Concho Resources Inc. (CXO)

[OilStockReport]

Looks like we will be seeing some continued upside w/ this one.

Concho Resources (CXO) is a company increasing its liquids drilling platform. In the fourth quarter of 2010, Concho had production of 54.4MBoep/d. 2010 proved reserves were 323.5 MMBoe. Concho has 788367 gross and 374743 net acres. Ninety eight percent of its acres are in the Permian. It estimates having 6200 drilling locations. Concho is a leading Permian producer with focus on three locations:

Wolfberry-14 Rigs
Yeso-13 Rigs
Delaware Basin-5 Rigs
The three locations are liquids rich and well costs are low. Concho had production growth of 42% in 2010, and organic growth of 32%. Proved reserves grew 53% with reserve replacement up 858%. In 2010, 662 gross wells were drilled with 32 rigs. Concho closed the sale of its Bakken properties for $196 million. Concho has a $1.1 billion capital budget for 2011:

62% New Mexico Shelf
23% Texas Permian
15% Delaware Basin
Concho's unhedged position is 55%. Since 2006, production has a CAGR of 42%. Concho's proved reserves have a CAGR of 43%. Low costs, increased production and higher oil prices should contribute to a good 2011.