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): July
29, 2015
Concho
Resources Inc.
(Exact Name of Registrant as Specified in
Its Charter)
Delaware
(State or Other Jurisdiction of
Incorporation)
001-33615
|
|
76-0818600
|
(Commission File Number)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
One Concho Center
600 West Illinois Avenue
Midland, Texas
|
|
79701
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
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))
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 July 29, 2015, Concho Resources Inc. (the “Company”)
issued a press release announcing its financial and operating results
for the three and six months ended June 30, 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.
Exhibit No.
|
|
Description of Exhibit
|
|
|
|
99.1
|
|
Press release dated July 29, 2015, announcing financial and
operating results for the three and six months ended June 30, 2015.
|
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.
|
CONCHO RESOURCES INC.
|
|
|
|
|
Date: July 29, 2015
|
By:
|
/s/ TRAVIS L. COUNTS
|
|
|
Name:
|
|
Travis L. Counts
|
|
|
Title:
|
|
Vice President and General Counsel
|
|
EXHIBIT INDEX
Exhibit No.
|
|
Description of Exhibit
|
|
|
|
99.1
|
|
Press release dated July 29, 2015, announcing financial and
operating results for the three and six months ended June 30, 2015.
|
Exhibit 99.1
Concho
Resources Inc. Reports Second Quarter 2015 Results
Delivers
Record Quarterly Production
Increases
Crude Oil Production 45% over Second Quarter of 2014
Raises
Full-Year 2015 Production Growth Target to 24% - 26%
MIDLAND, Texas--(BUSINESS WIRE)--July 29, 2015--Concho Resources Inc.
(NYSE: CXO) (the “Company” or “Concho”) today reported financial and
operating results for the second quarter of 2015.
Highlights
-
Production for the second quarter 2015 of 13.4 million Boe, or 147.4
MBoepd, was 37% higher year-over-year and exceeded the high end of the
Company’s guidance.
-
Crude oil production increased by 45% over the same quarter a year ago
and by 11% over the first quarter of 2015.
-
2015 production growth target raised to 24% to 26%, with the capital
expenditure outlook unchanged.
-
Concho reported a net loss of $1.02 per diluted share for the second
quarter of 2015. This compares to net income of $0.38 per diluted
share for the quarter on an adjusted basis (non-GAAP).
-
EBITDAX (non-GAAP) for the second quarter of 2015 was $457.8 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 continues to deliver strong results as we progress through an
uncertain year for commodity prices. In the second quarter, our drilling
program added nearly ten thousand barrels of oil production per day
quarter-over-quarter, highlighting the strength of our assets, efficient
drilling machine and ongoing success with enhanced completions. We are
on track to balance drilling and completion capital with cash flow in
the second half of 2015, and we are raising our annual production growth
target to 24% to 26%. Faster cycle times, improving well performance and
lower service costs enable our operational teams to do more with less –
an impactful combination in any price environment. Looking ahead, our
inventory-rich asset base coupled with our operational performance sets
Concho apart to deliver value today and in the future.”
Second Quarter 2015 Operations Summary
Production for the second quarter of 2015 was 13.4 million barrels of
oil equivalent (MMBoe), or an average of 147.4 thousand Boe per day
(MBoepd), an increase of 37% from the second quarter of 2014 and 11%
from the first quarter of 2015.
Second quarter 2015 production included 9.0 million barrels (MMBbls) of
crude oil, or an average of 99.2 thousand barrels of crude oil per day
(MBopd), an increase of 30.8 MBopd, or 45%, from the second quarter of
2014, and 9.6 MBopd, or 11%, from the first quarter of 2015. Second
quarter of 2015 production also included 26.3 billion cubic feet (Bcf)
of natural gas.
Capital expenditures for the quarter were $564.5 million, excluding
property acquisition costs, and represented a 23% decrease from the
first quarter of 2015. Capital expenditures and the resulting production
growth were driven by faster cycle times, strong well performance and
increased working interest in operated wells.
