COST: 7.6 $B
VOLUMES: 183 MBOE/d
ACRES: 250000 Acres
COST: 2.27 $B
VOLUMES: 38.3 MBOE/d
ACRES: 78000 Acres
COST: 2.8 $B
VOLUMES: 3.6 MBOE/d
ACRES: 71000 Acres
COST: 2.187 $MM
VOLUMES: 270 BOE/d
ACRES: 9140 Acres
AUSTIN, Texas, Dec. 3, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced that the special meeting of stockholders of Parsley Energy, Inc. (the "Parsley special meeting") to approve the pending combination with Pioneer Natural Resources Company (NYSE: PXD) ("Pioneer") is scheduled to take place on January 12, 2021 at 9:00 am Central Time. The record date for Parsley stockholders entitled to vote at the Parsley special meeting is the close of business on December 7, 2020.
Parsley Energy expects to file its definitive proxy statement with the U.S. Securities and Exchange Commission and begin mailing the definitive proxy statement to the Company's stockholders in early December 2020. The definitive proxy statement will be available on the "Investors" section of the company's website, as well as www.sec.gov.
As announced on October 20, 2020, Parsley Energy entered into a definitive agreement under which Pioneer will acquire all of the outstanding shares of Parsley in an all-stock transaction valued at approximately $4.5 billion as of October 19, 2020. Under the terms of the agreement, Parsley stockholders will receive a fixed exchange ratio of 0.1252 shares of Pioneer common stock for each share of Parsley common stock owned. The Parsley board unanimously recommends that Parsley stockholders vote "FOR" the Parsley merger proposal.
Parsley stockholders who need assistance in completing the proxy card, require additional copies of the proxy materials, or have questions regarding the special meeting may contact Parsley's proxy solicitor, MacKenzie Partners, Inc., by phone at (212) 929-5500 or (800) 322-2885, or by email at proxy@mackenziepartners.com.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
No Offer or Solicitation
This communication relates to a proposed business combination transaction (the "Transaction") between Parsley and Pioneer. This communication is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, in any jurisdiction, pursuant to the Transaction or otherwise, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this document in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Important Additional Information
The communication may be deemed to be solicitation material in respect of the proposed Transaction. The Transaction will be submitted to Parsley's stockholders and Pioneer's stockholders for their consideration. In connection with the Transaction, Pioneer filed a registration statement on Form S-4 with the U.S. Securities and Exchange Commission ("SEC") containing a preliminary joint proxy statement of Parsley and Pioneer and a preliminary prospectus of Pioneer. The information in the registration statement on Form S-4 is not complete and may be changed. Parsley and Pioneer may also file other documents with the SEC regarding the Transaction. After the registration statement on Form S-4 is declared effective, the definitive joint proxy statement/prospectus will be sent to the stockholders of Pioneer and Parsley. This document is not a substitute for the registration statement and joint proxy statement/prospectus or any other documents that Pioneer or Parsley may file with the SEC or send to stockholders of Pioneer or Parsley in connection with the Transaction. INVESTORS AND SECURITY HOLDERS OF PARSLEY AND PIONEER ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION AND ALL OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND RELATED MATTERS.
Investors and security holders will be able to obtain free copies of the registration statement and the joint proxy statement/prospectus (when available) and all other documents filed or that will be filed with the SEC by Pioneer or Parsley through the website maintained by the SEC at http://www.sec.gov. Copies of documents filed with the SEC by Parsley will be made available free of charge on Parsley's website at http://www. Parsleyenergy.com, under the heading "SEC Filings," or by directing a request to Investor Relations, Parsley Energy, Inc., 303 Colorado Street, Austin, TX 78701, Tel. No. (512) 505-5199. Copies of documents filed with the SEC by Pioneer will be made available free of charge on Pioneer's website at http://www.investors.pxd.com, or by directing a request to Investor Relations, Pioneer, 777 Hidden Ridge, Irving, Texas 75038, Tel. No. (972) 444-9001.
