Concho Resources Prices Notes - Analyst Blog
21 Maggio 2013 - 6:30PM
Zacks
Concho Resources
Inc. (CXO) recently announced the pricing of senior
unsecured notes worth $850 million. The notes, which carry a coupon
rate of 5.5%, are due in 2023. The company expects to close the
sale of the notes by Jun 4, 2013.
The proceeds from this issue would be utilized to repurchase senior
notes worth $300 million maturing in 2017 and repay borrowings
under the credit facility. The 2017 notes have a dearer coupon rate
of 8.625% that are adding to the interest burden of the
company.
Concho Resources Inc. is an independent oil and natural gas company
engaged in the acquisition, development, exploitation and
exploration of oil and natural gas properties. The company's
conventional operations are primarily focused in the Permian Basin
of Southeast New Mexico and West Texas. In addition, the company is
involved in a number of unconventional emerging resource plays.
As of Dec 31, 2012, the company owned interests in approximately
1.3 million gross (745,000 net) acres in the New Mexico and Texas
Permian, alongside proved reserves of 458 million barrels of oil
equivalent.
However, recent times have not been particularly good for the
company. Earlier in May, the company reported weak first quarter
numbers. The bottom line fell 3.3% year over year owing to lower
prices dragging down revenues. Higher production at the same time
could salvage the performance only partially.
The company currently holds a Zacks Rank #3, which is equivalent to
a short-term Hold rating. However, there are other stocks in the
oil and gas sector – Abraxas Petroleum Corp.
(AXAS), Enerplus Corporation (ERF) and EPL
Oil & Gas, Inc. (EPL) – which hold a Zacks Rank #1
(Strong Buy) and are expected to perform better.
ABRAXAS PETE/NV (AXAS): Free Stock Analysis Report
CONCHO RESOURCS (CXO): Free Stock Analysis Report
EPL OIL&GAS INC (EPL): Free Stock Analysis Report
ENERPLUS CORP (ERF): Free Stock Analysis Report
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