Concho to increase revolver to $2 billion for Marbob assets purchase

By Sara Rosenberg

New York, July 20 - Concho Resources Inc. plans on upsizing its revolving credit facility to $2 billion from $1.2 billion in connection with its acquisition of all the oil and gas assets of Marbob Energy Corp., according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

JPMorgan and Bank of America, the lead banks on the revolver, provided the commitments for the expansion.

Under the agreement, Concho is buying the oil and gas assets for $1.65 billion in cash and Concho securities. The total consideration paid to Marbob at closing will consist of $1.45 billion in cash, 1.1 million shares of Concho common stock and a $150 million 8% senior unsecured note issued to Marbob due in 2018.

The cash portion, plus $35 million for fees and expenses, will come from $1.185 billion of borrowings under the expanded revolver and from the sale of 6.6 million shares of common stock for $300 million in a private placement transaction.

Completion of the acquisition - and the private placement of stock - is expected to occur on Nov. 1, subject to certain preferential rights to purchase, due diligence, customary purchase price adjustments and other customary conditions.

Concho is a Midland, Texas-based oil and natural gas company.

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