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BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc.

Concho Resources, Inc. · Dec 3, 2014 · 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 LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 1
    December 2014 Bank of America Merrill Lynch 2014 Leveraged Finance Conference
  2. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 2
    Concho Resources Inc. Leading Permian Basin Operator Company Overview Permian Basin Strategic acreage position Core assets in the Delaware Basin, Midland Basin and on the New Mexico Shelf 1.2mm gross (605,000 net) acres(2) 22,000…
  3. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 3
    Permian Basin Horizontal Drilling Activity Horizontal Rig Growth Since 1Q11 % Horizontal % Vertical 559 568 545 516 513 482 484 491 477 470 470 463 450 462 416 43% 41% 47% 373 49% 75% 70% 60% 55% 68% 64% 63% 80% 77% 82% 81% 82% 57% 59%…
  4. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 4
    Recent Highlights 3Q14 Total production exceeds 10 MMBoe Quarterly Crude Oil Growth (MBopd) Up 6% over 2Q14 and 20% over 3Q13 OPERATIONAL 3Q14 Production mix 64% oil 72.7 68.5 19th consecutive quarter of oil production growth 62.5 65.0…
  5. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 5
    Cash Margin Unhedged Cash Margin (/Boe)(1) 3Q14 Product Mix Midland / Cushing Crude Oil Wet Gas Basis Widening 75.20 72.27 71.84 70.82 36% 67.07 Realized Price 64% 77% 74% 75% 75% 74% Cash Margin 3Q14 Revenue Mix Crude Oil NGLs Dry Gas…
  6. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 6
    Northern Delaware Basin Well Performance (Boepd)(1) Deep 30-day avg. peak Boepd / 24-hour avg. peak 1,000 Lusk 3Q14 1,015 220 40 wells 1,576 343 2Q14 931 200 31 wells 1,420 304 Red Hills 1Q14 909 210 State Line 39 wells 1,488 344 CXO…
  7. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 7
    Program Efficiencies & Completion Improvements Northern Delaware Basin 2nd Bone Spring Upsized Completion vs. Base Completion(1) 160 +25% 140 AVG. STAGES Avg. Cumulative Production (MBoe) PER WELL 120 100 75% Increase Base Upsized…
  8. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 8
    Northern Delaware Basin Significant Inventory of High-Return Locations Northern Delaware Basin acreage: Average Peak Rate (Boepd) YE13 Gross Well Count (1) 365,000 gross (217,000 net) 30-Day 24-Hour Inventory Brushy Canyon 10 525 824…
  9. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 9
    2015 Capital Program Well Positioned to Deliver Growth & Flexible at Lower Prices Drilling & Completion Capital Program 2015 Drilling Program 14% 5 2015e Production 2.7Bn Growth: 39 Rigs 22% 10 D&C 28% - 32% (34 Hz) 64% 24…
  10. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 10
    The 2x3 Growth Plan Scalable Operational Efficiencies Drilling & Completion Optimization The 2x3 Growth Plan Production (MMBoe) 39 37 2x 2013 Production AVG. RIG COUNT 28%-32% 33.6 20%-24% 4Q14e 2015e +70% 2013 2014e 2015e 2016e…
  11. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 11
    Strong, Simple Balance Sheet Liquidity - 2.6bn Balance Sheet Overview as of 9/30/14 ( in millions) Undrawn Borrowing Commitments Cash and Cash Equivalents Cash and cash equivalents. 99 Total long-term debt: 0.1bn Credit facility, due…
  12. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 12
    Hedges (as of 11/4/2014) Oil Hedges (1) (2) 20 Oil Swaps Oil Basis Swaps 87.73 15 (3.73) MMBbl 90.57 10 92.49 5 (1.07) 87.00 0 4Q14 2015 2016 2017 Natural Gas Hedges (3) (4) (5) 30 Natural Gas Swaps Natural Gas Collars Natural Gas…
  13. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 13
    Key Takeaways Largest Permian pure play Significant inventory delivering industry-leading well results across the Permian Basin Program efficiencies and completion improvements maximizing well productivity and returns Low-cost…
  14. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 14
    Appendix
  15. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 15
    Northern Delaware Basin Brushy Canyon Brushy Canyon Testing across State Line Deep Avalon Avalon shale Lusk Testing slickwater completions 1st Bone Spring Pilot program in Red Hills testing well density 2nd Bone Spring 2nd Bone Spring…
  16. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 16
    Southern Delaware Basin Delivering strong well performance 9 new wells, including 5 extended laterals, in 3Q14 with 30+ days of production (avg. lateral length 5,607) North Harpoon 30-day avg. peak rate: 991 Boepd (79% oil) 24-hour…
  17. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 17
    Midland Basin Core Midland Basin acreage position with multi-zone potential 2,500 horizontal Spraberry and Wolfcamp locations Currently running 5 horizontal rigs Strong well performance 9 new wells in 3Q14 with 30+ days of production…
  18. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 18
    New Mexico Shelf Deep inventory of high return, low cost locations Horizontal Yeso: 1,250 locations Well cost: 3.5mm Vertical Yeso: 1,100 locations Well Cost: 1.5mm Current program Running 2 horizontal rigs, targeting Paddock and…
  19. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 19
    Midstream Strategy Develop midstream solutions to provide access to multiple markets Alpha Crude Connector (ACC) Formed midstream JV to develop crude oil gathering and storage system in the northern Delaware Basin 400-miles of crude…
  20. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 20
    Annual Guidance (as of 11/5/2014) 2014 2015 Production 4Q14 Production: Year-over-year growth 20% - 24% 28% - 32% 122 127 MBoepd Oil mix 62% - 64% 63% - 65% Price realizations, excluding commodity derivatives (% of NYMEX) Crude oil…
  21. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 21
    Hedges (as of 11/4/2014) 4Q14 2015 2016 2017 Oil Swaps: (a) V olume (Bbl) ................................................................... 4,633,000 1 5,262,000 9,349,000 1 68,000 Price per Bbl…
  22. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 22
    EBITDAX Reconciliation T hree Nine T welv e Months Ended Months Ended Months Ended Septem ber 30, Septem ber 30, Septem ber 30, (in thousands) 2014 2013 2014 2013 2014 Net incom e…
  23. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 23
    Adjusted Net Income T hree Nine Months Ended Months Ended Septem ber 30, Septem ber 30, (in thousands, ex cept per share am ounts) 2014 2013 2014 2013 Net incom e - as reported…
  24. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 24
    Adjusted Cash Flows Nine Months Ended Septem ber 30, (in thousands) 2014 2013 Adjustm ents for certain non-cash and unusual item s: Cash flows from operating activ ities…
  25. BAML LEVERAGED FINANCE CONFERENCE – Concho Resources, Inc. – slide 25
    Unhedged Cash Margin 2013 2014 ( in thousands, ex cept per unit data) 3Q13 4Q13 1Q14 2Q14 3Q14 Net incom e............................................................................. 30,421 1 05,7 89 91 ,307 1 1 ,7 69 305,203 Ex…

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