................................................................................................................................................   $ 5.70   $ 5.18   $ 5.78   $ 4.82
    Total, without derivatives (Boe) ................................................................................................................................................................................................................   $ 71.84   $ 67.85   $ 72.04   $ 64.57
    Total, with derivatives (Boe) (a) ................................................................................................................................................................................................................   $ 69.18   $ 68.04   $ 69.89   $ 65.04
                                 
  Operating costs and expenses per Boe:                        
    Lease operating expenses and workover costs .......................................................................................................................................................................................   $ 8.15   $ 7.25   $ 8.11   $ 7.48
    Oil and natural gas taxes ............................................................................................................................................................................................................................   $ 5.61   $ 5.68   $ 5.70   $ 5.50
    Depreciation, depletion and amortization ...............................................................................................................................................................................................   $ 24.20   $ 22.75   $ 24.21   $ 22.29
    General and administrative ........................................................................................................................................................................................................................   $ 5.05   $ 4.94   $ 5.13   $ 5.26
                                 
                                 
  (a) Includes the effect of cash settlements received from (paid on) commodity derivatives not designated as hedges:            
                                 
            Three Months Ended   Six Months Ended
            June 30,   June 30,
    (in thousands)   2014   2013   2014   2013
                                 
    Cash receipts from (payments on) derivatives not designated as hedges:                        
      Oil derivatives ................................................................................................................................................................................................................................   $ (24,569)   $ 1,320   $ (34,338)   $ 7,336
      Natural gas derivatives .................................................................................................................................................................................................................     (1,485)     255     (6,553)     255
      Total............................................................................................................................................................................................................................................   $ (26,054)   $ 1,575   $ (40,891)   $ 7,591
                                 
                                 
    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 loss on derivatives not designated as hedges in the statements of operations. This presentation of average prices with derivatives is a means by which to reflect the actual cash performance of our commodity derivatives for the respective periods and presents oil and natural gas prices with derivatives in a manner consistent with the presentation generally used by the investment community.
   
   
   
                                 

 

Concho Resources Inc.
Supplemental Non-GAAP Financial Measures
Unaudited

 

The following tables provide information that the Company believes may be useful to investors who follow the practice of some industry analysts who adjust reported company net income and cash flows from operating activities to exclude certain non-cash 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)     2014     2013     2014     2013
                             
Net income - as reported ................................................................................................................................................................................................................................   $ 11,769   $ 84,700   $ 103,076   $ 114,793
                             
Adjustments for certain non-cash and unusual items:                        
  (Gain) loss on derivatives not designated as hedges..................................................................................................................................................................................     164,707     (70,324)     200,322     (11,307)
  Cash receipts from (payments on) derivatives not designated as hedges...................................................................................................................................................     (26,054)     1,575     (40,891)     7,591
  Impairments of long-lived assets .............................................................................................................................................................................................................     -     65,375     -     65,375
  Leasehold abandonments..........................................................................................................................................................................................................................     11,193     2,940     15,138     7,327
  Loss on extinguishment of debt................................................................................................................................................................................................................     4,316     28,616     4,316     28,616
  Loss on disposition of assets, net ............................................................................................................................................................................................................     9,603     -     9,457     -
  Discontinued operations:                        
    (Gain) loss on disposition of assets.......................................................................................................................................................................................................     -     764     -     (19,599)
  Tax impact (a)...........................................................................................................................................................................................................................................     (61,739)     (11,144)     (71,005)     (30,031)
Adjusted net income .......................................................................................................................................................................................................................................   $ 113,795   $ 102,502   $ 220,413   $ 162,765
                             
Adjusted earnings per share:                        
  Basic.........................................................................................................................................................................................................................................................   $ 1.04   $ 0.98   $ 2.06   $ 1.55
  Diluted......................................................................................................................................................................................................................................................   $ 1.04   $ 0.98   $ 2.05   $ 1.55
                             
                             
Effective tax rates...........................................................................................................................................................................................................................................     37.7%     38.5%     37.7%     38.5%
                             
                             
(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:

 

                Six Months Ended
                 June 30
(in thousands)     2014     2013
                         
Cash flows from operating activities ..................................................................................................................................................................   $ 854,728   $ 487,129
  Settlements received from (paid on) derivatives not designated as hedges (a) .............................................................................     (40,891)     7,591
Adjusted cash flows ...............................................................................................................................................................................................   $ 813,837   $ 494,720
                         
                         
(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) impairments 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   Six Months Ended
        June 30,   June 30,
(in thousands)   2014   2013   2014   2013
                             
Net income ....................................................................................................................................................................................................................................   $ 11,769   $ 84,700   $ 103,076   $ 114,793
  Exploration and abandonments ..............................................................................................................................................................................................     28,288     8,398     53,663     26,805
  Depreciation, depletion and amortization ...............................................................................................................................................................................     237,445     188,730     458,837     357,150
  Accretion of discount on asset retirement obligations ............................................................................................................................................................     1,722     1,442     3,393     2,836
  Impairments of long-lived assets............................................................................................................................................................................................     -     65,375     -     65,375
  Non-cash stock-based compensation......................................................................................................................................................................................     9,775     8,588     21,207     15,355
  (Gain) loss on derivatives not designated as hedges ..............................................................................................................................................................     164,707     (70,324)     200,322     (11,307)
  Cash receipts from (payments on) derivatives not designated as hedges................................................................................................................................     (26,054)     1,575     (40,891)     7,591
  (Gain) loss on disposition of assets, net ................................................................................................................................................................................     9,603     (137)     9,457     (132)
  Interest expense .....................................................................................................................................................................................................................     55,388     54,079     111,523     106,185
  Loss on extinguishment of debt..............................................................................................................................................................................................     4,316     28,616     4,316     28,616
  Income tax expense from continuing operations ...................................................................................................................................................................     7,059     53,351     62,390     64,328
  Discontinued operations ........................................................................................................................................................................................................     -     453     -     (12,081)
EBITDAX .....................................................................................................................................................................................................................................   $ 504,018   $ 424,846   $ 987,293   $ 765,514
                           

 

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)   2014   2013   2014   2013
                             
Property acquisition costs:                        
  Proved ..............................................................................................................................................................................................................................................   $ 2,137   $ 652   $ 22,627   $ 2,537
  Unproved .........................................................................................................................................................................................................................................     11,382     16,945     36,070     44,841
Exploration ...........................................................................................................................................................................................................................................     342,424     283,254     666,921     549,944
Development ........................................................................................................................................................................................................................................     193,163     220,588     404,842     395,310
  Total costs incurred for oil and natural gas properties ............................................................................................................................................................   $ 549,106   $ 521,439   $ 1,130,460   $ 992,632
                             
                             
(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)   2014   2013   2014   2013
                             
  Exploration costs.............................................................................................................................................................................................................................   $ 562   $ 820   $ 1,120   $ 1,554
  Development costs..........................................................................................................................................................................................................................     339     5,832     1,304     7,362
    Total asset retirement obligations .............................................................................................................................................................................................   $ 901   $ 6,652   $ 2,424   $ 8,916

