Bill Cara

Cara Community Oilers: Concho Res

Concho Resources (NASDAQ: CXO) reviewed 10-15-2020

Market Cap: $9.8 Billion (USD)                   Share Price: $49.54 (USD)

Stock chart: https://www.investing.com/equities/concho-resources-inc-chart

Shares outstanding: 197,951,047

Cash & cash equivalents: $320 Million (USD) as of 30 Jun 2020

Debt:  $3.96 Billion (USD) as of 30 Jun 2020

Insiders: Low                                      Institutional: 656 holders hold approx. 96%

Website: concho.com

Investor presentation: https://s2.q4cdn.com/413021264/files/doc_presentations/2020/09/final/[FINAL]-Barclays-Deck.pdf

CEO: Tim Leach                                 HQs: Midland, TX

Concho Resources is an independent oil & natural gas company with operations in the Permian Basin in west Texas and southeast New Mexico

Has 528,000 net acres in Delaware basin and 280,000 gross acres in the Midland Basin

Q2 2020 cash flow was $689 Million. Oil delivery was 200MBOPD, 719 MMcf per day of natural gas

Reported a net loss of $435 Million or ($2.23) per share for Q2 2020. This does not mesh well with the 1st half 2020 number, reported as a loss of ($49.73) for 1H 2020. Is creative accounting going on here?

Q2 2020 CAPEX was reduced by 44% compared to Q1

Q2 oil sales were $430 Million vs. $1.05 Billion in 2019, highlighting the extraordinary impact of the COVID-19 situation on the macroeconomy in general and in energy specifically

The Debt-to-cash ratio is approximately 12:1 if the balance sheet is correctly stated

The company has taken steps to reign in expenses and curtail exploration

Bottom Line:

  • ConocoPhillips (https://www.conocophillips.com/) is tendering a bid to acquire Concho Resources as of 14 Oct, reported by Bloomberg; as a result, shares of Concho have risen substantially
  • This could be 2020’s biggest Oil industry takeover