Parsley Energy (PE)

[dan_s]

Parsley's Q4 results came in above my forecast. I will update my forecast model and valuation this afternoon. - Dan

Parsley Energy, Inc. (PE) (“Parsley,” “Parsley Energy,” or the “Company”) today announced financial and operating results for the quarter ended December 31, 2015 and also introduced its 2016 capital program. The Company has posted to its website a presentation that supplements the information in this release.

Fourth Quarter 2015 Highlights
• Net production averaged 25.2 MBoe/d, up 17% versus 3Q15 and 38% year-over-year. Oil volumes increased 27% quarter-over-quarter and 52% year-over-year, representing 63% of total production in 4Q15.
• Full-year 2015 production increased 55% over full-year 2014 to 22.0 MBoe/d, with growth through drilling accounting for substantially all of the increase. Oil volumes increased 69% in 2015 relative to 2014.
• Parsley expects to generate production growth of approximately 35-50% in 2016 versus 2015, with oil volumes up approximately 50-70% over the same period.
• Parsley intends to spend $380 million to $430 million on development activities in 2016—flat at the midpoint relative to 2015 capital expenditures—while completing 60 to 70 gross horizontal wells—35% more completions at the midpoint than in 2015.
• The Company’s first operated horizontal well in the Southern Delaware Basin, the Trees State 16-1H, posted an exceptional 30-day initial production (“IP”) rate of 1,151 Boe/d on a 4,562’ lateral, equal to 252 Boe/d per thousand completed feet, tied for Parsley’s second-highest scaled 30-day peak rate. The non-operated Cilantro 2524-C31H, drilled onto the northwest corner of Parsley’s Southern Delaware acreage position, also generated a robust 30-day IP rate of 1,501 Boe/d on an 8,279’ lateral, or 181 Boe/d per thousand completed feet. Both wells targeted the upper Wolfcamp formation.
• Parsley’s first Lower Spraberry well, the Skaggs 8-2808H, posted a solid 30-day IP rate of 585 Boe/d on a 5,049’ completed lateral, translating to 116 Boe/d per thousand completed feet.
• Lease operating expense (“LOE”) per Boe decreased 27% versus 3Q15 to $5.57.
• Cash general & administrative (“G&A”) expense per Boe decreased 36% versus 3Q15 to $4.41.
• Parsley entered 2016 with a strong balance sheet; as of December 31, 2015, pro forma for the acquisition announced in December and that closed in January, the Company had $195 million of cash on hand, $770 million of liquidity, and a net debt to annualized adjusted EBITDAX ratio of 1.5x.
• Based on the midpoint of Parsley’s 2016 production guidance range, the Company’s hedge position covers all anticipated oil volumes to be produced during 2016, and the Company has also established a significant hedge position in 2017.


“The fourth quarter was a strong conclusion to a banner year for Parsley Energy,” said Bryan Sheffield, Parsley’s President and CEO. “Our Midland Basin Wolfcamp development program continues to shine and initial well results on our Southern Delaware acreage are very encouraging, as well. We entered 2016 with significant production momentum, having increased oil volumes by 27% in a single quarter and, as expected, recently produced at a 30 MBoe/d rate. Our 2016 capital plan enables us to sustain this momentum, generating roughly 60% oil growth on flat year-over-year spending while maintaining a strong financial position. Substantial declines in completed well costs and operating expenses support healthy well economics in a challenging commodity price environment, positioning Parsley Energy to deliver differentiated full-cycle returns.”