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

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

Business Wire

MIDLAND, Texas -- February 20, 2013

Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) today reported
financial and operating results for the three months and year ended December
31, 2012. Highlights for the year ended December 31, 2012 include:

  *Production of 29.8 million barrels of oil equivalent (“MMBoe”) for 2012, a
    26% increase over 2011
  *Net income of $431.7 million, or $4.15 per diluted share, for 2012, as
    compared to net income of $548.1 million, or $5.28 per diluted share, in
    2011
  *Adjusted net income^1 (non-GAAP) of $388.6 million, or $3.74 per diluted
    share, for 2012, as compared to $430.1 million, or $4.15 per diluted
    share, for 2011
  *EBITDAX^2 (non-GAAP) of $1,475.6 million for 2012, a 16% increase over
    2011

^1 Adjusted net income (non-GAAP) is comparable to securities analyst
estimates. For an explanation of how we calculate adjusted net income
(non-GAAP) and a reconciliation of net income (GAAP) to adjusted net income
(non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

^2 For an explanation of how we calculate and use EBITDAX (non-GAAP) and a
reconciliation of net income (GAAP) to EBITDAX (non-GAAP), please see
"Supplemental Non-GAAP Financial Measures" below.

Year End 2012 Financial Results

Production for 2012 totaled 29.8 MMBoe (18.0 million barrels of oil (“MMBbls”)
and 70.6 billion cubic feet of natural gas (“Bcf”)), an increase of 26% as
compared to 23.6 MMBoe (14.7 MMBbls and 53.7 Bcf) produced in 2011.

Tim Leach, Concho's Chairman, CEO and President, commented, “In 2012, Concho
was able to execute our $1.5 billion capital program and grow production in
excess of 20% organically. In addition, we positioned the Company for future
growth in emerging areas such as the Delaware Basin through the acquisition of
Three Rivers and internally identified drilling locations. Today, our
opportunity set is deeper than at any time in the Company’s history and we
look forward to executing on our inventory of high rate of return projects.”

For 2012, the Company reported net income of $431.7 million, or $4.15 per
diluted share, as compared to net income of $548.1 million, or $5.28 per
diluted share, for 2011. The Company’s 2012 results were impacted by several
non-cash items including: (1) a $103.9 million unrealized mark-to-market gain
on commodity derivatives, (2) $12.4 million of leasehold abandonments, (3)
$3.2 million of other settlements and (4) an $18.7 million loss related to the
sale of non-core assets included in discontinued operations. Excluding these
items and their tax effects, the 2012 adjusted net income (non-GAAP) was
$388.6 million, or $3.74 per diluted share. Excluding similar non-cash items
and their tax impact, adjusted net income (non-GAAP) for 2011 was $430.1
million, or $4.15 per diluted share. For a description and a reconciliation of
net income (GAAP) to adjusted net income (non-GAAP), please see “Supplemental
Non-GAAP Financial Measures” below.

EBITDAX was $1,475.6 million in 2012, an increase of 16% from $1,275.2 million
in 2011. For a description and a reconciliation of net income (GAAP) to
EBITDAX (non-GAAP), please see “Supplemental Non-GAAP Financial Measures”
below.

Oil and natural gas sales from continuing operations for 2012 increased 12%
when compared to 2011. This increase was attributable to a 27% increase in
production from continuing operations in 2012 compared to 2011, which was
partially offset by a 34% decrease in the Company’s unhedged realized natural
gas price and a 4% decrease in the Company’s unhedged realized oil price. Oil
and natural gas production expense from continuing operations for 2012,
including oil and natural gas taxes, totaled $343.7 million, or $12.29 per
barrel of oil equivalent (“Boe”), a 3% decrease per Boe from 2011. This
decrease was due primarily to lower oil and natural gas taxes, which averaged
$5.39 per Boe in 2012 as compared to $5.96 per Boe in 2011. The decrease in
oil and natural gas taxes per Boe over 2011 was primarily due to lower
realized oil and natural gas prices.

