Concho Resources Inc. Announces Three Year Accelerated Growth Plan, Provides 2014 Capital Budget Detail and Guidance and Reports

  Concho Resources Inc. Announces Three Year Accelerated Growth Plan, Provides
  2014 Capital Budget Detail and Guidance and Reports Third Quarter 2013
  Financial and Operating Results

Business Wire

MIDLAND, Texas -- November 6, 2013

Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) today announced
a new three-year growth plan intended to double production by 2016. In
addition, the Company provided details on its 2014 capital budget and guidance
and reported financial and operating results for the three and nine months
ended September 30, 2013. Highlights include:

  *Accelerated growth plan that is expected to deliver annual production of
    over 67 million barrels of oil equivalent (“MMBoe”) in 2016 and reduce the
    Company’s leverage ratio (debt-to-EBITDAX) to less than 1.5x
  *2014 capital budget of $2.3 billion and expected production growth of 18%
    to 22%
  *Production from continuing operations of 8.7 million barrels of oil
    equivalent (“MMBoe”) for the third quarter of 2013, a 19% increase over
    the third quarter of 2012 and a 5% increase over the second quarter of
    2013
  *Net income of $30.4 million, or $0.29 per diluted share, for the third
    quarter of 2013, as compared to net income of $6.0 million, or $0.06 per
    diluted share, for the third quarter of 2012
  *Adjusted net income^1 (non-GAAP) of $111.1 million, or $1.06 per diluted
    share, for the third quarter of 2013, as compared to $99.9 million, or
    $0.96 per diluted share, for the third quarter of 2012
  *EBITDAX^2 (non-GAAP) of $456.4 million for the third quarter of 2013, as
    compared to $387.2 million for the third quarter of 2012

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

Three-Year Accelerated Growth Plan

Concho is launching an accelerated growth plan intended to double production
by 2016 and strategically position the Company as the leading operator in the
Permian Basin. By accelerating activity across multiple horizons in the
Permian, the Company believes that it can deliver annualized organic
production growth of 25% over the next three years, which is in excess of its
historical average, while increasing crude oil mix and reducing leverage
ratios.

“Strategically, we have significant flexibility in how we choose to execute
our business. That flexibility is a direct result of the success across our
assets in both the Delaware and Midland Basins,” commented Tim Leach, Concho’s
Chairman, CEO and President. “The performance of our assets and depth of our
inventory are compelling and suggest that we can increase our growth rate.
Combined with a strong balance sheet, robust cash margin and compelling
economics, we are well positioned today to accelerate growth. Our 2014 capital
budget is intended to lay the groundwork for a multi-year growth plan expected
to double our production while reducing our leverage ratio by 2016.”

Third Quarter 2013 Financial Results

Production from continuing operations for the third quarter of 2013 totaled
8.7 MMBoe (5.4 million barrels of oil (“MMBbls”) and 19.6 billion cubic feet
of natural gas (“Bcf”)), an increase of 19% as compared to 7.3 MMBoe (4.3
MMBbls and 17.7 Bcf) produced in the third quarter of 2012 and an increase of
5% as compared to the 8.3 MMBoe (5.2 MMBbls and 18.6 Bcf) produced in the
second quarter of 2013.

“The third quarter was a great example of the quality of our assets and our
ability to execute,” said Tim Leach.“We had a record quarter in terms of
production and cash flow. It’s hard to ignore all of the momentum that Concho
has generated, especially when you consider our industry-leading well results
in both the northern and southern Delaware Basin and our early success in
testing the horizontal potential of our Midland Basin assets.”

