At all relevant times, 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 , 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. Contrary to these statements, however, on July 31, 2019, after the close of trading, Concho shocked the market by revealing it had been forced to scale back production in the Permian Basin, attributing the disappointing news to problems caused by aggressively tight well spacing at Dominator and other projects. On this news, Concho shares declined approximately 22 percent in a single day on August 1, 2019, erasing billions of dollars in the market value of Concho’s shares. As a result of the foregoing, the Action alleges that Defendants made materially false and misleading statements during the Class Period regarding the Company’s business and financial prospects. Specifically, that Defendants made false and/or misleading statements and/or failed to disclose 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, the Company’s public statements were materially false and misleading at all relevant times.
For More information as well as to join this case please contact Atara Twersky, Esq. at [email protected] or [email protected]. Atara is Principal at Twersky Law Group and Of counsel at AF&T law firm where she is director of Investor Services. Atara focuses her practice on assisting her clients with increasing their investment portfolio recoveries and ensuring that their portfolios remain healthy and robust. For more information on shareholder recoveries click here and to listen to Atara’s podcast with notable guests in the Pension fund Industry listen to Pension and Investments Podcast, on all matters related to your investment portfolio and more. For more information on Atara and her legal work connected to shareholder protection click here