Concho averaged 18 rigs in the second quarter of 2015, compared to 30
rigs in the first quarter of 2015. During the second quarter of 2015,
Concho started drilling or participating in a total of 91 gross wells
(65 operated) and completed 137 gross wells. The table below summarizes
the Company’s drilling activity by core area for the second quarter of
2015.
|
|
|
|
|
|
|
|
|
Number of Wells Drilled (Gross)
|
|
Number of Operated Wells Drilled (Gross)
|
|
Number of Wells Completed (Gross)
|
Delaware Basin
|
|
58
|
|
|
44
|
|
|
82
|
|
New Mexico Shelf
|
|
19
|
|
|
12
|
|
|
25
|
|
Midland Basin
|
|
14
|
|
|
9
|
|
|
30
|
|
Total
|
|
91
|
|
|
65
|
|
|
137
|
|
|
|
|
|
|
|
|
Percent Horizontal
|
|
96
|
%
|
|
95
|
%
|
|
81
|
%
|
|
|
|
|
|
|
|
Delaware Basin
Production from horizontal wells in the Delaware Basin was 81.6 MBoepd
in the second quarter of 2015, up 66% over the second quarter of 2014
and 18% over the first quarter of 2015.
During the second quarter of 2015, Concho drilled 58 wells in the
Delaware Basin, including 34 wells targeting the Bone Spring Sands, 17
wells targeting the Wolfcamp Shale and seven wells targeting the Avalon
Shale.
In the northern Delaware Basin, drilling days per well decreased by 15%
year-over-year. Concho added 52 new horizontal wells in the northern
Delaware Basin with at least 30 days of production as of the end of the
second quarter of 2015. The average peak 30-day and 24-hour rates for
these wells were 994 Boepd (71% oil) and 1,459 Boepd, respectively.
In the southern Delaware Basin, drilling days per well decreased by 25%
year-over-year. Concho added 12 new horizontal wells in the southern
Delaware Basin with at least 30 days of production as of the end of the
second quarter of 2015. The average peak 30-day and 24-hour rates for
these wells were 1,163 Boepd (78% oil) and 1,392 Boepd, respectively.
The Company currently has 12 horizontal rigs in the Delaware Basin, down
from a peak of 25 horizontal rigs in the fourth quarter of 2014.
Midland Basin
In the Midland Basin, drilling days per well decreased by 25%
year-over-year. Concho added 21 new horizontal wells in the Midland
Basin with at least 30 days of production as of the end of the second
quarter of 2015. The average peak 30-day and 24-hour rates for these
wells were 758 Boepd (82% oil) and 996 Boepd, respectively.
The Company currently has two horizontal rigs in the Midland Basin.
New Mexico Shelf
On the New Mexico Shelf, Concho added 17 new horizontal wells with at
least 30 days of production as of the end of the second quarter of 2015.
The average peak 30-day and 24-hour rates for these wells were 331 Boepd
(83% oil) and 477 Boepd, respectively.
The Company currently has two horizontal rigs on the New Mexico Shelf.
Second Quarter 2015 Financial Summary
The Company’s total realized price during the second quarter of 2015,
excluding the effect of commodity derivatives, was $40.07 per Boe,
compared with $71.84 per Boe during the second quarter of 2014. The
lower total realized price in the 2015 period reflects continued weak
crude oil, natural gas and natural gas liquids commodity prices.
Net loss for the second quarter of 2015 was $120.5 million, or $1.02 per
diluted share, compared to net income of $11.8 million, or $0.11 per
diluted share, in the second quarter of 2014. Excluding non-cash and
unusual items, adjusted net income (non-GAAP) for the second quarter of
2015 was $45.5 million, or $0.38 per diluted share, compared with
adjusted net income (non-GAAP) of $113.8 million, or $1.04 per diluted
share, for the second quarter of 2014.
EBITDAX (non-GAAP) for the second quarter of 2015 totaled $457.8
million, compared to $504.0 million in the second quarter of 2014.
Cash flows generated from operating activities in the first six months
of 2015 totaled $488.9 million, compared with $854.7 million in the same
period last year. Adjusted cash flows (non-GAAP), which are cash flows
from operating activities adjusted for settlements on derivatives not
designated as hedges, were $768.3 million for the first six months of
2015, as compared to $813.8 million for the same period last year.