For the third quarter of 2013, the Company reported net income of $30.4
million, or $0.29 per diluted share, as compared to net income of $6.0
million, or $0.06 per diluted share, for the third quarter of 2012. The
Company’s third quarter 2013 results were impacted by several non-cash and
unusual items including: (1) a $168.6 million loss on derivatives not
designated as hedges, (2) $45.3 million in cash payments on commodity
derivatives, (3) $7.6 million of leasehold abandonments and (4) $1.8 million
loss on the disposition of assets, net. Adjusting for these items and their
tax effects, third quarter 2013 adjusted net income (non-GAAP) was $111.1
million, or $1.06 per diluted share. Adjusting for similar non-cash and
unusual items and their tax impact, adjusted net income (non-GAAP) for the
third quarter of 2012 was $99.9 million, or $0.96 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 $456.4 million in the third quarter of 2013, an increase of 18%
from $387.2 million reported in the third quarter of 2012 and an increase of
7% from the $424.8 million reported in the second quarter of 2013. 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 the third quarter of
2013 increased 40% when compared to the third quarter of 2012. This increase
was attributable to a 16% increase ($13.87 per barrel) in the Company’s
unhedged realized oil price, a 6% increase ($0.31 per thousand cubic feet of
natural gas (“Mcf”)) in the Company’s unhedged realized natural gas price, and
a 19% increase in production from continuing operations.

Oil and natural gas production expense from continuing operations for the
third quarter of 2013, including oil and natural gas taxes, totaled $120.2
million, or $13.85 per barrel of oil equivalent (“Boe”), a 15% increase per
Boe from the third quarter of 2012. This increase was primarily due to (1)
higher oil and natural gas taxes, which averaged $6.08 per Boe in the third
quarter of 2013 as compared to $5.22 in the third quarter of 2012, as a result
of higher oil and natural gas prices, and (2) higher lease operating expenses
and workover costs, which averaged $7.77 per Boe in the third quarter of 2013
as compared to $6.87 per Boe in the third quarter of 2012.

Depreciation, depletion and amortization (“DD&A”) expense from continuing
operations for the third quarter of 2013 totaled $200.6 million, or $23.11 per
Boe, a 13% increase per Boe from the third quarter of 2012 and less than a 2%
increase over the second quarter of 2013.

General and administrative expense (“G&A”) from continuing operations for the
third quarter of 2013 totaled $40.8 million, or $4.70 per Boe, as compared to
$35.5 million, or $4.88 per Boe, in the third quarter of 2012. Cash G&A for
the third quarter of 2013 totaled $30.9 million and stock-based compensation
(non-cash) totaled $9.9 million. The decrease in per Boe expense for the third
quarter of 2013 over the third quarter of 2012 was primarily due to a 19%
increase in production from continuing operations, and was partially offset by
a 15% increase in absolute G&A expenses.

The Company’s cash flows from operating activities (GAAP) were $944.6 million
for the first nine months of 2013, as compared to $845.6 million for the first
nine months of 2012, an increase of 12%. Adjusted cash flows (non-GAAP), which
are cash flows from operating activities (GAAP) adjusted for settlements paid
on or received from derivatives not designated as hedges, were $907.0 million
for the first nine months of 2013, as compared to $838.2 million for the first
nine months of 2012, an increase of 8%. 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.

Operations

For the quarter ended September 30, 2013, the Company commenced the drilling
of or participated in a total of 124 gross wells (90 operated). The Company
had a 100% success rate on the 144 wells that were completed in the third
quarter of 2013.

The table below summarizes the Company’s gross drilling activities by core
area for the third quarter of 2013:

                  3Q 2013
                   Total Wells  Operated Wells  Completed Wells
                                                  
New Mexico Shelf   33            7                47
Texas Permian      50            50               52
Delaware Basin     41            33               45
Total              124           90               144
                                                  

Currently, the Company is operating 23 drilling rigs; 1 of these rigs is
drilling in the New Mexico Shelf, 6 are drilling in the Texas Permian and 16
are drilling in the Delaware Basin. Of the Company’s 23 operated rigs, 18 are
drilling horizontally, including 1 in the New Mexico Shelf, 2 in the Texas
Permian and 15 in the Delaware Basin.

Delaware Basin

Of the 41 wells drilled in the Delaware Basin, 32 were Bone Spring sands
wells, 4 were Brushy Canyon wells and 5 were Wolfcamp shale wells. The
Company’s net production in the third quarter of 2013 from horizontal Delaware
Basin wells averaged approximately 33,700 Boe per day, a 111% increase over
the third quarter of 2012 and an increase of 6% over the second quarter of
2013.

Credit Facility

At September 30, 2013, the Company had borrowings outstanding under the credit
facility of $207.6 million, and availability under the credit facility was
approximately $2.3 billion.

