Concho Resources Inc. has announced three separate transactions, which increase the company’s position in the southern Delaware Basin, high grade the company’s portfolio and reduce net debt. The transactions are as follows:
Concho agreed to acquire approximately 12 000 net acres complementary to the company’s core North Harpoon prospect in Ward and Reeves Counties, Texas, from a private operator for total consideration of approximately US$360 million, through a combination of common stock, cash and drilling carry.
The company underwent an acreage exchange with Clayton Williams Energy, Inc., consolidating 21 000 net non-operated acres into a concentrated, operated position adjacent to the Company’s Big Chief prospect in Reeves County, Texas.
Concho agreed to sell 14 000 net acres in Loving County, Texas, for cash proceeds of US$290 million.
The aggregate impact of these transactions is neutral to Concho’s 2016 capital and production outlook.
Tim Leach, Chairman, Chief Executive Officer and President, commented: “These transactions highlight our focus on actively managing and improving our portfolio of high-quality assets in the Permian Basin. The acquisition and acreage swap in Reeves and Ward Counties increase our exposure to the best part of the southern Delaware Basin and provide for more efficient development of our existing assets in North Harpoon and Big Chief, with drilling inventory that we believe competes with the best projects in our portfolio. 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.”
Edited from press release by Angharad Lock
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