Concho Resources Inc. (NYSE: CXO) (the “Company” or
“Concho”) today reported financial and operating results for the
first quarter of 2016.
Highlights
- Delivered quarterly production of 12.7
million Boe, or 139.5 MBoepd, exceeding the high end of the
Company’s guidance.
- Executed a disciplined capital program
within cash flow and further strengthened the Company’s balance
sheet, with a cash position of approximately $0.5 billion at
quarter end.
- Achieved per-unit lease operating
expense below the low end of the Company’s guidance.
- Closed two transactions, further
enhancing the Company’s high-quality portfolio and reinforcing
Concho’s financial position.
Tim Leach, Chairman, Chief Executive Officer and President,
commented, “Concho delivered a strong first quarter, with results
ahead of expectations. Our per-unit cost structure trended lower,
and drilling and completion capital was well within cash flow. Our
success is a direct result of our high-quality drilling inventory
across all our assets in the Permian Basin and our relentless focus
on driving low costs and optimizing field development. During the
first quarter, we also closed two transactions that high-graded the
portfolio – selling lower rate of return assets, while adding top
tier acreage – resulting in improved leverage metrics and
additional cash on our balance sheet. With a strong financial
position and premier asset base, we are well-positioned to execute
a disciplined, returns-based capital plan and deliver
differentiated value over the long term.”
First-Quarter 2016 Operations Summary
Production for the first quarter of 2016 was 12.7 million
barrels of oil equivalent (MMBoe), or an average of 139.5 thousand
Boe per day (MBoepd), an increase of 6% from the first quarter of
2015 and above the high end of the Company’s guidance.
First-quarter 2016 production was comprised of 64% oil and 36%
natural gas.
During the first quarter of 2016, Concho averaged 10 rigs,
compared to 12 rigs in the fourth quarter of 2015. Concho started
drilling or participating in a total of 40 gross wells (31
operated) and completed 50 gross wells during the first quarter of
2016. The table below summarizes the Company’s drilling activity by
core area for the first quarter of 2016.
Number of Wells
Drilled
(Gross)
Number of Operated Wells Drilled
(Gross)
Number of Wells Completed
(Gross)
Delaware Basin 27 21 33 New Mexico Shelf 8 6 12 Midland Basin 5 4 5
Total 40 31 50 Percent Horizontal 100% 100% 98%
Delaware Basin
Production from horizontal wells in the Delaware Basin totaled
80.0 MBoepd in the first quarter of 2016, up 16% over the first
quarter of 2015. During the first quarter of 2016, Concho drilled
27 gross wells in the Delaware Basin, including five wells in the
Avalon Shale, nine wells in the Bone Spring Sands and 13 wells in
the Wolfcamp.
Concho added 11 new horizontal wells in the northern Delaware
Basin with at least 30 days of production as of the end of the
first quarter of 2016. The average peak 30-day and 24-hour rates
for these wells were 1,115 Boe per day (Boepd) (79% oil) and 1,521
Boepd, respectively. The average lateral length for these wells was
4,628 feet. The Company is testing multi-zone potential in the
Avalon Shale. Successful results from the upper and lower Avalon
targets were key drivers to the Company’s operational success in
the first quarter of 2016.
Concho added four new horizontal wells in the southern Delaware
Basin with at least 30 days of production as of the end of the
first quarter of 2016. The average peak 30-day and 24-hour rates
for these wells were 1,035 Boepd (80% oil) and 1,374 Boepd,
respectively. The average lateral length for these wells was 6,342
feet.
Concho closed the previously-announced acquisition of
approximately 12,000 net acres in our core North Harpoon prospect
in the southern Delaware Basin during the first quarter of 2016.
The Company added two rigs to this acreage in April 2016.
The Company currently has eight horizontal rigs in the Delaware
Basin, with four horizontal rigs in the northern Delaware Basin and
four horizontal rigs in the southern Delaware Basin.
