Midland-based Concho Resources said last week it is again reducing capital spending for 2020 to $1.6 billion (40 percent below original budget) and complete about 110 to 130 gross operated wells. Concho said April 30 it expects to average about 8 rigs for the remainder of the year. First quarter oil production totaled 209,000 b/d compared to 210,000 b/d in 2019Q1. And Fort Worth-based Black Mountain Sand reportedly idled its plant in Kermit, one of its two in west Texas.
Several other Permian operators recently announced 2020 capex reductions:
Diamondback Energy of Midland said Monday it currently is operating 14 drilling rigs with plans to enter 2020Q3 running 8 rigs and 2020Q4 with 7 rigs. Capex for 2020 was reduced 40 percent. Diamondback plans to average less than 1 completion crew in 2020Q2 after ceasing all completions in early March for at least one month. Average oil production in 2020Q1 was 201,400 b/d – up 3 percent over 2019Q4 and up 12 percent over 2019Q1. In 2020Q1 the company drilled 55 gross horizontal wells in Midland Basin and 38 in Delaware Basin.
Centennial Resource Development of Denver said Monday it suspended all near-term drilling and completions and plans to curtail production in May by up to 40 percent. In early March the company had 5 drilling rigs and 2 completion crews. The capex was revised to 60 percent below original guidance. Centennial operates primarily in Delaware Basin.
Parsley Energy of Austin said Monday it suspended all new drilling and completions and reduced its 2020 capital budget to less than $700 million from an earlier projection of nearly $1 billion. Parsley shut in about 400 wells in mid-March (most vertical). During January and February, Parsley operated 15 development rigs and 5 frac spreads before steadily reducing activity.
SM Energy of Denver said last week it currently is operating 5 rigs in Midland Basin and 1 completion crew with plans to operate 4 rigs in July. Capex for 2020 will be reduced by 20 percent. First quarter production was 135.9 Mboed (51 percent oil) in Midland Basin and Eagle Ford. Daily oil production was up 30 percent compared to 2019Q1.