Generates Additional Net Proceeds to Concho of Approximately $300 Million
MIDLAND, Texas–(BUSINESS WIRE)–Concho Resources Inc. (NYSE: CXO) (“Concho” or the “Company”) today announced that Oryx Southern Delaware Holdings, LLC, (“Oryx”), the owner of the Oryx I oil gathering and transportation system, has entered into an agreement to sell 100% of the equity interests in its subsidiaries to Stonepeak Infrastructure Partners for $2.07 billion. Concho owns a 23.75% equity interest in Oryx and will receive approximately $300 million at closing after repayment of Oryx’s outstanding borrowings.
In February 2018, Concho received a $157 million distribution related to a recapitalization of Oryx. The sale proceeds from Oryx combined with the earlier distribution total approximately $457 million, representing a 10 times multiple on invested capital of approximately $45 million since December 2015.
Jack Harper, Concho’s President, commented, “Our investment in Oryx supported the continued growth of our assets in the Southern Delaware Basin with secured transportation for our production and improved oil price realizations. This sale represents an excellent return on investment for our shareholders. A strong balance sheet underpins our ability to execute a resilient high-margin growth and returns strategy, and we will use the proceeds of this sale to further strengthen our balance sheet by repaying borrowings on our revolver.
“We congratulate the Oryx management team. Their demonstrated execution and expertise created tremendous midstream and upstream value.”
This transaction is not expected to impact oil price realizations or transportation costs as Concho’s existing gathering agreement remains unchanged. Upon closing, the net cash proceeds from the transaction will be used to repay borrowings outstanding on the Company’s credit facility. Closing is expected to occur in the second quarter of 2019, subject to customary terms and conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act.
Concho Resources Inc.
Concho Resources (NYSE: CXO) is one of the largest unconventional shale producers in the Permian Basin, with operations focused on acquiring, exploring, developing, and producing oil and natural gas resources. Concho is at the forefront of applying advanced technology and large-scale development to safely and efficiently maximize resource recovery while delivering attractive, long-term economic returns. We are working today to deliver a better tomorrow for our shareholders, people and communities. For more information about Concho, visit www.concho.com.