Midland Basin
Concho added two new horizontal wells with at least 30 days of
production as of the end of the first quarter of 2016. The average
peak 30-day and 24-hour rates for these wells were 1,163 Boepd (87%
oil) and 1,296 Boepd, respectively, from an average lateral length
of 10,326 feet. Both wells were drilled from the same pad location
and successfully tested stacked development of the Wolfcamp A and B
zones.
The Company currently has one horizontal rig in the Midland
Basin, with plans to add two rigs during May 2016.
New Mexico Shelf
In the New Mexico Shelf, Concho added nine new horizontal wells
with at least 30 days of production as of the end of the first
quarter of 2016. The average peak 30-day and 24-hour rates for
these wells were 430 Boepd (84% oil) and 588 Boepd, respectively.
The average lateral length for these wells was 4,475 feet. Strong
results in the New Mexico Shelf were primarily attributable to
ongoing completion design optimization.
The Company currently has two horizontal rigs in the New Mexico
Shelf.
First-Quarter 2016 Financial Summary
Concho’s average realized price for oil and natural gas for the
first quarter of 2016, excluding the effect of commodity
derivatives, was $22.34 per Boe, compared with $34.76 per Boe for
the first quarter of 2015.
Net loss for the first quarter of 2016 was $1.0 billion, or
$7.95 per diluted share, compared to net income of $7.5 million, or
$0.06 per diluted share, for the first quarter of 2015. Adjusted
net loss (non-GAAP), which excludes non-cash and unusual items, for
the first quarter of 2016 was $7.0 million, or $0.05 per diluted
share, compared with adjusted net income (non-GAAP) of $42.1
million, or $0.36 per diluted share, for the first quarter of
2015.
EBITDAX (non-GAAP) for the first quarter of 2016 totaled $382.2
million, compared to $407.5 million for the first quarter of
2015.
Cash flows generated from operating activities for the three
months ended March 31, 2016, totaled $112.3 million, compared with
$126.2 million for the same period last year. Adjusted cash flows
(non-GAAP), which are cash flows from operating activities adjusted
for settlements on derivatives, were $370.2 million for the three
months ended March 31, 2016, as compared to $293.4 million for the
same period last year.
See “Supplemental Non-GAAP Financial Measures” at the end of
this press release for a description of non-GAAP measures adjusted
net income (loss), adjusted earnings per share, EBITDAX and
adjusted cash flows and a reconciliation of these measures to the
associated GAAP measures.
Credit Facility and Liquidity Update
Concho completed the annual redetermination of its credit
facility in April 2016. The bank group reaffirmed the commitment
amount of $2.5 billion and reduced the borrowing base amount to
$2.8 billion due to lower commodity prices.
At March 31, 2016, Concho had cash of approximately $0.5
billion, long-term debt of $3.3 billion, and a net debt-to-EBITDAX
ratio of 1.7 times. Concho currently has no outstanding borrowings
on its credit facility, providing the Company with total liquidity
of approximately $3.0 billion.
Commodity Derivatives Update
The Company enters into commodity derivatives to manage its
exposure to commodity price fluctuations. For the remainder of
2016, Concho has crude oil swap contracts covering approximately
60.0 MBopd at a weighted average price of $69.37 per Bbl. The
Company also has crude oil swaps for 2017 and 2018, covering
approximately 52.4 MBopd and 17.9 MBopd at a weighted average price
of $55.36 per Bbl and $48.42 per Bbl, respectively. Please see the
table under “Derivatives Information” below for detailed
information about the Company’s current derivatives positions.
Outlook
For the second quarter of 2016, Concho expects production to
average between 138 MBoepd and 142 MBoepd. In addition, Concho
updated its full-year 2016 outlook for certain items. The following
table summarizes the Company’s current guidance for those items, as
compared to the Company’s prior guidance.
