Concho Resources to sell New Mexico assets for $925 mln
Adds details on sale, background, shares
Sept 3 (Reuters) - U.S. oil and gas producer Concho Resources Inc CXO.N said on Tuesday it would sell its New Mexico assets for $925 million to an affiliate of privately held Spur Energy Partners LLC, which is backed by global investment firm KKR.
Oil and gas companies have been looking to trim non-core assets and focus their spending on areas including Permian's Delaware and Midland basins.
Concho, which has been hit by pricing concerns, took an impairment charge of $868 million on assets in the second quarter and said it did not plan to allocate capital on them for the next five years.
The sale includes a narrow strip of about 100,000 gross acres bordering its operations in the Delaware basin, which is spread across Texas and New Mexico.
The assets produce about 25,000 barrels of oil equivalent per day, the company said in a statement.
The proceeds from the deal will be used to pay down debt and initiate the share repurchase program of up to $1.5 billion.
Shares of Concho, which is the top oil producer in New Mexico, rose 1.2% to $74 per share in premarket trading.
(Reporting by Shanti S Nair in Bengaluru; Editing by Arun Koyyur)
((ShantiS.Nair@thomsonreuters.com; +1 646 223 8780 Ext: 7208;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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