MIDLAND, Texas–(BUSINESS WIRE)–Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) today announced that Oryx Southern Delaware Holdings, LLC, (“Oryx”), the owner of the Oryx I oil gathering and transportation system, has entered into an agreement to sell 100% of the equity interests in its subsidiaries to Stonepeak Infrastructure Partners for $2.07 billion. Concho owns a 23.75% equity interest in Oryx and will receive approximately $300 million at closing after repayment of Oryx’s outstanding borrowings.
In February 2018, Concho received a $157 million distribution related to a recapitalization of Oryx. The sale proceeds from Oryx combined with the earlier distribution total approximately $457 million, representing a 10 times multiple on invested capital of approximately $45 million since December 2015.
Jack Harper, Concho’s President, commented, “Our investment in Oryx supported the continued growth of our assets in the Southern Delaware Basin with secured transportation for our production and improved oil price realizations. This sale represents an excellent return on investment for our shareholders. A strong balance sheet underpins our ability to execute a resilient high-margin growth and returns strategy, and we will use the proceeds of this sale to further strengthen our balance sheet by repaying borrowings on our revolver.
“We congratulate the Oryx management team. Their demonstrated execution and expertise created tremendous midstream and upstream value.”
This transaction is not expected to impact oil price realizations or transportation costs as Concho’s existing gathering agreement remains unchanged. Upon closing, the net cash proceeds from the transaction will be used to repay borrowings outstanding on the Company’s credit facility. Closing is expected to occur in the second quarter of 2019, subject to customary terms and conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act.
Concho Resources Inc.
Concho Resources (NYSE: CXO) is one of the largest unconventional shale producers in the Permian Basin, with operations focused on acquiring, exploring, developing, and producing oil and natural gas resources. Concho is at the forefront of applying advanced technology and large-scale development to safely and efficiently maximize resource recovery while delivering attractive, long-term economic returns. We are working today to deliver a better tomorrow for our shareholders, people and communities. For more information about Concho, visit www.concho.com.
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,” “foresee,” “plan,” “will,” “guidance,” “outlook,” “goal” 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, expected financings 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 SEC. 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.
Megan P. Hays
Vice President of Investor Relations and Public Affairs