CXO Concho Resources Inc

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 4, 2015

Concho Resources Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)

Registrant’s telephone number, including area code: (432) 683-7443

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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TABLE OF CONTENTS

Item 2.02 Results of Operations and Financial Condition
Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EX-99.1

Item 2.02 Results of Operations and Financial Condition.

On May 4, 2015, Concho Resources Inc. (the “Company”) issued a press release announcing its financial and operating results for the quarter ended March 31, 2015 (the “Earnings Release”). A copy of the Company’s Earnings Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits.

THE INFORMATION CONTAINED IN THIS CURRENT REPORT, INCLUDING THE EXHIBITS ATTACHED HERETO, SHALL NOT BE DEEMED “FILED” FOR THE PURPOSES OF SECTION 18 OF THE SECURITIES AND EXCHANGE ACT OF 1934, NOR SHALL THEY BE DEEMED INCORPORATED BY REFERENCE INTO ANY REGISTRATION STATEMENT OR OTHER FILING PURSUANT TO THE SECURITIES ACT OF 1933, EXCEPT AS OTHERWISE EXPRESSLY STATED IN SUCH FILING.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit 99.1

Concho Resources Inc. Reports First Quarter 2015 Results and Raises Full-Year 2015 Production Growth Target

MIDLAND, Texas--(BUSINESS WIRE)--May 4, 2015--Concho Resources Inc. (NYSE: CXO) (the “Company” or “Concho”) today reported financial and operating results for first quarter 2015.

Highlights

• Concho delivered record quarterly production of 11.9 million Boe, or 132.2 MBoepd, exceeding the high end of the Company’s guidance.
• Concho achieved 38% crude oil production growth over the same quarter a year ago and 9% crude oil growth over the fourth quarter of 2014.
• Concho raised its 2015 total production growth target to 18% to 22%. Capital expenditures are expected to range between $1.8 billion to $2.0 billion for full year 2015.
• Concho announced excellent well results from the oil-rich extension of the Avalon Shale in the northern Delaware Basin.
• Concho successfully drove all per-unit expenses lower year-over-year, while capturing significant service cost savings across all areas of operations in the Permian Basin.
• First quarter of 2015 financial results reflected the lower commodity price environment. Earnings for the first quarter of 2015 totaled $0.06 per diluted share, or $0.36 per diluted share on an adjusted basis (non-GAAP).
• First quarter of 2015 EBITDAX (non-GAAP) totaled $407.5 million.

See “Supplemental Non-GAAP Financial Measures” at the end of this press release for a description of adjusted net income and EBITDAX (non-GAAP measures) and a reconciliation of these measures to the associated GAAP measure.

Tim Leach, Chairman, Chief Executive Officer and President, commented, “Concho delivered another outstanding quarter of production growth, reflecting great drilling results across our assets in the Permian Basin and strong momentum from our 2014 program. We remain focused on executing a flexible capital program that maintains our financial strength while we capitalize on our high-quality inventory – an inventory that continues to improve as we optimize our drilling and completion techniques. With the success from our drilling program, we are increasing our production growth target for 2015 to a range of 18% to 22% from a range of 16% to 20%, while slightly reducing our outlook for capital expenditures. We believe Concho is in a unique position to deliver attractive returns today and build shareholder value over the long term.”

First Quarter 2015 Operations Summary

Production for the first quarter of 2015 increased 30% from the first quarter of 2014 to 11.9 million barrels of oil equivalent (MMBoe), or an average of 132.2 thousand Boe per day (MBoepd), which exceeded the Company’s production guidance range of 127 MBoepd to 131 MBoepd.

Production for the first quarter of 2015 consisted of 8.1 million barrels (MMBbls) of crude oil and 23.0 billion cubic feet (Bcf) of natural gas. Crude oil production increased 38% and 9% over the first quarter of 2014 and the fourth quarter of 2014, respectively. The first quarter of 2015 marks the 21^st consecutive quarter of crude oil production growth from continuing operations.

Concho is currently running 18 rigs, as compared to 36 rigs at the beginning of the first quarter of 2015. All 18 rigs are drilling horizontal wells, with 14 rigs in the Delaware Basin, 2 rigs in the Texas Permian and 2 rigs on the New Mexico Shelf.

