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JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc.

Concho Resources, Inc. · Feb 25, 2013 · 26 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 1
    February 2013 J.P. Morgan High Yield & Leveraged Finance Conference
  2. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 2
    Concho Resources Inc. Company Highlights Permian Basin Leading pure-play Permian Basin operator 447 MMBoe year-end 2012 estimated proved reserves1 422% reserve replacement ratio Results in 4Q 2012: Drilled 196 gross wells…
  3. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 3
    Permian Basin Current Activity Wolfberry Technology expanding Wolfcamp resource potential across Cline/Penn the Permian Basin Mississippian Yeso Activity targeting unconventional reservoirs Approximately 440 rigs currently…
  4. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 4
    Operational Strategy Continued focus on the Permian Basin Exposed to some of the most prolific oil plays in the U.S. Capitalize on the strategic benefits of being one of the largest operators in the Permian Basin Committed to…
  5. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 5
    Track Record of Production & Reserve Growth Annual Production (MMBoe) Proved Reserves (MMBoe) 447.2 33.4 - 34.8 386.5 29.8 323.5 23.6 211.5 15.6 10.9 137.3 7.1 91.0 5.0 2007 2008 2009 2010 2011 2012 2013e…
  6. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 6
    Cash Margin Unhedged Cash Margin Percentage1 vs. Natural Gas Price (/MMbtu) 83 80.07 12 72.01 73.24 73.39 73 70.84 Realized Price (/Boe) 10 63.43 63.74 63 61.02 8.41 8.31 53 8 78% 7.16 Cash Margin 6.54 80% 76% 78% Avg.…
  7. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 7
    Significant Leverage to Oil 4Q12 Production Mix 4Q12 Revenue Contribution 7% Residue Gas 8.2 MMBoe 501.6 million 7% Dry Gas 40% Wet Gas 93% Liquids (80% Oil) 60% Oil 9
  8. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 8
    Reinvest High Margin Cash Flow into Robust ROR Projects Inventory Rates of Return1 Bone Spring Yeso (Horizontal) Yeso (Vertical) Avalon Shale Wolfberry (40-acre) 76% 60% 59% 50% 56% 46% 41% 47% 34% 46% 34% 39% 39%…
  9. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 9
    2013 Capital Budget and Activity 2013 Capital Budget: 1.6bn 2013 Drilling & Completion Budget: 1.4bn Drilling & Completion Facilities Leasehold & G&G Delaware Basin Texas Permian New Mexico Shelf 7% 8% 21% 67% Horizontal 54%…
  10. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 10
    Northern Delaware Basin Active Horizons Overview Bone Spring sand (1st/2nd) 4,212 locations1 targeting: Avalon shale Active Horizons Bone Spring sand (2nd/3rd) Bone Spring sands Wolfcamp shale Other targets: Delaware sands…
  11. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 11
    Southern Delaware Basin Overview 150,000 gross (130,000 net) acre position Target horizons: Delaware sands Avalon shale Bone Spring sands Wolfcamp shale Encouraging early production Four horizontal wells completed with 30…
  12. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 12
    Midland Basin Midland Basin Activity Technical team has drilled over 1,000 vertical wells in core Wolfberry play Continue to test opportunities in eastern Midland Basin Average 14 rigs during 2013 13 vertical 1 horizontal…
  13. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 13
    New Mexico Shelf Shelf Overview Will average 5 rigs in 2013 3 horizontal Yeso rigs 2 vertical Yeso rigs Concho has drilled over 1,000 wells in the Yeso Expanding the play boundary through horizontal development Potential to…
  14. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 14
    Long History of Capital Discipline Adjusted Cash Flows1 vs. Non-Acquisition Capital Expenditures ( in millions) Non-Acquisition Capital Expenditures Adjusted Cash Flows 5,000 4,000 3,000 2,000 1,000 0…
  15. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 15
    Strong, Simple Balance Sheet Liquidity - 2.5bn Credit Facility Balance Sheet Overview ( in millions) Available Liquidity 1 Current Amount Outstanding Total long-term debt at December 31, 2012: Credit facility, due 2016. 304 0.3bn…
  16. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 16
    Hedges as of 2/25/2013 Current Oil Swaps 1 Oil Basis Swaps Oil Swaps2 16,000 95.67 14,000 12,000 91.57 10,000 (1.23) MBbl 8,000 6,000 95.84 4,000 95.84 95.57 95.34 (1.23) (1.22) (1.23) 2,000 86.69 88.31…
  17. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 17
    Why Invest in Concho Leading Permian producer with focused operations in three core plays Yeso, Delaware Basin and Wolfberry Large, predominately oil and liquids-rich resource base Significant potential for reserve and production…
  18. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 18
    Appendix
  19. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 19
    2013 Organic Production Growth Organic Production Reconciliation (MMBoe) 33.4 - 34.8 A FY12 actual production 1.2 2.0 Includes 6 months of production from Three 29.8 Rivers 29.0 Includes 12 months of production from divested…
  20. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 20
    Permian Basin Base of the Wolfcamp Central Delaware Platform Midland Basin Basin DELAWARE CENTRAL MIDLAND PERIOD SERIES BASIN PERIOD SERIES PLATFORM PERIOD SERIES BASIN FORMATION FORMATION FORMATION TANSILL TANSILL…
  21. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 21
    Permian Basin Oil Takeaway Capacity Existing Takeaway Borger Cushing Refineries MBopd Big Spring 70 Holly Frontier Navajo 100 Borger Refinery (net from Permian) 115 Western 125 Wichita Falls Total 410 Oil Pipelines MBopd…
  22. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 22
    Permian Basin NGL Takeaway Capacity Existing Takeaway MBblpd Existing NGL Infrastructure 707 Inflows from Rockies Expansion Capacity NGL Expansions Completion Date MBblpd Lone Star West Texas Pipeline 1Q13 210 DCP Sand Hills…
  23. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 23
    EBITDAX Reconciliation Historical EBITDAX Pro Form a (a) T hree Months Ended Y ears Ended Y ear Ended Decem ber 31, Decem ber 31, Decem ber 31, (in thousands) 2012 2011 2012 2011 2012 Net incom e (loss)…
  24. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 24
    Unhedged Cash Margin Reconciliation Historical Unhedged Cash Margin ( in thousands, ex cept per unit data) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Net incom e (loss) 42,57 5 232,1 82 356,205 (82,825) 31 ,1 1 7 31 9,297 5,988 7 5,287…
  25. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 25
    Adjusted Cash Flow Reconciliation Historical Adjusted Cash Flow The Company believes adjusted cash flows may be useful to investors who follow the practice of some industry analysts who adjust reported cash flow from operating…
  26. JPMorgan Chase Cos Global High Yield & Leveraged Finance Conference – Concho Resources, Inc. – slide 26
    2013 Guidance Concho 2013 Production and Operating Guidance Production: Oil equiv alent (MMBoe) 33.4 - 34.8 % Oil 60% - 62% Price differentials to NY MEX: (ex cluding the effects of hedging) Oil (Bbl) 93% - 95% Natural gas…

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