Parsley Energy, Inc. (NYSE: PE) (“Parsley Energy” or the “Company”)
today announced that it has entered into agreements to acquire certain
undeveloped acreage and producing oil and gas properties located
adjacent to the Company’s existing operating areas in the Southern
Delaware and Midland Basins for an aggregate purchase price of $359
million in cash (subject to customary purchase price adjustments).
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Parsley Energy Acreage (Photo: Business Wire)
Acquisition Highlights
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22,908 net surface acres
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Estimated current net production of approximately 2,300 Boe per day
from nine producing horizontal wells and 97 vertical wells
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Acquired assets include six horizontal wells in various stages of
drilling and completion
Southern Delaware Basin
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14,197 net acres in Reeves and Ward Counties, TX for approximately
$144 million
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Estimated current net production of approximately 1,200 Boe per day
from seven horizontal wells and 20 vertical wells
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Adds approximately 700,000 drillable lateral feet based on projected
horizontal drilling inventory in one Wolfcamp flow unit; incremental
value from additional Wolfcamp flow units and multiple Bone Spring
targets
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Parsley to receive one drilled but uncompleted horizontal well at
closing
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Select offset wells demonstrated 24-hour initial production rates per
thousand completed feet ranging from 180 Boe to 320 Boe in Reeves
County and 152 Boe to 623 Boe in Ward County
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Scheduled to close on or before May 3, 2016, subject to the
satisfaction of customary closing conditions
Midland Basin
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8,711 net acres in Midland, Upton, Reagan, and Glasscock Counties, TX
for approximately $215 million
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Estimated current net production of approximately 1,100 Boe per day
from two horizontal wells and 77 vertical wells
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Adds 257 net horizontal drilling locations
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Extends eight existing horizontal drilling locations by approximately
5,000’ on average
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Parsley to receive four drilled but uncompleted horizontal wells at
closing, as well as one horizontal well to be completed by closing
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Select offset wells demonstrated 24-hour initial production rates per
thousand completed feet ranging from 236 Boe to 281 Boe in Glasscock
County, 193 Boe to 195 Boe in Midland County, 254 Boe to 553 Boe in
Upton County, and 176 to 270 Boe in Reagan County
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Scheduled to close on or before May 16, 2016, subject to the
satisfaction of customary closing conditions
“We are excited to announce a set of bolt-on acquisitions that add to
our premier asset bases in both the Midland and Southern Delaware
Basins,” stated Bryan Sheffield, CEO of Parsley Energy. “These additions
extend our running room in the Midland Basin and provide the critical
mass necessary to make the Southern Delaware a core part of our ongoing
development program. Together, the acquired properties increase our net
acreage by 20%, and all have top-tier return potential.”
Full-Year 2016 Guidance Update
Parsley Energy estimates that production from acquired producing wells
and acquired wells to be completed will contribute approximately 1,500
Boe per day in 2016, and therefore raises full-year production guidance
from 30.0-33.0 MBoe per day to 31.5-34.5 MBoe per day. In addition, to
accommodate several incremental completions associated with acquired
wells along with accompanying facilities and infrastructure spending to
support these wells and ongoing development on acquired properties, the
Company now expects capital expenditures of $410-$460 million in 2016,
up from a previous range of $380-$430 million.
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2016
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2016
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Previous
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Updated
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Production
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Production (MBoe/d)
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30.0-33.0
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31.5-34.5
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% Oil
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65%-70%
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65%-70%
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Capital Program
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Drilling and completion ($MM)
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$330-$370
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$355-$395
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Infrastructure and other ($MM)
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$50-$60
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$55-$65
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Total development expenditures ($MM)
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$380-$430
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$410-$460
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Activity
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Gross operated horizontal completions
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60-70
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65-75
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Midland Basin
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57-65
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60-68
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Delaware Basin
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3-5
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5-7
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Average Lateral Length
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~7,000’
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~7,000’
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Gross vertical completions
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3-6
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3-6
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Average Working Interest
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85%-95%
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85%-95%
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Unit Costs
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Lease operating expenses ($/Boe)
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$5.50-$6.50
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$5.50-$6.50
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Cash general and administrative expenses ($/Boe)
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$4.75-$5.75
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$4.75-$5.75
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Production and ad valorem taxes (as a % of revenue)
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6.5%-7.5%
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6.5%-7.5%
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Registration Statement
The Company has filed a registration statement (including a prospectus)
with the SEC for the offering to which this communication relates.
Before you invest, you should read the prospectus in that registration
statement and other documents the Company has filed with the SEC for
more complete information about the Company and this offering. You may
get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer participating
in the offering will arrange to send you the prospectus if you request
it by contacting Morgan Stanley & Co. LLC, Attn: Prospectus Department,
180 Varick Street, 2nd Floor, New York, NY 10014 or Raymond James &
Associates, Inc., Attn: Equity Syndicate, 880 Carillon Parkway, St.
Petersburg, Florida 33716.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company
focused on the acquisition and development of unconventional oil and
natural gas reserves in the Permian Basin in West Texas. For more
information, visit our website at www.parsleyenergy.com.
Forward-Looking Statements
Certain statements contained in this news release constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements represent Parsley Energy’s expectations or beliefs concerning
future events, and it is possible that the results described in this
news release will not be achieved. These forward-looking statements are
subject to risks, uncertainties and other factors, many of which are
outside of Parsley Energy’s control, which could cause actual results to
differ materially from the results discussed in the forward-looking
statements. Any forward-looking statement speaks only as of the date on
which it is made, and, except as required by law, Parsley Energy does
not undertake any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise. New factors emerge from time to time, and it is not possible
for Parsley Energy to predict all such factors. When considering these
forward-looking statements, you should keep in mind the risk factors and
other cautionary statements found in our filings with the SEC,
including, but not limited to, our Annual Report on Form 10-K for the
year ended December 31, 2015. The risk factors and other factors noted
in our SEC filings could cause our actual results to differ materially
from those contained in any forward-looking statement.
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