 

Concho Resources Inc.
Derivatives Information
Unaudited

 

The tables below provide data associated with the Company’s derivatives at August 6, 2014:  

 

                           
      2014            
      Third Quarter   Fourth Quarter   Total   2015   2016   2017
                           
Oil Swaps: (a)                        
  Volume (Bbl) ..................................................................................................................................................................................................................................   5,221,000   4,633,000   9,854,000   15,262,000   7,329,000   168,000
  Price (Bbl) ...................................................................................................................................................................................................................................... $ 92.96 $ 92.49 $ 92.74 $ 87.73 $ 90.62 $ 87.00
                           
Oil Basis Swaps: (b)                        
  Volume (Bbl) ..................................................................................................................................................................................................................................   3,956,000   3,956,000   7,912,000   7,122,000   -   -
  Price (Bbl) ...................................................................................................................................................................................................................................... $ (0.99) $ (1.07) $ (1.03) $ (3.41) $ - $ -
                           
Natural Gas Swaps: (c)                        
  Volume (MMBtu) ...........................................................................................................................................................................................................................   2,576,000   2,053,000   4,629,000   23,725,000   -   -
  Price (MMBtu) ................................................................................................................................................................................................................................ $ 4.23 $ 4.24 $ 4.23 $ 4.16 $ - $ -
                           
Natural Gas Collars: (d)                        
  Volume (MMBtu) ...........................................................................................................................................................................................................................   5,520,000   5,520,000   11,040,000   -   -   -
  Ceiling Price (MMBtu) .................................................................................................................................................................................................................... $ 4.40 $ 4.40 $ 4.40 $ - $ - $ -
  Floor Price (MMBtu) ...................................................................................................................................................................................................................... $ 3.85 $ 3.85 $ 3.85 $ - $ - $ -
                           
Natural Gas Basis Swaps: (e)                        
  Volume (MMBtu) ...........................................................................................................................................................................................................................   7,360,000   7,360,000   14,720,000   -   -   -
  Price (MMBtu) ................................................................................................................................................................................................................................ $ (0.09) $ (0.09) $ (0.09) $ - $ - $ -
                           
                           
(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.
                           

 

Contact:
Concho Resources Inc.

Price Moncrief (432) 683-7443
Vice President of Capital Markets and Strategy

Megan P. Hays (432) 685-2533
Director of Investor Relations

06.26.14 Concho Resources Inc. Schedules Second Quarter 2014 Conference Call for August 7, 2014

MIDLAND, Texas--(BUSINESS WIRE)--Jun. 26, 2014-- Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) will host a conference call on Thursday, August 7, 2014, at 8:30 AM CDT to discuss its second quarter financial and operating results. Earnings are expected to be released after the market closes on Wednesday, August 6, 2014.

Individuals who would like to participate should call (866) 318-8619 (passcode: 39034276) 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: 39351777) or via the Company's website, for approximately 30 days following the conference call.

About Concho Resources Inc.

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

Source: Concho Resources Inc.

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

05.15.14 Concho Resources Inc. Announces Participation in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)--May 15, 2014-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the UBS Global Oil and Gas Conference on Wednesday, May 21st at 10:35 AM CDT, the RBC Capital Markets’ 2014 Energy and Power Conference on Monday, June 2nd at 8:30 AM EDT and the Tudor, Pickering, Holt & Co. 10th Annual Hotter ‘N Hell Energy Conference on Wednesday, June 18th. The presentations will be available on Concho's website, www.concho.com. Additionally, the presentation for the UBS Global Oil and Gas Conference 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

05.12.14 Concho Resources Inc. Announces Upsizing and Pricing of Common Stock Offering

MIDLAND, Texas --(BUSINESS WIRE)--May 12, 2014-- Concho Resources Inc. (NYSE: CXO) (the “Company”) today announced that it has priced a public offering of 6,500,000 shares of its common stock at a price to the public of $129.00 per share. The size of the offering was upsized from 6,000,000 shares. Net proceeds from the offering are expected to be used to repay all outstanding borrowings under the Company’s credit facility and for general corporate purposes, including funding the Company’s three-year accelerated growth plan, capital commitments associated with the recently announced midstream joint venture and future acquisitions. The Company has also granted the underwriters an option to purchase up to an additional 975,000 shares of its common stock. The offering is expected to close on May 16, 2014 , subject to customary closing conditions.

Goldman, Sachs & Co. , BofA Merrill Lynch, Barclays and J.P. Morgan acted as joint book-running managers for the offering. The offering will be made only by means of a prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission’s website at www.sec.gov. Alternatively, the underwriters will arrange to send you the prospectus supplement and related base prospectus if you request them by contacting: Goldman, Sachs & Co. , 200 West Street , New York, NY 10282, Attention: Prospectus Department, by calling (866) 471-2526, or by emailing prospectus-ny@ny.email.gs.com; BofA Merrill Lynch, 222 Broadway , New York, NY 10038, Attn: Prospectus Department, email dg.prospectus_requests@baml.com; Barclays , c/o Broadridge Financial Solutions , 1155 Long Island Avenue Edgewood, NY 11717, Telephone: (888) 603-5847 or by emailing Barclaysprospectus@broadridge.com; or J.P. Morgan , via Broadridge Financial Solutions , 1155 Long Island Avenue , Edgewood, New York , 11717, by calling: (866) 803-9204.

This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. A registration statement relating to the securities has been filed and became effective September 21, 2012 .

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 .

Forward-Looking Statements and Cautionary Statements

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

Source: Concho Resources Inc.

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

05.12.14 Concho Resources Inc. Announces Common Stock Offering

MIDLAND, Texas --(BUSINESS WIRE)--May 12, 2014-- Concho Resources Inc. (NYSE:CXO) (the “Company”) today announced that it intends, subject to market conditions, to commence a registered public offering of 6,000,000 shares of common stock. The Company also expects to grant the underwriters an option to purchase up to 900,000 additional shares of stock. Net proceeds from the offering are expected to be used to repay all outstanding borrowings under the Company’s credit facility and for general corporate purposes, including funding the Company’s three-year accelerated growth plan, capital commitments associated with the recently announced midstream joint venture and future acquisitions.

Goldman, Sachs & Co. , BofA Merrill Lynch, Barclays and J.P. Morgan are acting as joint book-running managers for the offering. The offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the Securities and Exchange Commission’s website at www.sec.gov. Alternatively, the underwriters will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting: Goldman, Sachs & Co. , 200 West Street , New York, NY 10282, Attention: Prospectus Department, by calling (866) 471-2526, or by e-mailing prospectus-ny@ny.email.gs.com; BofA Merrill Lynch, 222 Broadway , New York, NY 10038, Attn: Prospectus Department, email dg.prospectus_requests@baml.com; Barclays , c/o Broadridge Financial Solutions , 1155 Long Island Avenue Edgewood, NY 11717, Telephone: (888) 603-5847 or by emailing Barclaysprospectus@broadridge.com; or J.P. Morgan , via Broadridge Financial Solutions , 1155 Long Island Avenue , Edgewood, New York , 11717, by calling: (866) 803-9204.

