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JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc.

Concho Resources, Inc. · Feb 28, 2014 · 26 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. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 1
    February 2014 J.P Morgan High Yield Presentation
  2. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 2
    Concho Resources Inc. Company Highlights Permian Basin Leading pure-play Permian Basin operator 503 MMBoe year-end 2013 estimated proved reserves1 266% reserve replacement ratio2 Results in 4Q 2013: Drilled 123 gross wells…
  3. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 3
    Strong Execution, Robust Opportunity Consistent, oil-weighted production growth in FY13 (+20%1 over FY12) FY13 oil growth1: +25% over FY12 4Q13 oil growth: +7% over 3Q13 Solid reserve replacement (+266%) at competitive F&D rate…
  4. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 4
    Low Cost, High Margin Operations Unhedged Cash Margin1 Midland / Cushing 4Q13 Product Mix Basis Widening Crude Oil Wet Gas 83 75.20 Realized Price (/Boe) 73 70.82 67.85 36% 63.74 63 61.02 61.05 64% 53 77% 75% 74% 71% Cash…
  5. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 5
    Delivering Oil Growth Total Company Production1 Crude Oil (MBopd) Natural Gas (MBoepd) 2012 2013 63.0 62.5 58.0 58.9 57.1 53.0 53.0 48.0 51.3 46.9 43.0 43.0 43.0 38.0 35.5 34.5 34.1 33.0 33.4…
  6. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 6
    Executing the Acceleration Plan Execution Goals Doubling Production in Three Years (MMBoe) 1 Double production by 2016 1Q14 Guidance: 98 - 101 MBoepd 67.2 2 Pursue operational efficiencies 3 Reduce leverage ratio 4 Expand…
  7. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 7
    2014 Capital Budget Initial Acceleration Phase Total Capital Budget: 2.3bn Drilling Capital Allocation: 2.0bn Drilling & Completion Facilities Leasehold & G&G Delaware Basin Texas Permian New Mexico Shelf 4% 7% 7% 90% Horizontal…
  8. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 8
    Delaware Basin The Growth Engine Horizontal Delaware Basin Production Delaware Basin Operations Production (MBoepd) Average Rig Count Horizontal Delaware Basin remains highest growth core 35.9 25 area 35.0 33.7 +7% over 3Q13 31.7…
  9. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 9
    Northern Delaware Basin Consistent Performance Well Performance 237 Wells Drilled Since 1Q11 30-Day IP Rate (Boepd) 24-Hour Peak Rate (Boepd) Avg. Lateral % Oil1 4Q13 749 4Q13 1,121 4,327' 77% 26 wells 3Q13 777 3Q13 1,352 4,210'…
  10. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 10
    Northern Delaware Basin Robust Inventory Northern Delaware Basin acreage: Average IP Rate (Boepd) YE13 Gross Well Count 1 365,000 gross (217,000 net) 30-Day 24-Hr Peak Inventory Brushy Canyon 6 634 903 850 Avalon 56 690…
  11. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 11
    Southern Delaware Basin Improving Well Performance Southern Delaware Basin Southern Delaware Basin Activity High-graded and increased acreage exposure North Harpoon through multiple transactions 165,000 gross / 140,000 net acres…
  12. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 12
    Midland Basin Advancing Horizontal Development Midland Basin Horizontal Activity Current focus on Wolfcamp A/B: Targeting other zones in Wolfcamp and Spraberry for horizontal development Moving towards extended laterals Optimizing…
  13. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 13
    Defining Inventory Depth and Resource Potential Drilling Inventory Growth YE13 Resource Potential (MMBoe) 22,000 12,270 19% Proved 9% Proved 40% Hz 65% Hz 503 YE12 YE13 YE13 Proved Reserves Resource Potential…
  14. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 14
    Strong, Simple Balance Sheet Liquidity - 2.5bn Credit Facility Balance Sheet Overview ( in millions) Available Liquidity 1 Current Amount Outstanding Total long-term debt at December 31, 2013: Credit facility, due 2016. 250 0.3bn…
  15. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 15
    Hedges as of 2/19/2014 Oil Hedges 1 2 20 Oil Swaps Oil Basis Swaps 92.27 15 (0.80) 86.86 MMBbl 10 93.65 92.69 5 91.23 (0.99) 91.09 (0.72) (0.92) (0.46) 88.31 87.00 0 1Q14 2Q14 3Q14 4Q14 2014 2015 2016 2017 Natural…
  16. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 16
    Appendix
  17. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 17
    Northern Delaware Basin State Line Recent Developments State Line Area 2nd Bone Spring Brushy Canyon Increased frac size improving economics Higher density tests in 2014 Avalon 3rd Bone Spring Extended productive area 1st Bone…
  18. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 18
    Northern Delaware Basin Lusk, Deep and Red Hills Recent Developments Northern Delaware Basin Avalon shale Deep Brushy Canyon Recent oil cuts 50 - 75% 1st Bone Spring Avalon Encouraging results in Loving County Lusk Further…
  19. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 19
    Northern Delaware Basin Brushy Canyon Recent Developments Northern Delaware Basin Drilled 11 Brushy Canyon Deep Lamar Bell Canyon wells Delaware Group 6 wells with 30 days of production Cherry Canyon 850 drilling locations…
  20. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 20
    Permian Basin Oil Takeaway Capacity Existing Takeaway Borger Cushing Refineries MBopd Big Spring 70 Holly Frontier Navajo 100 Borger Refinery (net from Permian) 115 Western 125 Wichita Falls Total 410 Oil Pipelines MBopd…
  21. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 21
    Permian Basin NGL Takeaway Capacity Existing Takeaway NGL Pipelines MBblpd Existing NGL Infrastructure 707 Inflows from Rockies Recent NGL Infrastructure Additions Lone Star West Texas 210 DCP Sand Hills 200 Texas Express* 280…
  22. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 22
    EBITDAX Reconciliation Historical EBITDAX T hree Months Ended Y ears Ended Decem ber 31, Decem ber 31, (in thousands) 2013 2012 2013 2012 Net incom e…
  23. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 23
    Adjusted Net Income Reconciliation Historical Adjusted Net Income T hree Months Ended Y ears Ended Decem ber 31, Decem ber 31, (in thousands, ex cept per share am ounts) 2013 2012 2013 2012 Net incom e - as reported…
  24. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 24
    Unhedged Cash Margin Historical Unhedged Cash Margin 2012 2013 ( in thousands, ex cept per unit data) 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Net incom e . 5,988 7 5,287 30,093 84,7 00 30,421 1 05,7 89 Ex ploration and abandonments 6,958 1…
  25. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 25
    Hedges as of 2/19/2014 Current Hedges 2014 1Q 2Q 3Q 4Q T otal 2015 2016 2017 Oil Swaps: (a) V olume (Bbl) .......................................... 5,07 5,000 4,544,000 4,1 1 6,000 3,833,000 1 7 ,568,000 1 2,81 2,000 429,000 1…
  26. JPMORGAN HIGH YIELD PRESENTATION – Concho Resources, Inc. – slide 26
    Production and Operating Guidance as of 11/6/2013 Annual Guidance 2014 Production: 1Q14 Production Guidance: A nnual Production 1 8% - 22% 62% - 64% 98 - 101 MBoepd % Oil Price differentials to NY MEX (90/Bbl; 4/MMBtu): (ex…

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