Permian Doesn't Look So Hot as Producers Hit Snags
- Concho plunges after being forced to slow down oil production
- ‘This is a big event for the sector,’ Evercore analyst says
Flared natural gas is burned off at a natural gas plant in the Permian Basin in Garden City, Texas.
Photographer: Spencer Platt/Getty Images
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One of the largest oil drillers in America’s most prolific shale field is being forced to slow down, casting a dark cloud over an industry already struggling to win back investors.
Concho Resources Inc., which Evercore ISI calls the bellwether of shale, plunged on Thursday after scaling back production targets for the rest of this year. The 23 wells that make up Concho’s “Dominator” project in the Permian Basin were spaced too closely, and production will have to slow to avoid overshooting budgets.