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12.29.15 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 6, 2016, and will participate in the U.S. Capital Advisors E&P Corporate Access Day on Wednesday, January 20, 2016.

The Company will refer to its January 2016 Investor Presentation, which will be available 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.

Concho Resources Inc.

Megan P. Hays, 432-685-2533

Director of Investor Relations

or

Gabriel Middendorf, 432-685-2577

Financial Analyst

11.04.15 Concho Resources Inc. Reports Third Quarter 2015 Results

Delivers Record Quarterly Production

Raises Full-Year 2015 Production Growth Target Range to 27% - 28%

Adds 25,000 Net Acres in Core Operating Areas

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

Highlights

  • Production for the third quarter 2015 of 13.7 million Boe, or 149.3 MBoepd, was 32% higher year-over-year and exceeded the high-end of the Company’s guidance.
  • Crude oil production increased by 34% over the same quarter a year ago.
  • 2015 production growth target increased to a range of 27% to 28%.
  • Year-to-date acquisitions add approximately 25,000 net acres complementary to the Company’s core operating areas.
  • Concho reported net income of $1.49 per diluted share for the third quarter of 2015. Net income was $0.33 per diluted share for the quarter on an adjusted basis (non-GAAP).
  • EBITDAX (non-GAAP) for the third quarter of 2015 was $446.2 million.

See “Supplemental Non-GAAP Financial Measures” at the end of this press release for a description of adjusted net income and EBITDAX (non-GAAP measures) and a reconciliation of these measures to the associated GAAP measures.

Tim Leach, Chairman, Chief Executive Officer and President, commented, “I am proud of our team as we continued to deliver outstanding results through the third quarter and once again have raised our 2015 production growth range. Our focus on enhanced completions and long-lateral development across our assets is driving improved efficiencies even as we reduce activity levels due to the weak commodity price environment. In addition, the properties we acquired in 2015 demonstrate our ability to consolidate and grow our core positions in the Permian Basin. Excluding acquisitions during the third quarter, we funded our capital budget within cash flow. We plan to continue to fund our capital budget in 2016 within cash flow in order to preserve our balance sheet and remain positioned to opportunistically consolidate high-quality acres within our core plays.”

Third Quarter 2015 Operations Summary

Production for the third quarter of 2015 was 13.7 million barrels of oil equivalent (MMBoe), or an average of 149.3 thousand Boe per day (MBoepd), an increase of 32% from the third quarter of 2014.

Third quarter 2015 production included 8.9 million barrels (MMBbls) of crude oil, or an average of 97.2 thousand barrels of crude oil per day (MBopd), an increase of 24.5 MBopd, or 34%, from the third quarter of 2014. Third quarter of 2015 production also included 28.7 billion cubic feet (Bcf) of natural gas.

The Company continues to adjust its capital budget due to the weak commodity price environment, as costs incurred, excluding property acquisition costs, for the third quarter of 2015 were $301.2 million and represented a 47% decrease from the second quarter of 2015. Concho averaged 15 rigs in the third quarter of 2015, compared to 18 rigs in the second quarter of 2015.

During the third quarter of 2015, Concho started drilling or participating in a total of 77 gross wells (57 operated) and completed 70 gross wells. The table below summarizes the Company’s drilling activity by core area for the third quarter of 2015.

           
Number of Wells Number of Operated Number of Wells
Drilled Wells Drilled Completed
(Gross) (Gross) (Gross)
Delaware Basin 45 35 42
Midland Basin 11 11 8
New Mexico Shelf 21   11   20  
Total 77   57   70  
 
Percent Horizontal 87 % 91 % 90 %
 

Delaware Basin

Production from horizontal wells in the Delaware Basin was 88.5 MBoepd in the third quarter of 2015, up 60% over the third quarter of 2014 and 8% over the second quarter of 2015. During the third quarter of 2015, Concho drilled 45 wells in the Delaware Basin, including 27 wells targeting the Bone Spring Sands, 11 wells targeting the Wolfcamp Shale and seven wells targeting the Avalon Shale.

Concho added 51 new horizontal wells in the northern Delaware Basin with at least 30 days of production as of the end of the third quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 966 Boepd (72% oil) and 1,471 Boepd, respectively. The average lateral length for these 51 wells reached a record for the Company in the northern Delaware Basin at 5,158 feet, including 10 long-lateral wells averaging 8,782 feet.

The Company’s midstream joint venture is near completion with the construction of a 400-mile crude oil gathering and transportation system, the Alpha Crude Connector (“ACC”), in the northern Delaware Basin. ACC is expected to begin operations at year-end 2015. The Company plans to transport a substantial portion of its crude oil production from the northern Delaware Basin on ACC, which the Company expects will contribute to better price realizations beginning in 2016.

Concho added 10 new horizontal wells in the southern Delaware Basin with at least 30 days of production as of the end of the third quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 1,188 Boepd (76% oil) and 1,537 Boepd, respectively. The average lateral length for these wells was 5,991 feet, up approximately 7% year-over-year, while drilling days are down 20% year-over-year to an average of approximately 30 days per well.

The Company currently has 10 horizontal rigs in the Delaware Basin, with eight horizontal rigs in the northern Delaware Basin and two horizontal rigs in the southern Delaware Basin.

Midland Basin

The Company delivered strong results in the Midland Basin, with eight new horizontal wells with at least 30 days of production as of the end of the third quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 967 Boepd (81% oil) and 1,300 Boepd, respectively, from an average lateral length of 6,705 feet.

The Company currently has two horizontal rigs in the Midland Basin.

New Mexico Shelf

On the New Mexico Shelf, Concho added 13 new horizontal wells with at least 30 days of production as of the end of the third quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 294 Boepd (84% oil) and 389 Boepd, respectively.

The Company currently has one horizontal rig on the New Mexico Shelf.

Third Quarter 2015 Financial Summary

The Company’s average realized price for oil and natural gas during the third quarter of 2015, excluding the effect of commodity derivatives, was $33.74 per Boe, compared with $67.07 per Boe during the third quarter of 2014. The lower average realized price in the 2015 period reflects continued weak crude oil, natural gas and natural gas liquids commodity prices.

Net income for the third quarter of 2015 was $179.7 million, or $1.49 per diluted share, compared to net income of $305.2 million, or $2.69 per diluted share, in the third quarter of 2014. Adjusted net income (non-GAAP), which excludes non-cash and unusual items, for the third quarter of 2015 was $39.3 million, or $0.33 per diluted share, compared with adjusted net income (non-GAAP) of $123.2 million, or $1.09 per diluted share, for the third quarter of 2014.

EBITDAX (non-GAAP) for the third quarter of 2015 totaled $446.2 million, compared to $536.4 million in the third quarter of 2014.

Cash flows generated from operating activities in the first nine months of 2015 totaled $760.6 million, compared with $1.3 billion in the same period last year. Adjusted cash flows (non-GAAP), which are cash flows from operating activities adjusted for settlements on derivatives, were $1.2 billion for the first nine months of 2015, as compared to $1.3 billion for the same period last year.

See “Supplemental Non-GAAP Financial Measures” at the end of this press release for a description of adjusted net income, EBITDAX and adjusted cash flows (non-GAAP measures) and a reconciliation of these measures to the associated GAAP measures.

Recent Acquisitions

Concho has completed approximately $255 million in acquisitions and leasehold additions year-to-date totaling approximately 25,000 net acres and 1.5 MBoepd of production. The properties, which are primarily concentrated in the Company’s existing core operating areas in the Delaware Basin, provide for more efficient long-lateral development and increase the Company’s working interests in these high-impact areas.

Financial Position and Liquidity

On October 6, 2015, the Company closed its previously announced public offering of 8,855,000 shares of the Company’s common stock, including the over-allotment option. Total net proceeds from the offering were approximately $794 million. The Company used a portion of the net proceeds to repay all outstanding borrowings under its credit facility, which were used in part to finance recent acquisitions, and the Company plans to use the remaining net proceeds for general corporate purposes, which may include funding potential future acquisitions. Pro forma for the common stock offering, the Company’s net debt-to-EBITDAX ratio at September 30, 2015, was 1.7 times.

Outlook

Fourth Quarter and Full Year 2015

For the fourth quarter of 2015, the Company expects production to average between 139 MBoepd and 143 MBoepd.

The Company currently expects its full-year 2015 capital budget, excluding acquisitions, to be approximately $1.9 billion, consisting of $1.7 billion for drilling and completion operations, including non-consents, and $0.2 billion for facilities, midstream, geological and geophysical and other. The Company’s 2015 production growth target is now a range of 27% to 28%, which compares to the Company’s prior range of 24% to 26%.

In addition, Concho updated its full-year 2015 outlook for certain items. The following table summarizes the Company’s current guidance for those items, as compared to the Company’s prior guidance.

   
Full Year 2015
Prior     Current
Production
Year-over-year production growth 24% - 26% 27% - 28%
 
Operating costs and expenses
Lease operating expense $7.50 - $8.00 $7.50 - $7.75
Depreciation, depletion and amortization $23.00 - $25.00 $23.00 - $24.00
Exploration $1.50 - $2.50 $1.00 - $2.00
 

Full Year 2016

Concho’s base 2016 capital budget is $1.4 billion, with drilling and completion capital accounting for $1.2 billion. Based on this level of capital and assuming a NYMEX WTI crude oil price of $50 per barrel and a NYMEX Henry Hub natural gas price of $2.50 per thousand cubic feet, Concho expects to maintain 2015 production levels year-over-year, fund the capital budget within cash flow and maintain a net debt-to-EBITDAX ratio of less than two times through 2016. Concho’s 2016 capital budget excludes acquisitions and is subject to change depending upon a number of factors, including commodity prices and industry conditions. The Company plans to provide detailed guidance for 2016 in its fourth quarter and full-year 2015 earnings release.

