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BAML Finance Conference – Concho Resources, Inc.

Concho Resources, Inc. · Dec 3, 2013 · 25 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. BAML Finance Conference – Concho Resources, Inc. – slide 1
    December 3, 2013 Bank of America Merrill Lynch 2013 Leveraged Finance Conference
  2. BAML 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 ratio2 Results in 3Q 2013: Drilled 124 gross wells…
  3. BAML Finance Conference – Concho Resources, Inc. – slide 3
    Building Momentum Delivered strong cash flow and earnings in 3Q13 EBITDAX1 (non-GAAP): 456mm (+7% over 2Q13, +18% over 3Q12) Adjusted net income1 (non-GAAP): 111mm (1.06 per fully-diluted share) Consistent, oil-weighted production…
  4. BAML Finance Conference – Concho Resources, Inc. – slide 4
    Low Cost, High Margin Operations Unhedged Cash Margin1 3Q13 Product Mix 80 75.20 Crude Oil Wet Gas Midland / Cushing Basis Widening 70 67.85 Realized Price (/Boe) 63.43 63.74 61.02 61.05 38% 60 62% 50 77% Cash Margin 74%…
  5. BAML Finance Conference – Concho Resources, Inc. – slide 5
    Delaware Basin The Growth Engine Horizontal Delaware Basin Production Delaware Basin Operations Production (MBoepd) Average Rig Count Horizontal Delaware Basin remains highest growth core 35.0 33.7 25 area 31.7 +6% over 2Q13 +111%…
  6. BAML Finance Conference – Concho Resources, Inc. – slide 6
    Why the Delaware Basin Permian Basin Horizontal Wells with Peak Month Oil Rate 500 Bpd (first production after 1/1/12) 301 By Basin 47 Delaware Basin Midland Basin % Total1 30% 11% % Total CXO 71 48% Peer 1 42 19% Peer…
  7. BAML Finance Conference – Concho Resources, Inc. – slide 7
    Northern Delaware Basin Robust Activity Recent Developments Northern Delaware Basin Drilled and completed 211 Deep Brushy Canyon wells since 1Q11 primarily targeting 6 unique zones Avalon Shale Lusk 1st Bone Spring Recent…
  8. BAML Finance Conference – Concho Resources, Inc. – slide 8
    Northern Delaware Basin Consistent Performance Well Performance 211 Wells Drilled Since 1Q11 30-Day IP Rate (Boepd) 24-Hour Peak Rate (Boepd) Avg. Lateral % Oil1 3Q13 777 3Q13 1,352 4,210' 76% 27 wells 2Q13 8572Q13 1,407 4,402'…
  9. BAML Finance Conference – Concho Resources, Inc. – slide 9
    Northern Delaware Basin Deep Inventory Mulit-Zone Well Count1 Target Zone Average Rate (Boepd) YE12 Inventory (30-Day / 24-Hr Peak) 576 / 1,030 Pending 2 56 690 / 1,251 1,016 12 4,000 5,000 Gross Interval 108 499 / 989…
  10. BAML Finance Conference – Concho Resources, Inc. – slide 10
    Southern Delaware Basin Improving Well Performance Southern Delaware Basin Southern Delaware Basin Activity North Harpoon 200 Upper Wolfcamp drilling locations initially identified on derisked acreage Over 50% of locations assume…
  11. BAML Finance Conference – Concho Resources, Inc. – slide 11
    Midland Basin Advancing Horizontal Development Midland Basin Horizontal Wolfberry Horizontal Wolfberry Activity 2013 drilling activity testing multiple horizontal concepts across core Wolfberry play: 40-acre Wolfberry 20-acre…
  12. BAML Finance Conference – Concho Resources, Inc. – slide 12
    Strong, Simple Balance Sheet Liquidity - 2.5bn Credit Facility Balance Sheet Overview ( in millions) Available Liquidity Current Amount Outstanding Total long-term debt at September 30, 2013: Credit facility, due 2016 208 0.2bn…