Concho started drilling or participating in a total of 126 gross wells, of which 103 were operated by the Company, and completed 171 gross wells during the first quarter of 2015. The Company incurred a total of $730.9 million in capital expenditures, excluding property acquisition costs. The table below summarizes the Company’s drilling activity by core area for the first quarter of 2015.

Delaware Basin

During the first quarter of 2015, Concho drilled 60 wells in the Delaware Basin, including 39 wells targeting the Bone Spring Sands, 12 wells targeting the Wolfcamp Shale, seven wells targeting the Avalon Shale and two wells targeting the Brushy Canyon. First quarter of 2015 production attributable to horizontal wells in the Delaware Basin totaled 68.9 MBoepd, up 63% over the first quarter of 2014 and 7% over the fourth quarter of 2014.

In the northern Delaware Basin, Concho added 42 new horizontal wells with at least 30 days of production as of the end of the first quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 891 Boepd (73% oil) and 1,430 Boepd, respectively. We continue to delineate the multi-zone potential across our large acreage position in the northern Delaware Basin. In the first quarter of 2015, the Company made significant progress targeting the Avalon Shale, including strong results from three recent completions. The average peak 30-day and 24-hour rates for these three horizontal wells were 1,586 Boepd (77% oil) and 2,487 Boepd, respectively.

In the southern Delaware Basin, the Company added eight new horizontal wells with at least 30 days of production as of the end of the first quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 997 Boepd (79% oil) and 1,238 Boepd, respectively.

Texas Permian

In the Midland Basin, the Company added 12 new horizontal wells with at least 30 days of production as of the end of the first quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 742 Boepd (83% oil) and 957 Boepd, respectively.

New Mexico Shelf

On the New Mexico Shelf, the Company added seven new horizontal wells with at least 30 days of production as of the end of the first quarter of 2015. The average peak 30-day and 24-hour rates for these wells were 331 Boepd (84% oil) and 511 Boepd, respectively.

First Quarter 2015 Financial Summary

Net income for the first quarter of 2015 was $7.5 million, or $0.06 per diluted share, compared to net income of $91.3 million, or $0.87 per diluted share, in the first quarter of 2014. Excluding non-cash and unusual items, adjusted net income (non-GAAP) for the first quarter of 2015 was $42.1 million, or $0.36 per diluted share, compared with adjusted net income (non-GAAP) of $106.6 million, or $1.01 per diluted share, for the first quarter of 2014.

EBITDAX (non-GAAP) for the first quarter of 2015 totaled $407.5 million, compared to $483.3 million in the first quarter of 2014.

The Company’s total realized price during the first quarter of 2015, excluding the effect of commodity derivatives, was $34.76 per Boe, compared with $72.27 per Boe during the first quarter of 2014. The lower total realized price in the 2015 period reflects sharply lower crude oil and natural gas prices.

Financial Position and Liquidity

At March 31, 2015, we had total long-term debt of $3.4 billion for a debt-to-EBITDAX ratio of 1.7 times. In addition, we had a $2.5 billion revolving credit facility with a $3.25 billion borrowing base and no outstanding borrowings, providing us with $2.5 billion of liquidity as of March 31, 2015. As previously disclosed, in April 2015, the lenders to the Company’s credit agreement reaffirmed our borrowing base of $3.25 billion.

Commodity Derivatives Update

We enter into commodity derivatives to manage our exposure to commodity price fluctuations. For the remainder of 2015, Concho has swap contracts covering more than 65% of expected crude oil production, or 57.2 thousand barrels (MBbls) per day of crude oil, at a weighted average price of $78.82 per Bbl. For 2016, Concho has swap contracts covering 34.2 MBbls per day of crude oil at a weighted average price of $83.43 per Bbl. Please see the table under “Derivatives Information” for more detailed information about our current derivatives positions.

Outlook

For the second quarter of 2015, we expect production to average between 138 MBoepd and 142 MBoepd.

In addition, we updated our full-year 2015 outlook for certain items. The following table summarizes the Company’s current guidance for those items, as compared to the Company’s prior guidance.