Commodity Derivatives Update

The Company enters into commodity derivatives to manage its exposure to commodity price fluctuations. For the fourth quarter of 2015, Concho has swap contracts covering approximately 66.6 MBopd at a weighted average price of $72.86 per Bbl. For 2016, Concho has swap contracts covering approximately 63.4 MBopd at a weighted average price of $70.13 per Bbl. Please see the table under “Derivatives Information” for more detailed information about the Company’s current derivatives positions.

Changes and Additions to Management Group

The Company announced changes to its management group.

Gayle Burleson, formerly Vice President of New Mexico, has been named Vice President of Business Development. Since her arrival at Concho in 2006, Mrs. Burleson has held several reservoir engineering roles for Concho, including as Vice President of Engineering and Manager of Corporate Engineering.

Clay Bateman, formerly Vice President of Texas, has been named Vice President of New Mexico. Mr. Bateman joined Concho in 2008 and has previously also served as Texas Basins Asset Manager and Texas Asset Manager.

The Company also announced two management promotions.

Keith Corbett has been promoted to Vice President of Texas. Mr. Corbett joined Concho in 2005 as Lead Reservoir Engineer. Previously, Mr. Corbett has held the roles of New Mexico Basin Asset Manager, New Mexico Shelf Asset Manager and New Mexico Operations Supervisor. Before coming to Concho, Mr. Corbett held drilling, reservoir and production engineering positions at Pennzoil (later Devon Energy) and Stallion Energy. Mr. Corbett holds a Bachelor of Science in Petroleum Engineering from Texas A&M University.

Mary Ann Berry has been promoted to Vice President, Chief of Staff and Assistant Corporate Secretary. Mrs. Berry joined Concho in 2008 as an attorney in the legal department and subsequently held roles of increasing responsibility until becoming Chief of Staff in 2014. As Chief of Staff, Mrs. Berry oversees Human Resources, equity administration and internal communications. Before coming to Concho, Mrs. Berry was a corporate litigator at Cooper Levenson, P.A. in Atlantic City, New Jersey. Mrs. Berry holds a Bachelor of Arts in Politics from The Catholic University of America and a Juris Doctor from Seton Hall University School of Law.

Conference Call

Concho will discuss third quarter 2015 results on a conference call tomorrow, November 5, 2015, at 8:30 AM CT (9:30 AM ET). The telephone number and passcode to access the conference call are provided below:

Dial-in: (855) 445-9894
Intl. dial-in: (330) 863-3281
Participant Passcode: 50093034

To access the live webcast and view the related presentation, visit Concho’s website at www.concho.com. The replay will also be available on the Company’s website under the “Investors” section.

Upcoming Conferences

The Company will participate in the following upcoming conferences:

  • November 10, 2015Bank of America Merrill Lynch Global Energy Conference
  • November 11, 2015Jefferies Energy Conference

The Company’s presentation at the Bank of America conference is scheduled for 8:45 AM CT (9:45 AM ET) on Tuesday, November 10, 2015, and its presentation at the Jefferies conference is scheduled for 2:00 PM CT (3:00 PM ET) on Wednesday, November 11, 2015. Both presentations will be webcast and accessible on the “Events & Presentations” page under the “Investors” section of the Company’s website. The Company will refer to its November 2015 Investor Presentation. The presentation will be available on the Company’s website on or prior to the day of the first conference.

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, oil and natural gas reserves, 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 risk factors discussed or referenced in the Company’s most recent Annual Report on Form 10-K and Current Reports on Form 8-K; 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 and the export of oil and natural gas; environmental hazards, such as uncontrollable flows of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater contamination; 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; the costs and availability of equipment, resources, services and personnel required to perform the Company’s drilling and operating activities; potential financial losses or earnings reductions from the Company’s commodity price management program; risks and liabilities related to the integration of acquired properties or businesses; 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, either internationally or domestically; 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.

 
 
Concho Resources Inc.
Consolidated Balance Sheets
Unaudited
 
       
September 30, December 31,
(in thousands, except share and per share amounts)     2015     2014
Assets
Current assets:
Cash and cash equivalents $ 20 $ 21
Accounts receivable, net of allowance for doubtful accounts:
Oil and natural gas 229,756 250,600
Joint operations and other 220,137 409,665
Derivative instruments 581,436 490,351
Prepaid costs and other   39,332     37,759  
Total current assets   1,070,681     1,188,396  
Property and equipment:
Oil and natural gas properties, successful efforts method 15,682,799 13,867,831
Accumulated depletion and depreciation   (4,681,106 )   (3,790,953 )

Total oil and natural gas properties, net

11,001,693 10,076,878
Other property and equipment, net   160,582     129,136  
Total property and equipment, net   11,162,275     10,206,014  
Deferred loan costs, net 60,994 68,443
Intangible asset - operating rights, net 26,059 27,154
Inventory 21,688 14,435
Noncurrent derivative instruments 108,894 262,349
Other assets   76,971     33,172  
Total assets $ 12,527,562   $ 11,799,963  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable - trade $ 26,801 $ 20,380
Bank overdrafts 109,741 92,541
Revenue payable 185,732 238,098
Accrued and prepaid drilling costs 303,331 718,300
Deferred income taxes 197,632 162,566
Other current liabilities   205,417     195,308  
Total current liabilities   1,028,654     1,427,193  
Long-term debt 3,822,274 3,517,320
Deferred income taxes 1,409,684 1,438,185
Asset retirement obligations and other long-term liabilities 133,168 136,477
Stockholders’ equity:

Common stock, $0.001 par value; 300,000,000 authorized; 120,594,183 and 113,264,918 shares issued at September 30, 2015 and December 31, 2014, respectively

121 113
Additional paid-in capital 3,818,673 3,027,412
Retained earnings 2,346,429 2,279,741

Treasury stock, at cost; 304,483 and 260,124 shares at September 30, 2015 and December 31, 2014, respectively

  (31,441 )   (26,478 )
Total stockholders’ equity   6,133,782     5,280,788  
Total liabilities and stockholders’ equity $ 12,527,562   $ 11,799,963  

 
 
Concho Resources Inc.
Consolidated Statements of Operations
Unaudited
                     
           
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands, except per share amounts)     2015   2014     2015   2014
 
Operating revenues:
Oil sales $ 391,963 $ 575,611 $ 1,212,437 $ 1,696,240
Natural gas sales   71,511     124,652     201,984     369,684  
Total operating revenues   463,474     700,263     1,414,421     2,065,924  
Operating costs and expenses:
Oil and natural gas production 138,125 140,725 405,925 402,593
Exploration and abandonments 14,791 16,982 32,566 70,645
Depreciation, depletion and amortization 329,467 256,765 901,474 715,602
Accretion of discount on asset retirement obligations 1,853 1,769 5,894 5,162
Impairments of long-lived assets 7,588 15,476 7,588 15,476

General and administrative (including non-cash stock-based compensation of $16,327 and $13,465 for the three months ended September 30, 2015 and 2014, respectively, and $47,272 and $34,672 for the nine months ended September 30, 2015 and 2014, respectively)

60,052 52,763 179,776 150,048
Gain on derivatives   (413,130 )   (326,229 )   (381,071 )   (125,907 )
Total operating costs and expenses   138,746     158,251     1,152,152     1,233,619  
Income from operations   324,728     542,012     262,269     832,305  
Other income (expense):
Interest expense (53,752 ) (52,601 ) (160,803 ) (164,124 )
Loss on extinguishment of debt - - - (4,316 )
Other, net   556     2,155     (9,463 )   (6,833 )
Total other expense   (53,196 )   (50,446 )   (170,266 )   (175,273 )
Income before income taxes 271,532 491,566 92,003 657,032
Income tax expense   (91,873 )   (186,363 )   (25,315 )   (248,753 )
Net income $ 179,659   $ 305,203   $ 66,688   $ 408,279  
Earnings per share:
Basic net income $ 1.49 $ 2.70 $ 0.56 $ 3.74
Diluted net income $ 1.49 $ 2.69 $ 0.56 $ 3.73

 
 
Concho Resources Inc.
Consolidated Statements of Cash Flows
Unaudited
     
Nine Months Ended
September 30,
(in thousands)     2015   2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 66,688 $ 408,279
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization 901,474 715,602
Accretion of discount on asset retirement obligations 5,894 5,162
Impairments of long-lived assets 7,588 15,476
Exploration and abandonments, including dry holes 25,859 56,626
Non-cash stock-based compensation expense 47,272 34,672
Deferred income taxes 6,565 219,502
Loss on disposition of assets and other 1,588 8,697
Gain on derivatives (381,071 ) (125,907 )
Other non-cash items 8,074 11,207
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable 111,475 (75,963 )
Prepaid costs and other (3,049 ) (19,317 )
Inventory (7,236 ) 3,058
Accounts payable 4,089 18,500
Revenue payable (52,366 ) 13,176
Other current liabilities   17,749     (234 )
Net cash provided by operating activities   760,593     1,288,536  
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures on oil and natural gas properties (2,177,144 ) (1,754,835 )
Additions to property, equipment and other assets (45,231 ) (25,267 )
Proceeds from the disposition of assets 106 1,122
Contribution to equity method investment (45,000 ) (30,050 )
Settlements received from (paid on) derivatives   443,441     (26,174 )
Net cash used in investing activities   (1,823,828 )   (1,835,204 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 1,337,900 1,578,000
Payments of debt (1,030,900 ) (1,828,000 )
Exercise of stock options 59 4,660
Excess tax benefit from stock-based compensation 2,429 12,049
Net proceeds from issuance of common stock 741,509 931,989
Payments for loan costs - (10,649 )
Purchase of treasury stock (4,963 ) (5,820 )
Increase (decrease) in bank overdrafts   17,200     (36,718 )
Net cash provided by financing activities   1,063,234     645,511  
Net increase (decrease) in cash and cash equivalents (1 ) 98,843
Cash and cash equivalents at beginning of period   21     21  
Cash and cash equivalents at end of period $ 20   $ 98,864  

       
 
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,
          2015   2014   2015   2014
   
