Concho Resources Inc.
| Company Name | Concho Resources Inc. |
| Stock Symbol | CXO |
| Class Period | February 21, 2018 to July 31, 2019 |
| Lead Plaintiff Motion Deadline | September 28, 2021 |
In 2018, Concho planned and constructed the Dominator Project (“Dominator”) located in the Permian Basin. It consisted of 23 wells.
On July 31, 2019, Concho revealed the wells at Dominator were spaced “too tight,” leading the Company to reduce its active rig count to 18 (down from 33 in the first quarter of 2019) to avoid overshooting budgets.
On this news, Concho’s stock price fell 22% per share on August 1, 2019, thereby injuring investors.
ConocoPhillips (NYSE: COP) acquired Concho in January 2021 and is also named as a defendant in the complaint.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) the well spacing at 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, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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