Updated 2013 Capital Budget and Guidance

The Company now estimates that its annual 2013 production will total
approximately 33.5 to 34.0 MMBoe, compared to the Company’s most recent
production guidance range of approximately 33.4 to 34.8 MMBoe and that 2013
production will be over 62% crude oil, as compared to the previous guidance of
60% to 62% crude oil. The tighter range is in response to previously disclosed
volume curtailment issues in the New Mexico Shelf core area due to midstream
and infrastructure delays. In addition, the Company now estimates that its
capital spending for 2013 will approximate $1.8 billion, as compared to most
recent guidance of approximately $1.6 billion. This increase in planned
capital spending for the remainder of 2013 is the result of increased activity
levels in both the Midland and Delaware Basins as the Company begins its
three-year accelerated growth plan.

2014 Capital Budget

Concho’s capital budget for 2014 is approximately $2.3 billion, which the
Company believes will yield annual production growth in the range of 18% to
22% and allow the Company to accelerate growth beyond its average historical
organic rate over the next three years.

This budget contemplates operating an average of 37 drilling rigs for 2014, of
which 32 will drill horizontally. Concho estimates that its 2014 capital
budget and future capital spending should allow the Company to double
production in three years and concurrently reduce its leverage metrics
assuming a NYMEX crude oil price of $90.00 per barrel and a NYMEX natural gas
price of $4.00 per million British thermal units (“MMBtu”) for the Company’s
unhedged production. The Company intends to monitor both the direction of
commodity prices and the costs of goods and services and may adjust its
capital budget, and resultant estimated production and cash flows, as
conditions warrant.

Of the $2.3 billion capital budget, approximately $2 billion will be dedicated
to the Company's drilling program and 90% of the Company’s drilling budget
will be directed towards horizontal drilling.

The table below summarizes the Company’s 2014 drilling budget:

                  2014 Drilling Budget
                   Capital ($mm)  Gross Wells  Operated Rigs (Vt/Hz)
                                                 
New Mexico Shelf   $152            136           0/2
Texas Permian      459             190           5/9
Delaware Basin     1,406           281           0/21
Total              $2,017          607           5/32
                                                 

The remaining capital will be allocated between leasehold acquisitions,
geological and geophysical (“G&G”) and facilities.

2014 Guidance

Production:                                                
Annual Production Growth                                     18% - 22%
% Oil                                                        62% - 64%
                                                             
Price differentials to NYMEX ($90/Bbl; $4/MMBtu):
(excluding the effects of hedging)
Crude oil (Bbl)                                              93% - 95%
Natural gas (Mcf)                                            120% - 140%
                                                             
Operating costs and expenses:
Lease operating expense:
Direct lease operating expense ($/Boe)                       $7.50 - $8.00
Oil & natural gas taxes (% of oil and natural gas revenue)   8.25%
                                                             
G&A expense:
Cash G&A expense ($/Boe)                                     $3.50 - $4.00
Non-cash stock based compensation ($/Boe)                    $1.15 - $1.25
                                                             
DD&A expense ($/Boe)                                         $23.00 - $25.00
                                                             
Exploration, abandonments and G&G ($/Boe)                    $1.50 - $2.50
                                                             
Interest expense ($ in millions)                             $225 - $235
                                                             
Income taxes:                                                39%
Percent deferred of total taxes                              75% - 85%
                                                             
Capital expenditures ($ in billions)                         $2.3
                                                             

Derivative Update

The Company maintains an active crude oil and natural gas hedging program and
has continued to add to its derivative positions. Please see the “Derivatives
Information” table at the end of this press release for more detailed
information about the Company’s current derivative positions.

Conference Call and Presentation Information

The Company will host a conference call on Thursday, November 7, 2013 at 9:00
a.m. Central Time to discuss the accelerated growth plan, 2014 budget guidance
and the third quarter 2013 financial and operating results, with an
accompanying presentation. Interested parties may listen to the conference
call via the Company’s website at www.concho.com or by dialing (866) 713-8563
(passcode: 82695804). The presentation is also available on the Company’s
website. To access the presentation, visit www.concho.com and select “Investor
Relations,” then “Presentations.”

A replay of the conference call will be available on the Company’s website or
by dialing (888) 286-8010 (passcode: 91613648).

