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May 2012 Investor Presentation – Concho Resources, Inc.

Concho Resources, Inc. · May 10, 2012 · 27 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. May 2012 Investor Presentation – Concho Resources, Inc. – slide 1
    May 2012 May Investor Presentation
  2. May 2012 Investor Presentation – Concho Resources, Inc. – slide 2
    Concho Resources Inc. Company Highlights Permian Basin Leading pure-play Permian Basin operator 386.5 MMBoe year-end 2011 proved reserves (+19% over 2010)1 Record results in 1Q 2012: Drilled 210 gross wells Produced 6.9 MMBoe…
  3. May 2012 Investor Presentation – Concho Resources, Inc. – slide 3
    Permian Basin Oil Production 2,500 600 Yearly Avg. Rig Count Permian Production Peak (73): 2,085 MBo/d 500 2,000 Rig Count 400 1,500 MBo/d 300 1,000 200 Low (07): 850 MBo/d 500 100 0 0 1982 1990…
  4. May 2012 Investor Presentation – Concho Resources, Inc. – slide 4
    Evolution of the Permian Basin The Beginning Discovery Phase Rapid production growth Slaughter (1937) Focused on shallow Wasson (1937) platform targets Seminole (1936) Targeted high permeability Westbrook 1 (1921) carbonate…
  5. May 2012 Investor Presentation – Concho Resources, Inc. – slide 5
    Evolution of the Permian Basin 1950s High Growth Phase Stanolind Oil fracs first well Salt Creek (1950) in the Hugoton Field (KS) in 1947 Empire Abo (1957) Production increased to 1.2 Kelly-Snyder (1950) MMBo/d by end of the…
  6. May 2012 Investor Presentation – Concho Resources, Inc. – slide 6
    Evolution of the Permian Basin 1960s Maturity Phase Production increased to 1.5 Salt Creek (1950) MMBo/d as secondary recovery becomes more widespread Empire Abo (1957) Kelly-Snyder (1950) Discovery of new fields diminishes;…
  7. May 2012 Investor Presentation – Concho Resources, Inc. – slide 7
    Evolution of the Permian Basin 1970s Decline Phase Production peaks at 2 MMBo/d in 73 Operators implement CO2 floods Majors begin to exit 28,752 new wells drilled during the 70s (21% are dry holes) Source: UTPB CEED,…
  8. May 2012 Investor Presentation – Concho Resources, Inc. – slide 8
    Evolution of the Permian Current Activity Renaissance Phase Technology expanding resource potential across the Permian Basin Yeso Lower Abo Wolfberry Activity targeting Wolfcamp unconventional reservoirs Cline/Penn…
  9. May 2012 Investor Presentation – Concho Resources, Inc. – slide 9
    A Leader in the Permian Basin Permian Gross Operated Production (MBoe/d)1 300 200 125 100 0 OXY CXO KMI APA CVX SD XTO PXD DVN COP Permian Horizontal Wells Drilled by Public Companies (2009 2012 YTD) 300 250 216 200…
  10. May 2012 Investor Presentation – Concho Resources, Inc. – slide 10
    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…
  11. May 2012 Investor Presentation – Concho Resources, Inc. – slide 11
    Track Record of Production & Reserve Growth Annual Production (MMBoe) Proved Reserves (MMBoe) 30 450 27.5 - 28.5 400 386.5 25 23.6 350 323.5 20 300 250 15.6 15 211.5 200 10.9 10 150 137.3 7.1 6.9 100 91.0 5.0 77.8 5…
  12. May 2012 Investor Presentation – Concho Resources, Inc. – slide 12
    Strong, Liquids-driven Profitability Unhedged Cash Margin Percentage1 vs. Average NYMEX Natural Gas Price (/MMbtu) Realized Price (/Boe) 66.04 62.49 61.68 65.96 70.84 80.07 72.01 73.24 73.39 5.07 Avg. NYMEX Gas 4.34 4.37…
  13. May 2012 Investor Presentation – Concho Resources, Inc. – slide 13
    Significant Leverage to Oil and Liquids 2011 Production Mix 7% Residue 2011 Revenue Gas Contribution 23.6 MMBoe 1.7 Billion 7% Dry Gas 38% Wet Gas 93% Liquids (77% Oil) 62% Oil 15
