Marbob is an 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.
Timothy Leach, chairman, CEO and president of Concho, said: “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.”
Concho intends to finance this transaction with a combination of equity and debt. Total consideration paid to Marbob at closing will consist of $1.45bn in cash, 1.1 million shares of Concho common stock valued at $50m in the aggregate and a $150m 8% senior unsecured note issued to Marbob due in 2018.
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.