This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. A registration statement relating to the securities has been filed and became effective September 21, 2012 .

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 .

Forward-Looking Statements and Cautionary Statements

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

Source: Concho Resources Inc.

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

05.12.14 Concho Resources Inc. Reports First Quarter 2014 Financial and Operating Results; Announces Midstream Joint Venture in the Northern Delaware Basin

MIDLAND, Texas--(BUSINESS WIRE)--May 12, 2014-- Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) today reported financial and operating results for the three months ended March 31, 2014. Highlights include:

  • Average production of 101.6 thousand barrels of oil equivalent per day (“MBoepd”) for the first quarter of 2014, above the high end of its previous quarterly guidance range of 98.0 to 101.0 MBoepd
  • Added 39 new wells in the northern Delaware Basin with record high average 30-day and 24-hour peak rates of 909 and 1,488 Boepd, respectively
  • Net income of $91.3 million, or $0.87 per diluted share, for the first quarter of 2014, as compared to net income of $30.1 million, or $0.29 per diluted share, in the first quarter of 2013
  • Adjusted net income1 (non-GAAP) of $106.6 million, or $1.01 per diluted share, for the first quarter of 2014, as compared to $60.3 million, or $0.58 per diluted share, for the first quarter of 2013
  • EBITDAX2 (non-GAAP) of $483.3 million for the first quarter of 2014, a 42% increase over the first quarter of 2013
  • Increased 2014 production guidance range to 20% - 24% growth over 2013
  • Announced the formation of a midstream joint venture to construct a crude oil transportation system in the northern Delaware Basin

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

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

First Quarter 2014 Financial Results

Production for the first quarter of 2014 totaled 9.1 million barrels of oil equivalent (“MMBoe”) (5.8 million barrels of oil (“MMBbls”) and 19.8 billion cubic feet of natural gas (“Bcf”)), an increase of 18% as compared to 7.7 MMBoe (4.8 MMBbls of crude oil and 17.8 Bcf of natural gas) produced in the first quarter of 2013. Sequentially, Concho’s average daily production in the first quarter of 2014 increased 5% as compared to the previous quarter of 97.0 MBoepd.

“We are off to a great start executing our Two-by-Three Growth Plan,” commented Tim Leach, Chairman, Chief Executive Officer and President. “Production during the first quarter exceeded our expectations driven by improved operational efficiencies and strong well performance. Our assets in the Delaware Basin continue to deliver consistently strong results, reaffirming this region as one of the most prolific oil basins in the U.S. At the same time, we are realizing improved drill times which are enabling us to expand our budgeted drilling activity as we proceed through 2014.”

For the first quarter of 2014, the Company reported net income of $91.3 million, or $0.87 per diluted share, as compared to net income of $30.1 million, or $0.29 per diluted share, for the first quarter of 2013. The Company’s first quarter 2014 results were impacted by several non-cash and unusual items including: (1) a $35.6 million loss on derivatives not designated as hedges, (2) $14.8 million in cash payments on commodity derivatives, (3) $3.9 million of leasehold abandonments and (4) a $0.1 million net gain on disposition of assets. Excluding these items and their tax effects, first quarter 2014 adjusted net income (non-GAAP) was $106.6 million, or $1.01 per diluted share. Excluding similar non-cash and unusual items and their tax effects, adjusted net income (non-GAAP) for the first quarter of 2013 was $60.3 million, or $0.58 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 $483.3 million in the first quarter of 2014, an increase of 42% from $340.7 million 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 for the first quarter of 2014 increased 40% when compared to the first quarter of 2013. This increase was attributable to an 18% increase in production in the first quarter of 2014 compared to the first quarter of 2013, a 12% increase in the Company’s unhedged realized oil price in the first quarter of 2014 compared to the first quarter of 2013 and a 38% increase in the Company’s unhedged realized gas price in the first quarter of 2014 compared to the first quarter of 2013.

Oil and natural gas production expense for the first quarter of 2014, including oil and natural gas taxes, totaled $126.9 million, or $13.87 per barrel of oil equivalent (“Boe”), a 6% increase per Boe from the first quarter of 2013. This increase was due primarily to higher lease operating expenses (“LOE”) and workover costs, which averaged $8.07 per Boe in the first quarter of 2014 as compared to $7.74 per Boe in the first quarter of 2013.

Depreciation, depletion and amortization expense (“DD&A”) for the first quarter of 2014 totaled $221.4 million, or $24.21 per Boe, an 11% increase per Boe from the first quarter of 2013.

General and administrative expense (“G&A”) for the first quarter of 2014 totaled $47.8 million, or $5.22 per Boe, as compared to $43.3 million, or $5.60 per Boe, in the first quarter of 2013. Cash G&A expenses for the first quarter of 2014 totaled $36.4 million and stock-based compensation (non-cash) totaled $11.4 million. The decrease in per Boe expense for the first quarter of 2014 over the first quarter of 2013 was primarily due to an 18% increase in production.

The Company’s cash flow from operating activities (GAAP) was $476.0 million for the first quarter of 2014, as compared to $219.7 million for the first quarter of 2013, an increase of 117%. Adjusted cash flows (non-GAAP), which are cash flows from operating activities (GAAP) adjusted for settlements on derivatives not designated as hedges, were $461.1 million for the first quarter of 2014, as compared to $225.7 million for the first quarter of 2013, an increase of 104%. 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 March 31, 2014, the Company commenced drilling or participated in a total of 127 gross wells (95 operated, 67% horizontal) and completed 123 wells as producers. The table below summarizes the Company’s gross drilling activities by core area for the first quarter of 2014:







1Q 2014




Total Wells Operated Wells Completed Wells
Delaware Basin


55

49

53
New Mexico Shelf


30

12

31
Texas Permian


42

34

39
Total


127

95

123










Currently, the Company is operating 33 drilling rigs; 2 of these rigs are drilling Yeso wells in the New Mexico Shelf, 9 are drilling in the Texas Permian and 22 are drilling in the Delaware Basin. Of the Company’s 33 operated rigs, 29 are drilling horizontally, including 2 in the New Mexico Shelf, 5 in the Texas Permian and 22 in the Delaware Basin.

Delaware Basin

Of the 55 wells drilled in the Delaware Basin, 41 were Bone Spring sands wells, 11 were Wolfcamp shale wells, 2 were Brushy Canyon wells and 1 was an Avalon shale well. The Company’s net production in the first quarter of 2014 from horizontal Delaware Basin wells averaged approximately 42.3 MBoepd, an 82% increase over the first quarter of 2013 and an increase of 18% over the fourth quarter of 2013.

In the northern Delaware Basin, 39 new wells had at least 30 days of production by the end of the first quarter of 2014 and set new average production-rate records with an average 30-day rate of 909 Boepd (74% oil) and an average 24-hour peak rate of 1,488 Boepd from an average lateral length of 4,535 feet.