Production and operating data:
Net production volumes:
Oil (MBbl) 8,945 6,689 26,042 18,764
Natural gas (MMcf) 28,746 22,513 78,014 63,798
Total (MBoe) 13,736 10,441 39,044 29,397
 
Average daily production volumes:
Oil (Bbl) 97,228 72,707 95,392 68,733
Natural gas (Mcf) 312,457 244,707 285,766 233,692
Total (Boe) 149,304 113,492 143,020 107,682
 
Average prices:
Oil, without derivatives (Bbl) $ 43.82 $ 86.05 $ 46.56 $ 90.40
Oil, with derivatives (Bbl) (a) $ 61.23 $ 88.19 $ 62.65 $ 89.33
Natural gas, without derivatives (Mcf) $ 2.49 $ 5.54 $ 2.59 $ 5.79
Natural gas, with derivatives (Mcf) (a) $ 2.78 $ 5.56 $ 2.90 $ 5.70
Total, without derivatives (Boe) $ 33.74 $ 67.07 $ 36.23 $ 70.28
Total, with derivatives (Boe) (a) $ 45.68 $ 68.48 $ 47.58 $ 69.39
 
Operating costs and expenses per Boe:
Lease operating expenses and workover costs $ 7.23 $ 8.26 $ 7.38 $ 8.17
Oil and natural gas taxes $ 2.83 $ 5.21 $ 3.02 $ 5.53
Depreciation, depletion and amortization $ 23.99 $ 24.58 $ 23.09 $ 24.35
General and administrative $ 4.37 $ 5.06 $ 4.60 $ 5.11
                       
 
(a) Includes the effect of cash receipts from (payments on) derivatives:
                   
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands)     2015   2014   2015   2014
 
Cash receipts from (payments on) derivatives:
Oil derivatives $ 155,732 $ 14,271 $ 419,047 $ (20,067 )
Natural gas derivatives   8,301   446   24,394   (6,107 )
Total $ 164,033 $ 14,717 $ 443,441 $ (26,174 )
                   

The presentation of average prices with derivatives is a non-GAAP measure as a result of including the cash receipts from (payments on) commodity derivatives that are presented in our statements of cash flows. This presentation of average prices with derivatives is a means by which to reflect the actual cash performance of our commodity derivatives for the respective periods and presents oil and natural gas prices with derivatives in a manner consistent with the presentation generally used by the investment community.

 
 
Concho Resources Inc.
Costs Incurred
Unaudited
 

The table below provides the costs incurred for oil and natural gas producing activities for the periods indicated:

         
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands)     2015   2014   2015   2014
 
Property acquisition costs:
Proved $ 56,636 $ 37,732 $ 58,879 $ 60,359
Unproved 161,921 71,915 195,971 107,985
Exploration 201,737 469,290 973,957 1,136,211
Development   99,490   204,938   622,644   609,780
Total costs incurred for oil and natural gas properties $ 519,784 $ 783,875 $ 1,851,451 $ 1,914,335

             
 
Concho Resources Inc.
Derivatives Information
Unaudited
 

The table below provides data associated with the Company’s derivatives at November 4, 2015, for the periods indicated:

 
2016
Fourth Quarter First Second Third Fourth
2015 Quarter Quarter Quarter Quarter Total 2017
 
Oil Swaps: (a)
Volume (Bbl) 6,124,000 6,722,000 5,985,000 5,460,000 5,054,000 23,221,000 13,782,000
Price per Bbl $ 72.86 $ 71.99 $ 73.38 $ 74.21 $ 59.38 $ 70.13 $ 59.27
 
Oil Basis Swaps: (b)
Volume (Bbl) 5,428,000 5,398,000 5,095,000 4,876,000 4,416,000 19,785,000 7,427,000
Price per Bbl $ (2.41 ) $ (1.60 ) $ (1.62 ) $ (1.59 ) $ (1.62 ) $ (1.61 ) $ (1.34 )
 
Natural Gas Swaps: (c)
Volume (MMBtu) 5,980,000 7,280,000 7,280,000 7,360,000 7,360,000 29,280,000 -
Price per MMBtu $ 4.16 $ 3.02 $ 3.02 $ 3.02 $ 3.02 $ 3.02 $ -
 
Natural Gas Basis Swaps: (d)
Volume (MMBtu) 1,380,000 - - - - - -
Price per MMBtu $ (0.13 ) $ - $ - $ - $ - $ - $ -
                             
 

(a) The index prices for the oil contracts are based on the New York Mercantile Exchange (“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 basis differential price is between the El Paso Permian delivery point and NYMEX – Henry Hub delivery point.

 
 
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 earnings per share to exclude certain non-cash and unusual items and cash flows from operating activities to adjust for settlements on derivatives.

 

Adjusted Net Income and Adjusted Earnings per Share

 

The following table provides a reconciliation from the United States generally accepted accounting principles (“GAAP”) measure of net income 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)   2015   2014   2015   2014
 
Net income - as reported $ 179,659 $ 305,203 $ 66,688 $ 408,279
 
Adjustments for certain non-cash and unusual items:
Gain on derivatives (413,130 ) (326,229 ) (381,071 ) (125,907 )
Cash receipts from (payments on) derivatives 164,033 14,717 443,441 (26,174 )
Impairments of long-lived assets 7,588 15,476 7,588 15,476
Leasehold abandonments 13,283 4,618 16,646 19,756
Loss on extinguishment of debt - - - 4,316
(Gain) loss on disposition of assets and other (32 ) (760 ) 1,588 8,697
Tax impact 87,879 110,151 (33,954 ) 39,146
Change in statutory effective income tax rates   -     -     (1,826 )   -  
Adjusted net income $ 39,280   $ 123,176   $ 119,100   $ 343,589  
 
Adjusted earnings per share:
Basic $ 0.33 $ 1.09 $ 1.00 $ 3.15
Diluted $ 0.33 $ 1.09 $ 1.00 $ 3.14
 
Tax rates 38.5 % 37.7 % 38.5 % 37.7 %
 

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)     2015   2014
 
Cash flows from operating activities $ 760,593 $ 1,288,536
Settlements received from (paid on) derivatives (a)   443,441   (26,174 )
Adjusted cash flows $ 1,204,034 $ 1,262,362  
                   
 
(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 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 on derivatives, (7) cash receipts from (payments on) derivatives, (8) (gain) loss on disposition of assets and other, (9) interest expense, (10) loss on extinguishment of debt and (11) federal and state income taxes. EBITDAX is not a measure of net income or cash flows as determined by GAAP.

The Company’s EBITDAX measure 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:

         
Three Months Ended Nine Months Ended
September 30, September 30,
(in thousands)     2015   2014   2015   2014
 
Net income $ 179,659 $ 305,203 $ 66,688 $ 408,279
Exploration and abandonments 14,791 16,982 32,566 70,645
Depreciation, depletion and amortization 329,467 256,765 901,474 715,602
Accretion of discount on asset retirement obligations 1,853 1,769 5,894 5,162
Impairments of long-lived assets 7,588 15,476 7,588 15,476
Non-cash stock-based compensation 16,327 13,465 47,272 34,672
Gain on derivatives (413,130 ) (326,229 ) (381,071 ) (125,907 )
Cash receipts from (payments on) derivatives 164,033 14,717 443,441 (26,174 )
(Gain) loss on disposition of assets and other (32 ) (760 ) 1,588 8,697
Interest expense 53,752 52,601 160,803 164,124
Loss on extinguishment of debt - - - 4,316
Income tax expense   91,873     186,363     25,315     248,753  
EBITDAX $ 446,181   $ 536,352   $ 1,311,558   $ 1,523,645  

Source: Concho Resources Inc.

Concho Resources Inc.

Megan P. Hays, 432-685-2533

Director of Investor Relations

or

Gabriel Middendorf, 432-685-2577

Financial Analyst

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

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company”) today announced that it has priced an upsized public offering of 7,700,000 shares of its common stock for total gross proceeds (before underwriters’ fees and estimated expenses) of approximately $712 million. The underwriters have an option for 30 days to purchase up to an additional 1,155,000 shares of common stock from the Company. Proceeds from the offering are expected to be used to repay all outstanding borrowings under the Company’s credit facility, which were used in part to finance recent acquisitions, and for general corporate purposes, including funding potential future acquisitions.

J.P. Morgan and Credit Suisse are acting as joint book-running managers for the offering. The offering is expected to close on October 6, 2015, subject to customary closing conditions.

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 J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, via telephone at 866.803.9204, or by e-mailing prospectus-eq_fi@jpmchase.com; or Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, NY 10010, via telephone at 1-800-221-1037, or by emailing newyork.prospectus@credit-suisse.com.

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 on August 6, 2015.

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.

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. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company’s future financial position, liquidity and capital resources, operations, performance, business strategy, acquisitions, capital expenditures, oil and natural gas reserves, drilling program, derivative activities, potential financing and other guidance included in this press release. 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 risks relating to declines in the prices the Company receives for its oil and natural gas; uncertainties about the estimated quantities of reserves; drilling and operating risks; the adequacy of the Company’s capital resources and liquidity; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing and the export of oil and natural gas; environmental hazards, such as uncontrollable flows of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater contamination; difficult and adverse conditions in the 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 oil, natural gas liquids and natural gas and other processing and transportation considerations; the costs and availability of equipment, resources, services and personnel required to perform the Company’s drilling and operating activities; potential financial losses or earnings reductions from the Company’s commodity price management program; risks and liabilities related to the integration of acquired properties or businesses; 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.

Source: Concho Resources Inc.

Concho Resources Inc.

Megan P. Hays, 432-685-2533

Director of Investor Relations

09.30.15 Concho Resources Inc. Announces Public Offering of Common Stock

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company”) today announced the launch of an underwritten public offering of 7,000,000 shares of common stock. The underwriters will have an option to purchase up to an additional 1,050,000 shares of common stock from the Company. Proceeds from the offering are expected to be used to repay all outstanding borrowings under the Company’s credit facility, which were used in part to finance recent acquisitions, and for general corporate purposes, including funding potential future acquisitions.