Depreciation, depletion and amortization expense (“DD&A”) from continuing
operations for 2012 totaled $575.1 million, or $20.56 per Boe, a 13% increase
per Boe from 2011.

General and administrative expense (“G&A”) from continuing operations for 2012
totaled $133.8 million, or $4.79 per Boe, as compared to $98.5 million, or
$4.48 per Boe, in 2011. Cash G&A for 2012 totaled $103.9 million and
stock-based compensation (non-cash) totaled $29.9 million. The increase in per
Boe expense for 2012 over 2011 was primarily due to a 36% increase in absolute
G&A expenses reflecting increased staffing across the Company, and was
partially offset by a 27% increase in production from continuing operations.

The Company’s cash flow from operating activities (GAAP) was $1,237.5 million
for 2012, as compared to $1,199.5 million for 2011, an increase of 3%.
Adjusted cash flows (non-GAAP), which are cash flows from operating activities
(GAAP) adjusted for settlements on derivatives not designated as hedges, were
$1,261.0 million for 2012, as compared to $1,114.6 million for 2011, an
increase of 13%. For a description of the use of adjusted cash flows
(non-GAAP) and for a reconciliation of cash flows from operating activities
(GAAP) to adjusted cash flows (non-GAAP), please see “Supplemental Non-GAAP
Financial Measures” below.

In 2012, the Company collected net cash receipts on derivatives not designated
as hedges of $23.5 million and the non-cash unrealized mark-to-market gain on
derivatives not designated as hedges was $103.9 million. In comparison, the
Company made net cash payments of $84.9 million on derivatives not designated
as hedges and reported a $61.5 million non-cash unrealized mark-to-market gain
on derivatives not designated as hedges in 2011. To better understand the
impact of the Company’s derivative positions and their impact on the
statements of operations, please see the “Summary Production and Operating
Data” and “Derivatives Information” tables at the end of this press release.

Operations

For 2012, the Company commenced drilling or participated in a total of 840
gross wells (657 operated), 5 of which were plugged and abandoned, and
completed 798 wells as producers.

The table below summarizes the Company’s gross drilling activities by core
area for the fourth quarter and full year 2012:

                Total Wells^1       Operated Wells      Completed Wells
                  4Q 2012  FY 2012     4Q 2012  FY 2012     4Q 2012   FY
                                                                         2012
New Mexico        73        360         29        251         85         348
Shelf
Delaware          45        154         29        87          47         134
Basin
Texas Permian     78        326         77        319         78         316
Total             196       840         135       657         210        798

^1 Includes 5 wells that were plugged and abandoned in 2012.

Currently, the Company is operating 31 drilling rigs; 5 of these rigs are
drilling Yeso wells in the New Mexico Shelf, 14 are drilling in the Texas
Permian and 12 are drilling in the Delaware Basin. Of the 31 operated rigs,
the Company is currently running 16 horizontal drilling rigs, including 12 in
the Delaware Basin, 1 in the Texas Permian and 3 in the New Mexico Shelf.

New Mexico Shelf

At year-end 2012, the Company had identified 2,083 locations on the New Mexico
Shelf, with proved reserves attributed to 616 of such locations. Of these
2,083 drilling locations, 1,044 locations target the Yeso formation vertically
and 676 locations targeting the Yeso formation horizontally.

Delaware Basin

At year-end 2012, the Company had identified 4,212 drilling locations in the
northern Delaware Basin, an increase of over 2,300 drilling locations since
year-end 2011, with proved reserves attributed to 246 of such locations. These
locations include 2,462 targeting the Bone Spring sands, 1,016 targeting the
Avalon shale and 734 targeting other formations. Concho has not included any
potential drilling locations across its approximately 147,000 gross (128,000
net) acres in the southern Delaware Basin.

