Concho Resources Inc. (NYSE: CXO) (“Concho” or the
“Company”) today announced that it has priced an offering of a
total of $1,600 million aggregate principal amount of senior
unsecured notes, consisting of $1,000 million aggregate principal
amount of senior unsecured notes due 2028 (the “2028 notes”) and
$600 million aggregate principal amount of senior unsecured notes
due 2048 (the “2048 notes” and collectively with the 2028 notes,
the “notes”). The 2028 notes will bear interest at a rate of 4.300%
per annum and will be issued at 99.660% of par, and the 2048 notes
will bear interest at a rate of 4.850% per annum and will be issued
at 99.740% of par. The notes offering is expected to close on July
2, 2018, subject to the satisfaction of customary closing
conditions. Following the closing of the Company’s acquisition of
RSP Permian Inc. (“RSP”) through an all-stock transaction (the “RSP
Acquisition”), Concho intends to use the net proceeds from this
offering to redeem, as previously announced, RSP’s 6.625% senior
notes due 2022 and 5.25% senior notes due 2025 (collectively, the
“RSP notes”) for approximately $1.2 billion and to repay a portion
of the outstanding indebtedness under RSP’s existing credit
facility, under which RSP had outstanding borrowings of $445
million as of March 31, 2018. Pending the redemption of the RSP
notes and the repayment of a portion of the outstanding
indebtedness under RSP’s existing credit facility, the Company
intends to invest the net proceeds from this offering primarily in
cash, cash equivalents and U.S. government securities.
If the RSP Acquisition is not completed on or prior to December
31, 2018, or is terminated on or prior to completion, the Company
will redeem all of the notes at a price equal to 101% of the
principal amount of the notes of the applicable series, plus
accrued and unpaid interest to the redemption date.
BofA Merrill Lynch, J.P. Morgan and Wells Fargo Securities will
act as joint bookrunning managers for the senior unsecured notes
offering. The offering will be made only by means of a preliminary
prospectus supplement and the accompanying base prospectus, copies
of which may be obtained on the Securities and Exchange Commission
(“SEC”) website at www.sec.gov. Alternatively, the underwriters
will arrange to send you the preliminary prospectus supplement and
related base prospectus if you request them by contacting Merrill
Lynch, Pierce, Fenner & Smith Incorporated, 200 North College
Street, NC1-004-03-43, Charlotte, NC 28255-0001, Attention:
Prospectus Department, or by e-mailing
dg.prospectus_requests@baml.com, or via phone at (800) 294-1322;
J.P. Morgan Securities LLC, 383 Madison Avenue, 3rd Floor, New
York, New York 10179, Attention: Investment Grade Syndicate Desk,
or via phone at (212) 834-4533; or Wells Fargo Securities, LLC, 608
2nd Ave S, Suite 1000, Minneapolis, MN 55402, Attention: WFS
Customer Service, or by e-mailing
wfscustomerservice@wellsfargo.com, or via phone at (800)
645-3751.
This press release is neither an offer to sell nor a
solicitation of an offer to buy any securities, nor shall there be
any sale of any such securities in any state or jurisdiction in
which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
state or jurisdiction. A registration statement, as amended,
relating to the securities has been filed and became effective June
14, 2018. This press release is not intended as a notice of
redemption. Any such notice has been given to holders of the RSP
notes in a manner prescribed in the indentures governing those
notes. This communication also does not constitute a solicitation
of any vote or approval in any jurisdiction relating to the RSP
Acquisition.
Concho Resources Inc.
Concho Resources Inc. is an independent oil and natural gas
company engaged in the acquisition, development, exploration and
production of oil and natural gas properties. The Company’s
operations are focused in the Permian Basin of Southeast New Mexico
and West Texas.