J.P. Morgan and Credit Suisse 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 J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, Attention: Prospectus Department, via telephone at 866.803.9204, or by e-mailing prospectus-eq_fi@jpmchase.com; or Credit Suisse Securities (USA) LLC, Attention: Prospectus Department, One Madison Avenue, New York, New York 10010, via telephone at 1-800-221-1037, or by e-mailing newyork.prospectus@credit-suisse.com.

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 on August 6, 2015.

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.

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. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company’s future financial position, liquidity and capital resources, operations, performance, business strategy, acquisitions, capital expenditures, oil and natural gas reserves, drilling program, derivative activities, potential financing and other guidance included in this press release. 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 risks relating to declines in the prices the Company receives for its oil and natural gas; uncertainties about the estimated quantities of reserves; drilling and operating risks; the adequacy of the Company’s capital resources and liquidity; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing and the export of oil and natural gas; environmental hazards, such as uncontrollable flows of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater contamination; difficult and adverse conditions in the 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 oil, natural gas liquids and natural gas and other processing and transportation considerations; the costs and availability of equipment, resources, services and personnel required to perform the Company’s drilling and operating activities; potential financial losses or earnings reductions from the Company’s commodity price management program; risks and liabilities related to the integration of acquired properties or businesses; 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.

Source: Concho Resources Inc.

Concho Resources Inc.

Megan P. Hays, 432-685-2533

Director of Investor Relations

09.25.15 Concho Resources Inc. Schedules Third Quarter 2015 Conference Call for Thursday, November 5, 2015

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company”) will host a conference call on Thursday, November 5, 2015, at 8:30 AM CT (9:30 AM ET) to discuss third quarter 2015 financial and operating results. The Company plans to announce third quarter 2015 results on Wednesday, November 4, 2015, after close of trading.

Conference Call Information:

Dial-in: (855) 445-9894
Intl. dial-in: (330) 863-3281
Participant Passcode: 50093034

To access the live webcast, visit www.concho.com. The replay will also be available on the Company’s website under the “Investors” section.

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.

Concho Resources Inc.

Megan P. Hays, 432-685-2533

Director of Investor Relations

08.04.15 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 Tuohy Brothers’ 6th Annual Energy Conference on Monday, August 10, 2015, and the Barclays CEO Energy-Power Conference on Wednesday, September 9, 2015.

The Company will refer to its 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. Additionally, the presentation for the Barclays CEO Energy-Power Conference will be webcast and accessible from the Company’s website on the date of the event.

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.

Concho Resources Inc.

Megan P. Hays, 432-685-2533

Director of Investor Relations

or

Jere Thompson, 432-221-0383

Financial Analyst

07.29.15 Concho Resources Inc. Reports Second Quarter 2015 Results

Delivers Record Quarterly Production

Increases Crude Oil Production 45% over Second Quarter of 2014

Raises Full-Year 2015 Production Growth Target to 24% - 26%

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company” or “Concho”) today reported financial and operating results for the second quarter of 2015.

Highlights

  • Production for the second quarter 2015 of 13.4 million Boe, or 147.4 MBoepd, was 37% higher year-over-year and exceeded the high end of the Company’s guidance.
  • Crude oil production increased by 45% over the same quarter a year ago and by 11% over the first quarter of 2015.
  • 2015 production growth target raised to 24% to 26%, with the capital expenditure outlook unchanged.
  • Concho reported a net loss of $1.02 per diluted share for the second quarter of 2015. This compares to net income of $0.38 per diluted share for the quarter on an adjusted basis (non-GAAP).
  • EBITDAX (non-GAAP) for the second quarter of 2015 was $457.8 million.

See “Supplemental Non-GAAP Financial Measures” at the end of this press release for a description of adjusted net income and EBITDAX (non-GAAP measures) and a reconciliation of these measures to the associated GAAP measure.

Tim Leach, Chairman, Chief Executive Officer and President, commented, “Concho continues to deliver strong results as we progress through an uncertain year for commodity prices. In the second quarter, our drilling program added nearly ten thousand barrels of oil production per day quarter-over-quarter, highlighting the strength of our assets, efficient drilling machine and ongoing success with enhanced completions. We are on track to balance drilling and completion capital with cash flow in the second half of 2015, and we are raising our annual production growth target to 24% to 26%. Faster cycle times, improving well performance and lower service costs enable our operational teams to do more with less – an impactful combination in any price environment. Looking ahead, our inventory-rich asset base coupled with our operational performance sets Concho apart to deliver value today and in the future.”

Second Quarter 2015 Operations Summary

Production for the second quarter of 2015 was 13.4 million barrels of oil equivalent (MMBoe), or an average of 147.4 thousand Boe per day (MBoepd), an increase of 37% from the second quarter of 2014 and 11% from the first quarter of 2015.

Second quarter 2015 production included 9.0 million barrels (MMBbls) of crude oil, or an average of 99.2 thousand barrels of crude oil per day (MBopd), an increase of 30.8 MBopd, or 45%, from the second quarter of 2014, and 9.6 MBopd, or 11%, from the first quarter of 2015. Second quarter of 2015 production also included 26.3 billion cubic feet (Bcf) of natural gas.

Capital expenditures for the quarter were $564.5 million, excluding property acquisition costs, and represented a 23% decrease from the first quarter of 2015. Capital expenditures and the resulting production growth were driven by faster cycle times, strong well performance and increased working interest in operated wells.

Concho averaged 18 rigs in the second quarter of 2015, compared to 30 rigs in the first quarter of 2015. During the second quarter of 2015, Concho started drilling or participating in a total of 91 gross wells (65 operated) and completed 137 gross wells. The table below summarizes the Company’s drilling activity by core area for the second quarter of 2015.

     

Number of Wells
Drilled
(Gross)

Number of
Operated Wells
Drilled
(Gross)

Number of Wells
Completed
(Gross)

Delaware Basin 58 44 82
New Mexico Shelf 19 12 25
Midland Basin 14   9   30  
Total 91   65   137  
 
Percent Horizontal 96 % 95 % 81 %
 

Delaware Basin

Production from horizontal wells in the Delaware Basin was 81.6 MBoepd in the second quarter of 2015, up 66% over the second quarter of 2014 and 18% over the first quarter of 2015.

During the second quarter of 2015, Concho drilled 58 wells in the Delaware Basin, including 34 wells targeting the Bone Spring Sands, 17 wells targeting the Wolfcamp Shale and seven wells targeting the Avalon Shale.

In the northern Delaware Basin, drilling days per well decreased by 15% year-over-year. Concho added 52 new horizontal wells in the northern Delaware Basin with at least 30 days of production as of the end of the second quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 994 Boepd (71% oil) and 1,459 Boepd, respectively.

In the southern Delaware Basin, drilling days per well decreased by 25% year-over-year. Concho added 12 new horizontal wells in the southern Delaware Basin with at least 30 days of production as of the end of the second quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 1,163 Boepd (78% oil) and 1,392 Boepd, respectively.

The Company currently has 12 horizontal rigs in the Delaware Basin, down from a peak of 25 horizontal rigs in the fourth quarter of 2014.

Midland Basin

In the Midland Basin, drilling days per well decreased by 25% year-over-year. Concho added 21 new horizontal wells in the Midland Basin with at least 30 days of production as of the end of the second quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 758 Boepd (82% oil) and 996 Boepd, respectively.

The Company currently has two horizontal rigs in the Midland Basin.

New Mexico Shelf

On the New Mexico Shelf, Concho added 17 new horizontal wells with at least 30 days of production as of the end of the second quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 331 Boepd (83% oil) and 477 Boepd, respectively.

The Company currently has two horizontal rigs on the New Mexico Shelf.

Second Quarter 2015 Financial Summary

The Company’s total realized price during the second quarter of 2015, excluding the effect of commodity derivatives, was $40.07 per Boe, compared with $71.84 per Boe during the second quarter of 2014. The lower total realized price in the 2015 period reflects continued weak crude oil, natural gas and natural gas liquids commodity prices.

Net loss for the second quarter of 2015 was $120.5 million, or $1.02 per diluted share, compared to net income of $11.8 million, or $0.11 per diluted share, in the second quarter of 2014. Excluding non-cash and unusual items, adjusted net income (non-GAAP) for the second quarter of 2015 was $45.5 million, or $0.38 per diluted share, compared with adjusted net income (non-GAAP) of $113.8 million, or $1.04 per diluted share, for the second quarter of 2014.

EBITDAX (non-GAAP) for the second quarter of 2015 totaled $457.8 million, compared to $504.0 million in the second quarter of 2014.

Cash flows generated from operating activities in the first six months of 2015 totaled $488.9 million, compared with $854.7 million in the same period last year. Adjusted cash flows (non-GAAP), which are cash flows from operating activities adjusted for settlements on derivatives not designated as hedges, were $768.3 million for the first six months of 2015, as compared to $813.8 million for the same period last year.

See “Supplemental Non-GAAP Financial Measures” at the end of this press release for a description of adjusted net income, EBITDAX and adjusted cash flows (non-GAAP measures) and a reconciliation of these measures to the associated GAAP measures.

Commodity Derivatives Update

The Company enters into commodity derivatives to manage its exposure to commodity price fluctuations. For the remainder of 2015, Concho has swap contracts covering approximately 75% of expected crude oil production, or 63.8 MBopd, at a weighted average price of $75.19 per Bbl. For 2016, Concho has swap contracts covering 49.3 MBopd at a weighted average price of $75.71 per Bbl. Please see the table under “Derivatives Information” for more detailed information about the Company’s current derivatives positions.

Outlook

For the third quarter of 2015, the Company expects production to average between 143 MBoepd and 147 MBoepd.

In addition, Concho updated its full-year 2015 outlook for certain items. The following table summarizes the Company’s current guidance for those items, as compared to the Company’s prior guidance.

