Oil companies grow Permian Basin presence as prices dip
CARLSBAD — A major oil and gas producer in the Permian Basin plans to sell off some of its older assets in the region for almost a billion dollars.
Midland, Texas-based Concho Resources announced this week it would sell its New Mexico assets in the basin for $925 million to Houston-based Spur Energy Partners. The sale included about 100,000 acres in the company’s New Mexico Shelf, which produces about 25,000 barrels of oil per day.
The company also plans to start a repurchasing program of up to $1.5 billion in shares of its common stock, according to a news release. Concho CEO Tim Leach said the move would allow the company to leverage itself into newer assets in the booming Permian Basin, while also protecting shareholders’ bottom lines.
“Proactively managing our asset portfolio has long been a key part of our strategy,” Leach said. “Divesting our New Mexico Shelf position enables us to accelerate the value of these legacy assets, while focusing our portfolio on opportunities with the highest potential for strong returns.”
Following the sale, Concho plans to maintain a “large presence” and development program in southeastern New Mexico. Another oil and gas company increased its presence in the Permian Basin.
Cimarex Energy plans to build a new 16,000-square-foot field office in Carlsbad, according to a report from Carlsbad Mayor Dale Janway.
The $2.9 million project would include 24 offices and a 140-seat auditorium, Janway said. “This is another massive development in the epicenter of our nation’s oil boom,” he added.
The news came as New Mexico held on to its position as the third-largest oil-producing state in the nation at 885,000 barrels per day as of June, according to data from the federal Energy Information Administration.
New Mexico was behind North Dakota, with about 1.4 million barrels per day, and Texas, with about 4.9 million barrels per day.