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
timing and estimated proceeds of the closing 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 filing and risks relating to declines in the prices
Concho receives for the Company’s 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 the Company’s capital resources
and liquidity; risks related to the concentration of the Company’s operations
in the Permian Basin; the results of the Company’s hedging program; weather;
litigation; shortages of oilfield equipment, services and qualified personnel
and increases in costs for such equipment, services and personnel;
uncertainties about the Company’s ability to replace reserves and economically
develop the Company’s 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

                                                           
                                             September 30,      December 31,
(in thousands, except share and per         2013           2012       
share amounts)
Assets
Current assets:
Cash and cash equivalents                    $ 22               $ 2,880
Accounts receivable, net of allowance
for doubtful accounts:
Oil and natural gas                            277,045            198,053
Joint operations and other                     277,286            202,738
Derivative instruments                         872                35,942
Deferred income taxes                          33,150             -
Prepaid costs and other                       19,337           19,269     
Total current assets                          607,712          458,882    
Property and equipment:
Oil and natural gas properties,                10,852,246         9,455,599
successful efforts method
Accumulated depletion and depreciation        (2,176,041 )      (1,565,316 )
Total oil and natural gas properties,          8,676,205          7,890,283
net
Other property and equipment, net             111,705          103,141    
Total property and equipment, net             8,787,910        7,993,424  
Funds held in escrow                           1,964              -
Deferred loan costs, net                       76,377             77,609
Intangible asset - operating rights, net       28,980             30,076
Inventory                                      19,894             20,611
Noncurrent derivative instruments              -                  2,769
Other assets                                  7,864            6,066      
Total assets                                 $ 9,530,701       $ 8,589,437  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable:
Trade                                        $ 36,813           $ 31,144
Related parties                                -                  185
Bank overdrafts                                69,444             24,275
Revenue payable                                194,008            162,073
Accrued and prepaid drilling costs             323,928            351,919
Derivative instruments                         71,364             1,584
Deferred income taxes                          -                  8,566
Other current liabilities                     178,727          160,340    
Total current liabilities                     874,284          740,086    
Long-term debt                                 3,588,650          3,101,103
Deferred income taxes                          1,302,249          1,186,621
Noncurrent derivative instruments              24,049             12,049
Asset retirement obligations and other         96,756             83,382
long-term liabilities
Stockholders’ equity:
Common stock, $0.001 par value;
300,000,000 authorized; 105,194,283 and
104,668,427 shares issued at September
30, 2013 and December 31, 2012,                105                105
respectively
Additional paid-in capital                     2,019,540          1,982,714
Retained earnings                              1,635,777          1,490,563
Treasury stock, at cost; 125,580 and
86,861 shares at September 30, 2013 and
December 31, 2012, respectively               (10,709    )      (7,186     )
Total stockholders’ equity                    3,644,713        3,466,196  
Total liabilities and stockholders’          $ 9,530,701       $ 8,589,437  
equity



Concho Resources Inc.
Consolidated Statements of Operations
Unaudited
                                                         
                                                            
                   Three Months Ended              Nine Months Ended
                   September 30,                   September 30,
(in thousands,
except per        2013        2012        2013          2012      
share amounts)
                                                                     