 
Full Year 2015
Prior   Current
Production
Year-over-year production growth 18% - 22% 24% - 26%
Oil mix 63% - 65% 64% - 66%
 
Price realization, excluding commodity derivatives (percent of NYMEX)
Natural gas (per Mcf) 100% - 120% 90% - 100%
 
Operating costs and expenses ($/Boe)
Lease operating expense:
Direct lease operating expense $7.75 - $8.25 $7.50 - $8.00
 

Conference Call

Concho will discuss second quarter 2015 results on a conference call tomorrow, July 30, 2015, at 8:30 AM CT (9:30 AM ET). The telephone number and passcode to access the conference call are provided below:

Dial-in: (855) 445-9894
Intl. dial-in: (330) 863-3281
Participant Passcode: 63780959

To access the live webcast and view the related presentation, visit Concho’s website at www.concho.com. The replay will also be available on the Company’s website under the “Investors” section.

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, oil and natural gas reserves, 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; 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 and the export of oil and natural gas; environmental hazards, such as uncontrollable flows of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater contamination; 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; the costs and availability of equipment, resources, services and personnel required to perform the Company’s drilling and operating activities; potential financial losses or earnings reductions from the Company’s commodity price management program; risks and liabilities related to the integration of acquired properties or businesses; 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, either internationally or domestically; 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.

Concho Resources Inc.
Consolidated Balance Sheets
Unaudited
 
   
June 30, December 31,
(in thousands, except share and per share amounts)     2015     2014
Assets
Current assets:
Cash and cash equivalents $ 280 $ 21
Accounts receivable, net of allowance for doubtful accounts:
Oil and natural gas 251,497 250,600
Joint operations and other 257,956 409,665
Derivative instruments 351,360 490,351
Prepaid costs and other   40,599   37,759
Total current assets   901,692   1,188,396
Property and equipment:
Oil and natural gas properties, successful efforts method 15,183,313 13,867,831
Accumulated depletion and depreciation   (4,353,015)   (3,790,953)
Total oil and natural gas properties, net 10,830,298 10,076,878
Other property and equipment, net   146,138   129,136
Total property and equipment, net   10,976,436   10,206,014
Deferred loan costs, net 63,497 68,443
Intangible asset - operating rights, net 26,424 27,154
Inventory 16,365 14,435
Noncurrent derivative instruments 93,843 262,349
Other assets   75,719   33,172
Total assets $ 12,153,976 $ 11,799,963
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable - trade $ 44,895 $ 20,380
Bank overdrafts 82,170 92,541
Revenue payable 202,542 238,098
Accrued and prepaid drilling costs 472,424 718,300
Deferred income taxes 115,781 162,566
Other current liabilities   181,317   195,308
Total current liabilities   1,099,129   1,427,193
Long-term debt 3,582,465 3,517,320
Deferred income taxes 1,389,702 1,438,185
Noncurrent derivative instruments 3,970 -
Asset retirement obligations and other long-term liabilities 140,563 136,477
Stockholders’ equity:

Common stock, $0.001 par value; 300,000,000 authorized; 120,600,497 and 113,264,918 shares issued at June 30, 2015 and December 31, 2014, respectively

121 113
Additional paid-in capital 3,802,137 3,027,412
Retained earnings 2,166,770 2,279,741

Treasury stock, at cost; 299,249 and 260,124 shares at June 30, 2015 and December 31, 2014, respectively

  (30,881)   (26,478)
Total stockholders’ equity   5,938,147   5,280,788
Total liabilities and stockholders’ equity $ 12,153,976 $ 11,799,963

 
Concho Resources Inc.
Consolidated Statements of Operations
Unaudited
                         
       
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands, except per share amounts)     2015     2014     2015     2014
 
Operating revenues:
Oil sales $ 470,890 $ 580,772 $ 820,474 $ 1,120,629
Natural gas sales   66,535   123,930   130,473   245,032
Total operating revenues   537,425   704,702   950,947   1,365,661
Operating costs and expenses:
Oil and natural gas production 142,265 134,944 267,800 261,868
Exploration and abandonments 12,020 28,288 17,775 53,663
Depreciation, depletion and amortization 304,802 237,445 572,007 458,837
Accretion of discount on asset retirement obligations 2,047 1,722 4,041 3,393

General and administrative (including non-cash stock-based compensation of $15,450 and $9,775 for the three months ended June 30, 2015 and 2014, respectively, and $30,945 and $21,207 for the six months ended June 30, 2015 and 2014, respectively)

60,923 49,535 119,724 97,285
Loss on derivatives not designated as hedges   147,399   164,707   32,059   200,322
Total operating costs and expenses   669,456   616,641   1,013,406   1,075,368
Income (loss) from operations   (132,031)   88,061   (62,459)   290,293
Other income (expense):
Interest expense (53,482) (55,388) (107,051) (111,523)
Loss on extinguishment of debt - (4,316) - (4,316)
Other, net   (5,678)   (9,529)   (10,019)   (8,988)
Total other expense   (59,160)   (69,233)   (117,070)   (124,827)
Income (loss) before income taxes (191,191) 18,828 (179,529) 165,466
Income tax (expense) benefit   70,708   (7,059)   66,558   (62,390)
Net income (loss) $ (120,483) $ 11,769 $ (112,971) $ 103,076
Earnings per share:
Basic net income (loss) $ (1.02) $ 0.11 $ (0.97) $ 0.96
Diluted net income (loss) $ (1.02) $ 0.11 $ (0.97) $ 0.96
 

 
Concho Resources Inc.
Consolidated Statements of Cash Flows
Unaudited
   
Six Months Ended
June 30,
(in thousands)   2015   2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (112,971) $ 103,076
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization 572,007 458,837
Accretion of discount on asset retirement obligations 4,041 3,393
Exploration and abandonments, including dry holes 12,352 41,762
Non-cash stock-based compensation expense 30,945 21,207
Deferred income taxes (95,268) 34,951
(Gain) loss on disposition of assets and other 1,620 9,457
Loss on derivatives not designated as hedges 32,059 200,322
Other non-cash items 5,298 9,418
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable 55,870 (83,061)
Prepaid costs and other (2,098) (6,154)
Inventory (1,935) 4,782
Accounts payable 23,339 36,626
Revenue payable (35,556) 17,671
Other current liabilities   (769)   2,441
Net cash provided by operating activities   488,934   854,728
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures on oil and natural gas properties (1,492,547) (1,054,000)
Additions to property, equipment and other assets (26,146) (20,456)
Proceeds from the disposition of assets 96 394
Contribution to equity method investment (45,000) (10,050)
Settlements received from (paid on) derivatives not designated as hedges   279,408   (40,891)
Net cash used in investing activities   (1,284,189)   (1,125,003)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 1,097,400 1,578,000
Payments of debt (1,030,900) (1,828,000)
Exercise of stock options 58 1,289
Excess tax benefit from stock-based compensation 2,221 4,000
Net proceeds from issuance of common stock 741,509 932,455
Payments for loan costs - (10,642)
Purchase of treasury stock (4,403) (4,642)
Decrease in bank overdrafts   (10,371)   (36,718)
Net cash provided by financing activities   795,514   635,742
Net increase in cash and cash equivalents 259 365,467
Cash and cash equivalents at beginning of period   21   21
Cash and cash equivalents at end of period $ 280 $ 365,488
 

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   Six Months Ended
June 30, June 30,
      2015   2014   2015   2014
   
Production and operating data:
Net production volumes:
Oil (MBbl) 9,031 6,229 17,097 12,075
Natural gas (MMcf) 26,283 21,485 49,268 41,285
Total (MBoe) 13,412 9,810 25,308 18,956
 
Average daily production volumes:
Oil (Bbl) 99,242 68,451 94,459 66,713
Natural gas (Mcf) 288,824 236,099 272,199 228,094
Total (Boe) 147,379 107,801 139,826 104,729
 
Average prices:
Oil, without derivatives (Bbl) $ 52.14 $ 93.24 $ 47.99 $ 92.81
Oil, with derivatives (Bbl) (a) $ 63.56 $ 89.29 $ 63.39 $ 89.96
Natural gas, without derivatives (Mcf) $ 2.53 $ 5.77 $ 2.65 $ 5.94
Natural gas, with derivatives (Mcf) (a) $ 2.88 $ 5.70 $ 2.97 $ 5.78
Total, without derivatives (Boe) $ 40.07 $ 71.84 $ 37.57 $ 72.04
Total, with derivatives (Boe) (a) $ 48.44 $ 69.18 $ 48.62 $ 69.89
 
Operating costs and expenses per Boe:
Lease operating expenses and workover costs $ 7.30 $ 8.15 $ 7.46 $ 8.11
Oil and natural gas taxes $ 3.30 $ 5.61 $ 3.12 $ 5.70
Depreciation, depletion and amortization $ 22.72 $ 24.20 $ 22.60 $ 24.21
General and administrative $ 4.54 $ 5.05 $ 4.73 $ 5.13
                           
 

(a) Includes the effect of cash receipts from (payments on) derivatives not designated as hedges:

                         
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands)   2015   2014   2015   2014
 
Cash receipts from (payments on) derivatives not designated as hedges:
Oil derivatives $ 103,129 $ (24,569) $ 263,315 $ (34,338)
Natural gas derivatives   9,123   (1,485)   16,093   (6,553)
Total $ 112,252 $ (26,054) $ 279,408 $ (40,891)
                           

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.
Costs Incurred
Unaudited

The table below provides the costs incurred for oil and natural gas producing activities for the periods indicated:

       
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands)   2015   2014   2015   2014
 
Property acquisition costs:
Proved $ 2,243 $ 2,137 $ 2,243 $ 22,627
Unproved 18,037 11,382 34,050 36,070
Exploration 343,051 342,424 772,220 666,921
Development   221,410   193,163   523,154   404,842
Total costs incurred for oil and natural gas properties $ 584,741 $ 549,106 $ 1,331,667 $ 1,130,460
 

Concho Resources Inc.
Derivatives Information
Unaudited

The table below provides data associated with the Company’s derivatives at July 29, 2015, for the periods indicated:

         
2015

Third
Quarter

Fourth
Quarter

Total 2016 2017
 
Oil Swaps: (a)
Volume (Bbl) 6,169,000 5,579,000 11,748,000 18,059,000 6,288,000
Price per Bbl $ 75.14 $ 75.24 $ 75.19 $ 75.71 $ 64.57
 
Oil Basis Swaps: (b)
Volume (Bbl) 5,811,000 5,336,000 11,147,000 14,661,000 6,335,000
Price per Bbl $ (2.50) $ (2.47) $ (2.48) $ (2.11) $ (1.51)
 
Natural Gas Swaps: (c)
Volume (MMBtu) 5,980,000 5,980,000 11,960,000 3,660,000 -
Price per MMBtu $ 4.16 $ 4.16 $ 4.16 $ 3.14 $ -
 
Natural Gas Basis Swaps: (d)
Volume (MMBtu) 1,380,000 1,380,000 2,760,000 - -
Price per MMBtu $ (0.13) $ (0.13) $ (0.13) $ - $ -
                               
 

(a) The index prices for the oil contracts are based on the New York Mercantile Exchange (“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 basis differential price is between the El Paso Permian delivery point and NYMEX – Henry Hub delivery point.

