Market Overview

Concho Resources Inc. Reports First-Quarter 2018 Results

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Delivered 27% Crude Oil Growth Year-over-Year

Raised Full-Year 2018 Production Growth Outlook

Concho Resources Inc. (NYSE:CXO) (the "Company" or "Concho")
today reported financial and operating results for first-quarter 2018.

First-Quarter 2018 Highlights

  • Announced agreement to acquire RSP Permian, Inc.
  • Increased crude oil production volumes by approximately 14 MBopd, or
    11%, quarter-over-quarter to 144 MBopd.
  • Delivered total production of 228 MBoepd, exceeding the high end of
    the Company's guidance range.
  • Raised full-year 2018 production growth outlook to a range of 18% -
    20% and maintained capital expenditure guidance. Concho's outlook
    excludes the RSP Permian transaction.
  • Achieved record 30-day production rates in the Company's Northern and
    Southern Delaware Basin assets and set a Company record average
    lateral length in the Northern Delaware Basin.
  • Received $157 million cash distribution from Oryx Southern Delaware
    Holdings, LLC.
  • Reduced total debt by approximately $320 million from year-end 2017.
  • Reported net income of $835 million, or $5.58 per diluted share.
    Adjusted net income totaled $149 million, or $1.00 per diluted share
    (non-GAAP).
  • Generated $570 million of EBITDAX (non-GAAP).

See "Supplemental Non-GAAP Financial Measures" at the end of this press
release for a description of non-GAAP measures adjusted net income,
adjusted earnings per share and EBITDAX as well as a reconciliation of
these measures to the associated GAAP measure.

Tim Leach, Chairman and Chief Executive Officer, commented, "Our team
achieved another outstanding quarter of operational and financial
results, driving significant production growth while maintaining a
disciplined capital program. Our results reflect our focus on
large-scale project development, which enables us to maximize ultimate
recovery, efficiencies and returns. Looking ahead, we intend to build on
our strong momentum and capitalize on our execution strength, cost
control and strong balance sheet to extend our track record of
delivering growth and returns. We are excited about our pending
transaction with RSP, which reinforces our scale advantage. We look
forward to completing the acquisition and delivering the value creating
benefits of the transaction to the shareholders of both companies."

First-Quarter 2018 Operations Summary

Production for first-quarter 2018 was 21 million barrels of oil
equivalent (MMBoe), or an average of 228 thousand Boe per day (MBoepd),
an increase of approximately 26% from first-quarter 2017 and 8% from
fourth-quarter 2017. Average daily crude oil production for
first-quarter 2018 totaled 144 thousand barrels per day (MBopd), an
increase of approximately 27% from first-quarter 2017 and 11% from
fourth-quarter 2017. Natural gas production for first-quarter 2018
totaled 505 million cubic feet per day (MMcfpd).

During first-quarter 2018, Concho averaged 20 rigs, compared to 16 rigs
in fourth-quarter 2017. The table below summarizes the Company's gross
drilling and completion activity by core area for first-quarter 2018.

                 

Number of
Wells Drilled

Number of
Operated
Wells Drilled

Number of
Wells
Completed

Number of
Operated Wells
Completed

Northern Delaware Basin 33 20 25 12
Southern Delaware Basin 16 15 12 10
Midland Basin 21 21 18 18
New Mexico Shelf 1 1 1 1
Total 71 57 56 41
 

The Company is currently running 20 rigs, including nine rigs in the
Northern Delaware Basin, six rigs in the Southern Delaware Basin and
five rigs in the Midland Basin. Concho expects to add one rig to the
Northern Delaware Basin and one rig to the New Mexico Shelf in May 2018.
Additionally, the Company is currently utilizing six completion crews.

Northern Delaware Basin

In the Northern Delaware Basin, Concho added 12 wells with at least 60
days of production as of the end of first-quarter 2018. The average
30-day peak and average 60-day peak rates for these wells were 1,993
Boepd (74% oil) and 1,900 Boepd (73% oil), respectively. The wells
delivered record 30-day performance. In addition, ten of the 12 wells
added were long-lateral wells, driving a Company record average lateral
length in the Northern Delaware Basin of 8,544 feet.

