Concho Resources cuts spending by $1 billion
Concho Resources cuts spending by $1 billion
MIDLAND, Texas -- Concho Resources has announced an updated 2015 capital program of $2.0 billion, as a result of the sharp decline in commodity prices. With this level of activity, the company expects to generate 16% to 20% year-over-year production growth in 2015.
In November, Concho announced that it was targeting production growth of 28% to 32% in 2015 from a capital program of $3.0 billion.
However, the Midland, Texas-based company announced its revised budget on Jan. 5. The updated program includes approximately $1.8 billion for drilling and completion activities and approximately $200 million for facilities, midstream and other capital.
The company plans to allocate approximately $1.3 billion for drilling and completions in the Delaware basin, approximately $300 million in the Texas Permian and approximately $200 million in the New Mexico Shelf.
Concho is currently running 36 drilling rigs and expects to average approximately 30 rigs in the first quarter of 2015 and approximately 25 rigs beginning in the second quarter of 2015 through year end.
Tim Leach, Chairman, CEO and President, commented, “Reducing the capital program while delivering robust growth reflects our commitment to a strong balance sheet and highlights the quality of our assets in the Permian basin. In the current environment, we intend to prudently manage our 2015 capital program around anticipated cash flows and retain significant flexibility to scale our activity level up or down depending on service costs and commodity prices.”
The 2015 capital program excludes acquisitions and is subject to change depending upon a number of factors, including economic and industry conditions.
