Yahoo Finance Concho Resources’ Production Guidance for 2016
What to Expect from Concho Resources’ 1Q16 Earnings
Concho Resources’ production guidance
For 1Q16, Concho Resources expects production to average 130-134 Mboepd (thousand barrels of oil equivalent per day). For 2016, CXO expects its annual production to be flat or even fall 5%. Concho Resources’ total production volume in 2015 was 143.3 Mboepd. This figure represents ~28% year-over-year growth compared to 2014.
Whiting Petroleum (WLL), by comparison, has provided 2016 production growth guidance of -18% at the midpoint, and Oasis Petroleum (OAS) has provided growth guidance of -6% at the midpoint. Apache (APA) has provided growth guidance of -9% at the midpoint.
On the other hand, PDC Energy (PDCE) expects its annual production to grow by 30%–40% in 2016. All these companies together make up ~8.7% of the iShares U.S. Oil & Gas Exploration & Production ETF (IEO).
Key efforts by Concho Resources amid low energy prices
CXO’s 4Q15 earnings release noted, “The Company’s 2016 production outlook is primarily driven by the reduction in activity year-over-year, shifting to pad drilling and the timing of completion activity.”
As we can in the image above, CXO’s exploration and development capex (capital expenditure) is expected to be $0.9 billion–$1.1 billion, down 44% at the midpoint compared to 2015’s exploration and development capex. Also, the company is also reducing its rig count in 2016.
Tim Leach, chairman, chief executive officer and president, said in the 4Q15 earnings release, “By appropriately scaling our capital program we preserve our high-quality drilling projects for a better environment, keep the balance sheet strong and remain well-positioned to capture unique opportunities in our core operating areas. We plan to manage capital spending around anticipated cash flow and retain significant flexibility to adjust our plan as we progress through 2016.”
In the next article in this series, we’ll look at Concho Resources’ stock performance ahead of 1Q16 earnings.
Browse this series on Market Realist:
