Permian Basin pure-play operator Parsley Energy Inc. said fourth quarter production fell short of expectations while capital expenditures (capex) in the final three months were the highest for the calendar year. It also said 2018 had started at a lower production level because of cold weather.

In an operational update, the Austin, TX-based company said Monday it expects to report total net production of 80,000-81,000 boe/d for 4Q2017, including 51,000-52,000 b/d of oil. However, both figures fell short of previous guidance, which was 80,000-83,000 boe/d total net production (a 1.2% decline from the midpoint) and 53,600-58,100 b/d for oil (a 7.8% decline). For the full-year 2017, Parsley said it expects net production of 68,000 boe/d, a 78% increase from 2016 (45,109 boe/d).

Citing freezing weather in January, Parsley said 2018 would initially begin "from a lower than anticipated starting point," with total production of 98,000-108,000 boe/d and average net oil production of 65,000-70,000 b/d. The revised oil production estimate is a 3.6% decline from the midpoint of preliminary guidance issued last November (67,500-72,500 b/d).

Parsley still plans to spend $1.35-1.55 billion on capex in 2018, the same as guidance issued last November. By comparison, the company expects to have spent about $1.2 billion on capex for the full-year 2017, including $410-420 million in the fourth quarter. Parsley's 4Q2017 was the most expensive for the year in terms of capex; it spent $188 million in 1Q2017, $295 million in 2Q2017 and $307 million in 3Q2017.

"Our focus now turns to a simplified 2018 development program that applies 2017 delineation and testing results and will increasingly be characterized by more familiar areas, proven configurations, and calibrated designs as we move through the year," said CEO Bryan Sheffield.

The company completed 41 wells in 4Q2017, within its original guidance of 40-50 wells.

Meanwhile, Parsley has closed the sale of its nonoperated properties in West Texas for $57 million. It sold about 63,000 gross (10,000 net) acres spread across Dawson, Howard, Irion, Martin, Pecos and Reagan counties to an undisclosed seller. Most of the acreage wasacquired from Double Eagle Energy Permian LLC in 2017.

Parsley last year placed into production several wells targeting the Wolfcamp C interval. Five wells recorded peak 30-day production rates that averaged 198 boe/d (122 b/d of oil) per thousand lateral feet.

The Char Hughes 28-2-4803H well in central Reagan County had a lateral length of about 11,000 feet and was turned into production two weeks ago. It achieved a peak 24-hour production rate of more than 1,000 b/d. According to Parsley, the well extends "the areal delineation of the Wolfcamp C target to the southeast corner" of its Midland sub-basin acreage.