Participants in the Solicitation
Pioneer, Parsley and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect to the Transaction.
Information regarding Parsley's directors and executive officers is contained in the proxy statement for Parsley's 2020 Annual Meeting of Stockholders filed with the SEC on May 21, 2020, and certain of its Current Reports on Form 8-K. You can obtain free copies of these documents at the SEC's website at http://www.sec.gov or by accessing Parsley's website at http://www.parsleyenergy.com. Information regarding Pioneer's executive officers and directors is contained in the proxy statement for the Pioneer's 2020 Annual Meeting of Stockholders filed with the SEC on May 21, 2020, and certain of its Current Reports on Form 8-K. You can obtain free copies of these documents at the SEC's website at www.sec.gov or by accessing the Pioneer's website at http://www.investors.pxd.com.
Investors may obtain additional information regarding the interests of those persons and other persons who may be deemed participants in the Transaction by reading the joint proxy statement/prospectus regarding the Transaction when it becomes available. You may obtain free copies of this document as described above.
Forward-Looking Statements and Cautionary Statements
The foregoing contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act 1934, as amended. All statements, other than statements of historical fact, included in this communication that address activities, events or developments that Pioneer or Parsley expects, believes or anticipates will or may occur in the future are forward-looking statements. Words such as "estimate," "project," "predict," "believe," "expect," "anticipate," "potential," "create," "intend," "could," "may," "foresee," "plan," "will," "guidance," "look," "outlook," "goal," "future," "assume," "forecast," "build," "focus," "work," "continue" or the negative of such terms or other variations thereof and words and terms of similar substance used in connection with any discussion of future plans, actions, or events identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements include, but are not limited to, statements regarding the Transaction, pro forma descriptions of the combined company and its operations, integration and transition plans, synergies, opportunities and anticipated future performance. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements included in this communication. These include the expected timing and likelihood of completion of the Transaction, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the Transaction that could reduce anticipated benefits or cause the parties to abandon the Transaction, the ability to successfully integrate the businesses, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement, the possibility that stockholders of Pioneer may not approve the issuance of new shares of common stock in the Transaction or that stockholders of Parsley may not approve the merger agreement, the risk that the parties may not be able to satisfy the conditions to the Transaction in a timely manner or at all, risks related to disruption of management time from ongoing business operations due to the Transaction, the risk that any announcements relating to the Transaction could have adverse effects on the market price of Pioneer's common stock or Parsley's common stock, the risk that the Transaction and its announcement could have an adverse effect on the ability of Pioneer and Parsley to retain customers and retain and hire key personnel and maintain relationships with their suppliers and customers and on their operating results and businesses generally, the risk the pending Transaction could distract management of both entities and they will incur substantial costs, the risk that problems may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as effectively and efficiently as expected, the risk that the combined company may be unable to achieve synergies or it may take longer than expected to achieve those synergies, the impact of reduced demand for Pioneer's or Parsley's products and products made from them due to governmental and societal actions taken in response to the COVID-19 pandemic; the uncertainties, costs and risks involved in Pioneer's and Parsley's operations, including as a result of employee misconduct; natural disasters, pandemics, epidemics (including COVID-19 and any escalation or worsening thereof) or other public health conditions and other important factors that could cause actual results to differ materially from those projected.
All such factors are difficult to predict and are beyond Pioneer's or Parsley's control, including those detailed in Pioneer's annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K that are available on its website at http://www.investors.pxd.com and on the SEC's website at http://www.sec.gov, and those detailed in Parsley's annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K that are available on Parsley's website http://www.parsleyenergy.com and on the SEC's website at http://www.sec.gov. All forward-looking statements are based on assumptions that Pioneer or Parsley believe to be reasonable but that may not prove to be accurate. Any forward-looking statement speaks only as of the date on which such statement is made, and Pioneer and Parsley undertake no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-january-12-2021-special-meeting-to-approve-merger-with-pioneer-natural-resources-301185195.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Oct. 28, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended September 30, 2020.
