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Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc.

Concho Resources, Inc. · Jun 6, 2017 · 24 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. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 1
    Investor Presentation Bank of America Merrill Lynch Energy Credit Conference JUNE 2017
  2. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 2
    Concho Resources Largest Pure-Play Permian Company Premier Permian Assets Leading exposure to the Permian Basin New Mexico Shelf 930,000 gross (600,000 net) acres Four core areas benefit capital flexibility Midland Northern Basin…
  3. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 3
    Driving Superior Capital Efficiency through Scale Defining the Scale Advantage Premier Permian Position Size & Quality High-quality assets, better well productivity, exceptional source of upside Long lateral, manufacturing-style…
  4. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 4
    Manufacturing Growth Maximizing Returns & Recoveries of High-Quality Resource Manufacturing Mode is New Mexico Shelf Manufacturing Transforming Our Business Across the Portfolio: Key Projects Midland Large-scale projects Northern…
  5. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 5
    Consistent Financial Strategy After-tax cash flow exceeded drilling & completion capital for past 7 consecutive Commitment to quarters Financial Strength 3-year outlook for 20% annualized production growth within cash flow Continued…
  6. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 6
    Executing a Disciplined Capital Program Operating Cash D&C Capital vs. Cash Flows (mm) Flows Exceeded D&C Drilling & Completion Capital1 Cash Flow from Operations Production (MBoepd) Capital for Past Seven Quarters 731 181 164…
  7. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 7
    Growing Production and Controlling Costs Increasing Quarterly Production Controlling Costs (/Boe) MBoepd Production Expense Cash G&A Interest Expense 181.4 14.53 164.3 13.06 152.9 145.2 4.27 11.50 139.5 11.33 4.13 10.46…
  8. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 8
    2017 Capital Program Capital-Efficient Growth & Value Creation Maximizing Scale 2017 Capital Program Allocation Extending Efficiency Gains Advantage through Diversified Capital Total capital program: 1.6bn to 1.8bn1 Rig Count…
  9. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 9
    Performance Track Record, Robust Outlook Delivering Differentiated Growth Visible Growth from High-Quality Assets Expect 2017 annual production growth of MBoepd 21% - 25% within cash flow Crude oil production expected to grow 25%…
  10. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 10
    Strong Balance Sheet Enhances Flexibility Net Debt / EBITDAX1 Peers 4.4x CXO Today vs. YE15 600mm less absolute debt 3.6x 55mm less annual interest expense Lower cost of capital 2.7x 2.2x 2.1x 2.0x 2.0x 1.9x Average2: 2.0x 1.6x…
  11. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 11
    Track Record of Peer-Leading Execution 10-Year Production Growth per Debt-Adjusted Share (CAGR)1 Peers 23% 19% 20% 13% 9% 9% 8% Average2: 6% 6% 5% 2% A B C D E F G H I J K L M N -1% -1% -1% -3% -3% Data per…
  12. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 12
    Key Messages Committed to Disciplined Capital Our Scale & Our Strategy Allocation Execution Strength Wins Hire the best Capital spending on Drive productivity gains high-ROR projects Develop the best asset base Control costs…
  13. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 13
    Appendix
  14. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 14
    Northern Delaware Basin Industry-Leading Exposure to Prolific Stacked Resource 380,000 gross 1Q17 Results (260,000 net) acres Added 16 horizontal wells (avg. lateral length 5,084) Record Performance: 12,000 Horizontal Drilling…
  15. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 15
    Northern Delaware Basin: Red Hills Area Oil-Rich, Multi-Zone Development Red Hills Multi-Zone Well Performance 440 LEA 400 Average per Well Cumulative Production (MBoe)1 360 Red Hills Area 320 EDDY 280 2 1 3 4 240…
  16. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 16
    Northern Delaware Basin: Deep Area Extending the Oil-Rich Fairway North Deep Area Deep Area Bone Spring Well Performance LEA 1 Average Per Well Cumulative Production (MBoe)1 1 EDDY Outstanding Bone Spring…
  17. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 17
    Southern Delaware Basin Core Position in Rapidly Advancing Oil Play 160,000 gross 1Q17 Results (100,000 net) acres Added 9 horizontal wells (avg. lateral length 8,184) 1,300 Horizontal Drilling Avg. 30-day peak rate: 1,632 Boepd (73%…
  18. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 18
    Midland Basin Building Momentum with Large-Scale Development Projects 260,000 gross 1Q17 Results (160,000 net) acres Added 21 horizontal wells (avg. lateral length 9,910) 4,000 Horizontal Drilling Avg. 30-day peak rate: 1,164 Boepd…
  19. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 19
    New Mexico Shelf Improving Recoveries in Legacy Oil Play 130,000 gross 1Q17 Results (80,000 net) acres Added 7 horizontal wells (avg. lateral length 4,517) 2,100 Horizontal Drilling Avg. 30-day peak rate: 546 Boepd (84% oil) Record…
  20. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 20
    2017 Operational & Financial Outlook 2017 Guidance 2Q17 GUIDANCE Production 182 - 186 MBoepd Annual growth 21% - 25% Oil mix 62% - 64% Price realizations, excluding commodity derivatives Crude oil differential to NYMEX (per Bbl)…
  21. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 21
    Hedge Position 2017 2018 2019 Disciplined hedging Second Third Fourth Total Total Total program protects Oil Swaps1: capital program and Volume (Bbl) 8,679,480 7,966,370 7,188,080 23,833,930 23,933,124 14,160,000 Price per Bbl 56.48…
  22. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 22
    Capitalization As of Strong Financial 3/31/2017 Position Recent transactions Cash 771 and liability management reduce Debt leverage metrics and Revolving Credit Facility - increase liquidity 5.500% Senior Notes due 2022 600 5.500%…
  23. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 23
    Reconciliation of Net Income (Loss) to EBITDAX (Unaudited) EBITDAX (as defined below) is presented herein and reconciled from the GAAP measure of net income (loss) because of its wide acceptance by the investment community as a financial…
  24. Bank of America Merrill Lynch Energy Credit Conference – Concho Resources, Inc. – slide 24
    Costs Incurred (Unaudited) The following table summarizes costs incurred for oil and natural gas producing activities for the periods indicated: Three Months Ended March 31, December 31, September 30, June 30, March 31, December 31,…

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