Full Year 2016 Prior
Current Annual production growth -5% - 0% 0%
Crude oil differential to NYMEX, excluding
commodity derivatives ($/Bbl)
($3.75) - ($4.25)
($3.50) - ($4.00)
Lease operating expense ($/Boe) $7.50 - $8.00 $7.25 - $7.75
Depreciation, depletion and amortization expense ($/Boe) $24.00 -
$26.00 $22.00 - $24.00
Conference Call
Concho will discuss first quarter 2016 results on a conference
call tomorrow, May 5, 2016, at 8:30 AM CT (9:30 AM ET). The
telephone number and passcode to access the conference call are
provided below:
Dial-in: (855) 445-9894Intl. dial-in: (330) 863-3281Participant
Passcode: 78705134
To access the live webcast and view the related earnings
presentation, visit Concho’s website at www.concho.com. The
replay will also be available on the Company’s website under the
“Investors” section.
Concho Resources Inc.
Concho Resources Inc. is an independent oil and natural gas
company engaged in the acquisition, development, exploration and
production 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 the Company’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 fact, 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. Forward-looking statements
contained in this press release specifically include statements,
estimates and projections regarding the Company’s future financial
position, operations, performance, business strategy, oil and
natural gas reserves, drilling program, capital expenditure budget,
liquidity and capital resources, the timing and success of specific
projects, outcomes and effects of litigation, claims and disputes,
derivative activities and potential financing. The words
“estimate,” “project,” “predict,” “believe,” “expect,”
“anticipate,” “potential,” “could,” “may,” “foresee,” “plan,”
“goal” or other similar expressions that convey the uncertainty of
future events or outcomes are intended to identify forward-looking
statements, which generally are not historical in nature. However,
the absence of these words does not mean that the statements are
not forward-looking. These statements are based on certain
assumptions and analyses 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 risk factors
discussed or referenced in the Company’s most recent Annual Report
on Form 10-K and Quarterly Report on Form 10-Q; risks relating to
declines in the prices the Company receives, or sustained depressed
prices the Company receives, for its oil and natural gas;
uncertainties about the estimated quantities of oil and natural gas
reserves; drilling and operating risks; the adequacy of the
Company’s capital resources and liquidity including, but not
limited to, access to additional borrowing capacity under its
credit facility; the effects of government regulation, permitting
and other legal requirements, including new legislation or
regulation of hydraulic fracturing and the export of oil and
natural gas; the impact of potential changes in the Company’s
credit ratings; environmental hazards, such as uncontrollable flows
of oil, natural gas, brine, well fluids, toxic gas or other
pollution into the environment, including groundwater
contamination; difficult and adverse conditions in the domestic and
global capital and credit markets; risks related to the
concentration of the Company’s operations in the Permian Basin of
southeast New Mexico and west Texas; disruptions to, capacity
constraints in or other limitations on the pipeline systems that
deliver the Company’s oil, natural gas liquids and natural gas and
other processing and transportation considerations; the costs and
availability of equipment, resources, services and personnel
required to perform the Company’s drilling and operating
activities; potential financial losses or earnings reductions from
the Company’s commodity price risk-management program; risks and