See “Supplemental Non-GAAP Financial Measures” at the end of this press
release for a description of adjusted net income, EBITDAX and adjusted
cash flows (non-GAAP measures) and a reconciliation of these measures to
the associated GAAP measures.
Commodity Derivatives Update
The Company enters into commodity derivatives to manage its exposure to
commodity price fluctuations. For the remainder of 2015, Concho has swap
contracts covering approximately 75% of expected crude oil production,
or 63.8 MBopd, at a weighted average price of $75.19 per Bbl. For 2016,
Concho has swap contracts covering 49.3 MBopd at a weighted average
price of $75.71 per Bbl. Please see the table under “Derivatives
Information” for more detailed information about the Company’s current
derivatives positions.
Outlook
For the third quarter of 2015, the Company expects production to average
between 143 MBoepd and 147 MBoepd.
In addition, Concho updated its full-year 2015 outlook for certain
items. The following table summarizes the Company’s current guidance for
those items, as compared to the Company’s prior guidance.
|
|
|
|
|
Full Year 2015
|
|
|
Prior
|
|
Current
|
Production
|
|
|
|
|
Year-over-year production growth
|
|
18% - 22%
|
|
24% - 26%
|
Oil mix
|
|
63% - 65%
|
|
64% - 66%
|
|
|
|
|
|
Price realization, excluding commodity derivatives (percent of
NYMEX)
|
|
|
|
|
Natural gas (per Mcf)
|
|
100% - 120%
|
|
90% - 100%
|
|
|
|
|
|
Operating costs and expenses ($/Boe)
|
|
|
|
|
Lease operating expense:
|
|
|
|
|
Direct lease operating expense
|
|
$7.75 - $8.25
|
|
$7.50 - $8.00
|
|
|
|
|
|
Conference Call
Concho will discuss second quarter 2015 results on a conference call
tomorrow, July 30, 2015, at 8:30 AM CT (9:30 AM ET). The telephone
number and passcode to access the conference call are provided below:
Dial-in: (855) 445-9894
|
Intl. dial-in: (330) 863-3281
|
Participant Passcode: 63780959
|
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; the costs and availability of equipment,
resources, services and personnel required to perform the Company’s
drilling and operating activities; 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.
Concho Resources Inc.
|
Consolidated Balance Sheets
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
(in thousands, except share and per share amounts)
|
|
|
2015
|
|
|
2014
|
Assets
|
Current assets:
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
280
|
|
$
|
21
|
Accounts receivable, net of allowance for doubtful accounts:
|
|
|
|
|
|
|
Oil and natural gas
|
|
|
251,497
|
|
|
250,600
|
Joint operations and other
|
|
|
257,956
|
|
|
409,665
|
Derivative instruments
|
|
|
351,360
|
|
|
490,351
|
Prepaid costs and other
|
|
|
40,599
|
|
|
37,759
|
Total current assets
|
|
|
901,692
|
|
|
1,188,396
|
Property and equipment:
|
|
|
|
|
|
|
Oil and natural gas properties, successful efforts method
|
|
|
15,183,313
|
|
|
13,867,831
|
Accumulated depletion and depreciation
|
|
|
(4,353,015)
|
|
|
(3,790,953)
|
Total oil and natural gas properties, net
|
|
|
10,830,298
|
|
|
10,076,878
|
Other property and equipment, net
|
|
|
146,138
|
|
|
129,136
|
Total property and equipment, net
|
|
|
10,976,436
|
|
|
10,206,014
|
Deferred loan costs, net
|
|
|
63,497
|
|
|
68,443
|
Intangible asset - operating rights, net
|
|
|
26,424
|
|
|
27,154
|
Inventory
|
|
|
16,365
|
|
|
14,435
|
Noncurrent derivative instruments
|
|
|
93,843
|
|
|
262,349
|
Other assets
|
|
|
75,719
|
|
|
33,172
|
Total assets
|
|
$
|
12,153,976
|
|
$
|
11,799,963
|
Liabilities and Stockholders’ Equity
|
Current liabilities:
|
|
