Concho Resources Buys Permian Basin Properties

Published: 23-Nov-2009

Concho Resources has signed a definitive agreement with multiple private sellers to acquire interests in certain producing and non-producing assets in the Wolfberry trend in the Permian Basin for $225m.

The acquisition of these interests is subject to certain participation rights of third parties, therefore, the company’s final ownership level in these acquired assets will be between approximately 20% and 100%.

Concho said that it identified over 300 identified Wolfberry drilling locations, with proved reserves of approximately 16 million barrels of oil equivalents (MMBoe), and 22 MMBoe of unproven reserves.

The company expects 2010 estimated production of 0.7 to 0.8 MMBoe based on assumed capital spending of approximately $110m, and 2011 estimated production of 1.5 to 2.0 MMBoe, based on assumed capital spending of approximately $125m in 2011.

Tim Leach, chairman, CEO and president, said: “These Wolfberry assets lie in the core of the Wolfberry trend and in the middle of our active drilling area in the play. At closing, we will be able to communicate more clearly the impact of this transaction on our capital budget and guidance for 2010 and beyond, after our final ownership has been determined.”

This transaction is scheduled to close in December 2009 and the company will update 2010 guidance when its final ownership is determined.

Concho Resources is an independent oil and natural gas company engaged in the acquisition, development, exploitation and exploration of oil and natural gas properties.