Parsley Energy (PE) Q4 Results - Feb 20

[dan_s]

AUSTIN, Texas, February 19, 2020 – Parsley Energy, Inc. (NYSE: PE) (“Parsley,” “Parsley Energy,” or the “Company”) today
announced financial and operating results for the quarter ended December 31, 2019. The Company has posted a presentation to its
website that supplements the information in this release.

Recent Highlights

> The Company recorded a net loss attributable to its stockholders of $36.4 million, or $0.13 per share, in 4Q19 and net income
attributable to its stockholders of $175.2 million, or $0.63 per share, for the year.

> Excluding, on a tax-adjusted basis, various items, including certain items that the Company does not view as indicative of
its ongoing financial performance, adjusted net income was $79.5 million, or $0.28 per share, for 4Q19 and $314.1 million,
or $1.12 per share, for the year. < My Q4 forecast was $79.0 million net income.

> Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense (“Adjusted
EBITDAX”) was $380.3 million in 4Q19 and $1,420.5 million for the year.

• Parsley published its inaugural Corporate Responsibility Report, outlining the Company’s commitment and approach to
environmental stewardship, governance, ethics, health and safety, and community engagement.

• The Company reported full-year 2019 capital expenditures of approximately $1.37 billion, which was nearly $30 million
below the low end of the full-year guidance range of $1.40-$1.47 billion.

• Increased quarterly dividend in 1Q20 from $0.03 per share to $0.05 per share.

• 4Q19 net oil production increased 16% year-over-year to 89.6 MBo per day. Total 4Q19 net production averaged 146.2 MBoe
per day. < My Q4 forecast was 150.0 MBoepd with 91.5 MBOPD.

• Parsley closed its acquisition of Jagged Peak Energy Inc. (“Jagged Peak”) on January 10, 2020, less than 90 days after
announcing the transaction.

• The Company received an Investment Grade credit rating from Fitch Ratings of BBB- with stable outlook.

• Parsley lowered its cost of debt by refinancing $400MM of outstanding debt with 4.125% senior unsecured notes due 2028.
• Proved reserves of 592.3 MMBoe as of December 31, 2019 represent a 14% increase versus proved reserves as of December
31, 2018. Proved developed reserves of 381.7 MMBoe as of December 31, 2019 represent a 23% increase versus proved
developed reserves as of December 31, 2018.

Summary Comment and Outlook
“The fourth quarter represented a strong finish to Parsley’s rigorous 2019 action plan that achieved success on multiple fronts,”
commented Matt Gallagher, Parsley’s President and CEO. “Our team delivered a step-change improvement in capital efficiency
and inflected to free cash flow generation ahead of schedule, all while keeping our environmental and social impacts at the
forefront of our decision making. As we turn to 2020, we will maintain this collective sense of urgency and accountability.
Organizational excellence on all fronts is required to demonstrate integration and execution success. The Parsley team is already
off to a strong start in 2020 and we look forward to delivering on our action plan in the coming quarters.”

I'm updating my forecast model this morning.

[dan_s]

I have updated my forecast/valuation model for PE, but I need to spend more time on it this weekend. I need to take a hard look at Jagged Peak Energy (JAG) that merged with Parsley on January 10th. Unless there is a significant change in JAG, my valuation of $28/share (in my last newsetter) looks reasonable. - Dan

Stifel's take dated 2/20/2020:
Parsley Energy, Inc. (PE, $17.22, Buy; Target $31.00)
- 4Q CFPS Beat Follows Strong Pre-release - Michael S. Scialla
- We view the release as slightly positive following a strong pre-release (1/23/20). The positives include: i) 4Q19 capex was on the low end of the pre-released range and 4% below consensus; ii) CFPS slightly beat consensus on realized price and unit cash costs; iii) the release provided additional details underpinning a 2020 plan that targets another 2%-5% capital efficiency gain following last year's 19% improvement and FCF >$200MM based on $50 WTI. The negatives include: i) total 4Q19 production was 1% below consensus.

First Call's target price this morning is $24.61, but keep in mind that it is based on analysts reports submitted to Reuters that are all dated prior to the Q4 earnings release.