Recent Highlights
Operational Update
During the third quarter of 2020, the Company placed on production 26 gross operated horizontal wells. Parsley's average working interest on wells placed on production was approximately 88%, with an average completed lateral length of approximately 9,700 feet. The Company placed on production 15 gross operated horizontal wells in the Midland Basin, with the remainder placed on production in the Delaware Basin.
After reactivating development activity in July, Parsley delivered steady improvements in drilling and completion efficiency(3) within each basin. Notably, in the Delaware Basin, Parsley drilled its first two three-mile lateral wells in under 29 days each, which helped drive a new Company-record for Delaware drilling efficiency in 3Q20. Parsley attributes these recent drilling efficiency gains to enhancements made to the Company's remote operational command center during the activity shutdown in May and June. As operational efficiency gains take hold, the Company is delivering leading edge well costs below $850 per foot in the Delaware Basin.
In line with prior Company commentary, Parsley deployed two additional rigs in late October, bringing the current number of active operated rigs to four. The Company expects to continue operating four rigs and one-to-two frac spreads for the remainder of 2020.
Financial Update
Profitability
During 3Q20, the Company recorded net income attributable to its stockholders of $22.6 million, or $0.06 per share. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, adjusted net income for 3Q20 was $82.6 million, or $0.22 per share.(1)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 3Q20 was $290.2 million.(1)
Realized Pricing
During 3Q20, Parsley reported an average unhedged oil price realization of $37.19 per Bbl net of transportation costs, representing a discount of $3.73 to the average WTI Cushing price(4) for the quarter.
Operating Costs
During the third quarter of 2020, the Company reported lease operating expense ("LOE") per Boe of $3.19, down 14% versus 2Q20 expense levels despite stable production volumes. Favorable LOE unit cost trends were driven by supplier price reductions and continued utilization of the Company's integrated water handling system.
Both general and administrative expense ("G&A") per Boe and cash based G&A per Boe(1), which excludes stock-based compensation expense, decreased quarter-over-quarter to $1.97 and $1.59, respectively. Encouraging G&A cost trends are a function of ongoing corporate cost savings initiatives.
Capital Expenditures
Parsley reported capital expenditures of $85 million during the third quarter of 2020, comprised of $84 million for operated drilling, completion, and equipment activity, and $1 million associated with water infrastructure and non-operated development activity.
Return of Capital Program
Today, Parsley Energy's board of directors declared a quarterly dividend of $0.05 per share.(2) The dividend is payable on December 18, 2020, to shareholders of record on December 8, 2020.
Liquidity and Hedging
The Company entered into an amendment to its revolving credit agreement on October 19, 2020, which reaffirmed its borrowing base at $2.7 billion and increased the elected commitment amount from $1.075 billion to $1.1 billion.
As of September 30, 2020, Parsley had approximately $767.7 million of liquidity, consisting of $4.7 million of cash and cash equivalents and an availability of $763.0 million on the Company's revolver.(5)
For details on Parsley's hedge position, please see the tables below under Supplemental Information and/or, upon availability, the Company's Quarterly Report on Form 10-Q for the three months ended September 30, 2020.
Guidance
In light of Parsley's recent entry into a definitive merger agreement with Pioneer, Parsley has discontinued providing guidance and long-term outlook information regarding its results of operations. Further, Parsley does not intend to update previously issued guidance and long-term outlook information, including the guidance provided in the Company's presentation posted to its website on September 8, 2020. Accordingly, investors are cautioned not to rely on historical forward-looking statements regarding guidance and long-term outlook information, as those forward-looking statements were the estimates of management only as of the date provided, have not and will not be updated and were subject to the specific risks and uncertainties that accompanied such forward-looking statements.
