Market Overview

Concho Resources Inc. Reports First-Quarter 2019 Results

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Achieves Record Oil Production

Raises Full-Year 2019 Production Growth Outlook

Maintains Capital Expenditure Plans

Concho Resources Inc. (NYSE:CXO) (the "Company" or "Concho")
today reported financial and operating results for first-quarter 2019.

First-Quarter 2019 Highlights

  • Achieved record oil production of 210 MBopd, a 46% increase over
    first-quarter 2018 and 6% over fourth-quarter 2018.
  • Delivered total production of 328 MBoepd, exceeding the high end of
    the Company's quarterly guidance range.
  • Reduced per unit controllable cash costs year-over-year, with a 7%
    reduction in production expenses.
  • Raised full-year 2019 production growth outlook, while maintaining
    capital expenditure guidance.
  • Announced sale of the Oryx I oil gathering and transportation system,
    with expected net proceeds of approximately $300 million.
  • Reported a net loss of $695 million, or ($3.49) per share. Adjusted
    net income (non-GAAP) totaled $144 million, or $0.72 per share.
  • Generated $755 million of adjusted EBITDAX (non-GAAP).

See "Supplemental Non-GAAP Financial Measures" below for descriptions of
the above non-GAAP measures as well as a reconciliation of these
measures to the associated GAAP (as defined herein) measure.

Tim Leach, Chairman and Chief Executive Officer, commented, "We are
delivering exceptional performance across our portfolio as we execute on
our clear strategy to drive sustained, differentiated oil growth, free
cash flow and corporate returns. Results for the first quarter of 2019
reflect our focus on large-scale development, controlling costs and
generating solid returns on strategic investments, as demonstrated by
the Oryx sale. During the quarter, we completed several important
projects ahead of schedule, driving increased production that exceeded
the high end of our guidance range. Given our strong start to the year,
we are raising our full-year production growth outlook while maintaining
our capital expenditure guidance. Our high-quality assets and
returns-driven approach position us to extend our track record of
enhancing value for shareholders."

First-Quarter 2019 Summary

Production for first-quarter 2019 was 29.6 million barrels of oil
equivalent (MMBoe), or an average of 328 thousand Boe per day (MBoepd),
an increase of 44% from first-quarter 2018 and 7% from fourth-quarter
2018. Average daily oil production for first-quarter 2019 totaled 210
thousand barrels per day (MBopd), an increase of 46% from first-quarter
2018 and 6% from fourth-quarter 2018. Natural gas production for
first-quarter 2019 totaled 709 million cubic feet per day (MMcfpd).
First-quarter 2019 production volumes benefited from strong early
production from the Company's latest large-scale projects and an
increase in non-operated activity.

Concho's average realized price for oil and natural gas for
first-quarter 2019, excluding the effect of commodity derivatives, was
$49.39 per Bbl and $2.64 per Mcf, respectively, compared with $61.29 per
Bbl and $3.39 per Mcf, respectively, for first-quarter 2018.

Net loss for first-quarter 2019 was $695 million, or ($3.49) per share,
compared with net income of $835 million, or $5.58 per share, for
first-quarter 2018. Excluding certain non-cash and special items,
first-quarter 2019 adjusted net income was $144 million, or $0.72 per
share, compared with adjusted net income of $149 million, or $1.00 per
share, for first-quarter 2018.

During the quarter, Concho generated adjusted EBITDAX of $755 million,
compared with $570 million for first-quarter 2018.

In first-quarter 2019, cash flow from operating activities was $623
million. Before ($78) million in working capital changes, operating cash
flow (non-GAAP) was $701 million.

Costs incurred for exploration and development activities for
first-quarter 2019 totaled $926 million, exceeding the Company's
quarterly guidance primarily due to an increase in non-operated capital
activity of approximately $40 million.

Operations Update

During first-quarter 2019, Concho averaged 33 rigs, compared to 34 rigs
in fourth-quarter 2018. The Company is currently running 29 rigs,
including 20 rigs in the Delaware Basin and nine rigs in the Midland
Basin. Additionally, the Company is currently utilizing eight completion
crews. See the table under "Operational Activity" below for detailed
information about the Company's drilling and completion activity by
operating area for first-quarter 2019.

In the Delaware Basin, excluding the New Mexico Shelf, Concho added 23
wells with at least 60 days of production as of the end of first-quarter
2019. The average 30-day and 60-day peak rates for these wells were
1,817 Boepd (73% oil) and 1,647 Boepd (72% oil), respectively. These
wells were drilled to an average lateral length of 9,125 feet.

In the Midland Basin, Concho added 27 wells with at least 60 days of
production as of the end of first-quarter 2019. The average 30-day and
60-day peak rates for these wells were 986 Boepd (86% oil) and 879 Boepd
(85% oil), respectively. These wells were drilled to an average lateral
length of 10,379 feet.

Concho continues to advance large-scale development across its
high-quality asset base. This approach to development accelerates
innovation and captures efficiencies to optimize resource recovery and
overall project economics. The Company successfully started production
on nine projects during first-quarter 2019, including the Dominator,
Eider and Jack projects in the Delaware Basin as well as the Mabee
project in the Midland Basin. Concho completed these projects on time or
ahead of schedule.

