Parsley Energy (PE) Update - Dec 4

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Parsley Energy (PE) Update - Dec 4

Post by dan_s »

I urge all of you to read carefully the updated profile on PE that we sent out today. It is going to be a VERY IMPRESSIVE company when they close the merger with JAG. Take a hard look at row 52 on the forecast model.

The company's revenue growth and cash flow from operations growth is "stunning".

MY TAKE is that there are a lot of money managers on Wall Street that realize they are under-exposed to energy and they know the sector is grossly oversold. With over 200,000 Boe per day of production and lots of running room AND increasing dividends, Parsley should draw a lot of attention.

Timing the market is all but impossible, but when the leaders of "The Herd" say it is time to add more energy to your portfolio, the moves in this sector should be impressive. We are obviously long overdue for some rotation back to energy. Lots of hedge funds "rebalance" at the end of the year by selling the winners to lock in their bonuses.

Natural gas and NGL prices in the Permian Basin and especially in the Delaware Basin have been terrible this year. Some companies had to actually pay midstream companies to take their gas, so they could keep producing oil. Parsley produces a lot of gas and NGLs, so improved commodity prices will add to my valuation.
Dan Steffens
Energy Prospectus Group
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