Jennifer Warren
Research analyst, commodities, macro, natural resources

Concho's Mad Shale Oil Skills In The Permian's Delaware Basin

Executive summary:

  • Concho's continued strong reserve-replacement ratios are ahead of many peers in the Permian.
  • The Delaware operators, with mid-cap Concho a leader, have room to run, with Southern Delaware activity ramping up.
  • Permian players have tailwinds on oil supply/demand fundamentals that are trending for potentially decades ahead.
  • Concho management shows a good balance between aggressiveness on growth and execution fronts, but prudence in their general modus operandi.

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In the Permian Basin, pure-play Concho Resources' Delaware Basin position is strong and becoming stronger. For a $12 billion-capitalization firm, it is nearly the largest acreage holder in the Delaware Basin with 345,000 net acres, just behind larger peer Anadarko Petroleum (NYSE:APC) with 350,000 net acres. Some E&P...

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