In the southern Delaware Basin, 7 new wells had at least 30 days of production by the end of the first quarter of 2014, with an average 30-day rate of 1,104 Boepd (77% oil) and an average 24-hour peak rate of 1,453 Boepd from an average lateral length of 4,385 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.

New Credit Facility

On May 9, 2014, the Company entered into a new five-year revolving credit facility. The borrowing base under the new facility increased to $3.25 billion and commitments were maintained at $2.5 billion. Additionally, the new facility provides for a 25 basis point reduction in the drawn spread and further interest rate reductions on the undrawn spread.

At March 31, 2014, the Company had borrowings outstanding under its credit facility of $294.7 million, and the availability under the credit facility was approximately $2.2 billion.

Midstream Joint Venture

The Company has formed a midstream joint venture with a private entity to construct a crude oil transportation system in the northern Delaware Basin. This aligns with the Company’s midstream strategic objectives of improving price realizations and securing transportation for its crude oil volume. The joint venture will connect a substantial portion of the Company’s crude oil production in the northern Delaware Basin and increase optionality by providing multiple delivery points. Current expectations are for the system to be operational in the second half of 2015.

Updated Guidance

Concho’s upstream capital budget increased to $2.6 billion, excluding acquisitions, as operational efficiencies continue to improve. The Company expects it will drill approximately 40 additional net wells with the incremental capital before the end of 2014. Additionally, the Company’s recently announced midstream joint venture and previously announced acreage acquisitions in the southern Delaware Basin are expected to add approximately $100 million to the overall 2014 capital budget.

In light of its first quarter production results and planned activity increase in the second half of 2014, the Company raised its 2014 annual production guidance range to 20% - 24% growth over 2013. For the second quarter of 2014, the Company expects production to average between 104 - 108 MBoepd.

The Company’s LOE guidance range for 2014 increased to $8.00 - $8.50 per Boe as a result of the rapid increase in activity across the Permian Basin and certain related infrastructure challenges.

Crude Oil Realizations

In the first quarter of 2014, the average discount on the Midland-to-Cushing WTI oil basis differential was approximately $3.53 per Bbl. The average discount for the months of April and May was $8.68 and $8.89 per Bbl, respectively. The Company’s unhedged crude oil realization during the second quarter of 2014 is expected to be 88% - 92% of NYMEX crude oil. However, the Company’s full-year 2014 unhedged crude oil realization is expected to remain within the annual guidance range of 93% - 95% of NYMEX crude oil.

Conference Call and Presentation Information

The Company will host a conference call with an accompanying presentation on Monday, May 12, 2014, at 9 a.m. CST to further discuss information regarding first 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 (800) 237-9752 (passcode: 78320382). 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: 54056975).

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 proceeds of the sale of the non-core properties, oil and natural gas reserves, number of identified drilling locations, drilling program, derivative activities, costs and other guidance. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the "Risk Factors" section of the Company's most recent Form 10-K and 10-Q filings and risks relating to declines in the prices we receive for our oil and natural gas; uncertainties about the estimated quantities of reserves; risks related to the integration of acquired assets; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; drilling and operating risks; the adequacy of our capital resources and liquidity; risks related to the concentration of our operations in the Permian Basin; the results of our hedging program; weather; litigation; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; uncertainties about our ability to replace reserves and economically develop our current reserves; competition in the oil and natural gas industry; and other important factors that could cause actual results to differ materially from those projected.

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









March 31,


December 31,
(in thousands, except share and per share amounts) 2014 2013
Assets



Current assets:







Cash and cash equivalents

$ 21


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







Oil and natural gas


266,489



223,790
Joint operations and other


249,568



247,945
Derivative instruments


1,358



590
Deferred income taxes


40,039



30,069
Prepaid costs and other

17,956

18,460
Total current assets

575,431

520,875
Property and equipment:







Oil and natural gas properties, successful efforts method


11,768,415



11,215,373
Accumulated depletion and depreciation

(2,600,913 )

(2,384,108 )
Total oil and natural gas properties, net


9,167,502



8,831,265
Other property and equipment, net

116,159

114,783
Total property and equipment, net

9,283,661

8,946,048
Deferred loan costs, net


69,701



73,048
Intangible asset - operating rights, net


28,250



28,615
Inventory


18,674



19,682
Noncurrent derivative instruments


269



966
Other assets

2,182

1,930
Total assets

$ 9,978,168

$ 9,591,164
Liabilities and Stockholders’ Equity



Current liabilities:







Accounts payable - trade

$ 34,071


$ 13,936
Bank overdrafts


90,285



36,718
Revenue payable


199,292



177,617
Accrued and prepaid drilling costs


372,896



318,296
Derivative instruments


70,824



53,701
Other current liabilities

171,236

156,600
Total current liabilities

938,604

756,868
Long-term debt


3,674,434



3,630,421
Deferred income taxes


1,386,577



1,334,653
Noncurrent derivative instruments


17,814



14,088
Asset retirement obligations and other long-term liabilities


99,552



97,185
Stockholders’ equity:







Common stock, $0.001 par value; 300,000,000 authorized; 105,397,895 and 105,222,765 shares issued at March 31, 2014 and December 31, 2013, respectively




105



105
Additional paid-in capital


2,042,841



2,027,162
Retained earnings


1,832,873



1,741,566

Treasury stock, at cost; 160,597 and 127,305 shares at March 31, 2014 and December 31, 2013, respectively




(14,632 )


(10,884 )
Total stockholders’ equity

3,861,187

3,757,949
Total liabilities and stockholders’ equity

$ 9,978,168

$ 9,591,164










Concho Resources Inc.
Consolidated Statements of Operations
Unaudited

Three Months Ended




March 31,
(in thousands, except per share amounts) 2014 2013








Operating revenues:








Oil sales


$ 539,857


$ 393,208
Natural gas sales


121,102

78,919
Total operating revenues


660,959

472,127
Operating costs and expenses:








Oil and natural gas production



126,924



100,845
Exploration and abandonments



25,375



18,407
Depreciation, depletion and amortization



221,392



168,420
Accretion of discount on asset retirement obligations



1,671



1,394

General and administrative (including non-cash stock-based compensation of $11,432 and $6,767 for the three months ended March 31, 2014 and 2013, respectively)





47,750



43,293
Loss on derivatives not designated as hedges


35,615

59,017
Total operating costs and expenses


458,727

391,376
Income from operations


202,232

80,751
Other income (expense):








Interest expense



(56,135 )


(52,106 )
Other, net


541

(109 )
Total other expense


(55,594 )

(52,215 )
Income from continuing operations before income taxes



146,638



28,536
Income tax expense


(55,331 )

(10,977 )
Income from continuing operations



91,307



17,559
Income from discontinued operations, net of tax


-

12,534
Net income


$ 91,307

$ 30,093
Basic earnings per share:








Income from continuing operations


$ 0.87


$ 0.17
Income from discontinued operations, net of tax


-

0.12
Net income


$ 0.87

$ 0.29
Diluted earnings per share:








