Estimated proved reserves in the Delaware Basin at year-end 2012 grew 64% over the previous year but only accounted for 18% of the Company’s total estimated proved reserves. Also of note, only 6% of the Company’s year-end 2012 Delaware Basin drilling locations were booked as proved. Concho anticipates that capital spending in 2013 in the Delaware Basin will be approximately $760 million, over 50% more than in 2012, and will drill approximately 175 wells.

Fourth Quarter and Full-Year 2012 Realized Prices

In the fourth quarter of 2012, the average discount on the Midland-to-Cushing WTI oil basis differential was approximately $3.57 per Bbl. This historically wide discount had an adverse effect on the Company’s unhedged crude oil realization during the quarter; however, the Company’s full-year 2012 unhedged crude oil realization remained within annual guidance. The table below summarizes average unhedged realized crude oil and natural gas prices for the fourth quarter and full-year 2012:
    4Q 2012     FY 2012
NYMEX crude oil (Bbl) $ 88.17 $ 94.19
Realized crude oil, excluding hedges (Bbl) $ 81.28 $ 88.01
NYMEX natural gas (Mcf) $ 3.35 $ 2.83
Realized natural gas, excluding hedges (Mcf) $ 5.06 $ 5.03

Derivative Update

The Company maintains an active hedging program and has added to its derivative positions. In addition to incremental crude oil swaps, Concho has added hedges that limit the Company’s exposure to the Midland-to-Cushing differential. Concho has hedged 7.7 MMBbls of the basis differential at an average price of $1.25 per Bbl from April 2013 to December 2013. Please see the “Derivatives Information” table at the end of this press release for more detailed information about the Company’s current derivative positions.

Credit Facility

At December 31, 2012, the Company had borrowings outstanding under the credit facility of $304.0 million, and the availability under the credit facility was approximately $2.2 billion.

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