|
|
|
|
|
Accounts payable - trade
|
|
$
|
44,895
|
|
$
|
20,380
|
Bank overdrafts
|
|
|
82,170
|
|
|
92,541
|
Revenue payable
|
|
|
202,542
|
|
|
238,098
|
Accrued and prepaid drilling costs
|
|
|
472,424
|
|
|
718,300
|
Deferred income taxes
|
|
|
115,781
|
|
|
162,566
|
Other current liabilities
|
|
|
181,317
|
|
|
195,308
|
Total current liabilities
|
|
|
1,099,129
|
|
|
1,427,193
|
Long-term debt
|
|
|
3,582,465
|
|
|
3,517,320
|
Deferred income taxes
|
|
|
1,389,702
|
|
|
1,438,185
|
Noncurrent derivative instruments
|
|
|
3,970
|
|
|
-
|
Asset retirement obligations and other long-term liabilities
|
|
|
140,563
|
|
|
136,477
|
Stockholders’ equity:
|
|
|
|
|
|
|
Common stock, $0.001 par value; 300,000,000 authorized;
120,600,497 and 113,264,918 shares issued at June 30, 2015 and
December 31, 2014, respectively
|
|
|
121
|
|
|
113
|
Additional paid-in capital
|
|
|
3,802,137
|
|
|
3,027,412
|
Retained earnings
|
|
|
2,166,770
|
|
|
2,279,741
|
Treasury stock, at cost; 299,249 and 260,124 shares at June 30,
2015 and December 31, 2014, respectively
|
|
|
(30,881)
|
|
|
(26,478)
|
Total stockholders’ equity
|
|
|
5,938,147
|
|
|
5,280,788
|
Total liabilities and stockholders’ equity
|
|
$
|
12,153,976
|
|
$
|
11,799,963
|
|
Concho Resources Inc.
|
Consolidated Statements of Operations
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
(in thousands, except per share amounts)
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil sales
|
|
$
|
470,890
|
|
$
|
580,772
|
|
$
|
820,474
|
|
$
|
1,120,629
|
Natural gas sales
|
|
|
66,535
|
|
|
123,930
|
|
|
130,473
|
|
|
245,032
|
Total operating revenues
|
|
|
537,425
|
|
|
704,702
|
|
|
950,947
|
|
|
1,365,661
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and natural gas production
|
|
|
142,265
|
|
|
134,944
|
|
|
267,800
|
|
|
261,868
|
Exploration and abandonments
|
|
|
12,020
|
|
|
28,288
|
|
|
17,775
|
|
|
53,663
|
Depreciation, depletion and amortization
|
|
|
304,802
|
|
|
237,445
|
|
|
572,007
|
|
|
458,837
|
Accretion of discount on asset retirement obligations
|
|
|
2,047
|
|
|
1,722
|
|
|
4,041
|
|
|
3,393
|
General and administrative (including non-cash stock-based
compensation of $15,450 and $9,775 for the three months ended June
30, 2015 and 2014, respectively, and $30,945 and $21,207 for the
six months ended June 30, 2015 and 2014, respectively)
|
|
|
60,923
|
|
|
49,535
|
|
|
119,724
|
|
|
97,285
|
Loss on derivatives not designated as hedges
|
|
|
147,399
|
|
|
164,707
|
|
|
32,059
|
|
|
200,322
|
Total operating costs and expenses
|
|
|
669,456
|
|
|
616,641
|
|
|
1,013,406
|
|
|
1,075,368
|
Income (loss) from operations
|
|
|
(132,031)
|
|
|
88,061
|
|
|
(62,459)
|
|
|
290,293
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(53,482)
|
|
|
(55,388)
|
|
|
(107,051)
|
|
|
(111,523)
|
Loss on extinguishment of debt
|
|
|
-
|
|
|
(4,316)
|
|
|
-
|
|
|
(4,316)
|
Other, net
|
|
|
(5,678)
|
|
|
(9,529)
|
|
|
(10,019)
|
|
|
(8,988)
|
Total other expense
|
|
|
(59,160)
|
|
|
(69,233)
|
|
|
(117,070)
|
|
|
(124,827)
|
Income (loss) before income taxes
|
|
|
(191,191)
|
|
|
18,828
|
|
|
(179,529)
|
|
|
165,466
|
Income tax (expense) benefit
|
|
|
70,708
|
|
|
(7,059)
|
|
|
66,558
|
|
|
(62,390)
|
Net income (loss)
|
|
$
|
(120,483)
|
|
$
|
11,769
|
|
$
|
(112,971)
|
|
$
|
103,076
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss)
|
|
$
|
(1.02)
|
|
$
|
0.11
|
|
$
|
(0.97)
|
|
$
|
0.96
|
Diluted net income (loss)
|
|
$
|
(1.02)
|
|
$
|
0.11
|
|
$
|
(0.97)
|
|
$
|
0.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concho Resources Inc.
