Parsley Energy Inc. said it has successfully integrated about 95,000 net acres in the Permian Basin into its portfolio, which it said makes it it the second-largest publicly traded operator working in the Midland sub-basin.

The Austin, TX-based company said it also is close to optimizing development in the Wolfcamp C play of the basin, after a delineation program there yielded some progress.

Net production during 4Q2017 averaged 80,327 boe/d, up 78% from the year-ago quarter (45,109 boe/d). For the full year, Parsley reported net production of 67,923 boe/d in 2017, up 77% from 2016 (38,257 boe/d).

During the fourth quarter, Parsley drilled 42 horizontal wells and completed 41 of them, with an average working interest (WI) of 95% and an average lateral length of about 9,500 feet. Its quarterly activity included a three-well stacked pad, the Strain Ranch 12-1 in Martin County, TX, which targets the Lower Spraberry, Wolfcamp A, and Wolfcamp B zones.

The company also brought five wells online last year that target the Wolfcamp C. The wells registered an average 30-day initial production (IP) rate of 198 boe/1,000 feet of lateral (62% oil), which management said validated the play. To date in 2018, Parsley has completed two stepout wells to the north and south, expanding areal delineation. Both wells registered peak 24-hour IP rates of more than 1,000 b/d.

“The results are encouraging,” COO Matthew Gallagher said during an earnings call Thursday. The Wolfcamp C results support “our preliminary outline of the fairway of the play. We’re closely watching results in the other, largely untapped zones on offsetting acreage, all of which reinforces the value proposition of core Permian acreage.”

The company has more than 900 drilling locations in the fairway of the Wolfcamp C.

Parsley reaffirmed its plans to spend $1.35-1.55 billion on capital expenditures (capex) in 2018, of which 85-90% would go toward drilling and completion costs. The company plans to place about 160 wells into production in 2018, about 75% of which would be in the Midland sub-basin and the rest in the twin Delaware sub-basin. The average lateral would be about 9,500 feet and the average WI would be about 90%.

The company estimated that net total production this year would average 98,000-108,000 boe/d, with net oil production of 65,000-70,000 b/d.

“2018 looks dramatically different,” Gallagher said. “While we continue to optimize our portfolio, our drilling schedule is essentially locked in through the end of the year and any changes we make will be discretionary.

“Last year, we added rigs and crews throughout the year. Every quarter we completed more wells [than] the quarter before. This year, we’re expecting a steady development pace bringing on around 40 wells online per quarter.”

Gallagher said that given the potential for tightness in the labor market, Parsley felt “fortunate” to have secured the fracture fleets and associated personnel it would need in 2018.

“In 2017, roughly half of our pads involved some type of delineation — in a new county, new targets, or a new spacing configuration,” Gallagher said. “Our delineation activity was distributed across our footprint. This year, our delineation activity should only constitute around 10% of our program.

“We’re also honing in on preferred targets zone this year and going back to many of the same areas as well. We’re back to lateral spacing of no less than 660 feet between wells. We’re also shifting back to smaller pads to reduce capital concentration and to get barrels online quickly in a backwards dated market. For all of these reasons, we believe that we are set up for a strong year on the execution front.”

In an operational update last month, Parsley said 4Q2017 production fell short of expectations while 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.

Parsley reported net income of $49.9 million (20 cents/share), versus a year-ago net loss of $30.7 million (minus 17 cents). For the full year, net income was $106.8 million (44 cents), compared with a 2016 net loss of $74.2 million (minus 46 cents).

Total revenues were $311.5 million in 4Q2017, nearly double the $155.9 million from the year-ago quarter. For the full year, Parsley reported $967 million in total revenue, more than double the $457.8 million recorded in 2016.

Parsley also announced a trio of executive promotions effective Feb. 1. Larry Parnell has been promoted to senior vice president for development operations; Carrie Endorf to vice president for reservoir engineering and planning; and Jody Jordan to vice president for marketing.