Forward-Looking Statements and Cautionary Statements
The foregoing contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. 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. Forward-looking statements
contained in this press release specifically include statements
relating to the Company’s planned offering, the use of the net
proceeds from the planned offering, and the pending RSP
Acquisition. The words “estimate,” “project,” “predict,” “believe,”
“expect,” “anticipate,” “potential,” “could,” “may,” “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, anticipated future developments 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
discussed or referenced in the Company’s most recent Annual Report
on Form 10-K; Quarterly Reports on Form 10-Q; risks associated with
the RSP Acquisition, including increased expenses, management
distraction from the Company’s business, declines in the market
price of the Company’s common stock and failure to realize the
expected benefits of the RSP Acquisition; failure, difficulties and
delays in meeting conditions required for closing set forth in the
Agreement and Plan of Merger associated with the RSP Acquisition;
risks associated with acquisitions, including liabilities
associated with acquired properties or businesses and the ability
to realize expected benefits; disruptions to, capacity constraints
in or other limitations on the pipeline systems that deliver the
Company’s oil, natural gas liquids and natural gas and other
processing and transportation considerations; declines in, or the
sustained depression of, the prices the Company receives for its
oil and natural gas; risks related to the concentration of the
Company’s operations in the Permian Basin of Southeast New Mexico
and West Texas; evolving cybersecurity risks, such as those
involving unauthorized access, denial-of-service attacks, malicious
software, data privacy breaches by employees, insiders or others
with authorized access, cyber or phishing-attacks, ransomware,
malware, social engineering, physical breaches or other actions;
the costs and availability of equipment, resources, services and
qualified personnel required to perform the Company’s drilling,
completion and operating activities; drilling, completion and
operating risks; environmental hazards, such as uncontrollable
flows of oil, natural gas, brine, well fluids, toxic gas or other
pollution into the environment, including groundwater
contamination; the effects of government regulation, permitting and
other legal requirements, including new legislation or regulation
related to hydraulic fracturing, climate change, derivatives reform
or the export of oil and natural gas; the impact of current and
potential changes to federal or state tax rules and regulations,
including the Tax Cuts and Jobs Act; potential financial losses or
earnings reductions from the Company’s commodity price risk
management program; difficult and adverse conditions in the
domestic and global capital and credit markets; the adequacy of the
Company’s capital resources and liquidity including, but not
limited to, access to additional borrowing capacity under the
Company’s credit facility; the impact of potential changes in the
Company’s credit ratings; uncertainties about the Company’s ability
to successfully execute the Company’s business and financial plans
and strategies; uncertainties about the estimated quantities of oil
and natural gas reserves; uncertainties about the Company’s ability
to replace reserves and economically develop the Company’s current
reserves; general economic and business conditions, either
internationally or domestically; competition in the oil and natural
gas industry; uncertainty concerning the Company’s assumed or
possible future results of operations; and other important factors
that could cause actual results to differ materially from those
projected.
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.
Additional Information and Where to Find It
In connection with the RSP Acquisition, Concho filed with the
SEC, on June 4, 2018, an amendment to the registration statement on
Form S-4 that was originally filed on April 20, 2018, that includes
a joint proxy statement of RSP and Concho that also constitutes a
prospectus of Concho. The registration statement was declared
effective on June 6, 2018, and RSP and Concho commenced mailing the
definitive joint proxy statement/prospectus to stockholders of
Concho and RSP on or about June 12, 2018. RSP and Concho will also
file other documents with the SEC regarding the RSP Acquisition.
This document is not a substitute for the registration statement
and joint proxy statement/prospectus filed with the SEC, including
any amendments thereto, or any other documents that Concho or RSP
may file with the SEC or send to stockholders of Concho or RSP in
connection with the RSP Acquisition. INVESTORS AND SECURITY
HOLDERS OF RSP AND CONCHO ARE URGED TO READ THE REGISTRATION
STATEMENT, THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS, AND ALL
OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE
SEC BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE RSP ACQUISITION AND RELATED MATTERS.
Investors and security holders are able to obtain free copies of
the registration statement and the definitive joint proxy
statement/prospectus and all other documents filed or that will be
filed with the SEC by Concho or RSP through the website maintained
by the SEC at www.sec.gov. Copies of documents filed with
the SEC by RSP will be made available free of charge on RSP’s
website at www.rsppermian.com, under the heading “SEC
Filings,” or by contacting RSP’s Investor Relations Department by
phone at (214) 252-2700. Copies of documents filed with the SEC by
Concho will be made available free of charge on Concho’s website at
www.concho.com, under the heading “Investors,” or by
contacting Concho’s Investor Relations Department by phone at (432)
221-0477.
Participants in Solicitation
Concho, RSP and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from the holders of Concho’s common stock and RSP’s common
stock in respect to the RSP Acquisition.
Information regarding RSP’s directors and executive officers is
contained in the Form 10-K/A filed with the SEC on April 30, 2018
and in the other documents filed after the date thereof by RSP with
the SEC. You can obtain a free copy of this document at the SEC’s
website at www.sec.gov or by accessing RSP’s website at
www.rsppermian.com. Information regarding Concho’s executive
officers and directors is contained in the proxy statement for
Concho’s 2018 Annual Meeting of Stockholders filed with the SEC on
April 5, 2018 and in the other documents filed after the date
thereof by Concho with the SEC. You can obtain a free copy of this
document at the SEC’s website at www.sec.gov or by accessing
Concho’s website at www.concho.com under the heading
“Investors.”
Investors may obtain additional information regarding the
interests of those persons and other persons who may be deemed
participants in the RSP Acquisition by reading the definitive joint
proxy statement/prospectus. You may obtain free copies of these
documents as described above.
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version on businesswire.com: https://www.businesswire.com/news/home/20180614006232/en/
Concho Resources Inc.Megan P. Hays, 432-685-2533Vice
President of Investor Relations and Public AffairsorMary T.
Starnes, 432-221-0477Investor Relations Manager
Concho Resources (NYSE:CXO)
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