liabilities associated with acquired properties or businesses;
uncertainties about the Company’s ability to successfully execute
its business and financial plans and strategies; uncertainties
about the Company’s ability to replace reserves and economically
develop its current reserves; general economic and business
conditions, either internationally or domestically; competition in
the oil and natural gas industry; uncertainty concerning the
Company’s assumed or possible future results of operations; 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
March
31, December 31, (in thousands, except share and per
share amounts) 2016
2015 Assets Current assets: Cash
and cash equivalents $ 466,821 $ 228,550 Accounts receivable, net
of allowance for doubtful accounts: Oil and natural gas 191,698
203,972 Joint operations and other 168,545 190,608 Derivative
instruments 527,769 652,498 Prepaid costs and other 33,734
38,922 Total current assets 1,388,567
1,314,550 Property and equipment: Oil and
natural gas properties, successful efforts method 16,217,487
15,846,307 Accumulated depletion and depreciation (6,830,070
) (5,047,810 ) Total oil and natural gas properties, net
9,387,417 10,798,497 Other property and equipment, net
182,473 178,450 Total property and equipment,
net 9,569,890 10,976,947 Deferred loan
costs, net 14,416 15,585 Intangible asset - operating rights, net
25,328 25,693 Inventory 19,311 19,118 Noncurrent derivative
instruments 114,072 167,038 Other assets 154,937
122,945 Total assets $ 11,286,521 $ 12,641,876
Liabilities and Stockholders’ Equity Current
liabilities: Accounts payable - trade $ 20,751 $ 13,200 Revenue
payable 123,338 169,787 Accrued and prepaid drilling costs 267,235
228,523 Other current liabilities 193,624
184,910 Total current liabilities 604,948
596,420 Long-term debt 3,332,854 3,332,188 Deferred
income taxes 1,046,796 1,630,373 Noncurrent derivative instruments
393 - Asset retirement obligations and other long-term liabilities
142,758 140,344 Stockholders’ equity:
Common stock, $0.001 par value;
300,000,000 authorized; 131,973,782 and 129,444,042 shares issued
at March 31, 2016 and December 31, 2015, respectively
132 129 Additional paid-in capital 4,874,546 4,628,390 Retained
earnings 1,325,161 2,345,641
Treasury stock, at cost; 409,076 and
306,061 shares at March 31, 2016 and December 31, 2015,
respectively
(41,067 ) (31,609 ) Total stockholders’ equity
6,158,772 6,942,551 Total liabilities and
stockholders’ equity $ 11,286,521 $ 12,641,876
Concho Resources Inc.
Consolidated Statements of
Operations
Unaudited
Three Months Ended March 31, (in thousands,
except per share amounts) 2016
2015 Operating
revenues: Oil sales $ 242,154 $ 349,584 Natural gas sales
41,410 63,938 Total operating revenues
283,564 413,522
Operating costs and
expenses: Oil and natural gas production 114,957 125,535
Exploration and abandonments 22,860 5,755 Depreciation, depletion
and amortization 310,082 267,205 Accretion of discount on asset
retirement obligations 1,712 1,994 Impairments of long-lived assets
1,524,645 -
General and administrative (including
non-cash stock-based compensation of $16,022 and $15,495 for the
three months ended March 31, 2016 and 2015, respectively)
53,795 58,801 Gain on derivatives (79,842 ) (115,340 ) (Gain) loss
on disposition of assets, net (111,066 ) 39
Total operating costs and expenses 1,837,143
343,989
Income (loss) from operations
(1,553,579 ) 69,533
Other income (expense):
Interest expense (54,138 ) (53,569 ) Other, net (6,535 )
(4,302 ) Total other expense (60,673 ) (57,871
)
Income (loss) before income taxes (1,614,252 ) 11,662
Income tax (expense) benefit 593,772 (4,150 )
Net income (loss) $ (1,020,480 ) $ 7,512
Earnings
per share: Basic net income (loss) $ (7.95 ) $ 0.07 Diluted net
income (loss) $ (7.95 ) $ 0.06
Concho Resources Inc.
