UPDATE: BMO Capital Markets Reiterates Outperform Rating, Lowers PT on Concho Resources

In a report published Friday, BMO Capital Markets reiterated its Outperform rating on Concho Resources

, but lowered its price target from $110.00 to $100.00. BMO Capital noted, “As more of Concho's future growth is driven by horizontal drilling in newer areas and less by the Yeso and Wolfberry, this does increase the risk profile of the production growth, but to date the company has had good success across the Delaware Basin. We pulled all of the horizontal wells Concho drilled to date in New Mexico and separated results between the gassy Avalon and more oily Bone Spring wells. The Bone Spring results look solid, with an average first-year cumulative production of ~90MBoe (77% oil) and we estimate an after-tax IRR of 36%, a higher return than the Wolfberry (26%) and Yeso (19%), which Concho has historically drilled.” Concho Resources closed on Thursday at $80.40.