Operating
revenues:
Oil sales          $ 553,068       $ 380,446       $ 1,412,887       $ 1,099,504
Natural gas         99,852        84,897        274,946         242,784   
sales
Total
operating           652,920       465,343       1,687,833       1,342,288 
revenues
Operating
costs and
expenses:
Oil and
natural gas          120,231         87,964          328,295           251,641
production
Exploration
and                  10,992          6,958           37,797            27,335
abandonments
Depreciation,
depletion and        200,625         148,145         557,775           408,675
amortization
Accretion of
discount on
asset                1,574           1,084           4,410             2,826
retirement
obligations
Impairments of
long-lived           -               -               65,375            -
assets
General and
administrative
(including
non-cash
stock-based
compensation
of
$9,923 and
$7,959 for the
three months
ended
September 30,
2013 and 2012,
respectively,
and $25,278
and $21,434
for the nine
months ended
September 30,
2013 and 2012,       40,836          35,492          125,120           95,994
respectively)
(Gain) loss on
derivatives         168,610       135,415       157,303         (109,542  )
not designated
as hedges
Total
operating           542,868       415,058       1,276,075       676,929   
costs and
expenses
Income from         110,052       50,285        411,758         665,359   
operations
Other income
(expense):
Interest             (55,995 )       (51,337 )       (162,180  )       (129,073  )
expense
Loss on
extinguishment       -               -               (28,616   )       -
of debt
Other, net          (1,941  )      (3,114  )      (1,806    )      (4,917    )
Total other         (57,936 )      (54,451 )      (192,602  )      (133,990  )
expense
Income (loss)
from
continuing           52,116          (4,166  )       219,156           531,369
operations
before income
taxes
Income tax
(expense)           (21,695 )      995           (86,023   )      (204,327  )
benefit
Income (loss)
from                 30,421          (3,171  )       133,133           327,042
continuing
operations
Income from
discontinued        -             9,159         12,081          29,360    
operations,
net of tax
Net income         $ 30,421       $ 5,988        $ 145,214        $ 356,402   
Basic earnings
per share:
Income (loss)
from               $ 0.29          $ (0.03   )     $ 1.27            $ 3.17
continuing
operations
Income from
discontinued        -             0.09          0.12            0.29      
operations,
net of tax
Net income         $ 0.29         $ 0.06         $ 1.39           $ 3.46      
Diluted
earnings per
share:
Income (loss)
from               $ 0.29          $ (0.03   )     $ 1.27            $ 3.15
continuing
operations
Income from
discontinued        -             0.09          0.11            0.28      
operations,
net of tax
Net income         $ 0.29         $ 0.06         $ 1.38           $ 3.43      



Concho Resources Inc.
Consolidated Statements of Cash Flows
Unaudited
                                                           
                                             Nine Months Ended
                                             September 30,
(in thousands)                              2013           2012       
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                   $ 145,214          $ 356,402
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation, depletion and amortization       557,775            408,675
Accretion of discount on asset                 4,410              2,826
retirement obligations
Impairments of long-lived assets               65,375             -
Exploration and abandonments, including        13,159             15,224
dry holes
Non-cash stock-based compensation              25,278             21,434
expense
Deferred income taxes                          75,808             203,107
Loss on disposition of assets, net             1,717              285
(Gain) loss on derivatives not                 157,303            (109,542   )
designated as hedges
Discontinued operations                        (12,250    )       28,591
Other non-cash items                           17,020             9,066
Changes in operating assets and
liabilities, net of acquisitions and
dispositions:
Accounts receivable                            (113,226   )       (54,752    )
Prepaid costs and other                        (1,866     )       (14,894    )
Inventory                                      434                (8,528     )
Accounts payable                               4,407              (4,919     )
Revenue payable                                44,983             (3,673     )
Other current liabilities                     (40,897    )      (3,666     )
Net cash provided by operating                944,644          845,636    
activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures on oil and natural        (1,426,349 )       (2,334,246 )
gas properties
Additions to other property and                (21,311    )       (47,489    )
equipment
Proceeds from the disposition of assets        15,212             4,419
Funds held in escrow                           (1,964     )       17,394
Settlements paid on derivatives not           (37,684    )      (7,485     )
designated as hedges
Net cash used in investing activities         (1,472,096 )      (2,367,407 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt                 3,283,875          3,856,500
Payments of debt                               (2,798,400 )       (2,336,000 )
Exercise of stock options                      2,304              8,062
Excess tax benefit from stock-based            9,244              18,522
compensation
Payments for loan costs                        (14,075    )       (23,926    )
Purchase of treasury stock                     (3,523     )       (2,721     )
Bank overdrafts                               45,169           1,283      
Net cash provided by financing                524,594          1,521,720  
activities
Net decrease in cash and cash                  (2,858     )       (51        )
equivalents
Cash and cash equivalents at beginning        2,880            342        
of period
Cash and cash equivalents at end of          $ 22              $ 291        
period
                                                                             
                                                                             

                            Concho Resources Inc.
                      Summary Production and Price Data
                                  Unaudited

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

                                             
                       Three Months Ended       Nine Months Ended
                           September 30,             September 30,
                      2013       2012      2013       2012    
                                                                
