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Concho Resources Inc. Reports Fourth Quarter 2012 And Year End Financial And Operating Results

Conference Call Information

The Company will host a conference call on Thursday, February 21, 2013 at 9:00 a.m. Central Time to discuss the fourth quarter 2012 and year-end financial and operating results. Interested parties may listen to the conference call via the Company’s website at www.concho.com or by dialing (866) 271-5140 (passcode: 10112096). A replay of the conference call will be available on the Company’s website or by dialing (888) 286-8010 (passcode: 61682005).

About 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 focused in the Permian Basin of Southeast New Mexico and West Texas. For more information, visit Concho’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 facts, 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. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's future financial position, operations, performance, production growth, returns, divestitures, capital expenditure budget, the proceeds of the sale of the non-core properties, oil and natural gas reserves, number of identified drilling locations, drilling program, derivative activities, costs and other guidance. These statements are based on certain assumptions 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 Form 10-K and 10-Q filings and risks relating to declines in the prices we receive for our oil and natural gas; uncertainties about the estimated quantities of reserves; risks related to the integration of acquired assets; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; drilling and operating risks; the adequacy of our capital resources and liquidity; risks related to the concentration of our operations in the Permian Basin; the results of our hedging program; weather; litigation; shortages of oilfield equipment, services and qualified personnel and increases in costs for such equipment, services and personnel; uncertainties about our ability to replace reserves and economically develop our current reserves; competition in the oil and natural gas industry; 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
 
    December 31,

(in thousands, except share and per share amounts)

      2012         2011  
Assets
Current assets:    
Cash and cash equivalents $ 2,880 $ 342
Accounts receivable, net of allowance for doubtful accounts:
Oil and natural gas 198,053 213,921
Joint operations and other 202,738 153,746
Derivative instruments 35,942 1,698
Deferred income taxes - 28,793
Prepaid costs and other   19,269     12,523  
Total current assets   458,882     411,023  
Property and equipment:
Oil and natural gas properties, successful efforts method 9,455,599 7,347,460
Accumulated depletion and depreciation   (1,565,316 )   (1,116,545 )
Total oil and natural gas properties, net 7,890,283 6,230,915
Other property and equipment, net   103,141     59,203  
Total property and equipment, net   7,993,424     6,290,118  
Funds held in escrow - 17,394
Deferred loan costs, net 77,609 65,641
Intangible asset - operating rights, net 30,076 33,425
Inventory 20,611 19,419
Noncurrent derivative instruments 2,769 7,944
Other assets   6,066     4,612  
Total assets $ 8,589,437   $ 6,849,576  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable:
Trade $ 31,144 $ 23,198
Related parties 185 154
Bank overdrafts 24,275 39,241
Revenue payable 162,073 146,061
Accrued and prepaid drilling costs 351,919 293,919
Derivative instruments 1,584 56,218
Deferred income taxes 8,566 -
Other current liabilities   160,340     142,686  
Total current liabilities   740,086     701,477  
Long-term debt 3,101,103 2,080,141
Deferred income taxes 1,186,621 1,002,295
Noncurrent derivative instruments 12,049 32,254
Asset retirement obligations and other long-term liabilities 83,382 52,670
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 300,000,000 authorized; 104,668,427 and 103,756,222
shares issued at December 31, 2012 and 2011, respectively 105 104
Additional paid-in capital 1,982,714 1,925,757
Retained earnings 1,490,563 1,058,874
Treasury stock, at cost; 86,861 and 55,990 shares at December 31, 2012 and 2011,
respectively   (7,186 )   (3,996 )
Total stockholders’ equity   3,466,196     2,980,739  
Total liabilities and stockholders’ equity $ 8,589,437   $ 6,849,576  

 
 
Concho Resources Inc.
Consolidated Statements of Operations
Unaudited
                         
               
Three Months Ended Years Ended
December 31, December 31,
(in thousands, except per share amounts)     2012     2011 (a)     2012     2011 (a)
 
