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2Q 2020 Earnings Presentation – Concho Resources, Inc.

Concho Resources, Inc. · Jul 29, 2020 · 18 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. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 1
    2Q 2020 Investor Presentation July 29, 2020
  2. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 2
    Key Messages Focused on Free Cash Flow, Capital Discipline and Emerging Stronger Prioritizing health & safety of Delivering exceptional Strengthening our balance Increasing cost efficiencies employees & communities performance…
  3. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 3
    Macro Indicators Demand Recovery Fragile Oil Inventories Normalizing Total Oil Stocks Tank Capacity Plug Utilization IEAs COVID-19 Impact on 2020 Oil Demand (MMBopd) 100 Avoided prior utilization peak 100% Cushing Oil Stocks…
  4. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 4
    2Q20 Summary 2Q20 Operational & Financial Highlights Strong Performance in a Challenging Environment (mm, unless noted) 1Q20 2Q20 Record quarterly FCF driven by consistent hedging strategy & cost control Oil production (MBopd) 209…
  5. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 5
    Successfully Aligning Operations with Market Realities Quickly reducing capital Exceeding cost reduction Strengthening balance spending targets sheet Focus on FCF generation, while Cost reduction initiatives and Capital…
  6. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 6
    Quickly Reducing Spending Prudently & dynamically managing capital program 900 Capital Spending (mm) 2Q20 Capital Spend 800 781 Averaged 11 rigs & 4 completion crews DC&E costs benefitting from better efficiencies with 2Q20…
  7. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 7
    Exceeding Cost Reduction Target Improving cost structure Controllable Costs ( per Boe) Cost Initiatives Support FCF Generation LOE G&A Interest Capturing cost efficiencies Labor & supply chain costs decreasing Optimizing well…
  8. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 8
    Focusing on Free Cash Flow Capital discipline supports strong FCF outlook for 2020+ Free Cash Flow Generation (mm) Near-Term Capital Investment Framework 4 Consecutive Quarters of Generate FCF FCF Generation Remain disciplined…
  9. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 9
    Strengthening Balance Sheet Targeting reduction in net debt Net Debt (bn) Debt Maturity Profile (mm) 1,000 1,000 Net debt is down 0.7bn y/y 4.3 800 3.6 600 600 3.0 4.375% 3.750% 4.300% 4.875% 4.850% Targeting an…
  10. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 10
    Federal Acreage Exposure High-Quality Growth Platform Spans the Delaware & Midland Basins with Manageable Federal Acreage Exposure High-quality acreage position across the core fairways in the Delaware and Midland Basins Midland…
  11. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 11
    Advancing Sustainability Progress Reduce Expand Water Enhance ESG Flaring Recycling Disclosures 50% Company Wide Publishing Inaugural 2017-2019 Focus Sustainability Report in August 2020 400 4.00% Emissions Reduction 350…
  12. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 12
    OUR STRATEGIC FOCUS Oil market indicators have strengthened, although Generate free cash flow uncertainty regarding global oil supply & demand persists Maintain financial strength We continue to execute from a position of strength, with…
  13. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 13
    Appendix
  14. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 14
    Net Debt Non-GAAP reconciliation The Company defines net debt as debt less cash and cash equivalents. Net debt should not be considered an alternative to, or more meaningful than, total debt, the most directly comparable GAAP measure.…
  15. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 15
    Change in Net Debt a Good Proxy for Real FCF Generation 1Q20 vs. 4Q19 1.0 Net Debt of Companies Decreased Net Debt (1.7bn) 16 0.5 Increased Net Debt 13.9bn 38 Change in Net Debt ( in billions) Total 12.2bn 54 0.0…
  16. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 16
    Extensive Development Program Optimizing multi-zone development Horizontal Wells Drilled by Zone (Gross Operated) Delaware Basin Midland Basin Formation 2009 - 2020 Well Count 2020 Formation 2009 - 2020 Well Count 2020 Brushy Canyon 23…
  17. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 17
    Hedge Position Updated as of July 29, 2020 2020 2021 2022 3Q 4Q Total Total Total Explanatory Notes Oil Price Swaps - WTI1: 1 These oil derivative contracts are settled based on the New York Volume (MBbl) 14,147 12,116 26,263 32,482…
  18. 2Q 2020 Earnings Presentation – Concho Resources, Inc. – slide 18
    Outlook Updated as of July 29, 2020 As previously disclosed, the Companys prior annual guidance is no longer applicable given continued uncertainty associated with the COVID-19 pandemic Under current assumptions, the Company…

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