Concho Resources

Oil-Weighted exploration and production companies (E&Ps) are slashing capital spending in 2015, as they need to regain control of their costs in today’s lower oil price environment. With robust oil prices over the past three years, these companies only posted middling profitability as capital and operating costs ate up much of their incremental revenue. The Large Oil Weighted E&Ps are cutting back less than the Small/Mid-Sized Oil Weighted E&Ps as they are more financially secure and have more ability to spend through the price cycle. The Small/Mid-Sized Oil Weighted E&Ps are focused on getting their spending in line with cash flows and to get to a point where they are self-funding their capital investment. Today we explore how each of the companies in the two oil-weighted peer groups is trying to resolve these issues.

Permian crude production is up over 1.5 MMb/d today and headed to 1.7 MMb/d by the end of 2014. Current hot spots include the Bone Spring, Avalon and Wolfcamp horizontal shale plays in the northern Delaware Basin located in Northwest Texas and Southeast New Mexico. Today we look at new and proposed gathering systems in the Delaware Basin that will transport over 200 Mb/d of crude from truck terminals to regional pipelines, rail hubs and refineries.