As some production companies notify their Oklahoma royalty owners of intentions to shut in some wells in the state, Permian Basin owners in West Texas are getting similar notifications from Concho Resources.
The Texas company says it is shutting some output in response to the collapse in crude prices and explains that others are doing the same in the country’s most prolific oil-producing region. The move will affect one Tulsa company, Frontier Midstream Solutions IV, LLC which joined Concho Resources a year ago this month to create Beta Crude Connector, LLC to provide crude oil gathering, transportation and storage services in the Northern Midland Basin.
“Concho, as well as other operators in the Permian Basin, have begun shutting in uneconomic production in rapid response to the recent market shift,” the company said in a letter to the Texas Railroad Commission, adding that “commodity prices will respond accordingly” when the market moves toward equilibrium.
Concho also says it is not in favor of state-imposed quotas, joining the likes of Exxon and Occidental.