CXO Posts Solid Q4 Results, Reserve Replacement

Analysts at Boenning & Scattergood maintain their "outperform" rating on Concho Resources Inc (NYSE: CXO). The target price for CXO is set to $52.

According to Boenning & Scattergood, Concho Resources has reported its Q4 results ahead of the estimates, driven by higher realized natural gas prices and lower non-cash DD&A and exploration expenses. “CXO’s YE ‘09 proven reserves of 211.5 MMBOE (67% oil) were 51% proven undeveloped compared with 44% at YE ’08,” the analysts say.

“The Texas Permian accounted for 37% of total company-wide year-end proven reserves. CXO has 1,795 remaining drilling locations (966 “booked” as PUDs), including 1,658 in the Wolfberry play, in the region… Importantly, CXO’s Blinebry/Paddock and Wolfberry plays generated an average estimated 60+% rate of-return at NYMEX prices of $70/Bbl and $4.00/MMBtu,” the analysts add.

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