|
Consolidated Statements of Cash Flows
|
Unaudited
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
June 30,
|
(in thousands)
|
|
2015
|
|
2014
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(112,971)
|
|
$
|
103,076
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
572,007
|
|
|
458,837
|
Accretion of discount on asset retirement obligations
|
|
|
4,041
|
|
|
3,393
|
Exploration and abandonments, including dry holes
|
|
|
12,352
|
|
|
41,762
|
Non-cash stock-based compensation expense
|
|
|
30,945
|
|
|
21,207
|
Deferred income taxes
|
|
|
(95,268)
|
|
|
34,951
|
(Gain) loss on disposition of assets and other
|
|
|
1,620
|
|
|
9,457
|
Loss on derivatives not designated as hedges
|
|
|
32,059
|
|
|
200,322
|
Other non-cash items
|
|
|
5,298
|
|
|
9,418
|
Changes in operating assets and liabilities, net of acquisitions and
dispositions:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
55,870
|
|
|
(83,061)
|
Prepaid costs and other
|
|
|
(2,098)
|
|
|
(6,154)
|
Inventory
|
|
|
(1,935)
|
|
|
4,782
|
Accounts payable
|
|
|
23,339
|
|
|
36,626
|
Revenue payable
|
|
|
(35,556)
|
|
|
17,671
|
Other current liabilities
|
|
|
(769)
|
|
|
2,441
|
Net cash provided by operating activities
|
|
|
488,934
|
|
|
854,728
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Capital expenditures on oil and natural gas properties
|
|
|
(1,492,547)
|
|
|
(1,054,000)
|
Additions to property, equipment and other assets
|
|
|
(26,146)
|
|
|
(20,456)
|
Proceeds from the disposition of assets
|
|
|
96
|
|
|
394
|
Contribution to equity method investment
|
|
|
(45,000)
|
|
|
(10,050)
|
Settlements received from (paid on) derivatives not designated as
hedges
|
|
|
279,408
|
|
|
(40,891)
|
Net cash used in investing activities
|
|
|
(1,284,189)
|
|
|
(1,125,003)
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Proceeds from issuance of debt
|
|
|
1,097,400
|
|
|
1,578,000
|
Payments of debt
|
|
|
(1,030,900)
|
|
|
(1,828,000)
|
Exercise of stock options
|
|
|
58
|
|
|
1,289
|
Excess tax benefit from stock-based compensation
|
|
|
2,221
|
|
|
4,000
|
Net proceeds from issuance of common stock
|
|
|
741,509
|
|
|
932,455
|
Payments for loan costs
|
|
|
-
|
|
|
(10,642)
|
Purchase of treasury stock
|
|
|
(4,403)
|
|
|
(4,642)
|
Decrease in bank overdrafts
|
|
|
(10,371)
|
|
|
(36,718)
|
Net cash provided by financing activities
|
|
|
795,514
|
|
|
635,742
|
Net increase in cash and cash equivalents
|
|
|
259
|
|
|
365,467
|
Cash and cash equivalents at beginning of period
|
|
|
21
|
|
|
21
|
Cash and cash equivalents at end of period
|
|
$
|
280
|
|
$
|
365,488
|
|
|
|
|
|
|
|
Concho Resources Inc.