Conference Call

Concho will discuss first quarter 2015 results on a conference call tomorrow, May 5, 2015, at 9:00 AM CT (10:00 AM ET). The telephone number and passcode to access the conference call are provided below:

Dial-in: (800) 299-8538
Intl. dial-in: (617) 786-2902
Participant Passcode: 77249327

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

Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company’s operations are primarily focused in the Permian Basin of southeast New Mexico and west Texas. For more information, visit the Company’s website at 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 and Section 21E of the Securities Exchange Act of 1934. 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. Forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company’s future financial position, operations, performance, business strategy, oil and natural gas reserves, drilling program, capital expenditure budget, liquidity and capital resources, the timing and success of specific projects, outcomes and effects of litigation, claims and disputes, derivative activities and potential financing. The words “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “could,” “may,” “foresee,” “plan,” “goal” or other similar expressions 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, anticipated future developments 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 factors discussed or referenced in the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K; risks relating to declines in the prices the Company receives for its oil and natural gas; uncertainties about the estimated quantities of oil and natural gas reserves; drilling and operating risks, including risks related to properties where the Company does not serve as the operator and risks related to hydraulic fracturing activities; the adequacy of the Company’s capital resources and liquidity including, but not limited to, access to additional borrowing capacity under its credit facility; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing and the export of oil and natural gas; environmental hazards, such as uncontrollable flows of oil, natural gas, brine, well fluids, toxic gas or other pollution into the environment, including groundwater contamination; difficult and adverse conditions in the domestic and global capital and credit markets; risks related to the concentration of the Company’s operations in the Permian Basin of Southeast New Mexico and West Texas; disruptions to, capacity constraints in or other limitations on the pipeline systems that deliver the Company’s oil, natural gas liquids and natural gas and other processing and transportation considerations; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; potential financial losses or earnings reductions from the Company’s commodity price management program; risks and liabilities related to the integration of acquired properties or businesses; uncertainties about the Company’s ability to successfully execute its business and financial plans and strategies; uncertainties about the Company’s ability to replace reserves and economically develop its current reserves; general economic and business conditions, either internationally or domestically; competition in the oil and natural gas industry; uncertainty concerning the Company’s assumed or possible future results of operations; and other important factors that could cause actual results to differ materially from those projected.

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.

The following table sets forth summary information concerning production and operating data for the periods indicated:

The table below provides the costs incurred for oil and natural gas producing activities for the periods indicated:

The table below provides data associated with the Company’s derivatives at May 4, 2015, for the periods indicated:

The following tables provide information that the Company believes may be useful to investors who follow the practice of some industry analysts who adjust reported company net income and cash flows from operating activities to exclude certain non-cash and unusual items.

Adjusted Net Income

The following table provides a reconciliation of net income (GAAP) to adjusted net income (non-GAAP) for the periods indicated:

EBITDAX

EBITDAX (as defined below) is presented herein, and reconciled from the generally accepted accounting principles ("GAAP") measure of net income because of its wide acceptance by the investment community as a financial indicator of a company's ability to internally fund exploration and development activities.

The Company defines EBITDAX as net income, plus (1) exploration and abandonments expense, (2) depreciation, depletion and amortization expense, (3) accretion expense, (4) non-cash stock-based compensation expense, (5) (gain) loss on derivatives not designated as hedges, (6) cash receipts from (payments on) derivatives not designated as hedges, (7) (gain) loss on disposition of assets, net, (8) interest expense and (9) federal and state income taxes. EBITDAX is not a measure of net income or cash flows as determined by GAAP.

The Company’s EBITDAX measure (which includes continuing and discontinued operations) provides additional information which may be used to better understand the Company’s operations. EBITDAX is one of several metrics that the Company uses as a supplemental financial measurement in the evaluation of its business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of operating performance. Certain items excluded from EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic cost of depreciable assets, none of which are components of EBITDAX. EBITDAX, as used by the Company, may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDAX is a widely followed measure of operating performance and is one of many metrics used by the Company’s management team, and by other users, of the Company’s consolidated financial statements. For example, EBITDAX can be used to assess the Company’s operating performance and return on capital in comparison to other independent exploration and production companies without regard to financial or capital structure, and to assess the financial performance of the Company’s assets and the Company without regard to capital structure or historical cost basis.

The following table provides a reconciliation of net income to EBITDAX for the periods indicated:

CONTACT:
Concho Resources Inc.
Megan P. Hays, 432-685-2533
Director of Investor Relations
or
Jere Thompson, 432-221-0383
Financial Analyst