Concho

The largest of our core areas, the Delaware Basin has advanced from an exploration play to a significant source of production and reserves growth for Concho. Horizontal drilling is a key driver of our growth in the Delaware Basin. Our primary targets are the oil-prone Bone Spring formation, which includes the Avalon Shale, three Bone Spring sandstone zones and the Wolfcamp Shale. Since 2010, Concho has drilled approximately 700 horizontal wells in the Delaware Basin, targeting six distinct zones, delivering industry-leading well results while identifying future opportunities.

In 2015, results from our drilling program, optimizing completion techniques and down-spacing increased our inventory in the northern Delaware Basin. Based on our well results, we have identified approximately 11,700 horizontal drilling locations in the northern Delaware Basin targeting six pay zones. We continue to capture, define and de-risk our resource, and believe there is further upside potential from reducing the spacing between wells and optimizing our completion design.

Located in Reeves, Ward and Pecos counties in Texas, our southern Delaware Basin assets are situated in a target-rich setting with considerable oil in place, where we leverage our success from the northern Delaware Basin to improve well performance and lower well costs. During 2015, we drilled some of the most prolific wells in our portfolio in this region, and are excited about the potential this area holds. As a result, we continued to add to our core acreage position in 2015.