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Howard Weil 39th Annual Energy Conference – Concho Resources, Inc.

Concho Resources, Inc. · Mar 28, 2011 · 28 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. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 1
    HOWARD WEIL ENERGY CONFERENCE March 28, 2011
  2. Howard Weil 39th Annual Energy Conference – 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. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 3
    Ticker: Market Cap1: 11.1 billion Enterprise Value2: 12.8 billion Average daily Q4 2010 production of 54.4 MBoepd3 323.5 MMBoe year end 2010 proved reserves (98% Permian)4 788,367 gross (374,743 net) acres5 Approximately…
  4. Howard Weil 39th Annual Energy Conference – 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. Howard Weil 39th Annual Energy Conference – 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 31 rigs…
  6. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 6
    Most of the active plays Yeso/ Lower Abo 22 Rigs are the result of modern technology Completions San Andres/ Clearfork Horizontal drilling 14 Rigs +/- 330 rigs running in the Wolfberry/ Spraberry Permian Basin 132 Rigs 150 in…
  7. Howard Weil 39th Annual Energy Conference – 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. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 8
    Daily Production (Mbo/d) Permian Peak (2,085 mbo/d) Alaska Peak (2,017 mbo/d) Projected 2010 Permian Rate (900 mbo/d) Daily Production change since 2007: Permian1: + 6% Projected 2010 Alaska Rate Alaska : 2 - 17%…
  9. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 9
    Year Ended December 31, 2010 Unhedged Cash Margin (/Boe)1 50.00 CXO 45.862 45.00 40.00 35.00 30.00 Median3: 30.88 25.00 20.00 15.00 10.00 5.00 0.00 Note: Peers include BEXP, DNR, CLR, PXD, PXP, RRC, SD, SM, SWN,…
  10. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 10
    Return Analysis1 80% Wolfberry Yeso 70% 67% 60% 56% 50% 51% 46% 40% 41% 36% 30% 33% 25% 20% 10% 0% 60.00 /4.50 70.00 /4.50 80.00 /4.50 90.00/4.50 1 IRRs based on the aggregate economics of the total…
  11. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 11
    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…
  12. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 12
    800,000 700,000 600,000 in thousands 500,000 400,000 300,000 200,000 100,000 - 2007 2008 2009 2010 1 Costs incurred without acquisitions and ARO Adjusted cash flows 1 The Company believes adjusted cash…
  13. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 13
    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…
  14. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 14
    New Mexico Shelf Delaware Basin 13 rigs currently drilling 5 rigs currently drilling 12 rigs in Yeso 7% of proved reserves1 1 rig in Lower Abo Activity concentrated in the 62% of proved reserves1 Bone Spring / Avalon Shale 71% of…
  15. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 15
    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…
  16. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 16
    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…
  17. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 17
    18
  18. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 18
    December 31, (in thousands) 2010 Assets Total current assets…
  19. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 19
    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…
  20. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 20
    Currently operating 14 rigs in the Wolfberry Over 8 years of drilling inventory at 2011 pace 210 wells to be drilled in 2011 7,500 to 11,000 vertical wells Technical team has drilled over 1,000 wells Further bolt-on consolidation…
  21. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 21
    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…
  22. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 22
    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…
  23. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 23
    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 3,480,000 1,248,000 600,000 NYMEX price (Bbl) (a)…
  24. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 24
    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…
  25. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 25
    Three Months Ended Years Ended December 31, December 31, (in thousands) 2010 2009 2010 2009 Net income (loss) .. (8,116) 16,879 204,370 (9,802) Exploration and abandonments . 4,676 462 10,324 10,632 Depreciation, depletion and…
  26. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 26
    Year Ended December 31, ( in thousands, except per unit amounts) 2010 Income from continuing operations before income taxes . 305,683 Exploration and abandonments . 10,324 Depreciation, depletion and amortization 249,850…
  27. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 27
    Three Months Ended Years Ended December 31, December 31, (in thousands, except per share amounts) 2010 2009 2010 2009 Net income (loss) - as reported .. (8,116) 16,879 204,370 (9,802) Adjustments for certain non-cash items:…
  28. Howard Weil 39th Annual Energy Conference – Concho Resources, Inc. – slide 28
    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…

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