• Production of 10.9 million barrels of oil equivalents ("MMBoe"), a 54% increase over 2008
• Net loss of $9.8 million, or $0.12 per diluted share; after adjusting for certain non-cash items, adjusted net income (non-GAAP) would have been $143.5 million, or $1.67 per diluted share, for 2009¹
• EBITDAX of $475.1 million, up 18% from 2008²

¹ The Company believes that this information may be useful to investors who follow the practice of some industry analysts who make adjustments to exclude certain non-cash items when calculating earnings per share and cash flow from operating activities. For an explanation of how the Company calculates and uses adjusted net income (non-GAAP) and cash flow from operating activities adjusted for settlements received from (paid on) derivatives not designated as hedges (non-GAAP) and a reconciliation of (i) net income (loss) (GAAP) to adjusted net income (non-GAAP) and (ii) cash flow from operating activities (GAAP) to cash flow from operating activities adjusted for settlements received from (paid on) derivatives not designated as hedges (non-GAAP), please see "Supplemental Non-GAAP Financial Measures" below.

² For an explanation of how the Company calculates and uses EBITDAX and a reconciliation of net income (loss) to EBITDAX, please see "Supplemental Non-GAAP Financial Measures" below.

Year End 2009 Financial Results

Production for 2009 totaled 10.9 MMBoe (7.3 million barrels of oil ("MMBbls") and 21.6 billion cubic feet of natural gas ("Bcf")), an increase of 54% as compared to 7.1 MMBoe (4.6 MMBbls of oil and 15.0 Bcf of natural gas) produced in 2008. Production in 2009 increased 34% over 2008 production including the pro forma effect of the properties acquired from Henry Petroleum LP and certain of its affiliated entities in 2008.

Timothy A. Leach, Concho's Chairman, CEO and President, commented, "Our 2009 results are a testament to the quality of our assets and to the Company's ability to remain flexible in the most challenging of environments. While the year began with the Company reducing rig count to stay within cash flow, we ended the year increasing rig count and adding to our inventory by closing two acquisitions in the Texas Permian. The Company is extremely well positioned to continue to execute in 2010 and beyond. Today, we are at an all time high rig count of twenty operated rigs and we plan to invest over $600 million in 2010, primarily in high rate of return drilling projects in our two core areas."

For 2009, the Company reported a net loss of $9.8 million, or $0.12 per diluted share, as compared to net income of $278.7 million, or $3.46 per diluted share, for 2008. The Company's 2009 results were impacted by several non-cash items. These non-cash items recorded in 2009, included a $239.3 million non-cash mark-to-market unrealized loss on commodity and interest rate derivatives, a $12.2 million impairment of long-lived assets, $6.6 million benefit due to a change in the statutory effective tax rate, and $5.1 million of leasehold abandonments. Excluding these items and assuming a normalized tax rate of 38%, 2009 adjusted net income would have been $143.5 million, or $1.67 per diluted share. Excluding similar non-cash items and their tax impact for 2008, adjusted net income would have been $145.4 million, or $1.80 per diluted share. For a description of the use of adjusted net income (non-GAAP), see footnote 1 above. For a reconciliation of net income (loss) (GAAP) to adjusted net income (non-GAAP) for the twelve month periods ended December 31, 2009 and 2008, please refer to the attached tables.

EBITDAX (defined as net income (loss), plus (1) exploration and abandonments expense, (2) depreciation, depletion and amortization expense, (3) accretion expense, (4) impairments of long-lived assets, (5) non-cash stock-based compensation expense, (6) bad debt expense, (7) ineffective portion of cash flow hedges and unrealized (gain) loss on derivatives not designated as hedges, (8) interest expense and (9) federal and state income taxes) increased to $475.1 million in 2009, as compared to $402.1 million in 2008.

