Concho Resources Inc. operates as an independent oil and natural gas company that engages in the acquisition, development, exploration and production of oil and natural gas properties in the United States.
Business and Properties
The company’s operations focuses on the Permian Basin, which underlies an area of West Texas and Southeast New Mexico approximately 250 miles wide and 300 miles long. Commercial accumulations of hydrocarbons occur in multiple stratigraphic horizons, at depths ranging...
Concho Resources Inc. operates as an independent oil and natural gas company that engages in the acquisition, development, exploration and production of oil and natural gas properties in the United States.
Business and Properties
The company’s operations focuses on the Permian Basin, which underlies an area of West Texas and Southeast New Mexico approximately 250 miles wide and 300 miles long. Commercial accumulations of hydrocarbons occur in multiple stratigraphic horizons, at depths ranging from approximately 1,000 feet to approximately 25,000 feet. As of December 31, 2019, the company’s 1,002 million barrels of oil equivalent total estimated proved reserves were approximately 74 percent proved developed.
The company owns RSP Permian, Inc. (RSP). RSP is an independent oil and natural gas company engages in the acquisition, exploration, development and production of oil and natural gas reserves in the Permian Basin. The majority of RSP’s acreage was located on large, contiguous acreage blocks in the core of the Midland Basin and the Delaware Basin. The acquisition added approximately 92,000 net acres to the company’s asset portfolio. The company’s operations focuses on the Delaware Basin and the Midland Basin, within the greater Permian Basin.
Delaware Basin: As of December 31, 2019, the company had estimated proved reserves in this area of 556 million barrels of oil equivalent, representing 55 percent of its total proved reserves. During the year ended December 31, 2019, the company commenced drilling or participated in the drilling of 299 (148 net) wells in this area, and it completed 294 (176 net) wells that are producing.
The company’s activity in 2019 was centered mostly on continued development of its assets, with an emphasis on multi-well pad sites and extended lateral lengths to develop multiple producing formations. The company primarily targets the Avalon, Bone Spring and Wolfcamp formations, which range from 6,500 feet to 13,500 feet.
Midland Basin: As of December 31, 2019, the company had estimated proved reserves in this area of 446 million barrels of oil equivalent, representing 45 percent of its total proved reserves. During the year ended December 31, 2019, the company commenced drilling or participated in the drilling of 155 (109 net) wells in this area, and it completed 185 (131 net) wells that are producing. The company’s primary objectives in the Midland Basin area are the Spraberry and Wolfcamp formations, which range from 7,500 feet to 11,500 feet. The company is developing these formations with horizontal drilling, utilizing multi-well pad sites and extended lateral development.
Principal Customers
The company sells its oil and natural gas production principally to marketers and other purchasers that have access to pipeline facilities. In areas where there is no practical access to pipelines, oil is transported to storage facilities by trucks owned or otherwise arranged by the marketers or purchasers. For 2019, revenues from oil and natural gas sales to Plains Marketing and Transportation, Inc. and Enterprise Crude Oil LLC accounted for approximately 17 percent and 10 percent of its total operating revenues, respectively.
Marketing
The company sells production at the lease to third-party purchasers.
Regulation
Rules and regulations to which the company’s business is subject to include the Resource Conservation and Recovery Act and comparable state statutes; the Comprehensive Environmental Response Compensation and Liability Act, also known as the Superfund law; the federal Water Pollution Control Act and analogous state laws; the federal Safe Drinking Water Act; the federal Clean Air Act and comparable state laws; the federal Endangered Species Act; and the National Environmental Policy Act.
The company is subject to the requirements of the federal Occupational Safety and Health Act (OSHA) and comparable state statutes. The OSHA hazard communication standard, the federal Environmental Protection Agency community right-to-know regulations under Title III of the Comprehensive Environmental Response Compensation and Liability Act, and similar state statutes require that the company organizes and/or discloses information about hazardous materials used or produced in its operations.
Significant Events
In August 2020, Solaris Water Midstream, LLC announced the company has expanded its existing joint venture with the company. Under the terms of the agreement, Solaris Water Midstream, LLC manages the company’s produced water gathering, transportation, disposal and recycling for a 2.3 million-acre area of mutual interest located in Eddy and Lea counties in New Mexico.
History
Concho Resources Inc., a Delaware corporation, was founded in 2006. The company was incorporated in 2006.
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