How Has Concho Resources’ Stock Fared ahead of 4Q15 Earnings?


Dec. 4 2020, Updated 10:51 a.m. ET

Concho Resources’ stock performance

Concho Resources’ (CXO) stock was mostly volatile in 2015. As the year came to a close, the stock started falling. This can be explained by the fall of crude oil prices below $40 per barrel in 4Q15. However, the stock seems to be rising. Concho Resources’ stock has fallen ~21% since February 2015. In comparison, the Energy Select Sector SPDR Fund (XLE) has fallen ~30% YoY (year-over-year).

CXO’s peers Apache Corporation (APA), Devon Energy Corporation (DVN), and Hess Corporation (HES) have seen their stocks fall ~41%, ~69%, and ~50%, respectively, on a YoY basis. All these companies make up ~4% of the Vanguard Energy ETF (VDE).

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Concho Resources’ stock offerings

Concho Resources used part of its equity offering proceeds to pay outstanding borrowings and finance its recently announced acquisitions. Several other North American upstream companies made similar offerings to bolster their financial positions amid falling oil prices last year.

CXO enhances its Delaware position

In a bid to strengthen its position in the Delaware Basin, CXO announced three separate transactions:

  • North Harpoon acquisition: CXO agreed to acquire ~12,000 net acres, which will complement its core North Harpoon prospect in Ward and Reeves counties in Texas, from a private operator for a total consideration of ~$360 million.
  • Acreage exchange with Clayton Williams Energy: CXO completed an acreage exchange with Clayton Williams Energy (CWEI). This encompasses ~21,000 net acres in the company’s Big Chief prospect in Reeves County, Texas.
  • Divestiture: CXO agreed to sell 14,000 net acres in Loving County, Texas, for cash proceeds of $290 million.

Tim Leach, chairman, CEO, and president of CXO, commented, “The combined effect of these transactions not only strengthens our portfolio, but also frees up capital to develop higher returning properties while improving our leverage metrics.”


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