The Company’s net production in the fourth quarter of 2012 from horizontal
Delaware Basin wells averaged approximately 21,100 barrels of oil equivalent
per day (“Boepd”) an increase of 92% over the fourth quarter of 2011 and an
increase of 32% over the third quarter of 2012.

Texas Permian

At year-end 2012, the Company had identified 5,974 drilling locations, with
proved reserves associated with 1,464 of such locations. Of these 5,974
drilling locations, 1,955 target the Wolfberry play on 40-acre spacing, 2,486
target the Wolfberry play on 20-acre spacing, 1,410 target the shallow
Wolfcamp vertically and the remaining drilling locations target other
objectives.

Derivative Update

The Company maintains an active hedging program and has added to its
derivative positions. In addition to the incremental crude oil swaps, Concho
has added basis swaps that limit the Company’s exposure to the
Midland-to-Cushing differential. Concho has hedged 9.0 MMBbls of the basis
differential at an average price of ($1.23) 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 its credit
facility of $304.0 million, and the availability under the credit facility was
approximately $2.2 billion.

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         2012           2011       
share amounts)
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,                9,455,599          7,347,460
successful efforts method
Accumulated depletion and depreciation        (1,565,316 )      (1,116,545 )
Total oil and natural gas properties,          7,890,283          6,230,915
net
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         83,382             52,670
long-term liabilities
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         105                104
2011, respectively
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’          $ 8,589,437       $ 6,849,576  
equity



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

(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                 4,187              2,444
retirement obligations
Exploration and abandonments, including        19,913             6,417
dry holes
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                 (127,443   )       23,350
designated as hedges
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                1,237,478        1,199,458  
activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures on oil and natural        (2,717,283 )       (1,707,939 )
gas properties
Additions to other property and                (56,588    )       (37,651    )
equipment
Proceeds from the sale of assets               492,497            196,420
Funds held in escrow                           17,394             (17,394    )
Settlements received from (paid on)           23,536           (84,854    )
derivatives not designated as hedges
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            18,963             24,037
compensation
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                1,005,504        451,918    
activities
Net increase (decrease) in cash and cash       2,538              (42        )
equivalents
Cash and cash equivalents at beginning        342              384        
of period
Cash and cash equivalents at end of          $ 2,880           $ 342        
period
SUPPLEMENTAL CASH FLOWS:
Cash paid for interest and fees, net of      $ 158,715          $ 77,921
$73 capitalized interest in 2011
Cash paid for income taxes                   $ 19,674           $ 22,768
                                                          
                                                                
(a) Retrospectively adjusted for presentation of discontinued operations.



                            Concho Resources Inc.
                      Summary Production and Price Data
                                  Unaudited

The following table sets forth summary information from our continuing and
discontinued operations concerning our production and operating data for the
periods indicated:

                                                              
                           Three Months Ended               Years Ended
                           December 31,                     December 31,
                    2012          2011           2012        2011
                                                                          
Production and
operating data:
  Net production
  volumes:
      Oil (MBbl)             4,950           4,074            18,003        14,692
      Natural gas            19,621          14,748           70,591        53,714
      (MMcf)
      Total (MBoe)           8,220           6,532            29,768        23,644
                                                                          
  Average daily
  production volumes:
      Oil (Bbl)              53,804          44,283           49,189        40,252
      Natural gas            213,272         160,304          192,872       147,162
      (Mcf)
      Total (Boe)            89,350          71,000           81,334        64,779
                                                                          
  Average prices:
      Oil, without
      derivatives          $ 81.28         $ 91.50          $ 88.01       $ 91.21
      (Bbl)
      Oil, with
      derivatives          $ 87.50         $ 87.75          $ 89.25       $ 84.13
      (Bbl) (a)
      Natural gas,
      without              $ 5.06          $ 7.16           $ 5.03        $ 7.62
      derivatives
      (Mcf)
      Natural gas,
      with derivatives     $ 5.07          $ 7.73           $ 5.05        $ 8.10
      (Mcf) (a)
      Total, without
      derivatives          $ 61.02         $ 73.24          $ 65.16       $ 73.99
      (Boe)
      Total, with
      derivatives          $ 64.80         $ 72.17          $ 65.95       $ 70.68
      (Boe) (a)
                                                                          