Income from continuing operations


$ 0.87


$ 0.17
Income from discontinued operations, net of tax


-

0.12
Net income


$ 0.87

$ 0.29











Concho Resources Inc.
Consolidated Statements of Cash Flows
Unaudited

Three Months Ended




March 31,
(in thousands) 2014 2013
CASH FLOWS FROM OPERATING ACTIVITIES:






Net income


$ 91,307


$ 30,093
Adjustments to reconcile net income to net cash provided by operating activities:








Depreciation, depletion and amortization



221,392



168,420
Accretion of discount on asset retirement obligations



1,671



1,394
Exploration and abandonments, including dry holes



23,759



4,478
Non-cash stock-based compensation expense



11,432



6,767
Deferred income taxes



41,954



11,500
(Gain) loss on disposition of assets, net



(146 )


5
Loss on derivatives not designated as hedges



35,615



59,017
Discontinued operations



-



(19,754 )
Other non-cash items



2,710



3,376
Changes in operating assets and liabilities, net of acquisitions and dispositions:








Accounts receivable



(10,139 )


12,608
Prepaid costs and other



21



726
Inventory



1,126



(21 )
Accounts payable



20,087



(27,679 )
Revenue payable



21,675



(15,636 )
Other current liabilities


13,516

(15,623 )
Net cash provided by operating activities


475,980

219,671
CASH FLOWS FROM INVESTING ACTIVITIES:








Capital expenditures on oil and natural gas properties



(554,266 )


(419,766 )
Additions to other property and equipment



(5,617 )


(4,244 )
Proceeds from the disposition of assets



24



15,865

Settlements received from (paid on) derivatives not designated as hedges




(14,837 )

6,016
Net cash used in investing activities


(574,696 )

(402,129 )
CASH FLOWS FROM FINANCING ACTIVITIES:








Proceeds from issuance of debt



593,400



626,700
Payments of debt



(548,750 )


(463,300 )
Exercise of stock options



1,254



2,059
Excess tax benefit from stock-based compensation



2,993



3,277
Purchase of treasury stock



(3,748 )


(2,909 )
Bank overdrafts


53,567

14,725
Net cash provided by financing activities


98,716

180,552
Net decrease in cash and cash equivalents



-



(1,906 )
Cash and cash equivalents at beginning of period


21

2,880
Cash and cash equivalents at end of period


$ 21

$ 974









Concho Resources Inc.

Summary Production and Price Data
Unaudited

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







Three Months Ended




March 31,
2014 2013








Production and operating data:










Net production volumes:








Oil (MBbl)



5,846



4,767
Natural gas (MMcf)



19,800



17,798
Total (MBoe)



9,146



7,733









Average daily production volumes:








Oil (Bbl)



64,956



52,967
Natural gas (Mcf)



220,000



197,756
Total (Boe)



101,623



85,926









Average prices:








Oil, without derivatives (Bbl)


$ 92.35


$ 82.49
Oil, with derivatives (Bbl) (a)


$ 90.68


$ 83.75
Natural gas, without derivatives (Mcf)


$ 6.12


$ 4.43
Natural gas, with derivatives (Mcf) (a)


$ 5.86


$ 4.43
Total, without derivatives (Boe)


$ 72.27


$ 61.05
Total, with derivatives (Boe) (a)


$ 70.65


$ 61.83









Operating costs and expenses per Boe:








Lease operating expenses and workover costs


$ 8.07


$ 7.74
Oil and natural gas taxes


$ 5.80


$ 5.31
Depreciation, depletion and amortization


$ 24.21


$ 21.79
General and administrative


$ 5.22


$ 5.60









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





Three Months Ended




March 31,
(in thousands) 2014 2013









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








Oil derivatives


$ (9,769 )

$ 6,016
Natural gas derivatives


(5,068 )

-
Total


$ (14,837 )

$ 6,016

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 loss on derivatives not designated as hedges in the statements of operations. This presentation of average prices with derivatives is a means by which to reflect the actual cash performance of our commodity derivatives for the respective periods and presents oil and natural gas prices with derivatives in a manner consistent with the presentation generally used by the investment community.

Concho Resources Inc.
Supplemental Non-GAAP Financial Measures
Unaudited

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





March 31,
(in thousands, except per share amounts) 2014 2013








Net income - as reported


$ 91,307


$ 30,093









Adjustments for certain non-cash and unusual items:








Loss on derivatives not designated as hedges



35,615



59,017
Cash receipts from (payments on) derivatives not designated as hedges



(14,837 )


6,016
Leasehold abandonments



3,945



4,387
(Gain) loss on disposition of assets, net



(146 )


5

Discontinued operations:










Gain on disposition of assets



-



(20,363 )
Tax impact (a)


(9,266 )

(18,889 )
Adjusted net income


$ 106,618

$ 60,266









Adjusted earnings per share:








Basic


$ 1.01


$ 0.58
Diluted


$ 1.01


$ 0.58


















Effective tax rates



37.7 %


38.5 %









(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:


Three Months Ended




March 31,
(in thousands) 2014 2013








Cash flows from operating activities


$ 475,980


$ 219,671

Settlements received from (paid on) derivatives not designated as hedges (a)




(14,837 )

6,016
Adjusted cash flows


$ 461,143

$ 225,687









(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) non-cash stock-based compensation expense, (5) loss on derivatives not designated as hedges, (6) cash receipts from (payments on) derivatives not designated as hedges, (7) (gain) loss on disposition of assets, net, (8) interest expense, (9) federal and state income taxes on continuing operations and (10) similar items listed above that are presented in discontinued operations. EBITDAX is not a measure of net income or cash flows as determined by GAAP.

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




March 31,
(in thousands) 2014 2013








Net income


$ 91,307


$ 30,093
Exploration and abandonments



25,375



18,407
Depreciation, depletion and amortization



221,392



168,420
Accretion of discount on asset retirement obligations



1,671



1,394
Non-cash stock-based compensation



11,432



6,767
Loss on derivatives not designated as hedges



35,615



59,017

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





(14,837 )


6,016
(Gain) loss on disposition of assets, net



(146 )


5
Interest expense



56,135



52,106
Income tax expense from continuing operations



55,331



10,977
Discontinued operations


-

(12,534 )
EBITDAX


$ 483,275

$ 340,668









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




March 31,
(in thousands) 2014 2013








Property acquisition costs:








Proved


$ 20,490

$ 1,885
Unproved



24,688


27,896
Exploration



324,497


266,690
Development


211,679

174,722
Total costs incurred for oil and natural gas properties


$ 581,354

$ 471,193









(a)

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













Three Months Ended




March 31,
(in thousands) 2014 2013









Exploration costs


$ 558

$ 734
Development costs


965

1,530
Total asset retirement obligations


$ 1,523

$ 2,264









Concho Resources Inc.
Derivatives Information
Unaudited

The tables below provide data associated with the Company’s derivatives at May 12, 2014 for the periods indicated:

2014




Second
Quarter


Third
Quarter


Fourth
Quarter


Total
2015
2016
2017





























Oil Swaps: (a)




























Volume (Bbl)



4,984,000



4,571,000



4,173,000



13,728,000



13,952,000



429,000


168,000
Price (Bbl)


