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BAML Leveraged Finance Conference – Concho Resources, Inc.

Concho Resources, Inc. · Dec 1, 2011 · 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. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 1
    December 1, 2011 Bank of America Merrill Lynch Leveraged Finance Conference
  2. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 2
    Company Overview Ticker: Permian Basin New Mexico Market Cap1: 9.8 billion Enterprise Value2: 11.6 billion Average daily Q3 2011 production of 68.6 MBoepd 342.6 MMBoe mid-year 2011 proved reserves (100% Permian)3 Texas…
  3. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 3
    2011 YTD Highlights Achieved record levels of production and earnings during Q3 2011 Drilled 223 gross wells Produced 6.3 MMBoe, a 73% increase over Q3 2010 production (continuing operations) EBITDAX1 of 349.6 million, a 90%…
  4. BAML Leveraged Finance Conference – 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 2010 1982 1980…
  5. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 5
    Permian Basin Activity Expansion Technology expanding New Mexico resource potential across Grayburg the Permian Basin Yeso San Andres Wolfberry Lower Abo Clearfork Wolfcamp Approximately 450 rigs Cline Mississipian currently…
  6. BAML Leveraged Finance Conference – 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. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 7
    Strong Track Record of Production & Reserve Growth Annual Production (MMBoe) Proved Reserves (MMBoe) 30 400 27.0 - 28.0 342.6 350 25 323.5 22.8 - 23.3 300 20 17.1 250 15.6 211.5 15 200 10.9 150 137.3 10 7.1 100 91.0 5.0…
  8. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 8
    Reinvest High Margin Cash Flow into Robust ROR Projects Unhedged Cash Margin (/Boe)1 Inventory Rates of Return2 Yeso Wolfberry 70% 65% 9 Months Sep-11 60% Operating Revenue 74.28 54% Cash Operating Costs: 50% 55% 45% LOE…
  9. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 9
    2012 Capital Budget and Activity 2012 Capital Budget: 1.3bn 2012 Drilling & Completion Budget: 1.2bn 4% 4% 35% Drilling & Completion New Mexico Shelf Facilities Texas Permian 42% Leasehold & G&G Delaware Basin 92% 23%…
  10. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 10
    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 185 wells…
  11. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 11
    Northern Delaware Basin Horizontal Play Horizontal Delaware 1,039 locations targeting1: Avalon shale Bone Spring sands Wolfcamp shale Additional targets: Delaware sands Penn shale Drill and complete: 5 - 7mm EURs: 400 -…
  12. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 12
    Southern Delaware Basin Vertical Play Vertical Delaware 332 locations targeting the Wolfbone play Bone Spring Wolfcamp shale Horizontal potential Drill and complete: 4 - 6mm EURs: 200 - 400 MBoe 30-day IP: 200 - 450…
  13. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 13
    Texas Permian Wolfberry Currently operating 13 rigs Wolfberry Portfolio Acquisition Impact 12/31/2010 6/30/2011 Recently acquired 400 Wolfberry locations in Upton County Working Interest 45% 50% Permian Additional…
  14. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 14
    New Mexico Shelf Currently operating 10 Yeso rigs, 1 Abo rig Concho New Mexico Shelf Production History1 Concho has drilled over 1,000 wells in the Yeso 40,000 Yeso well characteristics: Drill and complete costs: 1.6mm 35,000…
  15. BAML Leveraged Finance Conference – 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. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 16
    Appendix 18
  17. BAML Leveraged Finance Conference – 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. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 18
    EBITDAX Reconciliation T hree Months Ended Nine Months Ended Septem ber 30, Septem ber 30, (in thou sands) 2011 2010 2011 2010 Net incom e…
  19. BAML Leveraged Finance Conference – 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. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 20
    Cash Margin Reconciliation The following table provides a reconciliation of income before income taxes (GAAP) to unhedged cash margin (non-GAAP). Nine Months Ended Septem ber 30, 2011 (i n t h ou sa n ds) (per BOE) Incom e…
  21. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 21
    Hedges as of November 2, 2011 Fourth Quarter 2011 2012 2013 2014 2015 Oil Swaps: Volume (Bbl)…
  22. BAML Leveraged Finance Conference – Concho Resources, Inc. – slide 22
    2012 Guidance Production: Oil equivalent (MMBoe) 27.0 - 28.0 Oil (MMBbls) 17.3 - 17.9 Natural gas (Bcf) 58.3 - 60.5 Price differentials to NYMEX: (excluding the effects of hedging) Oil (Bbl) 93% - 95% Natural gas (Mcf) 140% -…

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