Concho Resources completes $1.62 billion acquisition of Midland Basin assets

Concho Resources

Concho Resources acquires 10 million boe/d in deal, 67% comprised of oil

MIDLAND, Texas – Concho Resources Inc. completed acquisition of 40,000 net acres in the core of the Midland Basin from Reliance Energy for approximately $1.625 billion.

The acquired assets, which are located in Andrews, Martin and Ectorcounties in Texas.

Concho is currently running one rig on the acquired assets and plans to add a second rig in early 2017.

Analysts at US financial services firm Cowen & Co said in July that producers added most rigs in the Permian Basin in West Texas since the rig count bottomed, noting Concho Resources Inc and Energen Corp were the most active drillers.

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Acquisition Highlights

Adds approximately 40,000 net acres with an average 99 per cent working interest to Concho’s core Midland Basin position
Includes approximately 10 MBoepd (67 per cent oil) of current production
Enhances the Company’s drilling inventory with more than 530 long-lateral drilling locations targeting the Middle Spraberry, Lower Spraberry and Wolfcamp B
Provides expansive development upside across multiple zones

Strong Financial Position

Concho Resources recently completed its previously announced redemption of the entire outstanding principal amount of $600 million of its 7.0 per cent Senior Notes due Jan. 2021.

The redemption price for the Notes was 103.5 per cent of the principal amount outstanding, which included the make-whole premium for the early redemption of the Notes as determined in accordance with the indenture governing the Notes.

Concho Resources also paid accrued and unpaid interest on the Notes through Sept. 19, 2016, the redemption date.

Concho continues to reinforce its strong financial position.

Pro forma for the Notes redemption, closing of the previously announced common stock offering and closing of the Reliance acquisition, Concho had long-term debt of approximately $2.7 billion as of June 30, 2016, representing a $0.9 billion reduction in long-term debt since June 30, 2015.

Additionally, the company’s pro forma liquidity totaled approximately $2.5 billion as of June 30, 2016, which reflects its undrawn revolving credit facility with total capacity of $2.5 billion.