$ 93.32


$ 92.06


$ 91.74


$ 92.42


$ 87.22


$ 88.31

$ 87.00





























Oil Basis Swaps: (b)




























Volume (Bbl)



3,458,000



3,956,000



3,956,000



11,370,000



543,000



-


-
Price (Bbl)


$ (0.72 )

$ (0.99 )

$ (1.07 )

$ (0.93 )

$ (3.00 )

$ -

$ -





























Natural Gas Swaps: (c)




























Volume (MMBtu)



3,335,000



2,576,000



2,053,000



7,964,000



23,725,000



-


-
Price (MMBtu)


$ 4.22


$ 4.23


$ 4.24


$ 4.23


$ 4.16


$ -

$ -





























Natural Gas Collars: (d)




























Volume (MMBtu)



5,460,000



5,520,000



5,520,000



16,500,000



-



-


-
Ceiling Price (MMBtu)


$ 4.40


$ 4.40


$ 4.40


$ 4.40


$ -


$ -

$ -
Floor Price (MMBtu)


$ 3.85


$ 3.85


$ 3.85


$ 3.85


$ -


$ -

$ -





























Natural Gas Basis Swaps: (e)




























Volume (MMBtu)



1,220,000



1,840,000



1,840,000



4,900,000



-



-


-
Price (MMBtu)


$ (0.11 )

$ (0.11 )

$ (0.11 )

$ (0.11 )

$ -


$ -

$ -





























(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

03.31.14 Concho Resources Inc. Schedules First Quarter 2014 Conference Call for May 12, 2014

MIDLAND, Texas--(BUSINESS WIRE)--Mar. 31, 2014-- Concho Resources Inc. (NYSE: CXO) ("Concho" or the "Company") will host a conference call on Monday, May 12, 2014, at 9:00 AM CDT to discuss its first quarter financial and operating results. Earnings are expected to be released before the market opens on Monday, May 12, 2014.

Individuals who would like to participate should call (800) 237-9752 (passcode: 78320382) 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: 54056975) 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

03.21.14 Concho Resources Appoints John Surma to Board of Directors and Names Jack Harper Executive Vice President

MIDLAND, Texas--(BUSINESS WIRE)--Mar. 21, 2014-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced that John Surma has been appointed to the Company's Board of Directors and that Jack Harper has rejoined the Company as Executive Vice President.

Mr. Surma joins the Company's Board of Directors after recently retiring as Chairman and Chief Executive Officer of United States Steel Corporation. Mr. Surma will serve on the Company's Audit Committee and Reserves Committee. He is currently a member of the boards of directors of Marathon Petroleum Corporation, Ingersoll-Rand plc and MPLX GP LLC, the general partner of MPLX LP. Additionally, Mr. Surma is on the boards of directors of the Federal Reserve Bank of Cleveland and the National Safety Council. He was appointed by President Barack Obama to the President's Advisory Committee for Trade Policy and Negotiations and serves as its vice chairman. Prior to joining United States Steel, Mr. Surma served in several executive positions with Marathon Petroleum Corporation and as a Partner with Price Waterhouse LLP. Mr. Surma earned a Bachelor of Science degree in accounting from Pennsylvania State University.

Mr. Harper served as the Company's Senior Vice President and Chief of Staff from November 2010 to January 2013. Mr. Harper joined the Company in July 2006 as Director of Investor Relations and Business Development and became Vice President - Business Development and Capital Markets in October 2007. Prior to joining the Company, Mr. Harper served in various capacities relating to finance, investor relations and business development at Unocal Corporation, Pure Resources, Inc. and Tom Brown, Inc. He is a graduate of Baylor University with a Bachelor of Business Administration degree in Finance.

Tim Leach, Chairman of the Board of Directors, Chief Executive Officer and President, commented, "Jack was a key part of Concho's growth from our initial public offering in 2007 through 2013. We are proud he's once again an integral member of our team bringing his financial expertise and strategic insight to the management of the Company's business. Additionally, John Surma's broad experience successfully running large, sophisticated energy and industrial companies will facilitate him being a strong contributor to our Board of Directors. With these additions, I am even more enthusiastic about Concho's positioning and look forward to working with both Jack and John as we embark on the next phase of the Company's growth."

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 Resources Inc.'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

03.18.14 Concho Resources Inc. Announces Participation in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)--Mar. 18, 2014-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the 42nd Annual Howard Weil Energy Conference on Monday, March 24th at 2:05 PM CDT and the Morgan Stanley Permian Basin Energy Summit on Tuesday, April 1st at 8:00 AM CDT. 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

02.20.14 Concho Resources Inc. Announces Participation in Upcoming Conferences

MIDLAND, Texas--(BUSINESS WIRE)--Feb. 20, 2014-- Concho Resources Inc. (NYSE: CXO) (the "Company") today announced its upcoming participation at the J.P. Morgan 2014 Global High Yield & Leveraged Finance Conference on Tuesday, February 25th at 7:40 AM EST, the Simmons & Company International Fourteenth Annual Energy Conference on Friday, February 28th at 11:10 AM PST and the Raymond James 35th Annual Institutional Investors Conference on Monday, March 3rd at 11:35 AM EST. The presentations will be available on Concho's website, www.concho.com. Additionally, the presentation for the Raymond James 35th Annual Institutional Investors Conference 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

02.19.14 Concho Resources Inc. Reports Fourth Quarter 2013 and Year End Financial and Operating Results

MIDLAND, Texas--(BUSINESS WIRE)--Feb. 19, 2014-- Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) today reported financial and operating results for the three months and year ended December 31, 2013. Highlights for the year ended December 31, 2013 include:

  • Production of 33.6 million barrels of oil equivalent (“MMBoe”) for 2013, a 20% increase over 2012 production from continuing operations
  • Net income of $251.0 million, or $2.39 per diluted share, for 2013, as compared to net income of $431.7 million, or $4.15 per diluted share, in 2012
  • Adjusted net income1 (non-GAAP) of $368.7 million, or $3.51 per diluted share, for 2013, as compared to $388.9 million, or $3.74 per diluted share, for 2012
  • EBITDAX2 (non-GAAP) of $1,685.6 million for 2013, a 14% increase over 2012

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

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

Financial Results

Production for 2013 totaled 33.6 MMBoe (21.1 million barrels of oil (“MMBbls”) and 75.1 billion cubic feet of natural gas (“Bcf”)), an increase of 20% as compared to 28.0 MMBoe (16.9 MMBbls of crude oil and 66.6 Bcf of natural gas) produced in 2012 from continuing operations.

In the fourth quarter of 2013 production was 8.9 MMBoe (5.8 MMBbls of crude oil and 19.0 Bcf of natural gas), or 97.0 thousand barrels of oil equivalent (“MBoe”) per day, a 14% increase over the comparable prior-year period of 7.8 MMBoe (4.7 MMBbls of crude oil and 18.5 Bcf of natural gas). Sequentially, Concho’s total fourth quarter 2013 production increased 3% as compared to the previous quarter of 8.7 MBoe (5.4 MMBbls of crude oil and 19.6 Bcf of natural gas) and crude oil production during the fourth quarter increased 7% over the previous quarter, despite the winter weather-related curtailments. The fourth quarter of 2013 was Concho’s 16th consecutive quarter to increase crude oil production from continuing operations over the immediately previous quarter.

