Energy Prospectus

CXO beat my forecast and they are increasing production guidance.

Concho Resources Inc. (CXO) (“Concho” or the “Company”) today announced a new three-year growth plan intended to double production by 2016. In addition, the Company provided details on its 2014 capital budget and guidance and reported financial and operating results for the three and nine months ended September 30, 2013. Highlights include:
• Accelerated growth plan that is expected to deliver annual production of over 67 million barrels of oil equivalent (“MMBoe”) in 2016 and reduce the Company’s leverage ratio (debt-to-EBITDAX) to less than 1.5x
• 2014 capital budget of $2.3 billion and expected production growth of 18% to 22%
• Production from continuing operations of 8.7 million barrels of oil equivalent (“MMBoe”) for the third quarter of 2013, a 19% increase over the third quarter of 2012 and a 5% increase over the second quarter of 2013
• Net income of $30.4 million, or $0.29 per diluted share, for the third quarter of 2013, as compared to net income of $6.0 million, or $0.06 per diluted share, for the third quarter of 2012
• Adjusted net income1 (non-GAAP) of $111.1 million, or $1.06 per diluted share, for the third quarter of 2013, as compared to $99.9 million, or $0.96 per diluted share, for the third quarter of 2012
• EBITDAX2 (non-GAAP) of $456.4 million for the third quarter of 2013, as compared to $387.2 million for the third quarter of 2012

Concho Resources Inc. (CXO): An updated Net Income & Cash Flow Forecast model has been posted under the Sweet 16 Tab.

My Fair Value Estimate went up $1.65 to $122.65/share.

In addition to have lots of running room, Concho gives very good guidance. This tells me they have very good internal controls and that they are focused on achieving their goals. This company has accomplished a lot in a very short period of time.

They should have a very impressive year-end reserve report.