Concho Resources Inc. : Reports Third-Quarter 2020 Results

Concho Resources Inc. (NYSE: CXO) today announced third-quarter 2020 results, reporting a net loss of $61 million, or $0.31 per share.

Adjusted net income (non-GAAP), which excludes certain non-cash and special items, for third-quarter 2020 was $282 million, or $1.43 per share.

Tim Leach, Chairman and Chief Executive Officer, commented, 'Despite the challenging market environment, Concho delivered excellent results that demonstrate the strength of our business, our high-quality asset base and our ability to execute. On October 19, we announced our intention to merge with ConocoPhillips. We look forward to closing the transaction in the first quarter of next year.'

Third-Quarter 2020 Results

Third-quarter 2020 oil production volumes averaged 201 thousand barrels per day (MBopd). Natural gas production for third-quarter 2020 averaged 716 million cubic feet per day (MMcfpd). The Company's total production for third-quarter 2020 was 320 thousand barrels of oil equivalent per day (MBoepd).

Concho's average realized price for oil and natural gas for third-quarter 2020, excluding the effect of commodity derivatives, was $39.23 per Bbl and $1.64 per Mcf, respectively.

For third-quarter 2020, controllable costs totaled $7.06 per Boe, representing a 27% decrease year over year. Controllable costs include production expenses (consisting of lease operating and workover expenses), cash general and administrative (G&A) expenses (which excludes non-cash stock-based compensation) and interest expense.

Cash flow from operating activities was $608 million, including $60 million in working capital changes. Operating cash flow before working capital changes (non-GAAP) was $668 million, exceeding third-quarter capital expenditures of $284 million, and resulting in free cash flow (non-GAAP) of $384 million. Capital expenditures refers to the Company's additions to oil and natural gas properties on the Company's condensed consolidated statements of cash flows.

At September 30, 2020, Concho had long-term debt of $3.9 billion with no outstanding debt maturities until January 2027, no debt outstanding under its credit facility and approximately $400 million in cash and cash equivalents.

About Concho Resources

Concho Resources (NYSE: CXO) is one of the largest unconventional shale producers in the Permian Basin, with operations focused on safely and efficiently developing and producing oil and natural gas resources. We are working today to deliver a better tomorrow for our shareholders, people and communities.

Forward-Looking Statements and Cautionary Statements

The foregoing contains 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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. The words 'estimate,' 'project,' 'predict,' 'believe,' 'expect,' 'anticipate,' 'potential,' 'could,' 'may,' 'enable,' 'strategy,' 'intend,' 'positioned,' 'foresee,' 'plan,' 'will,' 'guidance,' 'outlook,' 'goal,' 'target' 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, current plans, anticipated future developments, access to capital, market conditions, impacts of hedges, the impact of the COVID-19 pandemic and the actions taken by regulators and third parties in response to such pandemic 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 and other information discussed or referenced in the Company's most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. In particular, the unprecedented nature of the current economic downturn, pandemic and industry decline may make it particularly difficult to identify risks or predict the degree to which identified risks will impact the Company's business and financial condition. 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. Information on Concho's website is not part of this press release.

Use of Non-GAAP Financial Measures

To supplement the presentation of the Company's financial results prepared in accordance with U.S. generally accepted accounting principles ('GAAP'), this press release contains certain financial measures that are not prepared in accordance with GAAP, including adjusted net income, adjusted earnings per share, operating cash flow before working capital changes and free cash flow.

For future periods, the Company is unable to provide a reconciliation of free cash flow to the most comparable GAAP financial measures because the information needed to reconcile this measure is dependent on future events, many of which are outside management's control. Additionally, estimating free cash flow to provide a meaningful reconciliation consistent with the Company's policies for future periods is extremely difficult and requires a level of precision that is unavailable for these future periods and cannot be accomplished without unreasonable effort. Forward-looking estimates of free cash flow are estimated in a manner consistent with the relevant definitions and assumptions noted herein.

Contact:

Megan P. Hays

Tel: 432.685.2533