Lehman Brothers CEO Energy / Power Conference September 4, 2008 1
Company Overview Map of operations Ticker: ND Market Cap1: 2.8 billion NM AR Midland Enterprise Value2: 3.5 billion Core operating area TX Emerging resource plays Headquarters New Mexico Shelf properties Texas Permian…
Recent Highlights Revenues of 244.1 million in 1st half '08; 93% above 1st half '07 of 126.4 million Net cash provided by operating activities in 1st half '08 of 162.9 million, a 156% increase over 1st half '07 1 EBITDAX in 1st…
Margin Analysis 1st Six Months 2008 Cash Margin1 Strong price realizations due to 60/40 oil/gas mix and liquid content in gas stream Favorable cost structure in core area due to concentration of assets Stable differentials…
Overview of Henry Petroleum Acquisition 6
Transaction Overview Concho Resources acquired Henry Petroleum plus additional interests for approximately 588 million Funded by borrowings under amended senior credit facility and the proceeds from common stock private placement…
Strategic Rationale Established second proven growth engine within the Permian Basin Technical/operational synergies with Southeast New Mexico Shelf asset Strategic Increased portfolio of identified opportunities by 68% (2,500 to…
CXO Assets and Henry Petroleum Assets SENM Shelf Artesia W. Wolfberry E. Wolfberry Midland Spraberry Trend CXO Acreage Henry Petroleum Wolfberry Acreage 9
Henry Petroleum Acquisition Key Takeaways Established second proven growth engine in the Permian Basin Immediately accretive to recurring EPS and CFPS Incremental capital development plan is selffunding Enhanced Conchos growth…
Combined Concho Assets 11
Concho Assets (Post Henry Acquisition) New Mexico Shelf NM TX 782 Bcfe proved reserves1 61% of proved reserves 61% oil Majority of Northwest Shelf 56% proved developed opportunities < 7,000 Tatum Basin June 08 pro forma average…
Southeast New Mexico Shelf Core asset from Chase acquisition NM TX Producing approximately 60% of Companys total production1 Northwest 100,603 gross (49,306 net) acres Shelf Tatum Historic production from shallower zones including…
Southeast New Mexico Shelf Approximately 270 million (68% of 2008 capital budget) allocated to Shelf properties NM TX 132 drill wells Northwest 96 Paddock add pays Shelf Tatum Basin 63 Paddock restimulations Midland Basin 39…
Southeast New Mexico Shelf Concho Leasehold Acquired Wells + Other Producers 2006/07 Drilling Program 2008 Drilling Program PUD Locations Unproved Locations Total Proved1 Large Conventional Resource Additional Potential 51%…
Texas Permian - Wolfberry Over 500 Wolfberry wells drilled 8 Rigs currently drilling, executing a 9 year drilling schedule Approximately 1,600 drilling locations on 80 and 40 acre spacing Approximately Spraberry 300…
Type Curve and Return Analysis Wolfberry Well Yeso Well Wolfberry Yeso Initial Production: 90 BO/D + 230 MCF/D Initial Production: 145 BO/D + 346 MCF/D Final Decline Rate: 5% Final Decline Rate: 8% Gross EUR: 97 MBO + 321 MMCF…
Hedging Schedule 1 The index prices for the oil price swaps are based on NYMEX West Texas Intermediate monthly average futures price. 2 The index price for the natural gas price collar is based on the Inside FERCEl Paso Permian…
EBITDAX Reconciliation ( thousands) EBITDAX (as defined above) is presented herein, and reconciled to the generally accepted accounting principle (GAAP) measure of net income because of its wide acceptance by the investment…
Wolfberry Geologic Model Central Basin Wolfberry Fairway / Eastern Platform Henry Petroleum Acreage Shelf A A 7,500 8,500 Wolfcamp shelf 9,500 edge 10,500 Leonard shelf carbonates Wolfcamp shelf carbonates…
Updated 2008 Capital Budget of 389 million Drilling & recompletion projects in core areas Drilling & recompletion projects by core area Nonoperated New Mexico Basin Texas 4% 3% 15% Operated 96% New Mexico Shelf 82% Total…
Production & Reserve Growth Annual production 2004 through 2007 illustrates growth through acquisitions and drilling 50 42 43.5 40 Organic production growth driven by activity on core 30 30 23 southeast NM shelf asset…
Combined Guidance 1 Includes results from Henry acquisition 2 Production Expense includes Lease Operating expenses and Ad Valorem 26
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