“We are in a unique position of hitting our execution stride just as we are beginning to define the true depth and scale of the resource potential that exists across our assets,” commented Tim Leach, Chairman, Chief Executive Officer and President. “Concho delivered substantial crude oil growth during 2013 while building the largest horizontal development program in the Permian Basin. As we enter the first year of our acceleration plan to double production by year-end 2016, we have significant momentum and opportunity to continue our track record of solid execution and growth.”

For 2013, the Company reported net income of $251.0 million, or $2.39 per diluted share, as compared to net income of $431.7 million, or $4.15 per diluted share, for 2012. The Company’s 2013 results were impacted by several non-cash and unusual items including: (1) a $123.7 million loss on derivatives not designated as hedges, (2) $32.3 million in cash payments on commodity derivatives, (3) $65.4 million of impairments of long-lived assets, (4) $49.8 million of leasehold abandonments, (5) a $28.6 million loss on extinguishment of debt, (6) a $1.3 million loss on disposition of assets, net, (7) $11.4 million of other settlements, (8) a $19.6 million gain related to the disposition of non-core assets included in discontinued operations and (9) a $21.9 million benefit for a change in state statutory effective income tax rate. Excluding these items and their tax effects, the 2013 adjusted net income (non-GAAP) was $368.7 million, or $3.51 per diluted share. Excluding similar non-cash items and their tax impact, adjusted net income (non-GAAP) for 2012 was $388.9 million, or $3.74 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 $1,685.6 million in 2013, an increase of 14% from $1,475.6 million in 2012. 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 2013 increased 27% when compared to 2012. This increase was attributable to a 20% increase in production from continuing operations in 2013 compared to 2012 and a 4% increase in the Company’s unhedged realized oil price in 2013 compared to 2012.

Oil and natural gas production expense from continuing operations for 2013, including oil and natural gas taxes, totaled $455.4 million, or $13.54 per barrel of oil equivalent (“Boe”), a 10% increase per Boe from 2012. This increase was due primarily to higher lease operating expenses (“LOE”) and workover costs, which averaged $7.85 per Boe in 2013 as compared to $6.90 per Boe in 2012. The increase in LOE and workover costs per Boe during 2013 was primarily due to increased activity in higher-cost areas with developing infrastructure, like the Delaware Basin.

Depreciation, depletion and amortization expense (“DD&A”) from continuing operations for 2013 totaled $772.6 million, or $22.97 per Boe, a 12% increase per Boe from 2012.

General and administrative expense (“G&A”) from continuing operations for 2013 totaled $169.8 million, or $5.04 per Boe, as compared to $133.8 million, or $4.79 per Boe, in 2012. Cash G&A expenses for 2013 totaled $134.7 million and stock-based compensation (non-cash) totaled $35.1 million. The increase in per Boe expense for 2013 over 2012 was primarily due to a 27% increase in absolute G&A expenses reflecting increased staffing across the Company, and was partially offset by a 20% increase in production from continuing operations.

The Company’s cash flow from operating activities (GAAP) was $1,362.0 million for 2013, as compared to $1,237.5 million for 2012, an increase of 10%. Adjusted cash flows (non-GAAP), which are cash flows from operating activities (GAAP) adjusted for settlements on derivatives not designated as hedges, were $1,329.7 million for 2013, as compared to $1,261.0 million for 2012, an increase of 5%. 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 2013, the Company commenced drilling or participated in a total of 633 gross wells (465 operated, 44% horizontal), 4 of which were unsuccessful, and completed 675 wells as producers.

The table below summarizes the Company’s gross drilling activities by core area for the fourth quarter and full year 2013:


Total Wells Operated Wells Completed Wells1



4Q 2013 FY 2013

4Q 2013 FY 2013

4Q 2013 FY 2013
New Mexico Shelf

26
197

6
83

34
223
Delaware Basin

63
202

49
149

50
192
Texas Permian

34
234

33
233

38
260
Total

123
633

88
465

122
675

1 Excludes 4 wells that were unsuccessful in 2013.

Currently, the Company is operating 34 drilling rigs; 2 of these rigs are drilling Yeso wells in the New Mexico Shelf, 11 are drilling in the Texas Permian and 21 are drilling in the Delaware Basin. Of the 34 operated rigs, the Company is currently running 30 horizontal drilling rigs, including 21 in the Delaware Basin, 7 in the Texas Permian and 2 in the New Mexico Shelf.

Year-End 2013 Location Update

At year-end 2013, the Company had identified approximately 22,000 drilling locations across its 1.2 million gross (605,000 net) acreage position. The resource potential associated with these 22,000 drilling locations including what the Company has identified as proved is approximately six times the Company's year-end 2013 proved reserves of 503 MMBoe.

New Mexico Shelf

At year-end 2013, the Company had identified approximately 2,700 drilling locations in the New Mexico Shelf. Of these 2,700 drilling locations, approximately 1,100 locations target the Yeso formation vertically and approximately 1,250 locations target the Yeso formation horizontally.

As previously disclosed, the New Mexico Shelf experienced natural gas processing issues during 2013, which the Company estimates to have reduced full-year volumes by over 500 MBoe. Recently, the Company has seen continued improvement in line pressures and is monitoring multiple projects designed to further improve processing and takeaway capacity that are currently being developed and expected to be operational by mid-2014.

Delaware Basin

At year-end 2013, the Company had identified approximately 10,600 drilling locations in the Delaware Basin. In the northern Delaware Basin, these locations include approximately 6,000 locations targeting the Bone Spring sands, approximately 1,500 targeting the Avalon shale, approximately 1,400 targeting the Wolfcamp, and approximately 850 targeting the Brushy Canyon. In the southern Delaware Basin, these locations include approximately 800 Wolfcamp and 2nd Bone Spring sands locations.

Of the 63 wells drilled in the Delaware Basin in the fourth quarter of 2013, 45 were Bone Spring sands wells, 12 were Wolfcamp shale wells, 5 were Brushy Canyon wells, and 1 was an Avalon shale well. The Company’s net production in the fourth quarter of 2013 from horizontal Delaware Basin wells averaged approximately 35.9 MBoe per day, an increase of 70% over the fourth quarter of 2012 and an increase of 7% over the third quarter of 2013.

In the northern Delaware Basin, 26 new wells had at least 30 days of production by the end of the fourth quarter of 2013, with an average 30-day rate of 749 barrels of oil equivalent per day (“Boepd”) (77% oil) and an average 24-hour peak rate of 1,121 Boepd from an average lateral length of 4,327 feet.

In the southern Delaware Basin, 21 wells had at least 30 days of production by the end of the fourth quarter of 2013, with an average 30-day rate of 984 Boepd (80% oil) and an average 24-hour peak rate of 1,303 Boepd from an average lateral length of 4,378 feet.

