“We are in the very early stages of driving proved reserves and production growth in the Delaware Basin,” commented Tim Leach, Chairman, Chief Executive Officer and President. “Our drilling inventory in the northern Delaware Basin has expanded rapidly to over 4,200 gross locations, only 250 of which are currently identified as proved. Going forward, I expect that the robust returns from this deep inventory will continue to drive organic production and proved reserves growth for years to come.”
During 2012, the Company enhanced the sustainability of its long-term growth strategy through a combination of its development and exploration program, as well as the Three Rivers acquisition and subsequent non-core asset divestiture. “We have expanded the opportunity to reinvest capital across the Permian Basin without having to sacrifice returns,” said Tim Leach. At year-end 2012, gross acreage across the Permian Basin increased to 1.2 million acres, a 24% increase over the previous year. Much of that growth occurred in the Delaware Basin, where the Company now has exposure to over 475,000 gross acres.
(The following information is unaudited and preliminary. Final results will be provided in the Annual Report on Form 10-K for the year ended December 31, 2012.)
Full-Year and Fourth Quarter 2012 Production and Revised 2013 Production GuidanceConcho’s production for 2012 totaled 29.8 MMBoe (18.0 MMBbls of crude oil and 70.6 Bcf of natural gas), a 26% increase over 2011 production of 23.6 MMBoe and represents achievement of the upper-end of the Company’s 2012 full-year guidance. Crude oil production in 2012 grew 23% over 2011 and represented 60% of total production. Adjusting for acquisitions during the year, organic production in 2012 totaled 28.5 MMBoe (61% crude oil), a 21% increase over total production in 2011. Tim Leach commented, “Concho has delivered over 20% organic production growth every year as a public company while spending largely within cash flow. That is a significant accomplishment and reflects the high-quality nature of our assets in the oil-rich Permian Basin.”