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Comparing Capex Growth for 4 US Upstream Companies

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Dec. 4 2020, Updated 10:53 a.m. ET

RSPP: Capex growth leader

In this article, we’ll compare capex growth for our select group of US upstream companies.

RSP Permian (RSPP) recorded 4.6% fiscal 3Q15 capital expenditure (or capex) growth compared to last year’s quarter. RSPP is the only company in our select portfolio to have achieved capex growth in fiscal 3Q15. It spent $403 million on capex compared to $385 million a year ago.

The company’s fiscal 3Q15 capex included $95 million on drilling and completion activities and on asset acquisitions, including those in the Martin and Glasscock counties in Texas. During fiscal 3Q15, RSPP completed the drilling of 11 operated horizontal wells and five operated vertical wells.

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CRZO and MTDR reduced capex

Carrizo Oil & Gas (CRZO) recorded a 14.6% reduction in fiscal 3Q15 capex compared to last year’s quarter. In fiscal 3Q15, CRZO spent $169 million on capex compared to $192 million a year ago. Its fiscal 3Q15 capex included $122 million on drilling and completion activities, primarily in the Eagle Ford shale and the Delaware Basin.

It also spent ~$8 million on net land and seismic expenditures. In the Eagle Ford shale, Carrizo drilled 20 gross operated wells and completed 21 gross operated wells during fiscal 3Q15. It’s currently drilling its third well in the Delaware Basin.

Matador Resources (MTDR) recorded a 36% fall in fiscal 3Q15 capex compared to last year’s quarter. In fiscal 3Q15, MTDR spent $112 million on capex compared to $174 million a year ago. MTDR currently has three rigs operating, all in the Delaware Basin.

During fiscal 3Q15, MTDR completed, and began producing oil and natural gas from, 11 gross wells in the Permian Basin. Most of these wells are located in the Wolfcamp formation. MTDR makes up 0.14% of the iShares Russell 2000 Growth ETF (IWO).

LPI cut capex the most

Laredo Petroleum (LPI) reduced its capex by 77% in fiscal 3Q15, spending $119 million compared to $537 million in fiscal 3Q14. In fiscal 3Q14, LPI acquired leasehold properties in the Midland Basin.

Of its fiscal 3Q15 capex, LPI spent $70 million in exploration and development activities and ~$50 million in building pipelines infrastructure. The company completed eight horizontal wells during fiscal 3Q15. Three of the wells are located in the Upper Wolfcamp formation and five are in the Middle Wolfcamp formation in the Permian.

Next, we’ll discuss these companies’ free cash flow growth.

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