Concho Resources Inc. (CXO, Financial) filed Quarterly Report for the period ended 2010-06-30.
Concho Resources Inc. has a market cap of $5.71 billion; its shares were traded at around $62.39 with a P/E ratio of 32.3 and P/S ratio of 10.4. CXO is in the portfolios of RS Investment Management, Ron Baron of Baron Funds, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, Pioneer Investments.
Marbob Acquisition. On July 19, 2010, we entered into an asset purchase agreement to acquire substantially all of the oil and natural gas leases, interests, properties and related assets owned by Marbob Energy Corporation and certain affiliated entities (collectively, Marbob) for aggregate consideration of approximately $1.65 billion, subject to purchase price adjustments, which include downward purchase price adjustments based on the exercise of third parties of contractual preferential rights to purchase certain interests in properties to be acquired from Marbob (the Marbob Acquisition). Upon closing, the consideration is expected to consist of (i) cash consideration in the aggregate amount of $1.45 billion, (ii) the issuance by us to Marbob of an 8 percent unsecured promissory note due 2018 in the aggregate principal amount of $150 million and (iii) the issuance to Marbob of approximately 1.1 million shares of our common stock (representing a negotiated value of $50 million). The Marbob Acquisition is expected to close on or before November 30, 2010.
We intend to finance the $1.45 billion cash portion of the Marbob Acquisition with a combination of equity and debt. On July 19, 2010, we entered into a common stock purchase agreement with third-party investors to sell approximately 6.6 million shares of our common stock in a private placement for aggregate cash consideration of approximately $300 million. We anticipate that this private placement will close simultaneously with the Marbob Acquisition. In addition, we have received an $800 million underwritten commitment from two of our lenders under our Credit Facility to expand the size of our existing credit facility from $1.2 billion to $2.0 billion as part of the financing for the Marbob Acquisition, which we expect will provide the credit capacity to fund the remaining cash portion of the purchase price. The expanded credit facility is expected to close simultaneously with the Marbob Acquisition.
Credit facility. In April 2010, we increased our borrowing base under our credit facility to $1.2 billion, an increase of $244.1 million. We had $852.0 million of availability under our credit facility at June 30, 2010. As part of the Marbob Acquisition, we have received an $800 million underwritten commitment from two of our lenders in our credit facility to further expand the size of our existing credit facility from $1.2 billion to $2.0 billion as part of the financing for the acquisition. We believe that the increased size of the credit facility will provide us the credit capacity to fund the Marbob Acquisition and maintain an adequate level of liquidity.
Equity issuance. On February 1, 2010, we issued approximately 5.3 million shares of our common stock at $42.75 per share in a public offering. After deducting underwriting discounts of approximately $9.1 million and transaction costs, we received net proceeds of approximately $219.3 million. The net proceeds from this offering were used to repay a portion of the borrowings under our credit facility.
During the six months ended June 30, 2010, our cost incurred was approximately $330.0 million (excluding non leasehold acquisitions of approximately $13.7 million and asset retirement obligations). Originally our capital budget was front end loaded, and we expected to outspend our cash flow in the first half of 2010. We outspent our cash flow during the six months ended June 30, 2010 by approximately $60 million, including acquisitions.
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Concho Resources Inc. has a market cap of $5.71 billion; its shares were traded at around $62.39 with a P/E ratio of 32.3 and P/S ratio of 10.4. CXO is in the portfolios of RS Investment Management, Ron Baron of Baron Funds, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, Pioneer Investments.
Highlight of Business Operations:
Further, the NYMEX oil price and NYMEX natural gas price reached highs and lows of $82.55 and $71.98 per Bbl and $4.92 and $4.31 per MMBtu, respectively, during the period from July 1, 2010 to August 4, 2010. At August 4, 2010, the NYMEX oil price and NYMEX natural gas price were $82.47 per Bbl and $4.74 per MMBtu, respectively.Marbob Acquisition. On July 19, 2010, we entered into an asset purchase agreement to acquire substantially all of the oil and natural gas leases, interests, properties and related assets owned by Marbob Energy Corporation and certain affiliated entities (collectively, Marbob) for aggregate consideration of approximately $1.65 billion, subject to purchase price adjustments, which include downward purchase price adjustments based on the exercise of third parties of contractual preferential rights to purchase certain interests in properties to be acquired from Marbob (the Marbob Acquisition). Upon closing, the consideration is expected to consist of (i) cash consideration in the aggregate amount of $1.45 billion, (ii) the issuance by us to Marbob of an 8 percent unsecured promissory note due 2018 in the aggregate principal amount of $150 million and (iii) the issuance to Marbob of approximately 1.1 million shares of our common stock (representing a negotiated value of $50 million). The Marbob Acquisition is expected to close on or before November 30, 2010.
We intend to finance the $1.45 billion cash portion of the Marbob Acquisition with a combination of equity and debt. On July 19, 2010, we entered into a common stock purchase agreement with third-party investors to sell approximately 6.6 million shares of our common stock in a private placement for aggregate cash consideration of approximately $300 million. We anticipate that this private placement will close simultaneously with the Marbob Acquisition. In addition, we have received an $800 million underwritten commitment from two of our lenders under our Credit Facility to expand the size of our existing credit facility from $1.2 billion to $2.0 billion as part of the financing for the Marbob Acquisition, which we expect will provide the credit capacity to fund the remaining cash portion of the purchase price. The expanded credit facility is expected to close simultaneously with the Marbob Acquisition.
Credit facility. In April 2010, we increased our borrowing base under our credit facility to $1.2 billion, an increase of $244.1 million. We had $852.0 million of availability under our credit facility at June 30, 2010. As part of the Marbob Acquisition, we have received an $800 million underwritten commitment from two of our lenders in our credit facility to further expand the size of our existing credit facility from $1.2 billion to $2.0 billion as part of the financing for the acquisition. We believe that the increased size of the credit facility will provide us the credit capacity to fund the Marbob Acquisition and maintain an adequate level of liquidity.
Equity issuance. On February 1, 2010, we issued approximately 5.3 million shares of our common stock at $42.75 per share in a public offering. After deducting underwriting discounts of approximately $9.1 million and transaction costs, we received net proceeds of approximately $219.3 million. The net proceeds from this offering were used to repay a portion of the borrowings under our credit facility.
During the six months ended June 30, 2010, our cost incurred was approximately $330.0 million (excluding non leasehold acquisitions of approximately $13.7 million and asset retirement obligations). Originally our capital budget was front end loaded, and we expected to outspend our cash flow in the first half of 2010. We outspent our cash flow during the six months ended June 30, 2010 by approximately $60 million, including acquisitions.
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