Concho Resources announced Thursday it has entered into a definitive agreement to acquire operated interests in certain producing and non-producing assets in the Wolfberry trend in the Permian Basin from Petroleum Development Corporation for approximately $175 million, subject to customary purchase price adjustments.
The Acquisition adds approximately 10,800 gross (10,200 net) acres located in Andrews, Ector and Midland Counties, Texas.
Highlights of the Acquisition:
In connection with the Acquisition, the Company will increase its 2012 capital budget from $1.30 billion to $1.37 billion to develop the newly acquired assets.
In addition, the Company currently estimates that its 2012 production will total between 27.5 MMBoe and 28.5 MMBoe, an increase of approximately 0.5 MMBoe due to the Acquisition.
The Company estimates that its updated 2012 capital budget can be substantially funded out of its after-tax cash flow assuming (i) a NYMEX crude oil price of $85 per barrel and a NYMEX natural gas price of $4 per thousand cubic feet of natural gas for the Company's unhedged production and (ii) that the Company achieves the mid-point of its 2012 production guidance.
The Acquisition, which is expected to close in the first quarter of 2012, will be funded with borrowings under the Company’s credit facility.
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