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Concho Resources Inc. Reports Second Quarter 2013 Financial And Operating Results

Stocks in this article: CXO

Oil and natural gas production expense from continuing operations for the second quarter of 2013, including oil and natural gas taxes, totaled $107.2 million, or $12.93 per barrel of oil equivalent (“Boe”), a 1% increase per Boe from the second quarter of 2012 . This increase was due primarily to higher oil and natural gas taxes, which averaged $5.68 per Boe in the second quarter of 2013 as compared to $5.27 in the second quarter of 2012, as a result of higher oil and natural gas prices. This was partially offset by lower lease operating expenses and workover costs, which averaged $7.25 per Boe in the second quarter of 2013 as compared to $7.57 per Boe in the second quarter of 2012.

Depreciation, depletion and amortization (“DD&A”) expense from continuing operations for the second quarter of 2013 totaled $188.7 million, or $22.75 per Boe, a 9% increase per Boe from the second quarter of 2012. This increase in the Company’s DD&A rate is primarily driven by higher cost, exploratory horizontal drilling activity in the Delaware Basin.

In the second quarter of 2013, the Company recognized a $65.4 million impairment of long-lived assets on non-core, natural gas properties in the New Mexico Shelf asset. The impairment of these assets was primarily due to downward adjustments to the economically recoverable proved reserves associated with declines in well performance and a reduction in estimated realized natural gas prices.

General and administrative expense (“G&A”) from continuing operations for the second quarter of 2013 totaled $41.0 million, or $4.94 per Boe, as compared to $32.5 million, or $5.09 per Boe, in the second quarter of 2012. Cash G&A for the second quarter of 2013 totaled $32.4 million and stock-based compensation (non-cash) totaled $8.6 million. The decrease in per Boe expense for the second quarter of 2013 over the second quarter of 2012 was primarily due to a 30% increase in production from continuing operations, and was partially offset by a 26% increase in absolute G&A expenses.

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