  14. May 2012 Investor Presentation – Concho Resources, Inc. – slide 14
    Reinvest High Margin Cash Flow into Robust ROR Projects Inventory Rates of Return1 Yeso Wolfberry Bone Spring sands Avalon shale 66% 56% 63% 46% 54% 52% 38% 45% 42% 33% 37% 34% 30% 30% 27% 24% 80/bbl; 4/mcf…
  15. May 2012 Investor Presentation – Concho Resources, Inc. – slide 15
    2012 Capital Budget and Activity 2012 Capital Budget: 1.37bn 2012 Drilling & Completion Budget: 1.25bn 4% 4% 33% Drilling & Completion New Mexico Shelf Facilities 40% Texas Permian Leasehold & G&G Delaware Basin 92% 27%…
  16. May 2012 Investor Presentation – Concho Resources, Inc. – slide 16
    Delaware Basin Overview Horizontal Delaware Basin play targeting Avalon shale, Bone Spring sands and Wolfcamp shale is one of the most active emerging liquids plays in the U.S. Additional targets: Delaware sands, Penn shale…
  17. May 2012 Investor Presentation – Concho Resources, Inc. – slide 17
    Texas Permian Midland Basin North Midland Basin New Play Early mover establishing large, contiguous position through greenfield leasing efforts Over 67,000 gross acres with high WI and actively leasing Multi-pay potential…
  18. May 2012 Investor Presentation – Concho Resources, Inc. – slide 18
    New Mexico Shelf Shelf Overview Currently operating 9 Yeso rigs, 1 Lower Abo rig Concho has drilled over 1,000 wells in the Yeso Vertical Yeso well characteristics: Drill and complete costs: 1.6mm EUR: 145 MBoe 30-day IP…
  19. May 2012 Investor Presentation – Concho Resources, Inc. – slide 19
    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…
  20. May 2012 Investor Presentation – Concho Resources, Inc. – slide 20
    Appendix 22
  21. May 2012 Investor Presentation – Concho Resources, Inc. – slide 21
    Northern Delaware Basin 1,417 locations1 targeting: Avalon shale Bone Spring sands Wolfcamp shale Additional targets: Delaware sands Penn shale Drill and complete: 5 - 9mm EURs: 300 - 700 MBoe 30-day IP: 300 1,500…
  22. May 2012 Investor Presentation – Concho Resources, Inc. – slide 22
    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…
  23. May 2012 Investor Presentation – Concho Resources, Inc. – slide 23
    EBITDAX Reconciliation Y ear Ended T hree Months Ended Decem ber 31, March 31, (in thousands) 2011 2012 2011 Net incom e…
  24. May 2012 Investor Presentation – Concho Resources, Inc. – slide 24
    Adjusted Net Income Reconciliation The following provides information that the Company believes may be useful to investors who follow the practice of some industry analysts who adjust company earnings and cash flows from operating…
  25. May 2012 Investor Presentation – Concho Resources, Inc. – slide 25
    Unhedged Cash Margin Reconciliation Years Ended Decem ber 31, ( in thousands, except per unit data) 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 2011 2010 1Q12 Net incom e (loss) 67 ,540 124,17 1 20,7 7 5 (8,116) 42,57 5 232,182 356,205…
  26. May 2012 Investor Presentation – Concho Resources, Inc. – slide 26
    Hedges as of May 2, 2012 2012 Second T hird Fourth Quarter Quarter Quarter T otal 2013 2014 2015 2016 Oil Swaps: V olume (Bbl) ........................ 3,949,500 3,67 8,500 3,341 ,500 1 0,969,500 1 1 ,365,000 4,057 ,000 692,000…
  27. May 2012 Investor Presentation – Concho Resources, Inc. – slide 27
    2012 Guidance Production: Oil equivalent (MMBoe) 27.5 - 28.5 % Oil 60% - 63% Price differentials to NYMEX: (excluding the effects of hedging) Oil (Bbl) 93% - 95% Natural gas (Mcf) 140% - 160% Operating costs and expenses: Lease…

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