|
Summary Production and Price Data
|
Unaudited
|
The following table sets forth summary information concerning production
and operating data for the periods indicated:
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production and operating data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net production volumes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbl)
|
|
|
9,031
|
|
|
6,229
|
|
|
17,097
|
|
|
12,075
|
Natural gas (MMcf)
|
|
|
26,283
|
|
|
21,485
|
|
|
49,268
|
|
|
41,285
|
Total (MBoe)
|
|
|
13,412
|
|
|
9,810
|
|
|
25,308
|
|
|
18,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily production volumes:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (Bbl)
|
|
|
99,242
|
|
|
68,451
|
|
|
94,459
|
|
|
66,713
|
Natural gas (Mcf)
|
|
|
288,824
|
|
|
236,099
|
|
|
272,199
|
|
|
228,094
|
Total (Boe)
|
|
|
147,379
|
|
|
107,801
|
|
|
139,826
|
|
|
104,729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average prices:
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil, without derivatives (Bbl)
|
|
$
|
52.14
|
|
$
|
93.24
|
|
$
|
47.99
|
|
$
|
92.81
|
Oil, with derivatives (Bbl) (a)
|
|
$
|
63.56
|
|
$
|
89.29
|
|
$
|
63.39
|
|
$
|
89.96
|
Natural gas, without derivatives (Mcf)
|
|
$
|
2.53
|
|
$
|
5.77
|
|
$
|
2.65
|
|
$
|
5.94
|
Natural gas, with derivatives (Mcf) (a)
|
|
$
|
2.88
|
|
$
|
5.70
|
|
$
|
2.97
|
|
$
|
5.78
|
Total, without derivatives (Boe)
|
|
$
|
40.07
|
|
$
|
71.84
|
|
$
|
37.57
|
|
$
|
72.04
|
Total, with derivatives (Boe) (a)
|
|
$
|
48.44
|
|
$
|
69.18
|
|
$
|
48.62
|
|
$
|
69.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses per Boe:
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating expenses and workover costs
|
|
$
|
7.30
|
|
$
|
8.15
|
|
$
|
7.46
|
|
$
|
8.11
|
Oil and natural gas taxes
|
|
$
|
3.30
|
|
$
|
5.61
|
|
$
|
3.12
|
|
$
|
5.70
|
Depreciation, depletion and amortization
|
|
$
|
22.72
|
|
$
|
24.20
|
|
$
|
22.60
|
|
$
|
24.21
|
General and administrative
|
|
$
|
4.54
|
|
$
|
5.05
|
|
$
|
4.73
|
|
$
|
5.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes the effect of cash receipts from (payments on)
derivatives not designated as hedges:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash receipts from (payments on) derivatives not designated as
hedges:
|
Oil derivatives
|
|
$
|
103,129
|
|
$
|
(24,569)
|
|
$
|
263,315
|
|
$
|
(34,338)
|
Natural gas derivatives
|
|
|
9,123
|
|
|
(1,485)
|
|
|
16,093
|
|
|
(6,553)
|
Total
|
|
$
|
112,252
|
|
$
|
(26,054)
|
|
$
|
279,408
|
|
$
|
(40,891)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The presentation of average prices with derivatives is a non-GAAP
measure as a result of including the cash receipts from (payments
on) commodity derivatives that are presented in loss on
derivatives not designated as hedges in the statements of
operations. This presentation of average prices with derivatives
is a means by which to reflect the actual cash performance of our
commodity derivatives for the respective periods and presents oil
and natural gas prices with derivatives in a manner consistent
with the presentation generally used by the investment community.
|
|
|
|
|
|
Concho Resources Inc.
|
Costs Incurred
|
Unaudited
|
The table below provides the costs incurred for oil and natural gas
producing activities for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property acquisition costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved
|
|
$
|
2,243
|
|
$
|
2,137
|
|
$
|
2,243
|
|
$
|
22,627
|
Unproved
|
|
|
18,037
|
|
|
11,382
|
|
|
34,050
|
|
|
36,070
|
Exploration
|
|
|
343,051
|
|
|
342,424
|
|
|
772,220
|
|
|
666,921
|
Development
|
|
|
221,410
|
|
|
193,163
|
|
|
523,154
|
|
|
404,842
|
Total costs incurred for oil and natural gas properties
|
|
$
|
584,741
|
|
$
|
549,106
|
|
$
|
1,331,667
|
|
$
|
1,130,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Concho Resources Inc.