Production and operating data from continuing and discontinued operations:
  Net production
  volumes:
      Oil (MBbl)             5,417         4,619       15,376        13,053
      Natural gas            19,593        19,122      56,006        50,970
      (MMcf)
      Total (MBoe)           8,683         7,806       24,710        21,548
                                                                   
  Average daily
  production volumes:
      Oil (Bbl)              58,880        50,207      56,322        47,639
      Natural gas (Mcf)      212,967       207,848     205,150       186,022
      Total (Boe)            94,375        84,848      90,514        78,643
                                                                   
  Average prices:
      Oil, without         $ 102.10      $ 88.13     $ 91.89       $ 90.56
      derivatives (Bbl)
      Oil, with
      derivatives (Bbl)    $ 92.89       $ 91.56     $ 89.12       $ 89.91
      (a)
      Natural gas,
      without              $ 5.10        $ 4.73      $ 4.91        $ 5.03
      derivatives (Mcf)
      Natural gas, with
      derivatives (Mcf)    $ 5.33        $ 4.75      $ 5.00        $ 5.04
      (a)
      Total, without       $ 75.20       $ 63.74     $ 68.31       $ 66.74
      derivatives (Boe)
      Total, with
      derivatives (Boe)    $ 69.98       $ 65.81     $ 66.78       $ 66.39
      (a)
                                                                   
  Operating costs and
  expenses per Boe:
      Lease operating
      expenses and         $ 7.77        $ 7.15      $ 7.59        $ 7.30
      workover costs
      Oil and natural      $ 6.08        $ 5.24      $ 5.70        $ 5.53
      gas taxes
      Depreciation,
      depletion and        $ 23.11       $ 20.19     $ 22.57       $ 20.18
      amortization
      General and          $ 4.70        $ 4.47      $ 5.06        $ 4.37
      administrative
                                                       
                                                                   
  (a) Includes the effect of cash settlements received from (paid on)
      commodity derivatives not designated as hedges:
                                                         
                           Three Months Ended        Nine Months Ended
                           September 30,             September 30,
      (in thousands)       2013       2012      2013       2012    
                                                                   
      Cash receipts from (payments on) derivatives not designated as hedges:
          Oil              $ (49,864 )   $ 15,859    $ (42,528 )   $ (8,374  )
          derivatives
          Natural gas       4,589       280        4,844       889     
          derivatives
                Total      $ (45,275 )   $ 16,139    $ (37,684 )   $ (7,485  )
                                                         
                                                                   
      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 our statements of cash
      flows. 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 the Company’s
continuing operations concerning production and operating data for the periods
indicated:

                                             
                       Three Months Ended       Nine Months Ended
                           September 30,             September 30,
                      2013       2012      2013       2012    
                                                                
Production and operating data from
continuing operations:
  Net production
  volumes:
      Oil (MBbl)             5,417         4,312       15,376        12,141
      Natural gas            19,593        17,740      56,006        48,151
      (MMcf)
      Total (MBoe)           8,683         7,269       24,710        20,166
                                                                   
  Average daily
  production volumes:
      Oil (Bbl)              58,880        46,870      56,322        44,310
      Natural gas (Mcf)      212,967       192,826     205,150       175,734
      Total (Boe)            94,375        79,008      90,514        73,599
                                                                   
  Average prices:
      Oil, without         $ 102.10      $ 88.23     $ 91.89       $ 90.56
      derivatives (Bbl)
      Oil, with
      derivatives (Bbl)    $ 92.89       $ 91.91     $ 89.12       $ 89.87
      (a)
      Natural gas,
      without              $ 5.10        $ 4.79      $ 4.91        $ 5.04
      derivatives (Mcf)
      Natural gas, with
      derivatives (Mcf)    $ 5.33        $ 4.80      $ 5.00        $ 5.06
      (a)
      Total, without       $ 75.20       $ 64.02     $ 68.31       $ 66.56
      derivatives (Boe)
      Total, with
      derivatives (Boe)    $ 69.98       $ 66.24     $ 66.78       $ 66.19
      (a)
                                                                   
