Concho Resources Inc., Midland, has made an additional cut to its 2020 planned capital expenditures to $1.6 billion, representing a 40% decrease from original expectations, and targeting $100 million in operating cost reduction. The cut is in addition to the Mar. 17 capex reduction to $2 billion (OGJ Online, Mar. 17, 2020).
For the remainder of 2020, Concho expects to average 8 rigs and complete 110-130 gross operated wells.
The news comes as part of the company’s first quarter financial and operational report.
Net loss for the first quarter was $9.3 billion. Special items impacting earnings for the quarter included non-cash impairment charges of $12.6 billion primarily related to the company’s proved and unproved oil and natural gas assets and goodwill. These impairment charges are due to the weakness in equity markets due to the COVID-19 pandemic and the substantial decline in commodity prices, the company said. Excluding these and other special items, adjusted net income for the quarter was $142 million.
Cash flow from operating activities was $836 million. Operating cash flow before working capital changes was $744 million, exceeding capital expenditures of $556 million and resulting in $188 million of free cash flow.
First-quarter 2020 oil production volumes totaled 209,000 b/d of oil compared with 210,000 b/d in the same period a year ago. Natural gas production for first-quarter 2020 was 699 MMcfd. Total production for first-quarter 2020 was 326,000 boe/d compared with 328,000 boe/d produced in the same period a year ago.