  Operating costs and
  expenses per Boe:
      Lease operating
      expenses and         $ 7.17          $ 8.03           $ 7.27        $ 7.07
      workover costs
      Oil and natural      $ 5.19          $ 5.86           $ 5.43        $ 6.03
      gas taxes
      Depreciation,
      depletion and        $ 20.73         $ 18.91          $ 20.34       $ 18.21
      amortization
      General and          $ 4.51          $ 4.50           $ 4.40        $ 4.07
      administrative
                                                          
                                                                          
      Includes the effect of cash settlements received from (paid on) commodity
  (a) derivatives not designated as hedges and reported in operating costs and
      expenses. The following table reflects the amounts of cash settlements received
      from (paid on) commodity derivatives not designated as hedges that were included
      in computing average prices with derivatives and reconciles to the amount in
      (gain) loss on derivatives not designated as hedges as reported in the
      statements of operations:
                                                            
                                                                          
                           Three Months Ended               Years Ended
                           December 31,                     December 31,
      (in thousands)     2012          2011           2012        2011
                                                                          
      Gain (loss) on
      derivatives not
      designated as
      hedges:
        Cash receipts
        from (payments     $ 30,785        $ (15,290  )     $ 22,411      $ (103,969 )
        on) oil
        derivatives
        Cash receipts
        from natural         236             8,271            1,125         25,739
        gas
        derivatives
        Cash payments
        on interest          -               -                -             (6,624   )
        rate
        derivatives
        Unrealized
        mark-to-market
        gain (loss) on
        commodity and
           interest
           rate             (13,120 )      (313,293 )      103,907      61,504   
           derivatives
        Gain (loss) on
        derivatives        $ 17,901       $ (320,312 )     $ 127,443     $ (23,350  )
        not designated
        as hedges
                                                            
                                                                          
      The presentation of average prices with derivatives is a non-GAAP measure as a
      result of including the cash receipts from (payments on) commodity derivatives
      that are presented in gain (loss) on derivatives not designated as hedges in the
      statements of operations. This presentation of average prices with derivatives
      is a means by which to reflect the actual cash performance of our commodity
      derivatives for the respective periods and presents oil and natural gas prices
      with derivatives in a manner consistent with the presentation generally used by
      the investment community.
      
      

The following table sets forth summary information from our continuing
operations concerning production and operating data for the periods indicated:

                                                              
                           Three Months Ended               Years Ended
                           December 31,                     December 31,
                    2012          2011           2012        2011
                                                                          
Production and
operating data:
  Net production
  volumes:
      Oil (MBbl)             4,718           3,754            16,859        13,446
      Natural gas            18,462          14,041           66,613        51,118
      (MMcf)
      Total (MBoe)           7,795           6,094            27,961        21,966
                                                                          
  Average daily
  production volumes:
      Oil (Bbl)              51,283          40,804           46,063        36,838
      Natural gas            200,674         152,620          182,003       140,049
      (Mcf)
      Total (Boe)            84,728          66,241           76,397        60,180
                                                                          
  Average prices:
      Oil, without
      derivatives          $ 81.28         $ 91.64          $ 87.96       $ 91.34
      (Bbl)
      Oil, with
      derivatives          $ 87.81         $ 87.56          $ 89.29       $ 83.61
      (Bbl) (a)
      Natural gas,
      without              $ 5.09          $ 7.15           $ 5.06        $ 7.62
      derivatives
      (Mcf)
      Natural gas,
      with derivatives     $ 5.11          $ 7.74           $ 5.07        $ 8.13
      (Mcf) (a)
      Total, without
      derivatives          $ 61.26         $ 72.91          $ 65.08       $ 73.65
      (Boe)
      Total, with
      derivatives          $ 65.24         $ 71.76          $ 65.93       $ 70.09
      (Boe) (a)
                                                                          