  13. BAML Finance Conference – Concho Resources, Inc. – slide 13
    Hedges as of 11/6/2013 Oil Hedges 1 18 Oil Swaps Oil Basis Swaps 2 91.96 16 14 86.82 12 MMBbl 10 (0.46) 8 6 96.08 4 (1.12) 2 88.31 87.00 0 4Q13 2014 2015 2016 2017 Natural Gas Hedges Natural Gas Swaps 3 Natural…
  14. BAML Finance Conference – Concho Resources, Inc. – slide 14
    Launching Three-Year Acceleration Plan Execution Goals Exceptional asset performance 1 Double production by 2016 Driven by high-margin crude oil growth Deep, multi-year inventory 2 Pursue operational efficiencies…
  15. BAML Finance Conference – Concho Resources, Inc. – slide 15
    2014 Capital Budget Initial Acceleration Phase Total Capital Budget: 2.3bn Drilling Capital Allocation: 2.0bn Drilling & Completion Facilities Leasehold & G&G Delaware Basin Texas Permian New Mexico Shelf 4% 7% 7% 90% Horizontal…
  16. BAML Finance Conference – Concho Resources, Inc. – slide 16
    Three-Year Accelerated Growth Plan Doubling Production Production Growth Profile (MMBoe) +67.0 Significant oil-weighted Three year plan to growth opportunity on existing double production by asset base 2016 Operational scale to…
  17. BAML Finance Conference – Concho Resources, Inc. – slide 17
    Appendix
  18. BAML Finance Conference – Concho Resources, Inc. – slide 18
    Permian Basin Base of the Wolfcamp Delaware Basin Central Platform Midland Basin DELAWARE CENTRAL MIDLAND PERIOD SERIES BASIN PERIOD SERIES PLATFORM PERIOD SERIES BASIN FORMATION FORMATION FORMATION TANSILL TANSILL…
  19. BAML Finance Conference – Concho Resources, Inc. – slide 19
    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…
  20. BAML Finance Conference – Concho Resources, Inc. – slide 20
    Permian Basin NGL Takeaway Capacity Existing Takeaway NGL Pipelines MBblpd Existing NGL Infrastructure 707 Inflows from Rockies Recent NGL Infrastructure Additions Lone Star West Texas 210 DCP Sand Hills 200 Texas Express* 280…
  21. BAML Finance Conference – Concho Resources, Inc. – slide 21
    EBITDAX Reconciliation Historical EBITDAX T hree T hree Nine Months Ended Months Ended Months Ended June 30, Septem ber 30, Septem ber 30, (in thousands) 2013 2013 2012 2013 2012 Net incom e…
  22. BAML Finance Conference – Concho Resources, Inc. – slide 22
    Adjusted Net Income Reconciliation Historical Adjusted Net Income T hree Nine Months Ended Months Ended Septem ber 30, Septem ber 30, (in thousands, ex cept per share am ounts) 2013 2012 2013 2012 Net incom e - as reported…
  23. BAML Finance Conference – Concho Resources, Inc. – slide 23
    Unhedged Cash Margin Reconciliation Historical Unhedged Cash Margin 2012 2013 ( in thousands, ex cept per unit data) 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 Net incom e . 31 9,297 5,988 7 5,287 30,093 84,7 00 30,421 Ex ploration and…
  24. BAML Finance Conference – Concho Resources, Inc. – slide 24
    Hedges as of 11/6/2013 Current Hedges 4Q13 2014 2015 2016 2017 Oil Swaps: (a) V olume (Bbl) .......................................... 4,7 64,000 1 5,565,000 1 2,092,000 429,000 1 68,000 Price per Bbl…
  25. BAML Finance Conference – Concho Resources, Inc. – slide 25
    Production and Operating Guidance Annual Guidance 2013 2014 Production: Annual Production 33.5 - 34.0 MMBoe 1 8% - 22% % Oil 62% 62% - 64% Price differentials to NY MEX (90/Bbl; 4/MMBtu): (ex cluding the effects of hedging)…

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