|
Derivatives Information
|
Unaudited
|
The table below provides data associated with the Company’s derivatives
at July 29, 2015, for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
Third Quarter
|
|
|
Fourth Quarter
|
|
|
Total
|
|
|
2016
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Swaps: (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (Bbl)
|
|
|
6,169,000
|
|
|
5,579,000
|
|
|
11,748,000
|
|
|
18,059,000
|
|
|
6,288,000
|
Price per Bbl
|
|
$
|
75.14
|
|
$
|
75.24
|
|
$
|
75.19
|
|
$
|
75.71
|
|
$
|
64.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Basis Swaps: (b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (Bbl)
|
|
|
5,811,000
|
|
|
5,336,000
|
|
|
11,147,000
|
|
|
14,661,000
|
|
|
6,335,000
|
Price per Bbl
|
|
$
|
(2.50)
|
|
$
|
(2.47)
|
|
$
|
(2.48)
|
|
$
|
(2.11)
|
|
$
|
(1.51)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Swaps: (c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (MMBtu)
|
|
|
5,980,000
|
|
|
5,980,000
|
|
|
11,960,000
|
|
|
3,660,000
|
|
|
-
|
Price per MMBtu
|
|
$
|
4.16
|
|
$
|
4.16
|
|
$
|
4.16
|
|
$
|
3.14
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural Gas Basis Swaps: (d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume (MMBtu)
|
|
|
1,380,000
|
|
|
1,380,000
|
|
|
2,760,000
|
|
|
-
|
|
|
-
|
Price per MMBtu
|
|
$
|
(0.13)
|
|
$
|
(0.13)
|
|
$
|
(0.13)
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The index prices for the oil contracts are based on the New
York Mercantile Exchange (“NYMEX”) – West Texas Intermediate
(“WTI”) monthly average futures price.
|
(b) The basis differential price is between Midland – WTI and
Cushing – WTI.
|
(c) The index prices for the natural gas price swaps are based on
the NYMEX – Henry Hub last trading day futures price.
|
(d) The basis differential price is between the El Paso Permian
delivery point and NYMEX – Henry Hub delivery point.
|
|
Concho Resources Inc.
|
Supplemental Non-GAAP Financial Measures
|
Unaudited
|
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 to exclude certain non-cash and
unusual items and cash flows from operating activities to adjust for
settlements on derivatives not designated as hedges.
Adjusted Net Income
The following table provides a reconciliation of net income (loss)
(GAAP) to adjusted net income (non-GAAP) for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
|
June 30,
|
(in thousands, except per share amounts)
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) - as reported
|
|
$
|
(120,483
|
)
|
|
|
$
|
11,769
|
|
|
|
$
|
(112,971
|
)
|
|
|
$
|
103,076
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments for certain non-cash and unusual items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on derivatives not designated as hedges
|
|
|
147,399
|
|
|
|
|
164,707
|
|
|
|
|
32,059
|
|
|
|
|
200,322
|
|
Cash receipts from (payments on) derivatives not designated as hedges
|
|
|
112,252
|
|
|
|
|
(26,054
|
)
|
|
|
|
279,408
|
|
|
|
|
(40,891
|
)
|
Leasehold abandonments
|
|
|
1,444
|
|
|
|
|
11,193
|
|
|
|
|
3,363
|
|
|
|
|
15,138
|
|
Loss on extinguishment of debt
|
|
|
-
|
|
|
|
|
4,316
|
|
|
|
|
-
|
|
|
|
|
4,316
|
|
(Gain) loss on disposition of assets and other
|
|
|
1,581
|
|
|
|
|
9,603
|
|
|
|
|
1,620
|
|
|
|
|
9,457
|
|
Tax impact (a)
|
|
|
(94,826
|
)
|
|
|
|
(61,739
|
)
|
|
|
|
(114,238
|
)
|
|
|
|
(71,005
|
)
|
Change in statutory effective income tax rates
|
|
|
(1,826
|
)
|
|
|
|
-
|
|
|
|
|
(1,826
|
)
|
|
|
|
-
|
|
Adjusted net income
|
|
$
|
45,541
|
|
|
|
$
|
113,795
|
|
|
|
$
|
87,415
|
|
|
|
$
|
220,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.38
|
|
|
|
$
|
1.04
|
|
|
|
$
|
0.74
|
|
|
|
$
|
2.06
|
|
Diluted
|
|
$
|
0.38
|
|
|
|
$
|
1.04
|
|
|
|
$
|
0.74
|
|
|
|
$
|
2.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rates
|
|
|
36.1
|
%
|
|
|
|
37.7
|
%
|
|
|
|
36.1
|
%
|
|
|
|
37.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The tax impact is computed utilizing the Company's adjusted
statutory effective federal and state income tax rates shown in
the table above.
