2008-10-21-2008-06-05-2008-08-01

Bought co., gaining 163 Bcfe proved, 33 MMcfe/d in TX, NM.

Concho Resources Inc., Midland, Texas, (NYSE: CXO) has closed its acquisition of privately held, Midland, Texas-based Henry Petroleum for $560 million in cash. In addition, Concho purchased additional nonoperated interests in certain Henry properties for approximately $28 million. Proved reserves of these additional interests are 8.6 billion cubic feet equivalent as of June 1 and identified unproved reserves totaled 11.6 billion equivalent. Henry's holdings are in the Permian Basin of West Texas and southeastern New Mexico, including a significant position in the Spraberry/Wolfcamp play in West Texas where Henry has drilled more than 500 wells since 2002 and is the leading producer in the play. Proved reserves are 163 billion cubic feet equivalent (70% oil; 62% proved developed). Production is approximately 33 million cubic feet equivalent per day. The reserve-to-production ratio is 13.5 years. Upside includes 283 billion cubic feet equivalent of identified unproved reserves and 1,651 identified drilling locations (1,420 in the Wolfberry), of which 312 are proved undeveloped. Eight rigs are currently drilling in the Wolfberry play. Concho will retain Henry's technical and operational staff. Concho reported it plans to enter into derivative contracts for a significant portion of the current unhedged proved developed producing reserves estimated to be produced in the last five months of 2008 and in each of 2009, 2010, 2011 and 2012. The deal was funded with borrowings from an amended and restated senior credit facility arranged by J.P. Morgan Securities Inc. and Bank of America Securities LLC. and with proceeds from a $250-million private placement of 8.3 million Concho shares. The company has approximately $300 million available under its senior credit facility following the transaction. KeyBank Capital Markets Inc. was advisor to Concho.