Consolidated Statements of Cash
Flows
Unaudited
Three Months Ended March 31, (in
thousands) 2016
2015 CASH FLOWS FROM OPERATING ACTIVITIES: Net
income (loss) $ (1,020,480 ) $ 7,512 Adjustments to reconcile net
income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization 310,082 267,205 Accretion
of discount on asset retirement obligations 1,712 1,994 Impairments
of long-lived assets 1,524,645 - Exploration and abandonments,
including dry holes 20,652 2,700 Non-cash stock-based compensation
expense 16,022 15,495 Deferred income taxes (583,577 ) (11,031 )
(Gain) loss on disposition of assets, net (111,066 ) 39 Gain on
derivatives (79,842 ) (115,340 ) Other non-cash items 5,282 2,612
Changes in operating assets and liabilities, net of acquisitions
and dispositions: Accounts receivable 68,701 35,731 Prepaid costs
and other (4,764 ) 649 Inventory (219 ) 3 Accounts payable 7,536
3,119 Revenue payable (44,335 ) (77,105 ) Other current liabilities
1,926 (7,334 ) Net cash provided by operating
activities 112,275 126,249
CASH
FLOWS FROM INVESTING ACTIVITIES: Capital expenditures on oil
and natural gas properties (379,799 ) (790,773 ) Additions to
property, equipment and other assets (8,999 ) (8,147 ) Proceeds
from the disposition of assets 292,013 - Contributions to equity
method investments (25,000 ) (20,000 ) Net settlements received
from derivatives 257,930 167,156 Net
cash provided by (used in) investing activities 136,145
(651,764 )
CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from issuance of debt - 739,000 Payments
of debt - (878,500 ) Exercise of stock options 11 57 Excess tax
benefit (deficiency) from stock-based compensation (702 ) 464 Net
proceeds from issuance of common stock - 741,184 Purchase of
treasury stock (9,458 ) (3,151 ) Decrease in bank overdrafts
- (73,539 ) Net cash provided by (used in) financing
activities (10,149 ) 525,515 Net increase in
cash and cash equivalents 238,271 - Cash and cash equivalents at
beginning of period 228,550 21 Cash and
cash equivalents at end of period $ 466,821 $ 21
NON-CASH INVESTING AND FINANCING ACTIVITIES: Issuance of
common stock for a business combination $ 230,828 $ -
Concho Resources Inc. Summary Production
and Price Data Unaudited
The following table sets forth summary
information concerning production and operating data for the
periods indicated:
Three Months Ended March 31,
2016 2015
Production and operating data: Net production
volumes: Oil (MBbl) 8,100 8,066 Natural gas (MMcf) 27,557
22,985 Total (MBoe) 12,693 11,897
Average daily
production volumes: Oil (Bbl) 89,011 89,622 Natural gas (Mcf)
302,824 255,389 Total (Boe) 139,482 132,187
Average
prices: Oil, without derivatives ($/Bbl) $ 29.90 $ 43.34 Oil,
with derivatives ($/Bbl) (a) $ 60.90 $ 63.20 Natural gas, without
derivatives ($/Mcf) $ 1.50 $ 2.78 Natural gas, with derivatives
($/Mcf) (a) $ 1.75 $ 3.08 Total, without derivatives ($/Boe) $
22.34 $ 34.76 Total, with derivatives ($/Boe) (a) $ 42.66 $ 48.81
Operating costs and expenses per Boe: Lease operating
expenses and workover costs $ 7.28 $ 7.64 Oil and natural gas taxes
$ 1.78 $ 2.91 Depreciation, depletion and amortization $ 24.43 $
22.46 General and administrative $ 4.24 $ 4.95
(a) Includes the effect of net cash receipts from
derivatives:
Three Months Ended March 31,
(in thousands) 2016 2015
Net cash receipts from derivatives: Oil derivatives $
251,127 $ 160,186 Natural gas derivatives 6,803 6,970
Total $ 257,930 $ 167,156
The presentation of average prices with
derivatives is a non-GAAP measure as a result of including the net
cash receipts from commodity derivatives that are presented in the
Company’s statements of cash flows. This presentation of average
prices with derivatives is a means by which to reflect the actual
cash performance of the Company’s 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. Costs Incurred
Unaudited
The table below provides the costs
incurred for oil and natural gas producing activities for the
periods indicated:
Three Months Ended March 31, (in
thousands) 2016 2015
Property acquisition costs: Proved $ 252,352 $ - Unproved
138,640 16,013 Exploration 170,572 429,169 Development
83,104 301,744 Total costs incurred for oil and natural gas
properties $ 644,668 $ 746,926
Concho Resources Inc. Derivatives Information
Unaudited
The table below provides data associated
with the Company’s derivatives at May 4, 2016, for the periods
indicated:
2016 Second
Quarter
Third
Quarter
Fourth Quarter Total 2017 2018
Oil Swaps: (a) Volume (Bbl) 5,985,000 5,460,000
5,054,000 16,499,000 19,110,000 6,540,000 Price per Bbl $ 73.38 $
74.21 $ 59.38 $ 69.37 $ 55.36 $ 48.42
Oil Basis Swaps:
(b) Volume (Bbl) 5,914,000 5,520,000 5,060,000 16,494,000
14,276,000 - Price per Bbl $ (1.46 ) $ (1.46 ) $ (1.48 ) $ (1.47 )
$ (0.90 ) $ -
Natural Gas Swaps: (c) Volume (MMBtu)
7,280,000 7,360,000 7,360,000 22,000,000 11,855,000 - Price per
MMBtu $ 3.02 $ 3.02 $ 3.02 $ 3.02 $ 3.00 $ -
(a)
The index prices for the oil contracts are based on the New York
Mercantile Exchange (“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.