Oil and gas production expense for 2009, including taxes, totaled $108.1 million, or $9.89 per barrel of oil equivalent ("Boe"), a 23% decrease per Boe from 2008. This decrease was due primarily to lower commodity prices, resulting in lower production taxes, (which averaged $3.57 per Boe in 2009 as compared to $6.18 per Boe in 2008).

Depletion, depreciation and amortization expense ("DD&A") for 2009 totaled $206.1 million, or $18.86 per Boe, compared to $123.9 million, or $17.50 per Boe, in 2008. The increase in depletion expense was primarily due to the Henry acquisition for which the depletion rate was higher than the Company's legacy assets and the capitalized costs associated with new wells that were successfully drilled and completed.

General and administrative expense ("G&A") for 2009 totaled $52.3 million, or $4.78 per Boe, as compared to $40.8 million, or $5.76 per Boe for 2008. Recurring cash G&A for 2009 totaled $33.1 million, stock-based compensation (non-cash) totaled $9.0 million, and $10.2 million was attributable to certain employee bonuses to be paid over a two year period commencing July 31, 2008 under the terms of the Henry purchase agreement.

The Company's 2009 cash flow from operating activities (GAAP) was $359.5 million, as compared to $391.4 million in 2008. Cash flow from operating activities for the twelve months ended December 31, 2009, adjusted for settlements received from (paid on) derivatives not designated as hedges (non-GAAP) was $442.0 million, which is a 15% increase over 2008, which totaled $385.0 million. For a description of the use of cash flow from operating activities adjusted for settlements received from (paid on) derivatives not designated as hedges (non-GAAP), please see footnote 1 above. For a reconciliation of cash flow from operating activities (GAAP) to cash flow from operating activities adjusted for settlements received from (paid on) derivatives not designated as hedges (non-GAAP) for the twelve month periods ended December 31, 2009 and 2008, please refer to the attached tables.

In 2009, the Company received cash receipts for settlements on derivatives contracts not designated as hedges of $82.4 million and the non-cash mark-to-market unrealized loss for the derivatives contracts not designated as hedges was $239.3 million. This is compared to cash payments of $6.4 million on derivatives contracts not designated as hedges and a $256.2 million non-cash mark-to-market unrealized gain on contracts not designated as hedges in 2008. To better understand the Company's derivatives positions and their impact on the Company'sstatement of operations, please see the "summary production and price data" table at the end of this press release.

Total costs incurred for oil and natural gas properties was $680.3 million for the year ended December 31, 2009, including $399.8 million for exploration and development drilling activities and $280.5 million for property acquisitions.

Fourth Quarter 2009 Financial Results

Production for the fourth quarter of 2009 totaled 2.8 MMBoe (1.9 MMBbls of oil and 5.4 Bcf of natural gas), an increase of 22% as compared to 2.3 MMBoe (1.6 MMBbls of oil and 4.6 Bcf of natural gas) produced in the fourth quarter of 2008.

For the fourth quarter of 2009, the Company reported net income of $16.9 million, or $0.20 per diluted share, as compared to net income of $128.8 million, or $1.51 per diluted share, for the fourth quarter of 2008. The Company's fourth quarter 2009 results were impacted by several non-cash items. These non-cash items, recorded in the fourth quarter of 2009, included a $67.2 million non-cash mark-to-market unrealized loss on commodity and interest rate derivatives, a $2.5 million impairment of long-lived assets, $6.6 million benefit related to a change in the state statutory effective tax rate, and $0.4 million of leasehold abandonments. Excluding these items and assuming a normalized tax rate of 38%, fourth quarter of 2009 adjusted net income would have been $53.6 million, or $0.62 per diluted share. Excluding similar non-cash items and their tax impact from the fourth quarter of 2008, adjusted net income would have been $27.6 million, or $0.32 per diluted share. For a description of the use of adjusted net income (non-GAAP), see footnote 1 above. For a reconciliation of net income (loss) (GAAP) to adjusted net income (non-GAAP) for the three month periods ended December 31, 2009 and 2008, please refer to the attached tables.