  Operating costs and
  expenses per Boe:
      Lease operating
      expenses and         $ 6.64          $ 7.68           $ 6.90        $ 6.69
      workover costs
      Oil and natural      $ 5.17          $ 5.80           $ 5.39        $ 5.96
      gas taxes
      Depreciation,
      depletion and        $ 21.35         $ 18.91          $ 20.56       $ 18.21
      amortization
      General and          $ 4.85          $ 4.92           $ 4.79        $ 4.48
      administrative
                                                          
                                                                          
      Includes the effect of cash settlements received from (paid on) commodity
  (a) derivatives not designated as hedges and reported in operating costs and
      expenses. The following table reflects the amounts of cash settlements received
      from (paid on) commodity derivatives not designated as hedges that were included
      in computing average prices with derivatives and reconciles to the amount in
      (gain) loss on derivatives not designated as hedges as reported in the
      statements of operations:
                                                            
                                                                          
                           Three Months Ended               Years Ended
                           December 31,                     December 31,
      (in thousands)     2012          2011           2012        2011
                                                                          
      Gain (loss) on
      derivatives not
      designated as
      hedges:
        Cash receipts
        from (payments     $ 30,785        $ (15,290  )     $ 22,411      $ (103,969 )
        on) oil
        derivatives
        Cash receipts
        from natural         236             8,271            1,125         25,739
        gas
        derivatives
        Cash payments
        on interest          -               -                -             (6,624   )
        rate
        derivatives
        Unrealized
        mark-to-market
        gain (loss) on
        commodity and
           interest
           rate             (13,120 )      (313,293 )      103,907      61,504   
           derivatives
        Gain (loss) on
        derivatives        $ 17,901       $ (320,312 )     $ 127,443     $ (23,350  )
        not designated
        as hedges
                                                            
                                                                          
      The presentation of average prices with derivatives is a non-GAAP measure as a
      result of including the cash receipts from (payments on) commodity derivatives
      that are presented in gain (loss) on derivatives not designated as hedges in the
      statements of operations. This presentation of average prices with derivatives
      is a means by which to reflect the actual cash performance of our commodity
      derivatives for the respective periods and presents oil and natural gas prices
      with derivatives in a manner consistent with the presentation generally used by
      the investment community.
      
      

                            Concho Resources Inc.
                   Supplemental Non-GAAP Financial Measures
                                  Unaudited

The following tables provide information that the Company believes may be
useful to investors who follow the practice of some industry analysts who
adjust reported company net income and cash flows from operating activities to
exclude certain non-cash items.

Adjusted Net Income

The following table provides a reconciliation of net income (GAAP) to adjusted
net income (non-GAAP) for the periods indicated:

                                                              
                     Three Months Ended               Years Ended
                     December 31,                     December 31,
(in thousands,
except per share    2012        2011         2012         2011     
amounts)
                                                                       
Net income
(loss) - as          $ 75,287        $ (82,825  )     $ 431,689        $ 548,137
reported
                                                                       
Adjustments for
certain non-cash
and unusual
items:
    Unrealized
    (gain) loss
    on commodity       13,120          313,293          (103,907 )       (61,504  )
    and interest
    rate
    derivatives
    Impairments
    of                 -               363              -                439
    long-lived
    assets
    Leasehold          3,161           4,555            12,395           5,350
    abandonments
    Other              3,242           -                3,242            -
    settlements
    Discontinued
    operations:
    Leasehold          -               385              -                385
    abandonments
    (Gain) loss
    on sale of         18,704          6,007            18,704           (135,943 )
    assets
    Tax impact        (13,953 )      (122,700 )      26,505         73,258   
    (a)
Adjusted net         $ 99,561       $ 119,078       $ 388,628       $ 430,122  
income
                                                                       
