Permian Basin pure-play Parsley Energy Inc. said it plans to shed nearly 12,000 net acres in West Texas within the Midland sub-basin, for $170 million through “multiple transactions.”

The Austin, TX-based independent is divesting about 11,850 net acres in central Reagan County, southern Upton County and northern Howard County. The sales are expected to close by the end of the year.

“This is quality acreage, but for us it wasn’t part of our near-term development plan,” CFO Ryan Dalton said during a conference call last Friday to discuss third quarter performance. “We think it makes sense to raise cash that can be invested in higher priority projects.”

The transactions include multiple divestitures and a cash-and-asset trade. Production on the divested and traded assets totaled about 1,200 boe/d in 3Q2018, 55% weighted to oil. The assets include 256 net development locations, with an average lateral length of 5,100 feet, targeting the Lower Spraberry and the Wolfcamp A, B and C zones.

For the third quarter, total net production averaged 116,196 boe/d, up 62.4% from the year-ago quarter and 7.8% sequentially. Crude oil production totaled 6.76 million bbl in 3Q2018, which marked a 55.8% increase from 3Q2017 and a 9.7% sequential increase. Natural gas production totaled 9.88 Bcf in 3Q2018, up 57.7% from the year-ago quarter and 7% higher sequentially. Natural gas liquids production totaled 2.28 million bbl in 3Q2018, up 91% year/year and 8.3% from the second quarter.

During 3Q2018, Parsley spud 46 wells and placed online 46 gross operated horizontal wells (98% working interest) with an average lateral lengths of 9,400 feet. Thirty-eight of the wells turned to sales targeted the Midland sub-basin, while the rest were drilled in the Delaware sub-basin.

The company made note of six wells that were turned into production during the quarter in Martin County, TX. The wells comprised three-well pads for the Hayden and Strain Ranch, which targeted the Wolfcamp A and B zones in a staggered configuration.

The Hayden wells registered an average 30-day initial production (IP) rate of 1,560 boe/d (80% oil), which was a company record for a 30-day oil rate from a three-well pad. The Strain Ranch wells achieved an average 30-day IP rate of 1,435 boe/d (74% oil).

“This is a firm endorsement of the rocks as we ramp up development in this area,” said COO David Dell’Osso. Parsley, he said, also has begun a water recycling pilot program, with than 100,000 barrels of recycled water used to complete the Hayden wells.

“As we gradually transition to larger pads sizes in Martin County and elsewhere, scaled-up water recycling capabilities will be an important tool in the toolkit,” Dell’Osso said.

Parsley currently has three rigs deployed in Martin County, where it has started drilling a six-well project. Full-year production guidance for 2018 was unchanged at 106,000-111,000 boe/d, including 68,000-70,500 b/d of crude oil. The capital program for the year was also unchanged, at $1.65-1.75 billion, with 85-90% devoted to drilling and completion costs.

Parsley reported net income of $113.3 million (41 cents/share) in 3Q2018, compared with a net loss of $13.3 million (minus 5 cents) in the year-ago quarter. Revenues totaled $511 million in 3Q2018, compared with $241 million in 3Q2017.