Delineating Lower Second Bone Spring in Eddy County, New Mexico

In the Northern Delaware Basin, Concho continues to optimize lateral
placement, completion techniques and well spacing to maximize recovery
from the prolific multi-zone resource. During first-quarter 2018, Concho
delineated a new target within the 2nd Bone Spring formation in Eddy
County, New Mexico, with two successful well results from the Craig
Federal 12H and the Road Runner Federal 12H. These two wells, which were
landed in the lower 2nd Bone Spring, are part of a stacked development
pattern in the 2nd Bone Spring, with the landing zones between these two
wells and existing wells separated vertically by 500 feet. Additionally,
the average 30-day peak and average 60-day peak rates per well were
2,457 Boepd (74% oil) and 2,322 (72% oil), respectively, from an average
lateral length of approximately 9,830 feet.

Southern Delaware Basin

In the Southern Delaware Basin, Concho added 21 wells with at least 60
days of production as of the end of first-quarter 2018. The average
30-day peak and average 60-day peak rates for these wells were 2,070
Boepd (73% oil) and 1,787 Boepd (73% oil), respectively. Notably, the
average 30-day peak rate marked a Company record in the Southern
Delaware Basin. The average lateral length for these wells was 9,204
feet.

Midland Basin

In the Midland Basin, Concho added 20 wells with at least 60 days of
production as of the end of first-quarter 2018. The average 30-day peak
and average 60-day peak rates for these wells were 1,156 Boepd (85% oil)
and 1,114 Boepd (84% oil), respectively, with an average lateral length
of 10,156 feet.

Delivering Outstanding Results from Large-Scale Project Development in
the Midland Basin

During fourth-quarter 2017, Concho completed the 13-well, two-mile Mabee
Ranch project located in Andrews County, Texas. The project achieved
average 30-day peak and average 60-day peak rates of approximately 15
MBoepd (83% oil) and 14 MBoepd (83% oil), respectively. Additionally,
through fiber optic monitoring, Concho continues to gather valuable
proprietary data with long-term implications for full-field development
optimization. The Company has transferred several of these completion
techniques to other projects across the portfolio.

First-Quarter 2018 Financial Summary

Concho's average realized price for crude oil and natural gas for
first-quarter 2018, excluding the effect of commodity derivatives, was
$61.29 per Bbl and $3.39 per Mcf, respectively, compared to $49.08 per
Bbl and $3.00 per Mcf, respectively, for first-quarter 2017.

Net income for first-quarter 2018 was $835 million, or $5.58 per diluted
share, compared to net income of $650 million, or $4.37 per diluted
share, for first-quarter 2017. Adjusted net income (non-GAAP), which
excludes non-cash and unusual items, for first-quarter 2018 was $149
million, or $1.00 per diluted share. Non-cash and unusual items for
first-quarter 2018 included (i) a preliminary non-cash gain of
approximately $575 million attributable to the Company's strategic trade
with a large integrated oil company, (ii) a gain of approximately $134
million due to the sale of non-core leasehold in Ward and Reeves
Counties, Texas, and (iii) a gain of approximately $103 million related
to the cash distribution from the Company's equity method investment.
Adjusted net income for first-quarter 2017 was $72 million, or $0.49 per
diluted share.

EBITDAX (non-GAAP) for first-quarter 2018 totaled $570 million, compared
to $461 million for first-quarter 2017.

Concho's effective income tax rate for first quarter 2018 was 23%,
compared to 36% for first quarter 2017, primarily due to the reduction
of the U.S. federal statutory corporate income tax rate from 35% to 21%.

Agreement to Acquire RSP Permian Enhances Scale Advantage

On March 28, 2018, Concho announced that it had entered into a
definitive agreement to acquire all of the outstanding shares of RSP
Permian, Inc. Under the terms of the agreement, shareholders of RSP will
receive 0.320 shares of Concho common stock for each share of RSP common
stock. The transaction is expected to be completed in third-quarter
2018, subject to approval of both Concho and RSP shareholders, the
satisfaction of certain regulatory approvals and other customary closing
conditions.

