Concho Resources Inc.
) has priced an underwritten public offering of 6,500,000 common
shares - upsized from the original offering size of 6,000,000
shares - at $129.00 a piece, with an over-allotment option for an
additional 975,000 shares. The offering, which was announced on May
12, is likely to close on May 16.
The oil and natural gas explorer plans to use the net proceeds from
this offering to repay the debts under the company's credit
facility, as well as for corporate purposes that includes financing
its three-year accelerated growth plan, capital expenditure tied to
the recently announced midstream joint venture and potential future
Concho Resources, which recently reported upbeat first quarter
results on strong production, is an independent exploration and
production company engaged in the acquisition, finding, and
development of oil and gas properties. The company's operations are
concentrated primarily in the Permian Basin of Southeast New Mexico
and West Texas.
With holdings of around 605,000 net acres across the Permian Basin,
22,000 drilling locations and approximately 3 billion
oil-equivalent barrels of resource potential, Concho Resources'
asset portfolio is primed for high production growth and
However, as is the case with other independent exploration and
production companies, Concho Resources' results are directly
exposed to oil and gas prices, which are inherently volatile and
subject to complex market forces. Realized prices could differ
significantly from our estimates, thereby affecting the company's
revenues, earnings and cash flow.
As a result, Concho Resources currently retains a Zacks Rank #3
(Hold), implying that it is expected perform in line with the
broader U.S. equity market over the next one to three months.
However, some better-ranked domestic upstream energy stocks include
Matador Resources Co.
Callon Petroleum Co.
EPL Oil & Gas Inc.
). All the firms hold a Zacks Rank #1 (Strong Buy).
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CALLON PETE-DEL (CPE): Free Stock Analysis
CONCHO RESOURCS (CXO): Free Stock Analysis
EPL OIL&GAS INC (EPL): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
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