 

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 to exclude certain non-cash and unusual items and cash flows from operating activities to adjust for settlements on derivatives not designated as hedges.

Adjusted Net Income

The following table provides a reconciliation of net income (loss) (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)     2015       2014       2015       2014  
 
Net income (loss) - as reported $ (120,483 ) $ 11,769 $ (112,971 ) $ 103,076
 
Adjustments for certain non-cash and unusual items:
Loss on derivatives not designated as hedges 147,399 164,707 32,059 200,322
Cash receipts from (payments on) derivatives not designated as hedges 112,252 (26,054 ) 279,408 (40,891 )
Leasehold abandonments 1,444 11,193 3,363 15,138
Loss on extinguishment of debt - 4,316 - 4,316
(Gain) loss on disposition of assets and other 1,581 9,603 1,620 9,457
Tax impact (a) (94,826 ) (61,739 ) (114,238 ) (71,005 )
Change in statutory effective income tax rates   (1,826 )   -     (1,826 )   -  
Adjusted net income $ 45,541   $ 113,795   $ 87,415   $ 220,413  
 
Adjusted earnings per share:
Basic $ 0.38 $ 1.04 $ 0.74 $ 2.06
Diluted $ 0.38 $ 1.04 $ 0.74 $ 2.05
 
Effective tax rates 36.1 % 37.7 % 36.1 % 37.7 %
                               
 

(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:

           
Six Months Ended
June 30,
(in thousands)     2015     2014
 
Cash flows from operating activities $ 488,934 $ 854,728
Settlements received from (paid on) derivatives not designated as hedges (a)   279,408   (40,891)
Adjusted cash flows $ 768,342 $ 813,837
                     
 
(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 United States generally accepted accounting principles ("GAAP") measure of net income (loss) 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 (loss), 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 and other, (8) interest expense, (9) loss on extinguishment of debt and (10) federal and state income taxes. EBITDAX is not a measure of net income (loss) or cash flows as determined by GAAP.

The Company’s EBITDAX measure 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 (loss) 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 (loss) (GAAP) to EBITDAX (non-GAAP) for the periods indicated:

       
 
 
Three Months Ended Six Months Ended
June 30, June 30,
(in thousands)   2015   2014   2015   2014
 
Net income (loss) $ (120,483) $ 11,769 $ (112,971) $ 103,076
Exploration and abandonments 12,020 28,288 17,775 53,663
Depreciation, depletion and amortization 304,802 237,445 572,007 458,837
Accretion of discount on asset retirement obligations 2,047 1,722 4,041 3,393
Non-cash stock-based compensation 15,450 9,775 30,945 21,207
Loss on derivatives not designated as hedges 147,399 164,707 32,059 200,322
Cash receipts from (payments on) derivatives not designated as hedges 112,252 (26,054) 279,408 (40,891)
(Gain) loss on disposition of assets and other 1,581 9,603 1,620 9,457
Interest expense 53,482 55,388 107,051 111,523
Loss on extinguishment of debt - 4,316 - 4,316
Income tax expense (benefit)   (70,708)   7,059   (66,558)   62,390
EBITDAX $ 457,842 $ 504,018 $ 865,377 $ 987,293

Source: Concho Resources Inc.

Concho Resources Inc.

INVESTOR RELATIONS

Megan P. Hays, 432-685-2533

Director of Investor Relations

or

Jere Thompson, 432-221-0383

Financial Analyst

06.29.15 Concho Resources Inc. Schedules Second Quarter 2015 Conference Call for Thursday, July 30, 2015

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company”) will host a conference call on Thursday, July 30, 2015, at 8:30 AM CT (9:30 AM ET) to discuss second quarter 2015 financial and operating results. The Company plans to announce second quarter 2015 results on Wednesday, July 29, 2015, after close of trading.

Conference Call Information:

Dial-in: (855) 445-9894
Intl. dial-in: (330) 863-3281
Participant Passcode: 63780959

To access the live webcast, visit www.concho.com. The replay will also be available on the Company’s website under the “Investors” section.

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.

Concho Resources Inc.

Megan P. Hays, 432-685-2533

Director of Investor Relations

or

Jere Thompson, 432-221-0383

Financial Analyst

06.10.15 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 Tudor, Pickering, Holt & Co. Hotter ‘N Hell Conference on Wednesday, June 17, 2015, and the Global Hunter Securities 100 Energy Conference on Wednesday, June 24, 2015.

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.

Concho Resources Inc.

Megan P. Hays, 432-685-2533

Director of Investor Relations

or

Jere Thompson, 432-221-0383

Financial Analyst

05.18.15 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 UBS Global Oil and Gas Conference on Wednesday, May 20, 2015, at 8:05 AM CT (9:05 AM ET), the BMO Global Energy Invitational on Wednesday, May 27, 2015, and the RBC Global Energy and Power Executive Conference on Monday, June 1, 2015.

The Company will refer to its 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. Additionally, the presentation for the UBS Global Oil and Gas Conference will be webcast and accessible from the Company’s website on the date of the event.

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.

Concho Resources Inc.

Megan P. Hays, 432-685-2533

Director of Investor Relations

or

Jere Thompson, 432-221-0383

Financial Analyst

05.04.15 Concho Resources Inc. Reports First Quarter 2015 Results and Raises Full-Year 2015 Production Growth Target

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company” or “Concho”) today reported financial and operating results for first quarter 2015.

Highlights

  • Concho delivered record quarterly production of 11.9 million Boe, or 132.2 MBoepd, exceeding the high end of the Company’s guidance.
  • Concho achieved 38% crude oil production growth over the same quarter a year ago and 9% crude oil growth over the fourth quarter of 2014.
  • Concho raised its 2015 total production growth target to 18% to 22%. Capital expenditures are expected to range between $1.8 billion to $2.0 billion for full year 2015.
  • Concho announced excellent well results from the oil-rich extension of the Avalon Shale in the northern Delaware Basin.
  • Concho successfully drove all per-unit expenses lower year-over-year, while capturing significant service cost savings across all areas of operations in the Permian Basin.
  • First quarter of 2015 financial results reflected the lower commodity price environment. Earnings for the first quarter of 2015 totaled $0.06 per diluted share, or $0.36 per diluted share on an adjusted basis (non-GAAP).
  • First quarter of 2015 EBITDAX (non-GAAP) totaled $407.5 million.

See “Supplemental Non-GAAP Financial Measures” at the end of this press release for a description of adjusted net income and EBITDAX (non-GAAP measures) and a reconciliation of these measures to the associated GAAP measure.

Tim Leach , Chairman, Chief Executive Officer and President, commented, “Concho delivered another outstanding quarter of production growth, reflecting great drilling results across our assets in the Permian Basin and strong momentum from our 2014 program. We remain focused on executing a flexible capital program that maintains our financial strength while we capitalize on our high-quality inventory – an inventory that continues to improve as we optimize our drilling and completion techniques. With the success from our drilling program, we are increasing our production growth target for 2015 to a range of 18% to 22% from a range of 16% to 20%, while slightly reducing our outlook for capital expenditures. We believe Concho is in a unique position to deliver attractive returns today and build shareholder value over the long term.”

First Quarter 2015 Operations Summary

Production for the first quarter of 2015 increased 30% from the first quarter of 2014 to 11.9 million barrels of oil equivalent (MMBoe), or an average of 132.2 thousand Boe per day (MBoepd), which exceeded the Company’s production guidance range of 127 MBoepd to 131 MBoepd.

Production for the first quarter of 2015 consisted of 8.1 million barrels (MMBbls) of crude oil and 23.0 billion cubic feet (Bcf) of natural gas. Crude oil production increased 38% and 9% over the first quarter of 2014 and the fourth quarter of 2014, respectively. The first quarter of 2015 marks the 21st consecutive quarter of crude oil production growth from continuing operations.

Concho is currently running 18 rigs, as compared to 36 rigs at the beginning of the first quarter of 2015. All 18 rigs are drilling horizontal wells, with 14 rigs in the Delaware Basin, 2 rigs in the Texas Permian and 2 rigs on the New Mexico Shelf.

Concho started drilling or participating in a total of 126 gross wells, of which 103 were operated by the Company, and completed 171 gross wells during the first quarter of 2015. The Company incurred a total of $730.9 million in capital expenditures, excluding property acquisition costs. The table below summarizes the Company’s drilling activity by core area for the first quarter of 2015.

