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Concho Resources Inc. (CXO - Snapshot Report) 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 - Snapshot Report) , Enerplus Corporation and EPL Oil & Gas, Inc. – which hold a Zacks Rank #1 (Strong Buy) and are expected to perform better.