Energy Prospectus

Concho Resources Inc. (CXO) (“Concho” or the “Company”) today reported financial and operating results for the three months ended March 31, 2014. Highlights include:
• Average production of 101.6 thousand barrels of oil equivalent per day (“MBoepd”) for the first quarter of 2014, above the high end of its previous quarterly guidance range of 98.0 to 101.0 MBoepd
• Added 39 new wells in the northern Delaware Basin with record high average 30-day and 24-hour peak rates of 909 and 1,488 Boepd, respectively
• Net income of $91.3 million, or $0.87 per diluted share, for the first quarter of 2014, as compared to net income of $30.1 million, or $0.29 per diluted share, in the first quarter of 2013
• Adjusted net income1 (non-GAAP) of $106.6 million, or $1.01 per diluted share, for the first quarter of 2014, as compared to $60.3 million, or $0.58 per diluted share, for the first quarter of 2013
• EBITDAX2 (non-GAAP) of $483.3 million for the first quarter of 2014, a 42% increase over the first quarter of 2013
• Increased 2014 production guidance range to 20% - 24% growth over 2013
• Announced the formation of a midstream joint venture to construct a crude oil transportation system in the northern Delaware Basin

Production above my forecast and adjusted earnings slightly below my forecast. I will update the forecast model today and have more comments later. - Dan

Concho Resources Inc. (CXO) (the “Company”) today announced that it intends, subject to market conditions, to commence a registered public offering of 6,000,000 shares of common stock. The Company also expects to grant the underwriters an option to purchase up to 900,000 additional shares of stock. Net proceeds from the offering are expected to be used to repay all outstanding borrowings under the Company’s credit facility and for general corporate purposes, including funding the Company’s three-year accelerated growth plan, capital commitments associated with the recently announced midstream joint venture and future acquisitions.

Dilution but this also lowers interest expense.

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

Concho's increased production guidance has raised my Fair Value Estimate to $154.35/share.

Concho Resources price target raised to $160 from $130 at Citigroup
Citigroup raised its price target for Concho Resources shares to $160 following the company's Q1 results and reiterates a Buy rating on the stock.