EBITDAX increased to $139.0 million in the fourth quarter of 2009, as compared to $103.0 million in the fourth quarter of 2008.

Oil and gas production expense for the fourth quarter of 2009, including taxes, totaled $32.1 million, or $11.41 per Boe, a 4% increase per Boe over the fourth quarter of 2008. This increase was due primarily to higher commodity prices, resulting in more production taxes, (which averaged $4.61 per Boe in the fourth quarter 2009 as compared to $3.86 per Boe in the fourth quarter 2008).

DD&A for the fourth quarter of 2009 totaled $48.2 million, or $17.11 per Boe, compared to $48.1 million, or $20.77 per Boe, in the fourth quarter of 2008. The decrease in depletion expense in the fourth quarter of 2009 was due to additional proved reserves at year-end 2009 as compared to year-end 2008.

G&A for the fourth quarter of 2009 totaled $13.6 million. Recurring cash G&A for the quarter totaled $8.8 million, stock-based compensation (non-cash) totaled $2.4 million, and $2.4 million was attributable to amounts owed to certain employees which are to be paid over a two year period that commenced on July 31, 2008 under the terms of the Henry Petroleum purchase agreement.

For the three months ended December 31, 2009, net income included the effect of non-cash mark-to-market unrealized loss for the derivatives contracts not designated as hedges of $67.2 million and $4.8 million in cash receipts for settlements on derivatives contracts not designated as hedges, as compared to a non-cash mark-to-market gain on derivatives contracts not designated as hedges of $183.4 million and $22.8 million in cash receipts for settlements on derivatives contracts not designated as hedges for the same period in 2008. To better understand the Company's derivatives positions and their impact on the fourth quarter statement of operations, please see the "Summary Production and Price Data" table at the end of this press release.

At December 31, 2009, the Company had $550.0 million outstanding under its credit facility in addition to $295.8 million of net senior unsecured notes due 2017. The borrowing base under the Company's credit facility is $955.9 million, providing $405.9 million of available borrowing capacity at year end 2009. Assuming the proceeds of $219.2 million from the Company's February 2010 equity offering had been received on December 31, 2009 and were applied to reduce borrowings under the Company's credit facility, availability under the credit facility would have been $625 million.

Operations

During 2009, the Company commenced the drilling of or participated in a total of 361 gross wells (314 operated), of which 295 had been completed as producers, 64 of which were in progress and two of which were unsuccessful at December 31, 2009. Currently, the Company is operating twenty drilling rigs, all in the Permian Basin; seven of these rigs are drilling Yeso wells in the New Mexico Permian, eleven of these rigs are drilling Wolfberry wells in the Texas Permian, and two rigs are drilling Lower Abo wells in New Mexico.

New Mexico Permian

During the fourth quarter of 2009, the Company commenced the drilling of 60 gross wells (54 operated), with a 100% success rate on the 35 wells that had been completed by December 31, 2009.

Texas Permian

During the fourth quarter of 2009, the Company commenced the drilling of 46 gross wells (all operated), with a 100% success rate on the 15 wells that had been completed by December 31, 2009.

Conference Call Information

The Company will host a conference call on Thursday, February 25, 2010, at 9:00 a.m. CST (10:00 a.m. EST) to discuss its fourth quarter and full year 2009 financial and operating results. Interested parties may listen to the conference call via the Company's website at http://www.conchoresources.com or by dialing 800-299-9630 (passcode: 15400846). A replay of the conference call will be available on the Company's website or by dialing 888-286-8010 (passcode: 85822213).

Forward-Looking Statements and Cautionary Statements

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including the Company's drilling program, production, derivatives activities, capital expenditure levels and other guidance included in this press release. These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include risks relating to financial performance and results, prices and demand for oil and natural gas, availability of drilling equipment and personnel, availability of sufficient capital to execute the Company's business plan, its ability to replace reserves and efficiently develop its current reserves and other important factors that could cause actual results to differ materially from those projected as described in the Company's reports filed with the SEC.

Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

About Concho Resources Inc.

Concho Resources Inc. is an independent oil and natural gas company engaged in the acquisition, development and exploration of oil and natural gas properties. The Company's operations are focused in the Permian Basin of Southeast New Mexico and West Texas. In addition, the Company is involved in a number of emerging plays. For more information, visit Concho's website at www.conchoresources.com.

Concho Resources Inc.

Consolidated Balance Sheets

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Concho Resources Inc.

Consolidated Statements of Operations

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Concho Resources Inc.

Consolidated Statements of Cash Flows

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Concho Resources Inc.

Summary Production and Price Data

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The following table presents selected operating information of Concho Resources Inc. for the periods indicated:

(a) Includes the effect of (i) commodity derivatives designated as hedges and reported in oil and natural gas sales and (ii) includes the cash payments on/receipts from commodity derivatives not designated as hedges and reported in operating costs and expenses. The following table reflects the amounts of cash payments on/receipts from commodity derivatives not designated as hedges that were included in computing average prices with derivatives and reconciles to the amount in gain (loss) on derivatives not designated as hedges as reported in the statement of operations:

Concho Resources Inc.

Supplemental Non-GAAP Financial Measures

Unaudited

EBITDAX (as defined below) is presented herein, and reconciled from the generally accepted accounting principle ("GAAP") measure of net income because of its wide acceptance by the investment community as a financial indicator of a company's ability to internally fund exploration and development activities.

The Company defines EBITDAX as net income (loss), plus (1) exploration and abandonments expense, (2) depreciation, depletion and amortization expense, (3) accretion expense, (4) impairments of long-lived assets, (5) non-cash stock-based compensation expense, (6) bad debt expense, (7) ineffective portion of cash flow hedges and unrealized (gain) loss on derivatives not designated as hedges, (8) interest expense and (9) federal and state income taxes. EBITDAX is not a measure of net income (loss) or cash flow as determined by GAAP.

The Company's EBITDAX measure provides additional information which may be used to better understand its operations. EBITDAX is one of several metrics that the Company uses as a supplemental financial measurement in the evaluation of its business and should not be considered as an alternative to, or more meaningful than, net income, as an indicator of its operating performance. Certain items excluded from EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic cost of depreciable assets, none of which are components of EBITDAX. EBITDAX as used by us may not be comparable to similarly titled measures reported by other companies. The Company believes that EBITDAX is a widely followed measure of operating performance and is one of many metrics used by its management team and by other users of its consolidated financial statements. For example, EBITDAX can be used to assess the Company's operating performance and return on capital in comparison to other independent exploration and production companies without regard to financial or capital structure, and to assess the financial performance of its assets and the company without regard to capital structure or historical cost basis.

The following table provides a reconciliation of net income (loss) to EBITDAX:

The following tables provide information that the Company believes may be useful to investors who follow the practice of some industry analysts who adjust reported company earnings and cash flow from operating activities to match realizations to production settlement months and make other adjustments to exclude certain non-cash items. The following table provides a reconciliation of net income (loss) (GAAP) to adjusted net income (non-GAAP).

The following table provides a reconciliation of cash flow from operating activities (GAAP) to cash flow from operating activities adjusted for settlements received from (paid on) derivatives not designated as hedges (non-GAAP).

Concho Resources Inc.

Derivatives Information at February 24, 2010

Unaudited

The table below provides data associated with the Company's oil, natural gas and interest rate derivatives at February 24, 2010. The counterparties in its derivative instruments are Bank of America, N.A., Bank of Nova Scotia, BNP Paribas, Calyon, Citibank, N.A., Compass Bank, JPMorgan Chase Bank, N.A, KeyBank, and Wells Fargo Bank, N.A.

SOURCE: Concho Resources Inc.

Concho Resources Inc.
Jack Harper, 432-683-7443
Vice President - Capital Markets and Business Development