Texas Permian

At year-end 2013, the Company had identified approximately 8,500 drilling locations. Of these 8,500 drilling locations, approximately 1,800 target the vertical Wolfberry play on 40-acre spacing, approximately 2,500 target the vertical Wolfberry play on 20-acre spacing, approximately 1,400 target the vertical shallow Wolfcamp and approximately 2,500 target the horizontal Spraberry and Wolfcamp.

In the Texas Permian, 12 horizontal wells had at least 30 days of production by the end of the fourth quarter of 2013, with an average 30-day rate of 614 Boepd (75% oil) and an average 24-hour peak rate of 915 Boepd (78% oil) from an average lateral length of 4,415 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.

Credit Facility

At December 31, 2013, the Company had borrowings outstanding under its credit facility of $250.0 million, and the availability under the credit facility was approximately $2.2 billion.

Guidance

The Company’s 2014 production guidance range is 18 - 22% growth over 2013 volumes. For the first quarter of 2014, the Company expects production to average between 98 - 101 MBoe per day. Additionally, the Company is forecasting first quarter of 2014 LOE to be above the full year guidance range of $7.50 - $8.00 per Boe due, in part, to increased costs associated with restoring production from the winter weather in the fourth quarter of 2013. However, the Company expects full year 2014 lease operating expense to fall within the original guidance range of $7.50 - $8.00 per Boe.

Conference Call and Presentation Information

The Company will host a conference call with an accompanying presentation on Thursday, February 20, 2014, at 9:00 a.m. CST to further discuss information regarding 2013 reserves, inventory and fourth quarter and full-year 2013 financial and operating results. Interested parties may listen to the conference call via the Company’s website at www.concho.com or by dialing (877) 415-3186 (passcode: 28809385). 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: 17690036).

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 proceeds of the sale of the non-core properties, oil and natural gas reserves, number of identified drilling locations, drilling program, derivative activities, costs and other guidance. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the "Risk Factors" section of the Company's most recent Form 10-K and 10-Q filings and risks relating to declines in the prices we receive for our oil and natural gas; uncertainties about the estimated quantities of reserves; risks related to the integration of acquired assets; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; drilling and operating risks; the adequacy of our capital resources and liquidity; risks related to the concentration of our operations in the Permian Basin; the results of our hedging program; weather; litigation; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; uncertainties about our ability to replace reserves and economically develop our current reserves; competition in the oil and natural gas industry; and other important factors that could cause actual results to differ materially from those projected.

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






December 31,
(in thousands, except share and per share amounts) 2013 2012
Assets
Current assets:





Cash and cash equivalents

$ 21


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





Oil and natural gas


223,790



198,053
Joint operations and other


247,945



202,738
Derivative instruments


590



35,942
Deferred income taxes


30,069



-
Prepaid costs and other

18,460

19,269
Total current assets

520,875

458,882
Property and equipment:





Oil and natural gas properties, successful efforts method


11,215,373



9,455,599
Accumulated depletion and depreciation

(2,384,108 )

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


8,831,265



7,890,283
Other property and equipment, net

114,783

103,141
Total property and equipment, net

8,946,048

7,993,424
Deferred loan costs, net


73,048



77,609
Intangible asset - operating rights, net


28,615



30,076
Inventory


19,682



20,611
Noncurrent derivative instruments


966



2,769
Other assets

1,930

6,066
Total assets

$ 9,591,164

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





Accounts payable:





Trade

$ 13,936


$ 31,144
Related parties


-



185
Bank overdrafts


36,718



24,275
Revenue payable


177,617



162,073
Accrued and prepaid drilling costs


318,296



351,919
Derivative instruments


53,701



1,584
Deferred income taxes


-



8,566
Other current liabilities

156,600

160,340
Total current liabilities

756,868

740,086
Long-term debt


3,630,421



3,101,103
Deferred income taxes


1,334,653



1,186,621
Noncurrent derivative instruments


14,088



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


97,185



83,382
Commitments and contingencies





Stockholders’ equity:





Common stock, $0.001 par value; 300,000,000 authorized; 105,222,765 and 104,668,427





shares issued at December 31, 2013 and 2012, respectively


105



105
Additional paid-in capital


2,027,162



1,982,714
Retained earnings


1,741,566



1,490,563

Treasury stock, at cost; 127,305 and 86,861 shares at December 31, 2013 and 2012, respectively



(10,884 )

(7,186 )
Total stockholders’ equity

3,757,949

3,466,196
Total liabilities and stockholders’ equity

$ 9,591,164

$ 8,589,437

Concho Resources Inc.
Consolidated Statements of Operations
Unaudited








Three Months Ended

Years Ended



December 31,

December 31,
(in thousands, except per share amounts) 2013 2012 2013 2012












Operating revenues:











Oil sales

$ 525,546


$ 383,494


$ 1,938,433


$ 1,482,998
Natural gas sales

106,540

94,032

381,486

336,816
Total operating revenues

632,086

477,526

2,319,919

1,819,814
Operating costs and expenses:











Oil and natural gas production


127,141



92,102



455,436



343,743
Exploration and abandonments


71,752



12,505



109,549



39,840
Depreciation, depletion and amortization


214,833



166,453



772,608



575,128
Accretion of discount on asset retirement obligations


1,637



1,361



6,047



4,187
Impairments of long-lived assets


-



-



65,375



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











$9,800 and $8,438 for the three months ended December 31, 2013 and











2012, respectively, and $35,078 and $29,872 for the years ended











December 31, 2013 and 2012, respectively)


44,695



37,802



169,815



133,796
(Gain) loss on derivatives not designated as hedges

(33,651 )

(17,901 )

123,652

(127,443 )
Total operating costs and expenses

426,407

292,322

1,702,482

969,251
Income from operations

205,679

185,204

617,437

850,563
Other income (expense):











Interest expense


(56,401 )


(53,632 )


(218,581 )


(182,705 )
Loss on extinguishment of debt


-



-



(28,616 )


-
Other, net

(11,275 )

(3,670 )

(13,081 )

(8,587 )
Total other expense

(67,676 )

(57,302 )

(260,278 )

(191,292 )
Income from continuing operations before income taxes


138,003



127,902



357,159



659,271
Income tax expense

(32,214 )

(46,714 )

(118,237 )

(251,041 )
Income from continuing operations


105,789



81,188



238,922



408,230
Income (loss) from discontinued operations, net of tax

-

(5,901 )

12,081

23,459
Net income

$ 105,789

$ 75,287

$ 251,003

$ 431,689
Basic earnings per share:











Income from continuing operations

$ 1.01


$ 0.78


$ 2.28


$ 3.96
Income (loss) from discontinued operations, net of tax

-

(0.05 )

0.11

0.22
Net income

$ 1.01

$ 0.73

$ 2.39

$ 4.18
Diluted earnings per share:











Income from continuing operations

$ 1.01


$ 0.78


$ 2.28


$ 3.93
Income (loss) from discontinued operations, net of tax

-

(0.06 )

0.11