Concho expects increased oil production in 2020 following New Mexico deal close

Concho Resources Inc., Midland, expects to invest $2.6-$2.8 billion in 2020, a 10% reduction year over year at the midpoint of the guided range. For the year, and pro forma for the sale of the New Mexico Shelf assets, the company expects to increase oil production volumes 10-12% year over year (OGJ Online, Sept. 3, 2019). The company expects 300-320 gross operated well completions with an average lateral length of 10,000 ft compared to 294 gross operated well completions with an average lateral length of 9,000 ft in 2019.

Production for this year’s first quarter is expected to be 316,000-325,000 boe/d.

2019

For the 2019 full year, production increased 26% to 331,000 boe/d, including a 25% increase in oil production to 209,000 b/d. Natural gas production for 2019 was 731 MMcfd. For the year, the company reported net loss of $705 million. Adjusted net income totaled $611 million. Cash flow from operating activities was $2.8 billion.

For fourth-quarter 2019, the company delivered oil production volumes of 215,000 b/d, up 8% year over year. Natural gas production for the quarter totaled 735 MMcfd. The company’s total production for fourth-quarter 2019 grew 10% year over year to 337,000 boe/d. Cash flow from operating activities was $769 million. The company reported net loss of $471 million for the quarter. Special items impacting earnings for the quarter included a $201 million goodwill impairment charge and a $133 million loss on the disposition of assets, primarily related to certain exchanges of oil and natural gas properties. Adjusted net income totaled $206 million for the quarter.