UPDATE 1-Concho to buy Marbob Energy for $1.66 bln

Tue Jul 20, 2010 9:47am EDT

* Concho to buy Marbob, with assets in SE New Mexico

* To pay $1.45 bln cash, $58 mln stock, $150 mln note

* Concho shares up 4.6 pct

NEW YORK, July 20 (Reuters) - Oil and gas company Concho Resources Inc (CXO.N) said on Tuesday it agreed to buy privately held Marbob Energy for about $1.66 billion in cash and securities, picking up assets in the Permian basin of southeast New Mexico.

Concho said the Marbob assets hold proved reserves of 76 million barrels of oil equivalent (BOE) as well as 166 million BOE in unproved reserves. Marbob was producing about 14,000 BOE per day in the first quarter.

Midland, Texas-based Concho will pay $1.45 billion in cash and 1.1 million of its shares, currently worth about $58.6 million, for Marbob. It will also issue a $150 million, 8 percent senior unsecured note to Marbob, which will be due in 2018.

Concho also said it agreed to sell 6.6 million shares in a private placement for $300 million, or about $45.45 per share.

The company's shares were up $2.45, or 4.6 percent, at $55.74 in early trading on the New York Stock Exchange after initially dipping as low as $51.52. (Reporting by Michael Erman, editing by Gerald E. McCormick)

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