Strategic Midstream Investments Enhance Asset Value and Returns

During first-quarter 2019, Concho announced that Oryx Southern Delaware
Holdings, LLC ("Oryx"), the owner of the Oryx I oil gathering and
transportation system, entered into an agreement to sell Oryx I. Concho
owns a 23.75% equity interest in Oryx and expects to receive
approximately $300 million at closing after repayment of Oryx's
outstanding borrowings. In February 2018, Concho received a $157 million
distribution related to a recapitalization of Oryx. The sale proceeds
from Oryx combined with the earlier distribution total approximately
$457 million, representing a 10-times multiple on invested capital of
approximately $45 million since December 2015.

Importantly, the transaction is not expected to impact oil price
realizations or transportation costs as Concho's existing gathering
agreement remains unchanged. Transaction closing is expected to occur in
the second quarter of 2019, subject to customary terms and conditions,
with sale proceeds expected to be used to repay borrowings outstanding
on Concho's credit facility. As of March 31, 2019, Concho had $615
million of outstanding borrowings under its credit facility.

Following quarter end, Concho announced a joint venture with Frontier
Midstream Solutions IV, LLC to construct the Beta Crude Connector (BCC)
oil gathering, transportation and storage system in the Northern Midland
Basin. BCC will consist of an approximately 100-mile gathering system
and 250,000 barrels of crude oil storage facilities. The pipeline system
will have initial capacity to deliver 150,000 barrels per day of crude
oil to multiple delivery points, access local refineries and connect to
several long-haul pipelines. Following an open season in April 2019,
construction will commence, targeting initial flows in mid-2019. BCC
will enhance the value of the Company's high-quality footprint in the
Midland Basin with a reliable, cost-efficient gathering and
transportation solution.

Outlook

Second-quarter 2019 production is expected to be 316 MBoepd to 322
MBoepd. The Company increased full-year 2019 total production growth
guidance to 23% to 27%, reflecting first-quarter 2019 outperformance and
strong execution of a disciplined capital program. Additionally, the
Company increased full-year 2019 oil production growth guidance to 27%
to 31%.

Commodity Derivatives Update

The Company's commodity derivatives strategy is intended to manage its
exposure to commodity price fluctuations. Please see the table under
"Derivatives Information" below for detailed information about Concho's
current derivatives positions.

Conference Call

Concho will host a conference call tomorrow, May 1, 2019, at 8:00 AM CT
(9:00 AM ET) to discuss first-quarter 2019 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: 4757136

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.

About Concho Resources

Concho Resources (NYSE:CXO) is one of the largest unconventional shale
producers in the Permian Basin, with operations focused on acquiring,
exploring, developing and producing oil and natural gas resources.
Concho is at the forefront of applying advanced technology and
large-scale development to safely and efficiently maximize resource
recovery while delivering attractive, long-term economic returns. We are
working today to deliver a better tomorrow for our shareholders, people
and communities. For more information about Concho, visit www.concho.com.

Forward-Looking Statements and Cautionary Statements

The foregoing contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements,
other than statements of historical fact, included in this press release
that address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future are
forward-looking statements. The words "estimate," "project," "predict,"
"believe," "expect," "anticipate," "potential," "could," "may,"
"enable," "foresee," "plan," "will," "guidance," "outlook," "goal" or
other similar expressions that convey the uncertainty of future events
or outcomes are intended to identify forward-looking statements, which
generally are not historical in nature. However, the absence of these
words does not mean that the statements are not forward-looking. These
statements are based on certain assumptions and analyses made by the
Company based on management's experience, expectations and perception of
historical trends, current conditions, current plans, anticipated future
developments, expected financings and other factors believed to be
appropriate. Forward-looking statements are not guarantees of
performance. Although the Company believes the expectations reflected in
its forward-looking statements are reasonable and are based on
reasonable assumptions, no assurance can be given that these assumptions
are accurate or that any of these expectations will be achieved (in full
or at all) or will prove to have been correct. Moreover, such statements
are subject to a number of assumptions, risks and uncertainties, many of
which are beyond the control of the Company, which may cause actual
results to differ materially from those implied or expressed by the
forward-looking statements. These include the risk factors and other
information discussed or referenced in the Company's most recent Annual
Report on Form 10-K and other filings with the Securities and Exchange
Commission. Any forward-looking statement speaks only as of the date on
which such statement is made, and the Company undertakes no obligation
to correct or update any forward-looking statement, whether as a result
of new information, future events or otherwise, except as required by
applicable law. Information on Concho's website is not part of this
press release.

Use of Non-GAAP Financial Measures

To supplement the presentation of the Company's financial results
prepared in accordance with U.S. generally accepted accounting
principles (GAAP), this press release contains certain financial
measures that are not prepared in accordance with GAAP, including
adjusted net income, adjusted earnings per share, adjusted EBITDAX and
operating cash flow before working capital changes.

See "Supplemental Non-GAAP Financial Measures" below for a description
and reconciliation of each non-GAAP measure presented in this press
release to the most directly comparable financial measure calculated in
accordance with GAAP.

 
 
Concho Resources Inc.
Consolidated Balance Sheets
Unaudited
 
    March 31,     December 31,
(in millions, except share and per share amounts)     2019     2018
Assets
Current assets:
Cash and cash equivalents $ - $ -
Accounts receivable, net of allowance for doubtful accounts:
Oil and natural gas 530 466
Joint operations and other 413 365
Inventory 34 35
Derivative instruments 1 484
Prepaid costs and other   49     59  
Total current assets   1,027     1,409  
Property and equipment:
Oil and natural gas properties, successful efforts method 32,559 31,706
Accumulated depletion and depreciation   (10,138
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