Concho Resources High-quality portfolio Todays Message NEW MEXICO SHELF Clear the Air Our Focus New Mexico Shelf Asset Sale MIDLAND BASIN 925mm sale accelerates value & jumpstarts share repurchase program 1.5bn Share Repurchase…
Key Messages Whats Changed: What Hasnt Changed: Weve tested closer well spacing, and wells Our asset quality underperformed Our resource depth Weve reprioritized smaller projects with wider Our focus on consistent execution spacing…
Clear the Air 1 Why the FY19 capital plan remains 2.8-3.0bn despite 2 a reduction in activity and lower oil production growth 3 and, the rationale for and extent of spacing tests 5
2019 Capital Plan 1 2019 Capital Plan Remains 2.8-3.0bn Factors Influencing the Plan (bn) Capital philosophy: align capital spending & cash flow Higher than expected non-op activity and 2.8-3.0 2.8-3.0 well costs offset reduced…
2019 Oil Production Outlook 2 2019 Oil Growth Guidance Exceeded 1H Forecast, but Lowered FY Guidance Less operated activity negatively impacted oil volumes & accounted for 2/3 of the 2.8-3.0 27%-31% lowered outlook 22%-26% Expect to…
Spacing Tests 3 2018-2019 Project Development Go-Forward Plan: Prioritize Returns Wells per Reservoir vs. Spacing Optimizing Spacing Illustrative Example 2018 1H19 2H19 Multiple decades of inventory at More suitable for Wider…
Our Focus Capital Efficiency Develop fewer wells per project on less dense spacing & improve cycle times Reduce well costs Margin Expansion Reduce cost structure & improve price realizations Sustainable Growth Deliver…
Capital Efficiency 2018-2019e Capital Efficiency Reducing Well Costs Ongoing Plan for (m per Bopd added) Basin-Level D,C&E Costs ( per foot) Reducing Well Costs 33 Further optimize drilling, 31 1800 completion & facilities…
Operational Performance Northern Delaware Basin Wolfcamp A Generating Strong Well Performance Reducing Well Costs 180-day Cumulative Oil Production (MBo) D,C&E Costs ( per foot) 250 2018-2019 Activity Whats driving the savings…
Active Portfolio Management Accelerates Value New Mexico Shelf Asset Sale Transaction Summary Accelerates value from legacy asset Focuses the portfolio, while maintaining leading Permian resource depth New Mexico Shelf Minimal…
Cash Proceeds Jumpstart Share Repurchase & Reinforce Financial Strength Capital Allocation Framework Allocation of Asset Sale Proceeds Sources Uses Dividend Cash Flow 40% Share Priorities Fund with Cash Flow from…
Insight into Capital Planning for 2020+ Capital Allocation Strategy Generate robust FCF Commitment to capital discipline underpins capital 50/Bbl Increase capital returns to shareholders allocation decisions WTI Operational focus on…
Our Commitment to Sustainability Reduce Expand Water Manage Climate Flaring Recycling Risk 50% Asset-Wide Published Inaugural 2016-2018 Focus Report 20% Gas Capture Performance 14% Texas Permian 9% 9% Basin 6% 5% 4% 3% 3%…
High-Quality Portfolio to Deliver Growth & Shareholder Returns We have a sense of Our core portfolio Disciplined urgency to is stronger than investment & cost demonstrate ever management is a consistent execution priority 17
Appendix
Our Extensive Development Program Informs Optimization Strategy Horizontal Wells Drilled by Zone (Gross Operated) Delaware Basin Midland Basin Formation 2009 - 2019 Well Count 2018 - 1H19 Formation 2009 - 2019 Well Count 2018 - 1H19…
Our Extensive Development Program is Outperforming Industry 2018-2019 program 180-day cumulative oil production (MBo) Northern Delaware Basin Midland Basin 200 100 Transitioning to Transition to optimal wider spacing spacing…
Our Extensive Development Program is Outperforming Industry 2017-2019 Wells Put on Production Top 100 Wells in the Permian Basin by Six Month Cumulative Oil Production 20 18 16 14 Well Count 12 10 8 6 4 2…
Hedge Position Updated as of July 31, 2019 2019 2020 2021 3Q 4Q Total Total Total Oil Price Swaps - WTI1: Volume (Bbl) 16,570,000 12,513,000 29,083,000 40,080,500 13,137,000 Price per Bbl 56.96 56.65 56.83 57.27 55.33 Oil Price…
Activity Overview 1H19 Activity Well Counts 1H19 Activity Drilling Rigs & Frac Crews Number of Wells Number of Wells Number of Wells Total 1Q19 2Q19 Total Gross Drilled Completed Put on Production Avg. Rig Count 33 26 Delaware Basin…
2019 Guidance Updated as of July 31, 2019 2019 3Q19 Guidance Guidance Production 316 MBoepd 322 MBoepd Total production growth 23% - 27% Oil production growth Expect consistent oil mix 2H19 22% - 26% vs. 1H19 (63%) Price…
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