           

Number of Wells
Drilled
(Gross)

Number of
Operated Wells
Drilled
(Gross)

Number of Wells
Completed
(Gross)

Delaware Basin 60 52 71
New Mexico Shelf 40 25 51
Texas Permian 26 26 49
Total 126 103 171
 
Percent Horizontal 73% 72% 67%
 

Delaware Basin

During the first quarter of 2015, Concho drilled 60 wells in the Delaware Basin, including 39 wells targeting the Bone Spring Sands, 12 wells targeting the Wolfcamp Shale, seven wells targeting the Avalon Shale and two wells targeting the Brushy Canyon. First quarter of 2015 production attributable to horizontal wells in the Delaware Basin totaled 68.9 MBoepd, up 63% over the first quarter of 2014 and 7% over the fourth quarter of 2014.

In the northern Delaware Basin, Concho added 42 new horizontal wells with at least 30 days of production as of the end of the first quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 891 Boepd (73% oil) and 1,430 Boepd, respectively. We continue to delineate the multi-zone potential across our large acreage position in the northern Delaware Basin. In the first quarter of 2015, the Company made significant progress targeting the Avalon Shale, including strong results from three recent completions. The average peak 30-day and 24-hour rates for these three horizontal wells were 1,586 Boepd (77% oil) and 2,487 Boepd, respectively.

In the southern Delaware Basin, the Company added eight new horizontal wells with at least 30 days of production as of the end of the first quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 997 Boepd (79% oil) and 1,238 Boepd, respectively.

Texas Permian

In the Midland Basin, the Company added 12 new horizontal wells with at least 30 days of production as of the end of the first quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 742 Boepd (83% oil) and 957 Boepd, respectively.

New Mexico Shelf

On the New Mexico Shelf, the Company added seven new horizontal wells with at least 30 days of production as of the end of the first quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 331 Boepd (84% oil) and 511 Boepd, respectively.

First Quarter 2015 Financial Summary

Net income for the first quarter of 2015 was $7.5 million, or $0.06 per diluted share, compared to net income of $91.3 million, or $0.87 per diluted share, in the first quarter of 2014. Excluding non-cash and unusual items, adjusted net income (non-GAAP) for the first quarter of 2015 was $42.1 million, or $0.36 per diluted share, compared with adjusted net income (non-GAAP) of $106.6 million, or $1.01 per diluted share, for the first quarter of 2014.

EBITDAX (non-GAAP) for the first quarter of 2015 totaled $407.5 million, compared to $483.3 million in the first quarter of 2014.

The Company’s total realized price during the first quarter of 2015, excluding the effect of commodity derivatives, was $34.76 per Boe, compared with $72.27 per Boe during the first quarter of 2014. The lower total realized price in the 2015 period reflects sharply lower crude oil and natural gas prices.

Financial Position and Liquidity

At March 31, 2015, we had total long-term debt of $3.4 billion for a debt-to-EBITDAX ratio of 1.7 times. In addition, we had a $2.5 billion revolving credit facility with a $3.25 billion borrowing base and no outstanding borrowings, providing us with $2.5 billion of liquidity as of March 31, 2015. As previously disclosed, in April 2015, the lenders to the Company’s credit agreement reaffirmed our borrowing base of $3.25 billion.

Commodity Derivatives Update

We enter into commodity derivatives to manage our exposure to commodity price fluctuations. For the remainder of 2015, Concho has swap contracts covering more than 65% of expected crude oil production, or 57.2 thousand barrels (MBbls) per day of crude oil, at a weighted average price of $78.82 per Bbl. For 2016, Concho has swap contracts covering 34.2 MBbls per day of crude oil at a weighted average price of $83.43 per Bbl. Please see the table under “Derivatives Information” for more detailed information about our current derivatives positions.

Outlook

For the second quarter of 2015, we expect production to average between 138 MBoepd and 142 MBoepd.

In addition, we updated our full-year 2015 outlook for certain items. The following table summarizes the Company’s current guidance for those items, as compared to the Company’s prior guidance.

     
Full Year 2015
Prior     Current
Production
Year-over-year production growth 16% - 20% 18% - 22%
 
Operating costs and expenses
Lease operating expense ($/Boe):
Direct lease operating expense $8.00 - $8.50 $7.75 - $8.25
General and administrative expense ($/Boe):
Non-cash stock-based compensation $1.10 - $1.20 $1.20 - $1.30
Depletion, depreciation and amortization expense ($/Boe) $24.00 - $26.00 $23.00 - $25.00
Cash interest expense ($ in millions) $215 - $225 $210 - $220
 
Capital budget ($ in billions) $2.0 $1.8 - $2.0
 

Conference Call

Concho will discuss first quarter 2015 results on a conference call tomorrow, May 5, 2015, at 9:00 AM CT (10:00 AM ET). The telephone number and passcode to access the conference call are provided below:

Dial-in: (800) 299-8538
Intl. dial-in: (617) 786-2902
Participant Passcode: 77249327

To access the live webcast and view the related presentation, visit Concho’s website at www.concho.com. The replay will also be available on the Company’s website under the “Investors” section.

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, oil and natural gas reserves, 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; 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 and the export of oil and natural gas; environmental hazards, such as uncontrollable flows of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater contamination; 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 and liabilities related to the integration of acquired properties or businesses; 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, either internationally or domestically; 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.

 
Concho Resources Inc.
Consolidated Balance Sheets
Unaudited
 
         
March 31, December 31,
(in thousands, except share and per share amounts)         2015       2014
Assets
Current assets:
Cash and cash equivalents $ 21 $ 21
Accounts receivable, net of allowance for doubtful accounts:
Oil and natural gas 219,486 250,600
Joint operations and other 401,425 409,665
Derivative instruments 495,803 490,351
Prepaid costs and other   37,541     37,759  
Total current assets   1,154,276     1,188,396  
Property and equipment:
Oil and natural gas properties, successful efforts method 14,609,006 13,867,831
Accumulated depletion and depreciation   (4,053,199 )   (3,790,953 )
Total oil and natural gas properties, net 10,555,807 10,076,878
Other property and equipment, net   132,778     129,136  
Total property and equipment, net   10,688,585     10,206,014  
Deferred loan costs, net 65,980 68,443
Intangible asset - operating rights, net 26,789 27,154
Inventory 14,352 14,435
Noncurrent derivative instruments 205,250 262,349
Other assets   51,914     33,172  
Total assets $ 12,207,146   $ 11,799,963  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable - trade $ 23,573 $ 20,380
Bank overdrafts 19,002 92,541
Revenue payable 160,993 238,098
Accrued and prepaid drilling costs 665,922 718,300
Deferred income taxes 166,447 162,566
Other current liabilities   188,840     195,308  
Total current liabilities   1,224,777     1,427,193  
Long-term debt 3,377,147 3,517,320
Deferred income taxes 1,423,273 1,438,185
Noncurrent derivative instruments 168 -
Asset retirement obligations and other long-term liabilities 139,432 136,477
Stockholders’ equity:
Common stock, $0.001 par value; 300,000,000 authorized; 120,304,465 and

113,264,918 shares issued at March 31, 2015 and December 31, 2014, respectively

120 113
Additional paid-in capital 3,784,605 3,027,412
Retained earnings 2,287,253 2,279,741
Treasury stock, at cost; 289,069 and 260,124 shares at March 31, 2015 and
December 31, 2014, respectively   (29,629 )   (26,478 )
Total stockholders’ equity   6,042,349     5,280,788  
Total liabilities and stockholders’ equity $ 12,207,146   $ 11,799,963  
 

 
Concho Resources Inc.
Consolidated Statements of Operations
Unaudited
               
         
Three Months Ended
March 31,
(in thousands, except per share amounts)       2015     2014
 
Operating revenues:
Oil sales $ 349,584 $ 539,857
Natural gas sales   63,938     121,102  
Total operating revenues   413,522     660,959  
Operating costs and expenses:
Oil and natural gas production 125,535 126,924
Exploration and abandonments 5,755 25,375
Depreciation, depletion and amortization 267,205 221,392
Accretion of discount on asset retirement obligations 1,994 1,671
General and administrative (including non-cash stock-based compensation of $15,495 and
$11,432 for the three months ended March 31, 2015 and 2014, respectively) 58,801 47,750
(Gain) loss on derivatives not designated as hedges   (115,340 )   35,615  
Total operating costs and expenses   343,950     458,727  
Income from operations   69,572     202,232  
Other income (expense):
Interest expense (53,569 ) (56,135 )
Other, net   (4,341 )   541  
Total other expense   (57,910 )   (55,594 )
Income before income taxes 11,662 146,638
Income tax expense   (4,150 )   (55,331 )
Net income $ 7,512   $ 91,307  
Earnings per share:
Basic net income $ 0.07 $ 0.87
Diluted net income $ 0.06 $ 0.87
 

 
Concho Resources Inc.
Consolidated Statements of Cash Flows
Unaudited
         
Three Months Ended
March 31,
(in thousands)       2015     2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,512 $ 91,307
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization 267,205 221,392
Accretion of discount on asset retirement obligations 1,994 1,671
Exploration and abandonments, including dry holes 2,700 23,759
Non-cash stock-based compensation expense 15,495 11,432
Deferred income taxes (11,031 ) 41,954
(Gain) loss on disposition of assets, net 39 (146 )
(Gain) loss on derivatives not designated as hedges (115,340 ) 35,615
Other non-cash items 2,612 2,710
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Accounts receivable 35,731 (10,139 )
Prepaid costs and other 649 21
Inventory 3 1,126
Accounts payable 3,119 20,087
Revenue payable (77,105 ) 21,675
Other current liabilities   (7,334 )   13,516  

Net cash provided by operating activities

  126,249     475,980  
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures on oil and natural gas properties (790,773 ) (554,266 )
Additions to property, equipment and other assets (8,147 ) (5,617 )
Proceeds from the disposition of assets - 24
Contribution to equity method investment (20,000 ) -
Settlements received from (paid on) derivatives not designated as hedges   167,156     (14,837 )
Net cash used in investing activities   (651,764 )   (574,696 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 739,000 593,400
Payments of debt (878,500 ) (548,750 )
Exercise of stock options 57 1,254
Excess tax benefit from stock-based compensation 464 2,993
Net proceeds from issuance of common stock 741,184 -
Purchase of treasury stock (3,151 ) (3,748 )
Increase (decrease) in bank overdrafts   (73,539 )   53,567  
Net cash provided by financing activities   525,515     98,716  
Net increase (decrease) in cash and cash equivalents - -
Cash and cash equivalents at beginning of period   21     21  
Cash and cash equivalents at end of period $ 21   $ 21  
 