Strengthening Financial Position

During first-quarter 2018, Concho further strengthened its financial
position through several accretive transactions.

As previously reported, Concho completed the sale of non-core leasehold
in Ward and Reeves Counties, Texas, for proceeds of approximately $280
million during first-quarter 2018. Additionally, the Company completed a
strategic trade with a large integrated oil company. For Concho, the
trade enhances its core development area in the Northern Midland Basin
and adds working interests to certain operated properties in Upton
County, Texas, and in the New Mexico Shelf. In the trade, Concho
conveyed its 32,000 acre checker-board leasehold position in Culberson
County, Texas.

Concho owns a 23.75% membership interest in Oryx Southern Delaware
Holdings, LLC, which operates a crude oil gathering and transportation
system in the Southern Delaware Basin. During first-quarter 2018, Oryx
obtained a term loan of $800 million, the proceeds from which were used
in part to fund a cash distribution to its equity holders. Concho
received a distribution of approximately $157 million, which represents
an approximate 3.5 times multiple on Concho's invested capital, and the
Company retains its ownership stake in Oryx.

As a result of these transactions and a disciplined capital investment
program, Concho reduced its total debt by approximately $320 million in
first-quarter 2018 as compared to year-end 2017. At March 31, 2018,
Concho had total long-term debt of $2.4 billion, with no borrowings
outstanding under its credit facility.

Outlook

Concho's outlook excludes the pending RSP Permian transaction. Concho
expects second-quarter 2018 production to be 226 MBoepd to 230 MBoepd.
For full-year 2018, the Company raised its production growth outlook to
a range of 18% to 20%, as compared to the prior range of 16% to 20%.
Also, the Company updated its guidance for crude oil price realizations
for full-year 2018. The updated guidance range of ($1.50) to ($2.00) per
barrel reflects pricing deductions and excludes the regional
Midland-Cushing price differential. As highlighted below under
"Commodity Derivatives Update," Concho enters into basis hedges to
protect against the Midland-Cushing differential.

Commodity Derivatives Update

The Company enters into commodity derivatives to manage its exposure to
commodity price fluctuations, including regional price dislocations such
as the Midland/Cushing crude oil price differential. For the remainder
of 2018, Concho has crude oil swap contracts covering approximately 112
MBopd at a weighted average price of $54.20 per Bbl, and it has
Midland/Cushing basis swaps covering approximately 94 MBopd at a
weighted average price of ($0.85) per Bbl. Please see the table under
"Derivatives Information" below for detailed information about the
Company's current derivatives positions.

Conference Call

Concho will host a conference call tomorrow, May 2, 2018, at 8:00 AM CT
(9:00 AM ET) to discuss first-quarter 2018 results. The telephone number
and passcode to access the conference call are provided below:

Dial-in: (844) 263-8298
Intl. dial-in: (478) 219-0007
Participant Passcode: 7175736

To access the live webcast and view the related earnings presentation,
visit Concho's website at www.concho.com.
The replay will also be available on the Company's website under the
"Investors" section.

Upcoming Conferences

The Company will present at the Citi Global Energy & Utilities
Conference on Tuesday, May 15, 2018 at 7:45 AM CT (8:45 AM ET). The
presentation will be webcast and accessible on the Events &
Presentations page under the Investors section of the Company's website, www.concho.com.

Additionally, Concho will participate in the following upcoming
conferences:

Conference Date       Conference
May 16, 2018 Stephens 2nd Annual Energy Executive Summit
May 23, 2018 UBS Global Oil & Gas Conference
 

The Company's presentation will be available on the Company's website on
or prior to the Company's appearance at each conference.

Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company
engaged in the acquisition, development, exploration and production of
oil and natural gas properties. The Company's operations are focused in
the Permian Basin of Southeast New Mexico and West Texas. For more
information, visit the Company's website at

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