Adjusted basic
earnings per
share:
    Adjusted net
    income per       $ 0.96          $ 1.16           $ 3.77           $ 4.19
    share
    Weighted
    average
    shares used
    in adjusted        103,494         102,771          103,190          102,581
    basic
    earnings per
    share
                                                                       
Adjusted diluted
earnings per
share:
    Adjusted net
    income per       $ 0.96          $ 1.15           $ 3.74           $ 4.15
    share
    Weighted
    average
    shares used
    in adjusted        104,194         103,770          103,972          103,653
    diluted
    earnings per
    share
                                                          
                                                                       
    The tax impact is computed utilizing the Company's adjusted statutory effective
(a) federal and state income tax rates. The income tax rates for the three months
    ended December 31, 2012 and 2011 were approximately 36.5% and 37.8%,
    respectively, and 38.1% and 38.3% for the years ended December 31, 2012 and
    2011, respectively.
    
    

Adjusted Cash Flows

The following table provides a reconciliation of cash flows from operating
activities (GAAP) to adjusted cash flows (non-GAAP) for the periods indicated:

                                                            
                                                 Years Ended December 31,
(in thousands)                                  2012         2011      
                                                                 
Cash flows from operating activities             $ 1,237,478     $ 1,199,458
Settlements received from (paid on)               23,536         (84,854   )
derivatives not designated as hedges (a)
Adjusted cash flows                              $ 1,261,014     $ 1,114,604 
                                                           
                                                                 
(a) Amounts are presented in cash flows from investing activities for GAAP
purposes.



EBITDAX

EBITDAX (as defined below) is presented herein, and reconciled from the
generally accepted accounting principles ("GAAP") measure of net income
because of its wide acceptance by the investment community as a financial
indicator of a company's ability to internally fund exploration and
development activities.

We define EBITDAX as net income, plus (1) exploration and abandonments
expense, (2) depreciation, depletion and amortization expense, (3) accretion
expense, (4) impairments of long-lived assets, (5) non-cash stock-based
compensation expense, (6) bad debt expense, (7) unrealized gain on derivatives
not designated as hedges, (8) (gain) loss on sale of assets, net, (9) interest
expense, (10) federal and state income taxes on continuing operations and (11)
similar items listed above that are presented in discontinued operations.
EBITDAX is not a measure of net income or cash flows as determined by GAAP.

Our EBITDAX measure (which includes continuing and discontinued operations)
provides additional information which may be used to better understand our
operations. EBITDAX is one of several metrics that we use as a supplemental
financial measurement in the evaluation of our business and should not be
considered as an alternative to, or more meaningful than, net income, as an
indicator of our operating performance. Certain items excluded from EBITDAX
are significant components in understanding and assessing a company's
financial performance, such as a company's cost of capital and tax structure,
as well as the historic cost of depreciable assets, none of which are
components of EBITDAX. EBITDAX, as used by us, may not be comparable to
similarly titled measures reported by other companies. We believe that EBITDAX
is a widely followed measure of operating performance and is one of many
metrics used by our management team, and by other users, of our consolidated
financial statements. For example, EBITDAX can be used to assess our operating
performance and return on capital in comparison to other independent
exploration and production companies without regard to financial or capital
structure, and to assess the financial performance of our assets and our
company without regard to capital structure or historical cost basis.

