Marbob is a privately-held exploration and production company with substantially all of its operations located in the Permian Basin of Southeast New Mexico, including a large acreage position contiguous to the Company's core Yeso play on the Southeast New Mexico Shelf and a significant acreage position in the emerging Bone Spring play in Southeast New Mexico.

 Highlights of the Marbob acquisition:

-- 76 million barrels of oil equivalent ("MMBoe") estimated proved reserves(1) (58% oil, 63% proved developed)

-- 166 MMBoe estimated unproved reserves(1)

-- First quarter 2010 average net daily production of approximately 14,000 barrels of oil equivalent per day

-- Reserve to production ratio of 14.9 years

-- Approximately 2,300 identified drilling locations (350 of which are proved undeveloped) including approximately 1,300 in the Yeso play and approximately 1,000 in the Bone Spring play

-- Marbob is currently running 5 rigs, including 1 rig drilling Yeso wells on the Southeast New Mexico Shelf and 4 rigs drilling in the Bone Spring play

-- Marbob's experienced technical and operational staff to be retained by Concho

 "We are pleased to announce the largest and most strategic acquisition in our Company's history,”  commented Timothy A. Leach, Concho's chairman in a prepared statement. “This acquisition has been one of our highest priorities for the last three years. These assets are a perfect complement to our New Mexico Shelf position, and they double our Yeso drilling inventory. In addition, Marbob's Bone Spring acreage, when coupled with our existing acreage, gives the Company over 100,000 net acres in one of the most exciting emerging plays in the industry today and adds a significant new area of growth to the Company's portfolio. After closing, we plan to increase the activity level and rig count on these acquired properties, which should result in significant production growth over the next several years. Going forward Concho will be a bigger version of today's company, with a large, high rate of return, high margin drilling inventory that will be complemented by the Bone Spring play.”  

 Concho intends to finance this transaction with a combination of equity and debt. Total consideration paid to Marbob at closing will consist of $1.45 billion in cash, 1.1 million shares of Concho common stock valued at $50 million in the aggregate and a $150 million 8% senior unsecured note issued to Marbob due in 2018. Additionally, Concho has received underwritten commitments from affiliates of J.P. Morgan Chase Bank, N.A. and Bank of America, N.A. to expand the size of its existing revolving credit facility from $1.2 billion to $2.0 billion as part of the financing for the acquisition. Finally, in addition to the securities issued to the seller, Concho has entered into an agreement with certain purchasers to sell 6.6 million shares of common stock for $300 million in a private placement transaction. The private placement is expected to close on the date of the closing of the Marbob acquisition, subject to the satisfaction of customary closing conditions and the satisfaction of certain conditions related to the Marbob acquisition. In conjunction with this transaction, Concho plans to enter into derivative contracts for a significant portion of the proved developed producing reserves estimated to be produced by the acquired assets in the years 2011 through 2015. In July, the Company has entered into new crude oil swaps on 5.6 million barrels of oil at a price of approximately $82.50 per barrel for the years 2011 through 2015 (see the updated hedge schedule at the end of this press release).

 Concho's Board of Directors has approved this transaction, which is expected to close on or before November 30, 2010, and is subject to certain preferential rights to purchase, due diligence, customary purchase price adjustments and other customary closing conditions.