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Credit Suisse Group Energy Summit – Concho Resources, Inc.

Concho Resources, Inc. · Feb 11, 2011 · 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. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 1
    CREDIT SUISSE ENERGY SUMMIT February 11, 2011
  2. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 2
    The SEC requires oil and gas companies, in their filings with the SEC, to disclose proved reserves, which are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable…
  3. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 3
    Ticker: New Mexico Market Cap1: 9.8 billion Tatum Northwest Basin Shelf Enterprise Value2: 11.5 billion Midland Basin ARTESIA Average daily Q4 2010 production of 54.4 MBoepd3 323.5 MMBoe year end 2010 proved reserves (98%…
  4. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 4
    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 growth from…
  5. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 5
    2010 production of 15.6 MMBoe, a 42% increase over 2009 Organic growth of 32% over 2009 Year end proved reserves of 323.5 MMBoe, a 53% increase over year end 2009 Reserve replacement of 858% Drilled 662 gross wells in 2010…
  6. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 6
    Most of the active plays Yeso/ Lower Abo are the result of modern 22 Rigs technology Completions Horizontal drilling San Andres/ Clearfork 14 Rigs Wolfberry/ Spraberry +/- 330 rigs running in the 132 Rigs Permian Basin 150 in…
  7. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 7
    35 31 30 5 Bone Spring 25 Number of Active Operated Drilling Rigs 13 20 Shelf 15 10 13 Wolfberry 5 0 CXO Note: Other operators include only public company operators (APA, CHK, CVX, DVN, EGN, LINE,…
  8. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 8
    Nine Months Ended September 30, 2010 Unhedged Cash Margin (/Boe)1 50.00 CXO 45.212 45.00 40.00 35.00 Median3: 32.72 (/Boe) 30.00 25.00 20.00 15.00 10.00 5.00 - Note: Peers include BEXP, DNR, CLR, OAS, PXD,…
  9. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 9
    Return Analysis1 Yeso well Wolfberry well 90% 80% 79% 73% 70% 66% 60% 60% 53% 50% 48% 42% 40% 36% 30% 20% 10% 0% 60 Oil /4.50 Gas 70 Oil /4.50 Gas 80 Oil /4.50 Gas 90 Oil /4.50 Gas 1 IRRs based on the…
  10. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 10
    2011 capital budget of 1.1 billion Average 29 rigs in 2011 2011 Drilling Capital 12 rigs in the Yeso to drill approximately 540 wells 5 rigs in the Bone Spring to drill New Mexico approximately 50 wells Shelf 62% 1 rig in the…
  11. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 11
    1,600,000 1,400,000 1,200,000 in thousands 1,000,000 800,000 600,000 400,000 200,000 - 2007 2008 2009 1st Nine Months 2010 Total Capex excluding acquisition cost Adjusted cash flow from operations 1 1…
  12. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 12
    Annual Production (MMBoe) Proved Reserves (MMBoe) 350 25.0 323.5 22.5 - 23.0 300 20.0 250 15.6 211.5 15.0 200 MMBoe MMBoe 10.9 150 137.3 10.0 7.1 91.0 100 77.8 5.0 5.0 3.8 50 1.2 12.5 17.8 0.1 0.0 0 2004…
  13. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 13
    New Mexico Shelf Delaware Basin 13 rigs currently drilling New Mexico 5 rigs currently drilling 12 rigs in Yeso 7% of proved reserves1 1 rig in Lower Abo Northwest Tatum Activity concentrated in the 62% of proved reserves1 Basin Bone…
  14. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 14
    NEW MEXICO Bone Spring is one of the most active and promising Formation Lith Reservoir Name Prod Delaware Mtn. Brushy Canyon emerging oil plays in the Bone Spring Limestone Leonard Shale U.S. Upper Avalon Shale…
  15. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 15
    900% 160.00 800% 140.00 700% 120.00 600% Share Price Performance 100.00 500% Oil Price CXO 80.00 Peer Group 400% Dow Jones WTI Oil Price 60.00 300% 40.00 200% 20.00 100% 0% - Note: Peer…
  16. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 16
    17
  17. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 17
    Acquired a largely undeveloped set of properties which provide a multi-year inventory of drilling opportunities Marbobs New Mexico Shelf assets significantly increase Conchos existing New Mexico Shelf drilling inventory Concho has…
  18. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 18
    NEW MEXICO Geographically close to the New Mexico Yeso Approximately 60,000 net acres at 12/31/10 Tatum Drilled 22 operated wells, including discovery Northwest Basin Shelf well in early 2007, and participated as a non- operator…
  19. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 19
    Currently operating 13 rigs in the Wolfberry Over 8 years of drilling inventory at 2011 pace GAINES DAWSON BORDON SCURRY 210 wells to be drilled in 2011 7,500 to 11,000 vertical wells Wolfberry Wolfberry Trend Trend ANDREWS MARTIN…
  20. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 20
    Central Basin Eastern Platform Wolfberry Fairway Shelf A B 7,500 8,500 Wolfcamp 9,500 shelf edge Leonard shelf carbonates 10,500 Wolfcamp shelf carbonates Spraberry turbidites (primary target) Wolfcamp debris flows…
  21. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 21
    Liquidity Profile ( in billions) 0.6 1.4 0.2 0.1 0.5 Liquidity at Permian December December Senior Notes Liquidity at Sept. 30, 2010 Asset Divestiture Equity Offering Offering December 31, 2010 1 Pro forma for acquisition…
  22. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 22
    2011 First Second Third Fourth Quarter Quarter Quarter Quarter Total 2012 2013 2014 2015 Oil Swaps Volume (Bbl) 2,919,436 2,721,436 2,480,436 2,308,436 10,429,744 7,961,000 1,380,000 1,248,000 600,000 NYMEX price (Bbl) (a) 83.03…
  23. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 23
    Production: Oil equivalent (MMBoe) 22.5 - 23.0 Oil (MMBbls) 14.7 - 15.0 Natural gas (Bcf) 47.0 - 47.5 Price differentials to NYMEX: (excluding the effects of hedging) Oil (Bbl) 93 - 95% Natural gas (Mcf) 120 - 140% Operating costs…
  24. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 24
    Three Months Ended Nine Months Ended September 30, September 30, (in thousands) 2010 2009 2010 2009 Net income (loss) .. 20,775 19,762 212,486 (26,681) Exploration and abandonments . 3,625 2,776 5,798 10,195 Depreciation, depletion…
  25. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 25
    The Company believes adjusted net income may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings to match realizations to production settlement months and make other adjustments to…
  26. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 26
    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 activities to match realizations to production settlement months. The…
  27. Credit Suisse Group Energy Summit – Concho Resources, Inc. – slide 27
    Cash margin per BOE (as defined below) is presented herein, and reconciled to the generally accepted accounting principle (GAAP) measure of income (loss) before income taxes. Management believes this presentation may be helpful to…

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