Concho Resources Inc. Announces Sale of Its Interest in Oryx I Oil Gathering System
April 02 2019 - 7:05AM
Business Wire
Generates Additional Net Proceeds to Concho
of Approximately $300 Million
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20190402005546/en/
INVESTOR RELATIONSMegan P. HaysVice President of
Investor Relations and Public Affairs432.685.2533
MEDIAMary T. StarnesManager of Public
Affairs432.221.0477
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