Permian pure-play operator Parsley Energy Inc. reported a sharp increase in its quarterly production trajectory, due in large part to the integration of acreage it acquired during the first quarter, but lower lease operating expenses (LOE) and improving well results also gave it a boost.

On Thursday, the Austin, TX-based company said net production averaged 54,789 boe/d in 1Q2017. That represents a 21.4% increase from 4Q2016 (45,109 boe/d) and an 88.4% increase from the year-ago quarter (29,088 boe/d). Meanwhile, LOEs trended downward — from $5.25/boe in 1Q2016 to $3.57/boe in 1Q2017, a 32% decrease.

During a conference call to discuss 1Q2017 on Friday, company executives lauded the closing of its acquisition of 71,000 net acres in the core of the Midland subbasin from Double Eagle Energy Permian LLC for $2.8 billion. That deal, and other recent trades, gave Parsley about 155 net horizontal drilling locations, added more than 900,000 net lateral feet to its horizontal drilling inventory, and increased its position in the Permian to approximately 230,000 net acres.

“Parsley Energy is off to a fast start in 2017, setting the stage for a year of stellar execution,” said CEO Bryan Sheffield. “For a good while, we’ve been promising that our growth would be characterized by improving margins and healthy returns.”

Case in point, Parsley said initial results from Strain Ranch, a three-well pad in southeast Martin County, TX, delivered impressive results and confirmed the presence of at least productive formations: the Lower Spraberry, and the Wolfcamp A and B. The wells, which were drilled with 1.5-mile laterals, produced at least 1,300 boe/d after more than 30 days of production.

“This pad is typical of the projects we’re going to be executing on the acquired assets,” said COO Matt Gallagher. “As always, we’re striving to increase the concentration and working interest [WI] of our acreage, but there are hundreds and hundreds of high WI operating locations ready to go.”

Gallagher said Parsley plans to drill about 10 multi-well pads across acreage it acquired from Double Eagle, in Texas’s Glasscock, Howard, Martin and Midland counties. Slides that accompanied Friday’s earnings call show the company plans to spud more than 30 wells across the acquired acreage in 2017.

“One of the reasons we’re really excited about Double Eagle is that it adds meaningfully to our Lower Spraberry portfolio,” Gallagher said. “The Lower Spraberry well on the Strain Ranch pad…is the latest in a series of strong and strengthening Lower Spraberry wells that spans much of our Midland Basin acreage.”

Consequently, Parsley raised its full-year production guidance for 2017 to 65,000-71,000 boe/d (up from 62,000-68,000 boe/d), with oil expected to account for 68-73% of the total. The company also raised its production guidance for 4Q2017 to 78,000-88,000 boe/d (up from 75,000-85,000 boe/d).

By comparison, the company reported 9,200 boe/d of net production in 1Q2014.

Parsley’s capital expenditure budget remained unchanged, ranging from $1.0-1.15 billion, including $840-960 million for drilling and completions. The company continues to expect that 130-150 gross operated horizontal completions will be made in 2017, of which 95-105 will be made in the Midland subbasin and 35-45 will be in the Delaware subbasin. But Parsley lowered its expectations for LOEs, from $4.00-4.75/boe to $3.50-4.50/boe.

During the first quarter, Parsley spud 26 and completed 22 gross operated horizontal wells. Most of the drilling and completions were performed in the Midland subbasin, where 20 wells were spud and 19 gross completed.

Sheffield said the company is in the middle of a “digestion period,” integrating and developing its new assets, and expects the company to be in that position “for the time being. We’re on the sidelines when it comes to sizeable acquisitions.” But during the Q&A portion of Friday’s call, the CEO said Parsley “might start looking at bolt-ons next year [or in] mid-year 2018 — small bolt-ons.

“I don’t see us doing a big deal in 2018, or maybe even 2019,” Sheffield said. “It depends if it’s accretive for Parsley. But right now, we’re just focused on execution through 2017.”

Parsley reported more than $1.6 billion in liquidity at the end of the first quarter, consisting of $616 million in cash on hand and $997 million in undrawn borrowing capacity on the company’s revolving credit facility.

The company reported net income of $29.4 million (13 cents/share) in 1Q2017, with income from operations totaling $72.5 million. By comparison, Parsley had a net loss of $19.4 million (minus 14 cents) in the year-ago quarter, with a loss of $26 million from operations.