Corporate History
Concho was formed in February 2006 as a result of the combination of Concho Equity Holdings Corp. and a portion of the oil and natural gas properties and related assets owned by Chase Oil Corporation and certain of its affiliates. Concho Equity Holdings Corp. was formed in April 2004 and represents the third of three Permian Basin-focused companies that have been formed since 1997 by our current management team (the prior two companies were sold to large domestic independent oil and natural gas companies).
In 2007, we drilled or participated in 125 wells (99 operated) and 143 recompletions (126 operated). As a result, we increased our total estimated net proved reserves by approximately 79 Bcfe from 467 Bcfe as of December 31, 2006 to 546 Bcfe as of December 31, 2007, while producing approximately 30 Bcfe of oil and natural gas during the year ended December 31, 2007. In addition, we increased our average net daily production from 80 MMcfe per day during the first quarter of 2007 to 91 MMcfe per day during the fourth quarter of 2007.
On June 5, 2008 Concho announced the acquisition of Henry Petroleum and certain affiliated entities for $565 million in cash. Henry is a private Midland, Texas based oil and gas exploration and production company with operations located in the Permian Basin of West Texas and Southeast New Mexico, including an industry leading position in the Sprayberry/Wolfcamp oil play in West Texas where Henry has drilled over 500 wells since 2002.
The Henry acquisition, which closed on July 31, 2008, included the following highlights at closing:
- 172 Bcfe of proved reserves as of June 1, 2008 (70% oil, 62% proved developed); 100% Permian Basin
- 295 Bcfe of identified unproved reserves
- 1,651 identified drilling locations (312 of which are proved undeveloped) including 1,420 in the Wolfberry Play
- Current production of approximately 5,500 boepd
- Henry’s Petroleum’s experienced technical and operational staff to be retained by Concho
- Significant portion of PDP hedged through 2012
