One of the largest operators in the Permian Basin, Concho Resources Inc. announced it has agreed to sell its assets in the New Mexico Shelf for $925 million to an affiliate of Spur Energy Partners LLC.
The assets include nearly 100,000 gross acres that produce about 25,000 barrels of oil equivalent a day.
Concho leadership says it will use proceeds to pay down debt and also fund a newly-announced share buyback program totaling up to $1.5 billion. The deal is expected to close yet this month.
Tim Leach, Chairman and Chief Executive Officer, commented, “Divesting our New Mexico Shelf position enables us to accelerate the value of these legacy assets, while focusing our portfolio on opportunities with the highest potential for strong returns. ”
He said it also reduces the company’s cost structure.
” The share repurchase program demonstrates our continued confidence in our strategy to generate sustainable oil growth and strong cash flow, and reflects our commitment to delivering long-term value to our shareholders.”
Following the sale, Concho will maintain a large presence and development program in southeastern New Mexico and will continue to support the local communities in which its employees live and work.
“Over the past decade, our Shelf team has done an excellent job of working safely and maximizing the value of these assets, and we are grateful for their hard work,” commented Leach.
RBC Richardson Barr served as financial advisor to Concho on the sale of the Shelf.