Operating revenues:
Oil sales $ 383,494 $ 344,005 $ 1,482,998 $ 1,228,167
Natural gas sales   94,032     100,337     336,816     389,604  
Total operating revenues   477,526     444,342     1,819,814     1,617,771  
Operating costs and expenses:
Oil and natural gas production 92,102 82,148 343,743 277,929
Exploration and abandonments 12,505 6,770 39,840 11,394
Depreciation, depletion and amortization 166,453 115,249 575,128 400,022
Accretion of discount on asset retirement obligations 1,361 669 4,187 2,444
Impairments of long-lived assets - 363 - 439
General and administrative (including non-cash stock-based compensation of
$8,438 and $5,405 for the three months ended December 31, 2012 and
2011, respectively, and $29,872 and $19,271 for the years ended
December 31, 2012 and 2011, respectively) 37,802 29,960 133,796 98,525
(Gain) loss on derivatives not designated as hedges   (17,901 )   320,312     (127,443 )   23,350  
Total operating costs and expenses   292,322     555,471     969,251     814,103  
Income (loss) from operations   185,204     (111,129 )   850,563     803,668  
Other income (expense):
Interest expense (53,632 ) (34,159 ) (182,705 ) (118,360 )
Other, net   (3,670 )   616     (8,587 )   (3,974 )
Total other expense   (57,302 )   (33,543 )   (191,292 )   (122,334 )
Income (loss) from continuing operations before income taxes 127,902 (144,672 ) 659,271 681,334
Income tax (expense) benefit   (46,714 )   54,559     (251,041 )   (261,800 )
Income (loss) from continuing operations 81,188 (90,113 ) 408,230 419,534
Income (loss) from discontinued operations, net of tax   (5,901 )   7,288     23,459     128,603  
Net income (loss) $ 75,287   $ (82,825 ) $ 431,689   $ 548,137  
Basic earnings per share:
Income (loss) from continuing operations $ 0.78 $ (0.88 ) $ 3.96 $ 4.09
Income (loss) from discontinued operations, net of tax   (0.05 )   0.07     0.22     1.25  
Net income (loss) $ 0.73   $ (0.81 ) $ 4.18   $ 5.34  
Weighted average shares used in basic earnings per share   103,494     102,771     103,190     102,581  
Diluted earnings per share:
Income (loss) from continuing operations $ 0.78 $ (0.88 ) $ 3.93 $ 4.05
Income (loss) from discontinued operations, net of tax   (0.06 )   0.07     0.22     1.23  
Net income (loss) $ 0.72   $ (0.81 ) $ 4.15   $ 5.28  
Weighted average shares used in diluted earnings per share   104,194     102,771     103,972     103,653  
                         
 
(a) Retrospectively adjusted for presentation of discontinued operations.

 
 
Concho Resources Inc.
Consolidated Statements of Cash Flows
Unaudited
 
   
Years Ended December 31,
(in thousands)     2012     2011 (a)
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $ 431,689 $ 548,137
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization 575,128 400,022
Impairments of long-lived assets - 439
Accretion of discount on asset retirement obligations 4,187 2,444
Exploration and abandonments, including dry holes 19,913 6,417
Non-cash compensation expense 29,872 19,271
Deferred income taxes 241,819 249,883
Loss on sale of assets, net 372 1,139
(Gain) loss on derivatives not designated as hedges (127,443 ) 23,350
Discontinued operations 49,011 (35,084 )
Other non-cash items 12,420 3,075
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable (23,091 ) (117,561 )
Prepaid costs and other (8,200 ) (1,730 )
Inventory (1,587 ) 7,749
Accounts payable 4,165 (25,381 )
Revenue payable 16,012 84,850
Other current liabilities   13,211     32,438  
Net cash provided by operating activities   1,237,478     1,199,458  
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures on oil and natural gas properties (2,717,283 ) (1,707,939 )
Additions to other property and equipment (56,588 ) (37,651 )
Proceeds from the sale of assets 492,497 196,420
Funds held in escrow 17,394 (17,394 )
Settlements received from (paid on) derivatives not designated as hedges   23,536     (84,854 )
Net cash used in investing activities   (2,240,444 )   (1,651,418 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt 4,262,000 2,809,300
Payments of debt (3,241,500 ) (2,389,300 )
Exercise of stock options 8,123 7,801
Excess tax benefit from stock-based compensation 18,963 24,037
Payments for loan costs (23,926 ) (24,466 )
Purchase of treasury stock (3,190 ) (2,381 )
Bank overdrafts   (14,966 )   26,927  
Net cash provided by financing activities   1,005,504     451,918  
Net increase (decrease) in cash and cash equivalents 2,538 (42 )
Cash and cash equivalents at beginning of period   342     384  
Cash and cash equivalents at end of period $ 2,880   $ 342  
SUPPLEMENTAL CASH FLOWS:
Cash paid for interest and fees, net of $73 capitalized interest in 2011 $ 158,715 $ 77,921
Cash paid for income taxes $ 19,674 $ 22,768
             
 
(a) Retrospectively adjusted for presentation of discontinued operations.
 
 




Stock quotes in this article: CXO 

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