Parsley Energ (PE)

[dan_s]

Matt Gallagher, Parsley’s President and Chief Operating Officer, commented, “Having maintained healthy activity levels, steadily supplemented our acreage portfolio, and increased our operational capacity throughout the downturn, Parsley has a head start toward leading production and cash flow growth in a more benign commodity price environment. The Company’s 2017 capital program spans our development areas and demonstrates our commitment to pulling value forward from new and legacy assets, alike. On top of sustainable growth from our reliably prolific and expanding Midland Basin resource base, we believe 2017 will mark an inflection point for Parsley in the Southern Delaware Basin as years of exploration and delineation begin to pay substantial dividends. We expect production from the Southern Delaware to increase fourfold by the end of the year and, boosted by this contribution, we expect to generate significant production momentum through the end of 2017. This production growth should be characterized by robust returns and expanding margins as a function of meaningfully higher average lateral lengths, net revenue interest, and oil as a percent of total production, accompanied by lower unit costs and development costs per lateral foot.”

2017 Capital Program Overview:

Average net production of approximately 57.0-63.0 MBoe per day

Oil volumes to account for 68-73% of total net production

4Q17 net production of approximately 70.0-80.0 MBoe per day

Capital expenditures of $750-$900 million

120-140 gross operated horizontal completions, with average working interest of 85-95%

Average lateral length of approximately 8,000’

MY TAKE: This confirms my 2017 forecast/valuation model. My valuation is $43.00/share.