Investor Presentation April 30, 2020 Forward-Looking Statements and - PowerPoint PPT Presentation

1Q | 2020 Investor Presentation April 30, 2020

Forward-Looking Statements and Other Disclaimers These materials and the accompanying oral presentation contain “forw ard -looking statements” w ithin the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included in this presentation that address activities, events or developments that Concho Resources Inc. (the “Company” or “Concho”) expects, believes or anticipates w ill or may occur in the future are forw ard-looking statements. The w ords “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “could,” “may,” “enable,” “strategy,” “intend,” “foresee,” “positioned,” “plan,” “w ill,” “guidance,” ”maximize,” “outlook,” “goal,” “strategy,” “target,” or other similar expressions that convey the uncertainty of future events or outcomes are intended to identify forw ard-looking statements, which generally are not historical in nature. How ever, the absence of these w ords does not mean that the statements are not forw ard-looking. These statements are based on certain assumptions and analyses made by the Company based on management’s experience, expectations and perception of historical trends, current conditions, current plans, anticipated future developments, expected financings, future market conditions, the impact of the COVID-19 pandemic and other factors believed to be appropriate. Forw ard-looking statements and historical results are not guarantees of future performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations w ill be achieved (in full or at all) or w ill prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of w hich are beyond the control of the Company, w hich may cause actual results to differ materially from those implied or expressed by the forw ard-looking statements. These include the risk factors and other information discussed or referenced in the Company’s most recent Annual Report on Form 10-K and other filings w ith the Securities and Exchange Commission (the “SEC”) . In particular, the unprecedented nature of the current economic dow nturn, pandemic and industry decline may make it particularly difficult to identify risks or predict the degree to w hich identified risks w ill impact the Company's business and financial condition. Any forw ard-looking statement speaks only as of the date on w hich such statement is made, and the Company undertakes no obligation to correct or update any forw ard-looking statement, w hether as a result of new information, future events or otherw ise, except as required by applicable law . Information on Concho’s w ebsite, including information referenced directly herein such as the Climate Risk Report, is not part of this presentation. These other materials are subject to additional cautionary statements regarding risks and forw ard looking information. To supplement the presentation of the Company’s financial results prepared in accordance w ith U.S. generally accepted accounting principles (“GAAP”), this presentation contains certain financial measures that are not prepared in accordance w ith GAAP, such as operating cash flow before w orking capital changes and free cash flow (“FCF”) . See the appendix for the descriptions and reconciliations of these non-GAAP measures presented in this presentation to the most directly comparable financial measures calculated in accordance w ith GAAP. For future periods, the Company is unable to provide a reconciliation of free cash flow to the most comparable GAA P financial measure because the information needed to reconcile this measure is dependent on future events, many of w hich are outside management's control. Additionally, estimating free cash flow to provide a meaningful reconciliation consistent w ith the Company's accounting policies for future periods is extremely difficult and requires a level of precision that is unavailable for these future periods and cannot be accomplished w ithout unreasonable effort. Forw ard-looking estimates of free cash flow are estimated in a manner consistent w ith the relevant definitions and assumptions noted above and herein. Cautionary Statement Regarding Production Forecasts and Other Matters Concho’s guidance and outlook regarding future performance, including production forecasts and expectations for future periods and statements regarding drilling inventory and ROR, are dependent upon many assumptions, including estimates of commodity prices, market conditions, production decline rates from existing w ells and the undertaking and outcome of future drilling activity, w hich may be affected by a prolonged period of low commodity prices, further commodity price declines or drilling cost increases or other factors that are beyond Concho’s control. Statements regarding w ell inventory or drilling locations does not guarantee the number or location of w ells that w ill actually be drilled or producing in the future. 2

Key Messages Well Positioned to Navigate Challenging Environment Health & safety of our Demonstrating operational 1Q20 performance extends Balance sheet provides a employees & communities flexibility & commitment to track record of delivery strong foundation comes first capital discipline › Quickly implemented › Total production & oil › Reducing capital expenditures › Strong balance sheet with mandatory work from home production above high end of to $1.6bn versus $2.7bn initial ample liquidity policy for those who can work guidance ranges guide › Hedging program designed to remotely › Demonstrated good cost › Targeting $100mm in protect financial strength › Practicing social distancing & control operating & G&A cost › FCF provides valuable limiting personnel on drilling & reductions › Generated strong FCF optionality in current completion sites › Capturing productivity gains & environment › Supporting our community well cost improvements through contributions to organizations that are helping during the crisis, such as the West Texas Food Bank Operating from a position of strength from team, asset quality, financial flexibility & balance sheet perspectives Free cash flow (FCF) is a non-GAAP measure. See appendix for definition and reconciliation to GAAP measure. 3

1Q20 Summary 1Q20 Operational & Financial Highlights Continued Strong Operational Execution › Cost control drives strong FCF generation ($mm, unless noted) 4Q19 1Q20 › 1Q20 total production & oil production above Oil production (MBopd) 215 209 high end of guidance ranges Total production (MBoepd) 337 326 • 1Q20 oil production of 209 MBopd in-line with 4Q19 divestiture-adjusted oil production of 210 Realized price ($/Boe) $40.17 $31.13 MBopd › DC&E costs per foot tracking below low end Operating cash flow (OCF) $769 $836 of FY20 target of $850-$900 per foot OCF before working capital › Returned capital to shareholders $801 $744 changes • Dividend of $0.20 per share, up 60% y/y • $100mm of share repurchases in January 2020 Capital expenditures $588 $556 FCF $213 $188 OCF before working capital changes and FCF are non-GAAP measures. See appendix for definitions and reconciliations to GAAP measures. Capital expenditures refers to additions to oil & natural gas properties as 4 reported on the Company’s statements of cash flows. 4Q19 production includes one month of production from the New Mexico Shel f assets, which the Company sold during 4Q19.

Global Economic Uncertainty Compounds Oil Supply/Demand Imbalance Collapsing Oil Demand U.S. Producers Quickly Cutting Capital COVID-19 Impact on 2020 Demand (MMBopd) Capital Cuts by Producer Market Cap Old New % Chg 1Q20 2Q20 3Q20 4Q20 FY20 0 $80 0% 5 Average Capex Reductions (% change) 7 7 5 >30% Average Capex Reduction $70 (10%) -10% 11 10 Aggregate Capex ($bn) $60 -20% (20%) 15 $50 (30%) -30% 20 25 $40 (40%) -40% 25 $30 (50%) -50% $20 (60%) -60% Significant Decline in Oil Prices $10 (70%) -70% Percent Drop in WTI Oil Price ($ per Bbl) $0 (80%) -80% >$15bn $5bn - $15bn $1bn - $5bn <$1bn 1985-1986 1997-1999 2008-2009 2014-2016 2020 -10% (10%) Market Value (30%) -30% › U.S. producers are aligning capital with prevailing market & (50%) -50% industry conditions with >$35bn in capital withdrawn so far (70%) -70% › Capital reductions & producer dynamics portend a sharp 2020 oil price decline most dramatic yet (90%) rollover in onshore oil supply beginning in 2Q20 -90% 0 2 4 6 8 10 12 14 16 18 20 22 Months U.S. producer capital cuts and market values as of April 29, 2020. 5 Sources: IEA, Bloomberg and public company reports.