  Operating costs and
  expenses per Boe:
      Lease operating
      expenses and         $ 7.77        $ 6.87      $ 7.59        $ 7.00
      workover costs
      Oil and natural      $ 6.08        $ 5.22      $ 5.70        $ 5.48
      gas taxes
      Depreciation,
      depletion and        $ 23.11       $ 20.38     $ 22.57       $ 20.26
      amortization
      General and          $ 4.70        $ 4.88      $ 5.06        $ 4.76
      administrative
                                                       
                                                                   
  (a) Includes the effect of cash settlements received from (paid on)
      commodity derivatives not designated as hedges:
                                                         
                           Three Months Ended        Nine Months Ended
                           September 30,             September 30,
      (in thousands)       2013       2012      2013       2012    
                                                                   
      Cash receipts from (payments on) derivatives not designated as hedges:
          Oil              $ (49,864 )   $ 15,859    $ (42,528 )   $ (8,374  )
          derivatives
          Natural gas       4,589       280        4,844       889     
          derivatives
                Total      $ (45,275 )   $ 16,139    $ (37,684 )   $ (7,485  )
                                                         
                                                                   
      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 our statements of cash
      flows. 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 and unusual 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              Nine Months Ended
                   September 30,                    September 30,
(in thousands,
except per          2013           2012       2013       2012     
share amounts)
                                                               
Net income - as    $  30,421         $  5,988       $ 145,214     $ 356,402
reported
                                                                  
Adjustments for
certain
non-cash and
unusual items:
(Gain) loss on
derivatives not       168,610           135,415       157,303       (109,542 )
designated as
hedges
Cash receipts
from (payments
on) derivatives       (45,275  )        16,139        (37,684 )     (7,485   )
not designated
as hedges
Impairments of
long-lived            -                 -             65,375        -
assets
Leasehold             7,578             677           13,828        9,234
abandonments
Loss on
extinguishment        -                 -             28,616        -
of debt
Loss on
disposition of        1,849             217           1,717         285
assets, net
Discontinued
operations:
Gain on
disposition of        -                 -             (19,599 )     -
assets
Tax impact (a)       (52,043  )       (58,540 )    (81,098 )    41,176   
Adjusted net       $  111,140       $  99,896     $ 273,672    $ 290,070  
income
                                                                  
Adjusted
earnings per
share:
Basic              $  1.06           $  0.97        $ 2.61        $ 2.81
Diluted            $  1.06           $  0.96        $ 2.61        $ 2.79
                                                                  
Effective tax         39.2     %        38.4    %     38.7    %     38.3     %
rates
                                                          
                                                                  
(a) The tax impact is computed utilizing the Company's adjusted statutory
effective federal and state income tax rates shown in the table above.



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:

                                                               
                                                    Nine Months Ended
                                                     September 30,
(in thousands)                                       2013       2012    
                                                                 
Cash flows from operating activities                 $ 944,644     $ 845,636
Settlements paid on derivatives not designated as     (37,684 )    (7,485  )
hedges (a)
Adjusted cash flows                                  $ 906,960    $ 838,151 
                                                               
                                                                   
(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.

The Company defines EBITDAX as net income, plus (1) exploration and
abandonments expense, (2) depreciation, depletion and amortization expense,
(3) accretion expense, (4) impairment of long-lived assets (5) non-cash
stock-based compensation expense, (6) (gain) loss on derivatives not
designated as hedges, (7) cash receipts from (payments on) derivatives not
designated as hedges, (8) (gain) loss on disposition of assets, net, (9)
interest expense, (10) loss on extinguishment of debt, (11) federal and state
income taxes on continuing operations and (12) 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.

The Company’s EBITDAX measure (which includes continuing and discontinued
operations) provides additional information which may be used to better
understand the Company’s operations. EBITDAX is one of several metrics that
the Company uses as a supplemental financial measurement in the evaluation of
its business and should not be considered as an alternative to, or more
meaningful than, net income, as an indicator of 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 the Company, may
not be comparable to similarly titled measures reported by other companies.
The Company believes that EBITDAX is a widely followed measure of operating
performance and is one of many metrics used by the Company’s management team,
and by other users, of the Company’s consolidated financial statements. For
example, EBITDAX can be used to assess the Company’s 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 the Company’s assets and the 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         Three Months Ended          Nine Months Ended
                 June 30,      September 30,               September 30,
(in thousands)   2013       2013       2012       2013         2012      
                                                                           
