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Parsley Acquires Acreage, Production in Permian For $148.5M

Permian pure-play operator Parsley Energy Inc. has agreed to acquire more than 5,000 undeveloped net acres within its core operating area, plus producing oil and gas properties adjacent to its holdings in Texas, for $148.5 million in cash.

The Austin, TX-based company said the acquisition includes 238 net horizontal drilling locations across 5,274 net surface acres in Texas's Glasscock, Reagan and Upton counties, which form the company's core operating area.

Parsley will also acquire three producing horizontal wells, which combined had an estimated net production of 1,000 boe/d in November. A fourth horizontal well, also included in the agreement, has been drilled and is awaiting completion by the undisclosed seller.

The company said it will have a high average working interest of 87% for the agreement, as well as a low average royalty burden of 20%. The wells will be 100% operated at close with no obligation to develop the acreage for two years. Parsley added that there is also "infrastructure in place to support ongoing horizontal drilling operations."

The agreement, subject to customary purchase price adjustments, is expected to close in early January.

According to Parsley's most recent investor presentation from November, the company reported 21,565 boe/d of average daily net production in 3Q2015, a 40.7% increase over the preceding third quarter (15,324 boe/d). The most recent production was 58% weighted toward oil, 22% natural gas and 20% natural gas liquids (NGL). Oil volumes increased 56.9% between 3Q2014 (1.15 million bbl) and 3Q2015 (733,000 bbl).

The company reported that it held 107,507 net surface acres in the Permian Basin in 3Q2015, pro forma for acquisitions announced in September and other announced divestitures. Parsley had more than 1,000 net drilling locations in the Wolfcamp and Spraberry formations at the end of the quarter, and a total of 2,241 net horizontal drilling locations.

Parsley's total capital program ranges $325-375 million for 2015, a 29% decline from the $491 million spent in 2014. The company's production guidance ranges from 21,500-22,500 boe/d, a 55% increase from the 14,200 boe/d produced in 2014. Parsley held an initial public offering last spring (see Shale DailyMay 23).

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