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Independent oil and gas company Concho Resources reported worse than expected fourth quarter earnings Tuesday. $CXO is the biggest Permian Basin pure-play company in terms of unconventional oil and gas production after its takeover of RSP Permian.

Concho Acerage 2019

Concho Resources Inc NYSE: CXO Reported Earnings After Close Tuesday

$0.94 Missed $1.13 EPS AND $1.07B Missed $1.19 billion Revenue Forecast

Earnings

Concho Resources (CXO) reported fourth quarter earnings per share of 94 cents, missing the $1.13 forecast by analysts surveyed by Refinitiv. Revenue missed also at $1.07 billion, compared to the $1.19 billion expected. Concho lowered its 2019 capital expenditures outlook to between $2.8 billion and $3 billion, while estimates were $3.27 billion.

Concho Resources Inc NYSE: CXO

Market Reaction After hours 115.59 −5.41 (4.47%)

Highlights

  • Concho lowered its 2019 capital expenditures outlook to between $2.8 billion and $3 billion, while estimates were $3.27 billion.
  • Delivered full-year production of 263 MBoepd (64% oil), in-line with the high-end of the Company’s guidance range. 
  • Generated $2.6 billion of cash from operating activities, exceeding $2.5 billion of cash used in investing activities for additions to oil and natural gas properties. 
  • Reported net income of $2.3 billion, or $13.25 per share
  • Adjusted net income (non-GAAP) totaled $792 million, or $4.59 per share. 
  • Generated $2.8 billion of adjusted EBITDAX (non-GAAP). 
  • Acquired and integrated RSP Permian, enhancing the Company’s scale advantage in the Permian Basin. 
  • Advanced manufacturing-style development across asset portfolio, driving strong well performance with the Company’s average 30-day peak rate up 21% year-over-year on an absolute and lateral-adjusted basis. 
  • Executed 15 asset trades, improving the Company’s development platform for large-scale, long-lateral manufacturing projects. 
  • Divested non-core assets for $361 million in proceeds, bringing the Company’s total divestiture proceeds to approximately $1.5 billion since 2016. 
  • Ended 2018 in a strong financial position with investment-grade credit ratings from Fitch, Moody’s and S&P. 
  • Issued $1.6 billion aggregate senior notes and redeemed $1.2 billion of RSP’s aggregate senior notes. These debt management transactions reduce annual interest expense by more than $15 million (pro forma for RSP). 
  • Received $157 million cash distribution from Oryx Southern Delaware Holdings, LLC.

 

Concho Resources Q3 Earnings Recap

$1.42 Beat $1.16 EPS AND $1.19B billion beat $1.08 billion in revenue 

Earnings

Concho Resources (CXO) reported third quarter earnings of $1.42 per share on revenue of $1.19B beating with expected earnings of $1.16 per share, which represents a year-over-year change of +157.8%. Revenues  beat the expected $1.08 billion, up 72.9% from the year-ago quarter.

Concho Resources Inc NYSE: CXO

Market Reaction After hours $138.00 +2.25 (1.66%)

Highlights

  • › Total production of 287 MBoepd above the high end of guidance
  • › Oil production 185 MBopd
  • › Advancing large-scale projects
  • › Strong cash margin reflects cost control
  • › Cash flow from operations exceeded capital investment, excluding acquisitions
  • › Net loss of $199mm, or $1.05 per diluted share; adjusted net income of $269mm, or $1.42 per diluted share
  • › EBITDAX of $829mm
  • Maintaining Strong Balance Sheet › At September 30, 2018, 1.2x debt-to-annualized EBITDAX
  • › Investment-grade credit ratings

CXO Q3 Highlights

In the second quarter of 2018 Concho Resources produced 229,000 boe per day, a gain of 24% on a year-over-year basis.  CXO output was 62.5% crude oil with the balance in natural gas.

Including RSP Permian’s output the second quarter production increases to 296,000 boe per day.Concho Resources’ closest rival is Pioneer Natural Resources (PXD) which produced 280,000 boe per day from the Permian Basin from continuing assets (272,000 boepd net production).

Concho Resources is operating 32 rigs in the Permian for drilling horizontal wells. Pioneer Natural Resources is operating up to 24 rigs. 

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About Concho Resources

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 in the United States. Concho Resources has become the biggest Permian Basin pure-play company in terms of unconventional oil and gas production after it completed its takeover of RSP Permian in July. 2018.

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