Concho Resources Inc.Supplemental
Non-GAAP Financial MeasuresUnaudited
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 (loss) and
earnings per share to exclude certain non-cash and unusual items
and cash flows from operating activities to adjust for settlements
on derivatives.
Adjusted Net Income (Loss) and Adjusted Earnings per
Share
The following table provides a reconciliation from the United
States generally accepted accounting principles (GAAP) measure of
net income (loss) to adjusted net income (loss) (non-GAAP) for the
periods indicated:
Three Months Ended March
31, (in thousands, except per share amounts)
2016 2015
Net income (loss) - as reported $ (1,020,480 ) $ 7,512
Adjustments for certain non-cash and unusual items:
Gain on derivatives (79,842 ) (115,340 ) Net cash receipts from
derivatives 257,930 167,156 Impairments of long-lived assets
1,524,645 - Leasehold abandonments 20,652 1,919 (Gain) loss on
disposition of assets and other (109,501 ) 39 Tax impact
(600,365 ) (19,144 )
Adjusted net income (loss) $
(6,961 ) $ 42,142
Adjusted earnings per share:
Basic net income (loss) $ (0.05 ) $ 0.37 Diluted net income (loss)
$ (0.05 ) $ 0.36
Adjusted Cash Flows
The following table provides a reconciliation of the GAAP
measure of cash flows from operating activities to adjusted cash
flows (non-GAAP) for the periods indicated:
Three
Months Ended March 31, (in thousands)
2016 2015 Cash flows from
operating activities $ 112,275 $ 126,249 Settlements received from
derivatives (a) 257,930 167,156 Adjusted cash flows $
370,205 $ 293,405
(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 GAAP measure of net income (loss) 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 (loss), 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) gain on derivatives, (7) net cash receipts from derivatives,
(8) (gain) loss on disposition of assets, net, (9) interest expense
and (10) federal and state income tax expense (benefit). EBITDAX is
not a measure of net income (loss) or cash flows as determined by
GAAP.
The Company’s EBITDAX measure 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 (loss) 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 the GAAP
measure of net income (loss) to EBITDAX (non-GAAP) for the periods
indicated:
Three Months Ended March
31, (in thousands) 2016
2015 Net income (loss) $ (1,020,480 ) $
7,512 Exploration and abandonments 22,860 5,755 Depreciation,
depletion and amortization 310,082 267,205 Accretion of discount on
asset retirement obligations 1,712 1,994 Impairments of long-lived
assets 1,524,645 - Non-cash stock-based compensation 16,022 15,495
Gain on derivatives (79,842 ) (115,340 ) Net cash receipts from
derivatives 257,930 167,156 (Gain) loss on disposition of assets,
net (111,066 ) 39 Interest expense 54,138 53,569 Income tax expense
(benefit) (593,772 ) 4,150
EBITDAX $
382,229 $ 407,535
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160504006617/en/
Concho Resources Inc.Investor Relations:Megan P.
Hays, 432-685-2533Director of Investor RelationsorMary
Tennant, 432-221-0477Senior Financial Analyst
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