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Concho Resources (CXO) Prices Offering of 0.9 Million Shares

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Independent exploration and production company, Concho Resources Inc. announced that it has priced a public offering of 0.9 million shares of its common stock. Total gross proceeds from the offering will likely be approximately $1.2 billion. The offering is expected to close on Aug 19, 2016.

Concho Resources expects to use proceeds from the offering to finance part of the cash portion of the purchase price for the company’s recently announced proposed acquisition of Midland Basin assets and fund part of the redemption of the company’s 7.0% Senior Notes due Jan 2021. The residual balance, if any, would be used for general corporate purposes.

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 on the Permian Basin of Southeast New Mexico and West Texas. In addition, the company is involved in a number of unconventional emerging resource plays. The company operated an average of 13 rigs during the second quarter of 2016, up from 10 rigs in the first quarter of 2016.
 

However, production for the second quarter of 2016 was 13.2 million barrels of oil equivalent (MMBoe), or an average of 145.2 thousand Boe per day (MBoepd), reflecting an increase of 4% from the first quarter of 2016. Second-quarter 2016 production comprised 62% oil and 38% natural gas.

The company currently carries a Zacks Rank #3 (Hold). Some better-ranked players from the same space are Devon Energy Corporation (DVN - Free Report) , North Atlantic Drilling Limited and Murphy USA Inc. (MUSA - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).

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