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Q4 2011 Earnings Call – Concho Resources, Inc.

Concho Resources, Inc. · Feb 23, 2012 · 22 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. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 1
    February 2012 February Investor Presentation
  2. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 2
    Company Overview Ticker: Permian Basin New Mexico Market Cap1: 12.0 billion Enterprise Value2: 14.0 billion Average daily Q4 2011 production of 71.0 MBoepd 386.5 MMBoe year end 2011 proved reserves (100% Permian)3 969,026…
  3. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 3
    Permian Basin Activity Technology expanding New Mexico resource potential across the Permian Basin Yeso Grayburg Wolfberry Lower Abo San Andres Cline Clearfork Wolfcamp Approximately 31 rigs Mississipian currently…
  4. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 4
    Permian Basin Oil Production 2,500 600 Yearly Avg. Rig Count Permian Production Peak (73): 2,085 mbo/d 500 2,000 400 1,500 MBO/D 300 1,000 200 Low (07): 850 mbo/d 500 100 0 0 1998 1978 1975 1995…
  5. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 5
    2011 Highlights Achieved record levels of production and earnings during 2011 Drilled 810 gross wells Produced 23.6 MMBoe, a 51% increase over 2010 production EBITDAX1 of 1.3 billion, a 72% increase over 2010 Adjusted net income1…
  6. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 6
    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…
  7. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 7
    Strong Track Record of Production & Reserve Growth Annual Production (MMBoe) Proved Reserves (MMBoe) 35 450 400 386.5 30 27.5 -28.5 350 323.5 25 23.6 300 20 250 15.6 211.5 15 200 10.9 150 137.3 10 7.1 100 91.0 77.8…
  8. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 8
    Track Record of High Margin Profitability Unhedged Cash Margin (/Boe)1 % Margin 78% 74% 76% 78% 78% 80% 78% 76% % Margin % Margin FY 2010 77% FY 2011 78% 64.38 64.37 56.44 55.68 55.81 51.10 51.27 46.52 51.59 51.65 46.51…
  9. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 9
    Reinvest High Margin Cash Flow into Robust ROR Projects Inventory Rates of Return1 80% Yeso Wolfberry 66% 60% 56% 46% 54% 38% 45% 40% 37% 30% 20% 0% 80 /4 90 /4 100 /4 110 /4 1 IRRs based on the aggregate…
  10. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 10
    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%…
  11. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 11
    Delaware Basin Overview New Mexico Bone Spring play targeting Avalon shale, Bone Spring sands and Wolfcamp shale is one of the most active emerging oil plays in the U.S. Concho is a leading operator, participating in over 180 wells…
  12. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 12
    Northern Delaware Basin Horizontal Play Horizontal Delaware 1,417 locations targeting1: Avalon shale Bone Spring Wolfcamp shale Additional targets: Delaware sands Penn shale Drill and complete: 5 - 7mm EURs: 400 - 700…
  13. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 13
    Texas Permian Wolfberry Currently operating 14 rigs Wolfberry Portfolio Acquisitions Impact Average 18 rigs in 2012 12/31/2008 12/31/2010 12/31/111 Announced acquisition of over 750 Working Interest 28% 45% 54% Permian…
  14. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 14
    New Mexico Shelf Currently operating 9 Yeso rigs, 1 Abo rig Concho New Mexico Shelf Production History1 Concho has drilled over 1,000 wells in the Yeso 45,000 Yeso well characteristics: Acquisition of NM Drill and complete costs:…
  15. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 15
    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…
  16. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 16
    Appendix 18
  17. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 17
    Permian Basin Base of the Wolfcamp NEW MEXICO TEXAS Central Midland Delaware Platform Basin Basin DELAWARE CENTRAL MIDLAND PERIOD SERIES BASIN PERIOD SERIES PLATFORM PERIOD SERIES BASIN FORMATION FORMATION FORMATION…
  18. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 18
    EBITDAX Reconciliation T hree Months Ended Y ears Ended Six Decem ber 31, Decem ber 31, (in thousands) 2011 2010 2011 2010 Net incom e (loss)…
  19. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 19
    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…
  20. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 20
    Unhedged Cash Margin Reconciliation Y ears Ended Decem ber 31, ( in thousands, ex cept per unit data) 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 2011 2010 Net incom e (loss) .. 67 ,540 1 24,1 7 1 20,7 7 5 (8,1…
  21. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 21
    Hedges as of February 22, 2012 2012 First Second Third Fourth Quarter Quarter Quarter Quarter Total 2013 2014 2015 2016 Oil Swaps: Volume (Bbl)…
  22. Q4 2011 Earnings Call – Concho Resources, Inc. – slide 22
    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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