Concho Resources is investing for the long term in its lucrative underground resources in Southeastern New Mexico and West Texas. The oil and gas company explores and develops properties (more than 72,472 net acres), located primarily in the Permian Basin region, where it produces oil and natural gas. The bulk of the company's reported 623.5 million barrels of proved reserves in 2015 was crude oil, while the rest was natural gas. Concho Resources gets 85% its revenues from crude oil, which is priced much higher than natural gas. The company drilled 273 net wells in 2015.


The company's core operations are focused in the Permian Basin, which underlies a 250 mile wide and 300 mile long area of Southeast New Mexico and West Texas. In 2015, substantially all of its estimated proved reserves were located in its core operating areas and consisted of 59% oil and 41% 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.

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 Delaware Basin represented 51% of Concho Resources' total reserves in 2015; the New Mexico Shelf 32%; and the Texas Permian (Midland Basin), 17%.

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 25% and 12%, respectively, of Concho Resources' revenues in 2015.

Financial Performance

Concho Resources' revenues the company's net revenues decreased by 32% to $1.8 billion due to a decline in realized oil and natural gas prices, offset partially by increased production due to a successful drilling program.

In 2015 the company's net income decreased by 88% to $65.9 million due to lower net revenues, an increase in depreciation, depletion and amortization expenses (related to depletion of proved oil and natural gas properties driven by increased production associated with new wells that were successfully drilled and completed and decrease in gain on derivatives, primarily related to lower commodity prices).

The company's operating cash inflow decreased by 46% to $897.51 million in 2015.


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.

To raise cash, in 2017 Concho Resources and Frontier Midstream Solutions agreed to sell 100% of their respective ownership interests of Alpha Holding Company, LLC, the owner of the Alpha Crude Connector system, to Plains All American Pipeline for $1.215 billion. Concho Resources will receive net proceeds of about $800 million from the deal.

Concho Resources reported a 2016 capital budget, excluding acquisitions, of $1.4 billion (with drilling and completion capital accounting for $1.2 billion). (Two years earlier, when oil prices were much higher, it had a annual capital budget of $2.3 billion).

Mergers and Acquisitions

In 2016 Concho Resources bought 40,000 net acres in the core of the Midland Basin from Reliance Energy for $1.6 billion.

That year it bought 80% of a third-party seller's interest in certain oil and natural gas properties and related assets in the southern Delaware Basin. It also agreed to buy 24,000 gross acres in the northern Delaware Basin for $430 million.

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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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
  • 2016 Employees: 1,085

Major Office Locations

  • Midland, TX

Other Locations

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