Concho Resources Inc.
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of Texas on behalf of those who acquired Concho Resources Inc. (“Concho” or the “Company”) (NYSE: CXO) securities from February 21, 2018 through July 31, 2019, inclusive (the “Class Period”). Investors have until September 28, 2021 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
Concho was engaged in the acquisition, development, and production of oil and natural gas in the Permian Basin, which is located in the southwestern part of the United States. In 2018, as part of the Company’s transition to large scale oil and gas projects, Concho planned for, constructed, and began operation of the Dominator pad (“Dominator”), a 23-well formation located within the Permian Basin. During this time, Concho repeatedly assured investors that its large-scale project development, including at Dominator, generated cost savings, optimized resource recovery, and was designed to mitigate well-spacing risks. The Company also assured investors that its well spacing at Dominator was a unique density test.
On July 31, 2019, after the close of trading, Concho released its financial results for the second quarter 2019. On this date, the Company revealed that the Dominator’s 23 wells were spaced “too tight,” and that Concho had already “incorporated learnings from [the Dominator] into its second half of 2019 program and future Delaware Basin projects.” Concho also revealed that it would be forced to scale back production targets for the rest of this year, including by reducing its active rig count to 18, down from 33 in the first quarter 2019. On this news, Concho’s share price declined by $21.71 per share, or approximately 22.23%, from $97.68 per share to close at $75.97 per share on August 1, 2019.
The lawsuit alleges throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the well spacing at the Dominator was aggressive and highly risky, and premised on no reasonable basis to believe it would work as intended; (2) Concho’s practice of implementing tighter well spacing was not relegated to a handful of ‘tests’ and therefore more widespread than the market was led to believe; (3) it was known or recklessly disregarded that any measures to mitigate well spacing risks were non-existent and or/impossible; (4) these risks had manifested during the Class Period, causing underground well interference and permanently decreasing production, forcing the Company to scale back production targets and adopt more conservative spacing measures in its other projects; (5) it would take multiple quarters to unwind the impacts of the widespread well spacing failure; and (6) as a result, the Company’s public statements were materially false and misleading at all relevant times.
If you purchased or otherwise acquired Concho securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP at 212-371-6600, by email at firstname.lastname@example.org, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.