|
|
Adjusted Cash Flows
The following table provides a reconciliation of cash flows from
operating activities (GAAP) to adjusted cash flows (non-GAAP) for the
periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
|
(in thousands)
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
$
|
488,934
|
|
$
|
854,728
|
Settlements received from (paid on) derivatives not designated as
hedges (a)
|
|
|
279,408
|
|
|
(40,891)
|
Adjusted cash flows
|
|
$
|
768,342
|
|
$
|
813,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Amounts are presented in cash flows from investing activities
for GAAP purposes.
|
|
EBITDAX
EBITDAX (as defined below) is presented herein and reconciled from the
United States generally accepted accounting principles ("GAAP") measure
of net income (loss) 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 (loss), plus (1) exploration
and abandonments expense, (2) depreciation, depletion and amortization
expense, (3) accretion expense, (4) non-cash stock-based compensation
expense, (5) 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 and other, (8) interest expense,
(9) loss on extinguishment of debt and (10) federal and state income
taxes. EBITDAX is not a measure of net income (loss) or cash flows as
determined by GAAP.
The Company’s EBITDAX measure 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
(loss) 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 (loss)
(GAAP) to EBITDAX (non-GAAP) for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
(in thousands)
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(120,483)
|
|
$
|
11,769
|
|
$
|
(112,971)
|
|
$
|
103,076
|
Exploration and abandonments
|
|
|
12,020
|
|
|
28,288
|
|
|
17,775
|
|
|
53,663
|
Depreciation, depletion and amortization
|
|
|
304,802
|
|
|
237,445
|
|
|
572,007
|
|
|
458,837
|
Accretion of discount on asset retirement obligations
|
|
|
2,047
|
|
|
1,722
|
|
|
4,041
|
|
|
3,393
|
Non-cash stock-based compensation
|
|
|
15,450
|
|
|
9,775
|
|
|
30,945
|
|
|
21,207
|
Loss on derivatives not designated as hedges
|
|
|
147,399
|
|
|
164,707
|
|
|
32,059
|
|
|
200,322
|
Cash receipts from (payments on) derivatives not designated as hedges
|
|
|
112,252
|
|
|
(26,054)
|
|
|
279,408
|
|
|
(40,891)
|
(Gain) loss on disposition of assets and other
|
|
|
1,581
|
|
|
9,603
|
|
|
1,620
|
|
|
9,457
|
Interest expense
|
|
|
53,482
|
|
|
55,388
|
|
|
107,051
|
|
|
111,523
|
Loss on extinguishment of debt
|
|
|
-
|
|
|
4,316
|
|
|
-
|
|
|
4,316
|
Income tax expense (benefit)
|
|
|
(70,708)
|
|
|
7,059
|
|
|
(66,558)
|
|
|
62,390
|
EBITDAX
|
|
$
|
457,842
|
|
$
|
504,018
|
|
$
|
865,377
|
|
$
|
987,293
|
CONTACT:
Concho Resources Inc.
INVESTOR RELATIONS
Megan P.
Hays, 432-685-2533
Director of Investor Relations
or
Jere
Thompson, 432-221-0383
Financial Analyst
Concho Resources (NYSE:CXO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Concho Resources (NYSE:CXO)
Historical Stock Chart
From Apr 2023 to Apr 2024