The following table provides a reconciliation of net income to EBITDAX for the
periods indicated:

                                                         
                  Three Months Ended            Years Ended
                  December 31,                  December 31,
(in              2012       2011        2012          2011      
thousands)
                                                                  
Net income        $ 75,287      $ (82,825 )     $ 431,689         $ 548,137
(loss)
Exploration
and                 12,505        6,770           39,840            11,394
abandonments
Depreciation,
depletion and       166,453       115,249         575,128           400,022
amortization
Accretion of
discount on
asset               1,361         669             4,187             2,444
retirement
obligations
Impairments
of long-lived       -             363             -                 439
assets
Non-cash
stock-based         8,438         5,405           29,872            19,271
compensation
Unrealized
(gain) loss
on
derivatives         13,120        313,293         (103,907  )       (61,504   )
not
designated as
hedges
(Gain) loss
on sale of          87            (1,990  )       372               1,139
assets, net
Interest            53,632        34,159          182,705           118,360
expense
Income tax
expense
(benefit) on        46,714        (54,559 )       251,041           261,800
continuing
operations
Discontinued       21,299       18,801        64,701          (26,343   )
operations
EBITDAX           $ 398,896     $ 355,335      $ 1,475,628      $ 1,275,159 
                                                                              
                                                                              

                                                          
Concho Resources Inc.
Costs Incurred
Unaudited
                                                                   
The table below provides the costs incurred for the periods indicated:
                                                                   
Costs incurred for oil and natural gas producing activities (a)
                                                                   
                       Three Months Ended          Years Ended
                       December 31,                December 31,
(in thousands)       2012        2011        2012          2011
                                                                   
Property
acquisition
costs:
    Proved             $ 2,103       $ 94,510      $ 857,836       $ 163,658
    Unproved             29,932        243,549       441,042         361,321
Exploration              214,109       152,590       781,174         562,679
Development             166,665      176,934      741,206        744,481
    Total costs
    incurred for
    oil and            $ 412,809     $ 667,583     $ 2,821,258     $ 1,832,139
    natural gas
    properties
                                                      
                                                                   
(a) The costs incurred for oil and natural gas producing activities includes
    the following amounts of asset retirement obligations:
                                                       
                                                                   
                       Three Months Ended          Years Ended
                       December 31,                December 31,
    (in              2012        2011        2012          2011
    thousands)
                                                                   
    Proved
    property           $ -           $ 379         $ 29,113        $ 527
    acquisition
    costs
    Exploration          159           1,346         2,611           2,184
    costs
    Development         7,234        9,730        15,536         11,824
    costs
    Total asset
    retirement         $ 7,393       $ 11,455      $ 47,260        $ 14,535
    obligations
                                                                     
                                                                     

                                                                           
Concho Resources Inc.
Derivatives Information
Unaudited
                                                                                      
The tables below provide data associated with the Company’s derivatives at February 20, 2013 for the
periods indicated:
                                                                                      
               2013
               First            Second            Third Quarter     Fourth            Total
               Quarter          Quarter                             Quarter
                                                                                      
Oil Swaps:
    Volume       4,116,000        3,801,000         3,446,000         3,188,000         14,551,000
    (Bbl)
    NYMEX
    price      $ 95.84          $ 95.84           $ 95.57           $ 95.34           $ 95.67
    (Bbl)
    (a)
                                                                                      
Basis Swap (b):
    Volume       -                3,003,000         3,036,000         2,944,000         8,983,000
    (Bbl)
    Price      $ -              $ (1.23     )     $ (1.22     )     $ (1.23     )     $ (1.23      )
    (Bbl)
                                                                      
                                                                                      
                                                                      
                                                                                      
                2014            2015            2016            2017      
                                                                                      
Oil Swaps:
    Volume       10,928,000       1,076,000         429,000           168,000
    (Bbl)
    NYMEX
    price      $ 91.57          $ 86.69           $ 88.31           $ 87.00
    (Bbl)
    (a)
                                                                      
                                                                                      
(a) The index prices for the oil contracts are based on the NYMEX – West Texas Intermediate (“WTI”)
    monthly average futures price.
(b) The basis differential price is between the Midland – WTI and the Cushing – WTI.

Contact:

Concho Resources Inc.
Price Moncrief, 432-683-7443
Vice President of Capital Markets and Strategy