About Concho Resources Inc.

Concho Resources has more than a hunch that a lucrative resource lies under its feet in Southeastern New Mexico and West Texas. The company explores and develops properties (more than 89,012 net acres), located primarily in the Permian Basin region, in which it produces oil and natural gas. The bulk of the company's reported 637.2 million barrels of proved reserves in 2014 was crude oil, while the rest was natural gas. Concho Resources gets more than 80% its revenues from crude oil, which is priced much higher than natural gas. The company drilled 329 net wells in 2014.

Geographic Reach

Concho Resources' core oil and gas exploration and production operating areas are the New Mexico Shelf, Delaware Basin, and Texas Permian, in the Permian Basin region of Southeast New Mexico and West Texas. The New Mexico Shelf represented 39% of Concho Resources' total reserves in 2014; Texas Permian, 23%; and the Delaware Basin, 38%.


The company’s core operations are focused in the Permian Basin, which underlies a 250 miles wide and 300 miles long area of Southeast New Mexico and West Texas. In 2014, substantially all of its estimated proved reserves were located in its core operating areas and consisted of 68% oil and 42% natural gas.

Concho Resources has assembled a multi-year inventory of vertical and horizontal development drilling and exploration projects, including projects to further evaluate the areal extent of the Yeso formation and the Wolfberry play; the Brushy Canyon, Bone Spring and Wolfcamp formations in the Delaware Basin; and the Spraberry and Wolfcamp formations in the Texas Permian.

Sales and Marketing

The company sells its oil and natural gas production principally to marketers and other purchasers that have access to pipeline facilities.

A significant portion of its oil in Southeast New Mexico, primarily on the New Mexico Shelf, is connected directly to oil gathering pipelines.

Concho Resources sells the majority of its natural gas under individually negotiated natural gas purchase contracts using market-based pricing.

The company’s major customers include HollyFrontier Refining and Marketing and Enterprise Crude Oil, which accounted for 17% and 12%, respectively, of Concho Resources' revenues in 2014.

Financial Performance

Concho Resources' revenues have grown steadily since since 2010. In 2014 it increased by 15% due to higher oil and gas revenues.
The increase was primarily due to higher production stemming from successful drilling efforts in 2013 and 2014 and higher natural gas prices, partially offset by lower oil prices.

In 2014 net income increased by 114% due to higher revenues and gains on derivatives not designated as hedges.

That year Concho Resources' net cash provided by the operating activities increased by 23% due to higher net income, a change in accounts receivables, prepaid costs, and other current liabilities.


The company has focused on expanding its holdings through medium- and large-sized complementary acquisitions, primarily in the Permian Basin. Concho Resources is reinvesting high-margin cash flows into projects with robust rates of return and pursuing acquisitions that enhance existing portfolio. It intends to grow its reserves and production through development drilling and exploration activities on its multi-year project inventory and through acquisitions that meet its strategic and financial objectives. In 2013, it drilled 44% of its wells horizontally (an advanced drilling technology that usually produces more oil per well than the traditional vertical method), and it continues to evaluate converting its identified vertical locations to horizontal opportunities, where possible.

It had a 2014 capital budget of $2.3 billion focused on drilling in the Delaware Basin and Midland Basin. It planned to spend 70% of it on drilling and completion costs on the Delaware Basin assets, with which it expects to drill 281 (191 net) wells; and 23% on the Texas Permian assets, with which it expects to drill 190 (99 net) wells.

Company Background

To raise cash to help fund acquisitions, in 2012 Concho Resources sold some non-core Permian Basin oil and natural gas properties to  Legacy Reserves for $520 million.

In 2012 the company acquired interests in the Wolfberry trend in the Permian Basin from Petroleum Development Corporation for $189.2 million. The acquisition added about 10,200 net acres to Concho Resources' holdings in the region and estimated proved oil reserves of about 10 million barrels of oil equivalent.

The company boosted its Permian holdings further in 2012 by buying all of the oil and gas assets of Three Rivers Operating Company for $1 billion. Three Rivers has estimated proved reserves of 45.5 million barrels of oil equivalent and 200,000 net acres in a handful of Permian plays.

Concho Resources acquired three entities affiliated with OGX Holdings II, LLC for $252 million. The OGX deal included producing and non-producing acreage in the Delaware Basin of Southeast New Mexico and West Texas representing about 5.7 million barrels of of proved oil equivalent reserves.

It also sold its Bakken assets in North Dakota in 2011 to focus on its core Permian properties.

The company was formed in 2006.

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Concho Resources Inc.

600 W Illinois Ave
Midland, TX 79701-4882
Phone: 1 (432) 683-7443
Fax: 1 (432) 683-7441


  • Employer Type: Public
  • Stock Symbol: CXO
  • Stock Exchange: NYSE
  • Chairman, CEO, and President: Timothy A. Leach
  • Chairman, CEO, and President: Timothy A. Leach
  • EVP and COO: E. Joseph Wright

Major Office Locations

  • Midland, TX

Other Locations

  • Artesia, NM
  • Santa Fe, NM
  • Houston, TX