 
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
March 31,
                  2015     2014
   
Production and operating data:
Net production volumes:
Oil (MBbl) 8,066 5,846
Natural gas (MMcf) 22,985 19,800
Total (MBoe) 11,897 9,146
 
Average daily production volumes:
Oil (Bbl) 89,622 64,956
Natural gas (Mcf) 255,389 220,000
Total (Boe) 132,187 101,623
 
Average prices:
Oil, without derivatives (Bbl) $ 43.34 $ 92.35
Oil, with derivatives (Bbl) (a) $ 63.20 $ 90.68
Natural gas, without derivatives (Mcf) $ 2.78 $ 6.12
Natural gas, with derivatives (Mcf) (a) $ 3.08 $ 5.86
Total, without derivatives (Boe) $ 34.76 $ 72.27
Total, with derivatives (Boe) (a) $ 48.81 $ 70.65
 
Operating costs and expenses per Boe:
Lease operating expenses and workover costs $ 7.64 $ 8.07
Oil and natural gas taxes $ 2.91 $ 5.80
Depreciation, depletion and amortization $ 22.46 $ 24.21
General and administrative $ 4.95 $ 5.22
                         
 
(a) Includes the effect of cash receipts from (payments on) derivatives not designated as hedges:
                   
Three Months Ended
March 31,
(in thousands)       2015     2014
 
Cash receipts from (payments on) derivatives not designated as hedges:
Oil derivatives $ 160,186 $ (9,769 )
Natural gas derivatives   6,970   (5,068 )
Total $ 167,156 $ (14,837 )
                   
 
The presentation of average prices with derivatives is a non-GAAP measure as a result of including the cash receipts from (payments on) commodity derivatives that are presented in our statements of cash flows. This presentation of average prices with derivatives is a means by which to reflect the actual cash performance of our commodity derivatives for the respective periods and presents oil and natural gas prices with derivatives in a manner consistent with the presentation generally used by the investment community.

 

 

Concho Resources Inc.

Costs Incurred

Unaudited

 

The table below provides the costs incurred for oil and natural gas producing activities for the periods indicated:

                 
        Three Months Ended
March 31,
(in thousands)       2015     2014
   
Property acquisition costs:
Proved $ - $ 20,490
Unproved 16,013 24,688
Exploration 429,169 324,497
Development   301,744   211,679
Total costs incurred for oil and natural gas properties $ 746,926 $ 581,354

 

 
Concho Resources Inc.
Derivatives Information
Unaudited
 

The table below provides data associated with the Company’s derivatives at May 4, 2015, for the periods indicated:

                           
2015

Second
Quarter

Third
Quarter

Fourth
Quarter

Total 2016 2017
 
Oil Swaps: (a)
Volume (Bbl) 5,114,000 5,719,000 4,904,000 15,737,000 12,499,000 3,948,000
Price (Bbl) $ 80.62 $ 77.19 $ 78.84 $ 78.82 $ 83.43 $ 65.58
 
Oil Basis Swaps: (b)
Volume (Bbl) 4,350,500 4,462,000 4,232,000 13,044,500 12,164,000 -
Price (Bbl) $ (3.24 ) $ (3.06 ) $ (2.99 ) $ (3.10 ) $ (2.23 ) $ -
 
Natural Gas Swaps: (c)
Volume (MMBtu) 5,915,000 5,980,000 5,980,000 17,875,000 - -
Price (MMBtu) $ 4.16 $ 4.16 $ 4.16 $ 4.16 $ - $ -
 
Natural Gas Basis Swaps: (d)
Volume (MMBtu) 1,365,000 1,380,000 1,380,000 4,125,000 - -
Price (MMBtu) $ (0.13 ) $ (0.13 ) $ (0.13 ) $ (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 basis differential price is between the El Paso Permian delivery point and NYMEX – Henry Hub delivery point.
     

 
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)       2015     2014
 
Net income - as reported $ 7,512 $ 91,307
 
Adjustments for certain non-cash and unusual items:
(Gain) loss on derivatives not designated as hedges (115,340 ) 35,615
Cash receipts from (payments on) derivatives not designated as hedges 167,156 (14,837 )
Leasehold abandonments 1,919 3,945
(Gain) loss on disposition of assets, net 39 (146 )
Tax impact (a)   (19,144 )   (9,266 )
Adjusted net income $ 42,142   $ 106,618  
 
Adjusted earnings per share:
Basic $ 0.37 $ 1.01
Diluted $ 0.36 $ 1.01
 
Effective tax rates 35.6 % 37.7 %
                     
 
(a) The tax impact is computed utilizing the Company's effective tax rates shown in the table above.
 

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) (gain) 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 and (9) federal and state income taxes. 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)       2015     2014
 
Net income $ 7,512 $ 91,307
Exploration and abandonments 5,755 25,375
Depreciation, depletion and amortization 267,205 221,392
Accretion of discount on asset retirement obligations 1,994 1,671
Non-cash stock-based compensation 15,495 11,432
(Gain) loss on derivatives not designated as hedges (115,340 ) 35,615
Cash receipts from (payments on) derivatives not designated as hedges 167,156 (14,837 )
(Gain) loss on disposition of assets, net 39 (146 )
Interest expense 53,569 56,135
Income tax expense   4,150     55,331  
EBITDAX $ 407,535   $ 483,275  

Source: Concho Resources Inc.

Concho Resources Inc.

Megan P. Hays, 432-685-2533

Director of Investor Relations

or

Jere Thompson, 432-221-0383

Financial Analyst

04.09.15 Concho Resources Inc. Schedules First Quarter 2015 Conference Call for Tuesday, May 5, 2015

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company”) will host a conference call on Tuesday, May 5, 2015, at 9:00 AM CT (10:00 AM ET) to discuss first quarter 2015 financial and operating results. The Company plans to announce first quarter 2015 results on Monday, May 4, 2015, after close of trading.

Conference Call Information:
Dial-in: (800) 299-8538
Intl. dial-in: (617) 786-2902
Participant Passcode: 77249327

To access the live webcast, visit www.concho.com. The replay will also be available on the Company’s website under the “Investors” section.

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.

Concho Resources Inc.

Megan P. Hays, 432-685-2533

Director, Investor Relations

or

Jere Thompson, 432-221-0383

Financial Analyst

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

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company”) today announced that it has priced an upsized public offering of 6,000,000 shares of its common stock for total gross proceeds (before underwriter’s fees and estimated expenses) of approximately $650 million. The underwriter has an option for 30 days to purchase up to an additional 900,000 shares of common stock from the Company. Proceeds from the offering are expected to be used to repay all of the outstanding borrowings under the Company’s credit facility and for general corporate purposes, which may include funding of the Company’s drilling and development program and future acquisitions.

BofA Merrill Lynch is acting as sole book-running manager for the offering and has offered, and may offer, the shares at prevailing market prices or otherwise from time to time through the New York Stock Exchange, in the over-the-counter market, through negotiated transactions or otherwise. On February 26, 2015, the last reported sale price of the Company’s common stock was $112.97 per share. The offering is expected to close on March 4, 2015, subject to customary closing conditions.

The offering is being made pursuant to an effective shelf registration statement, which has been filed and became effective September 21, 2012. 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: BofA Merrill Lynch, 222 Broadway, New York, NY 10038, Attn: Prospectus Department, email dg.prospectus_requests@baml.com.

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.

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.

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.

Megan P. Hays, 432-685-2533

Director of Investor Relations

or

Jere Thompson, 432-221-0383

Financial Analyst

02.26.15 Concho Resources Inc. Announces Public Offering of Common Stock

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE: CXO) (the “Company”) today announced the launch of an underwritten public offering of 5,600,000 shares of common stock. The underwriter will have an option to purchase up to an additional 840,000 shares of common stock from the Company. 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, which may include funding the Company’s drilling and development program and future acquisitions.

BofA Merrill Lynch is acting as sole book-running manager and underwriter for the offering and may offer the shares at prevailing market prices or otherwise from time to time through the New York Stock Exchange, in the over-the-counter market, through negotiated transactions or otherwise. On February 26, 2015, the last reported sale price of the Company’s common stock was $112.97 per share.

The offering is being made pursuant to an effective shelf registration statement, which has been filed and became effective September 21, 2012. 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 underwriter will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting: BofA Merrill Lynch, 222 Broadway, New York, NY 10038, Attn: Prospectus Department, email dg.prospectus_requests@baml.com.

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.

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.

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.

Megan P. Hays, 432-685-2533

Director of Investor Relations

or

Jere Thompson, 432-221-0383

Financial Analyst

02.25.15 Concho Resources Inc. Reports Fourth Quarter and Full-Year 2014 Results

MIDLAND, Texas--(BUSINESS WIRE)-- Concho Resources Inc. (NYSE:CXO) (the “Company” or “Concho”) today reported financial and operating results for fourth quarter and full year 2014.

Highlights

  • Concho delivered record quarterly production of 11.5 million Boe, or 124.8 MBoepd, and achieved 31% crude oil production growth over the same quarter a year ago.
  • Full-year 2014 production increased 22% over 2013, to 40.9 million Boe. Crude oil production increased 25% year-over-year.
  • Earnings for the fourth quarter of 2014 totaled $1.15 per diluted share, or $0.88 per diluted share on an adjusted basis (non-GAAP).
  • Fourth quarter EBITDAX (non-GAAP) of $509.6 million brings full-year 2014 EBITDAX to a record $2.0 billion.

See “Supplemental Non-GAAP Financial Measures” at the end of this press release for a description of adjusted net income and EBITDAX (non-GAAP m