Net income       $ 84,700      $ 30,421      $ 5,988       $ 145,214       $ 356,402
Exploration
and                8,398         10,992        6,958         37,797          27,335
abandonments
Depreciation,
depletion and      188,730       200,625       148,145       557,775         408,675
amortization
Accretion of
discount on
asset              1,442         1,574         1,084         4,410           2,826
retirement
obligations
Impairments of
long-lived         65,375        -             -             65,375          -
assets
Non-cash
stock-based        8,588         9,923         7,959         25,278          21,434
compensation
(Gain) loss on
derivatives        (70,324 )     168,610       135,415       157,303         (109,542  )
not designated
as hedges
Cash receipts
from (payments
on)
derivatives
not
designated as      1,575         (45,275 )     16,139        (37,684   )     (7,485    )
hedges
(Gain) loss of
disposition of     (137    )     1,849         217           1,717           285
assets, net
Interest           54,079        55,995        51,337        162,180         129,073
expense
Loss on
extinguishment     28,616        -             -             28,616          -
of debt
Income tax
expense
(benefit) from     53,351        21,695        (995    )     86,023          204,327
continuing
operations
Discontinued      453         -           14,962      (12,081   )    43,402    
operations
EBITDAX          $ 424,846    $ 456,409    $ 387,209    $ 1,221,923    $ 1,076,732 
                                                                   
                                                                                       

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           Nine Months Ended
                       September 30,                 September 30,
(in thousands)        2013          2012          2013         2012
                                                                
Property
acquisition costs:
    Proved             $  -           $  690,158     $ 2,376       $ 855,773
    Unproved              13,991         349,903       58,832        411,110
Exploration               229,082        223,569       779,026       567,065
Development              197,696       187,759      593,006      574,541
    Total costs
    incurred for       $  440,769     $  1,451,389   $ 1,433,240   $ 2,408,489
    oil and 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            Nine Months Ended
                       September 30,                 September 30,
    (in thousands)    2013          2012          2013         2012
                                                                   
    Exploration        $  535         $  1,185       $ 2,089       $ 2,452
    costs
    Development          1,801         5,019        9,163        8,302
    costs
       Total asset
       retirement      $  2,336       $  6,204       $ 11,252      $ 10,754
       obligations
                                                        
                                                                     

Concho Resources Inc.
Derivatives Information
Unaudited

The table below provides data associated with the Company’s derivatives at November
6, 2013:
                                                               
             Fourth                                                 
              Quarter
              2013            2014             2015           2016        2017
                                                                          
Oil Swaps: (a)
    Volume      4,764,000       15,565,000       12,092,000     429,000     168,000
    (Bbl)
    Price     $ 96.08         $ 91.96          $ 86.82        $ 88.31     $ 87.00
    (Bbl)
                                                                          
Oil Basis Swaps: (b)
    Volume      3,404,000       9,475,000        -              -           -
    (Bbl)
    Price     $ (1.12     )   $ (0.46      )   $ -            $ -         $ -
    (Bbl)
                                                                          
Natural Gas Swaps: (c)
    Volume      6,992,000       -                -              -           -
    (MMBtu)
    Price     $ 4.25          $ -              $ -            $ -         $ -
    (MMBtu)
                                                                          
Natural Gas Collars: (d)
    Volume      -               21,900,000       -              -           -
    (MMBtu)
    Ceiling
    Price     $ -             $ 4.40           $ -            $ -         $ -
    (MMBtu)
    Floor
    Price     $ -             $ 3.85           $ -            $ -         $ -
    (MMBtu)
                                                                          
Natural Gas Basis Swaps: (e)
    Volume      6,440,000       -                -              -           -
    (MMBtu)
    Price     $ (0.15     )   $ -              $ -            $ -         $ -
    (MMBtu)
                                                               
                                                                          
(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 Midland – WTI and Cushing – WTI.
(c) The index prices for the natural gas price swaps are based on the NYMEX – Henry
    Hub last trading day futures price.
(d) The index prices for the natural gas collars are based on the El Paso Permian
    delivery point.
(e) The basis differential price is between the El Paso Permian delivery point and
    NYMEX-Henry Hub delivery point.
   

Contact:

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