After bolting on more than 30,000 net acres in the second quarter, Permian pure-play operator Parsley Energy Inc. saw oil production surge more than 80% and the company raised its full-year production guidance for the second time this year.

Net production averaged 35,703 boe/d in 2Q2016, a 60.5% increase from 2Q2015 (22,249 boe/d) and a 22.7% increase from 1Q2016 (29,088 boe/d). Oil production surged 82.3% year/year (y/y), from 1,183 bbl in 2Q2015 to 2,157 bbl in 2Q2016. On a quarter/quarter (q/q) basis, oil production rose 24.6% from 1Q2016 (1,731 bbl). Meanwhile, natural gas production increased 16.9% y/y (from 2,698 MMcf in 2Q2015 to 3,154 MMcf in 2Q2016) and 7.1% q/q (2,944 MMcf in 1Q2016).

Parsley raised its production guidance for the full-year 2016 from 31,500-34,500 boe/d to 36,000-38,000 boe/d. The company started the year with full-year production guidance of 30,000-33,000 boe/d but raised it in April (see Shale Daily, April 5; Feb. 29).

The company also raised its capex budget from $410-460 million to $460-510 million for the year. Of that total, Parsley will devote $395-435 million to drilling and completion costs (up from $355-395 million), with infrastructure and other costs taking the remaining $65-75 million (up from $55-65 million).

Efficiency gains also prompted Parsley to increase the number of gross horizontal wells it plans to complete in 2016, from a range of 65-75 wells to a new range of 80-90. Most of the new wells (75-83) are expected to be completed in the Midland Basin, with the remainder (five-seven) coming from the Delaware Basin.

“I think it’s safe to say that Parsley Energy is firing in on all cylinders,” CEO Bryan Sheffield said during an earnings call to discuss 2Q2016 on Thursday.

For the fourth consecutive quarter, Parsley operated four horizontal rigs. Although the company plans to continue deploying four rigs for the remainder of the year, Sheffield said it could go up to six rigs sometime in 2017, but such a move would depend on commodity prices.

“We’re not going to commit to anything at this point,” Sheffield said. “[But] if we had to handicap it today, the most likely scenario for 2017 would be to run six rigs: three in the Midland Basin and three in the Southern Delaware, with two of the rigs in the Southern Delaware drilling on our mineral acreage.

“However it plays out, we’re very excited about the possibilities as our team continues to execute.”

Last May, Parsley acquired 29,813 acres of mineral rights under existing acreage and adjacent land in the Delaware sub-basin for $280.5 million, plus 885 net acres in Texas’s Pecos and Reeves counties for an additional $9 million (see Shale Daily, May 24). That preceded a separate deal to acquire more than 22,900 net bolt-on acres in the Midland and Southern Delaware basins for $359 million in April.

“We feel fortunate to have added to this position recent months at prices that look more compelling all the time,” Sheffield said.

During the Q&A portion of Thursday’s call, Sheffield said Parsley would welcome bolt-on opportunities in and near Pecos and Reeves counties, but wouldn’t venture into other areas of the Delaware Basin closer to the New Mexico border or into New Mexico proper.

“We’ve always had a strategy to bolt on from a close radius to our operations,” Sheffield said. “You have a huge advantage when you stay close to home and where your field offices, plumbers, foremen and engineers are focused, especially if you understand the rock in a certain area. We’re just going to keep on pounding away on anything that’s closer — [contiguous] maybe up to a 15-mile radius. That is the same strategy we’ve applied in the Midland Basin.”

Parsley recorded a net loss of $27.5 million in 2Q2016, compared to a net loss of $26.2 million in 2Q2015. The net loss attributable to the company’s shareholders totaled $21.4 million (minus 13 cents/share) in 2Q2016, compared to $19.1 million (minus 18 cents/share) in 2Q2015. But total revenues increased 36.5%, from $77.9 million in 2Q2015 to $106.3 million in 2Q2016.

Stay up to date on 2Q16 earnings and projections for the remainder of the year with NGI‘s Earnings Call and Coverage sheet.