Conference Call Information
Parsley Energy will host a brief conference call and webcast to discuss its results for the third quarter of 2020 on Thursday, October 29, 2020 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time). This conference call and webcast will not include a question and answer session. Participants should call 877-709-8150 (United States/Canada) or 201-689-8354 (International) 10 minutes before the scheduled time and request the Parsley Energy earnings conference call. A telephone replay will be available through November 5, 2020 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13710926. A live broadcast will also be available on the Internet at www.parsleyenergy.com under the "Investors-Events & Presentations" section of the website.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the Securities and Exchange Commission ("SEC"), including its most recent Annual Report on Form 10-K and any subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
Investor Contacts:
Kyle Rhodes
Vice President - Investor Relations
or
Dan Guill
Investor Relations Analyst
ir@parsleyenergy.com
(512) 505-5199
Media and Public Affairs Contacts:
Kate Zaykowski
Manager - Public Affairs and Corporate Communications
media@parsleyenergy.com
(512) 220-7100
- Tables to Follow -
(1) | "Cash based G&A per Boe", "Adjusted EBITDAX", "free cash flow", and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For definitions and reconciliations of the non-GAAP financial measures of Adjusted EBITDAX, free cash flow, and adjusted net income to GAAP financial measures, please see the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. | ||||||
(2) | Dividend to be paid to all Company equity holders, including shareholders of Class A common stock and holders of Parsley Energy, LLC units/Class B common stock. | ||||||
(3) | "Drilling efficiency" is measured based on drilled feet per operational day. "Completion efficiency" is measured based on stimulated lateral length per operational day. "Operational days" are measured as days equipment is active and do not include mobilization or other idle time. | ||||||
(4) | Represents Bloomberg-sourced 3Q20 average WTI Cushing price. | ||||||
(5) | Revolver availability is net of letters of credit. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Selected Operating Data | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
September 30, 2020 | June 30, 2020 | September 30, 2019 | |||||||||
Net production volumes: | |||||||||||
Oil (MBbls) | 10,213 | 10,242 | 8,440 | ||||||||
Natural gas (MMcf) | 18,371 | 16,949 | 14,475 | ||||||||
Natural gas liquids (MBbls) | 3,581 | 3,600 | 2,983 | ||||||||
Total (MBoe) | 16,856 | 16,667 | 13,836 | ||||||||
Average daily net production (Boe/d) | 183,217 | 183,154 | 150,391 | ||||||||
Average sales prices(1) : | |||||||||||
Oil, without realized derivatives (per Bbl) | $ | 37.19 | $ | 18.30 | $ | 55.16 | |||||
Oil, with realized derivatives (per Bbl) | $ | 35.73 | $ | 31.47 | $ | 54.12 | |||||
Natural gas, without realized derivatives (per Mcf) | $ | 1.02 | $ | 0.71 | $ | 0.59 | |||||
Natural gas, with realized derivatives (per Mcf) | $ | 0.92 | $ | 0.65 | $ | 0.64 | |||||
Natural gas liquids (per Bbl) | $ | 12.87 | $ | 5.10 | $ | 11.08 | |||||
Average price per Boe, without realized derivatives | $ | 26.38 | $ | 13.07 | $ | 36.65 | |||||
Average price per Boe, with realized derivatives | $ | 25.38 | $ | 21.10 | $ | 36.07 | |||||
Average costs (per Boe): | |||||||||||
Lease operating expenses | $ | 3.19 | $ | 3.69 | $ | 3.30 | |||||
Transportation and processing costs | $ | 1.32 | $ | 0.87 | $ | 0.87 | |||||
Production and ad valorem taxes | $ | 1.88 | $ | 1.40 | $ | 2.76 | |||||
Depreciation, depletion and amortization | $ | 7.60 | $ | 7.65 | $ | 15.30 | |||||
General and administrative expenses (including stock-based compensation) | $ | 1.97 | $ | 2.21 | $ | 2.65 | |||||
General and administrative expenses (cash based) | $ | 1.59 | $ | 1.81 | $ | 2.28 |
(1) | Average prices shown in the table reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculations of such effects include both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. Realized oil prices are net of transportation costs. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(Unaudited, in thousands, except for per share data) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
REVENUES | |||||||||||||||
Oil sales | $ | 379,804 | $ | 465,549 | $ | 1,089,423 | $ | 1,292,563 | |||||||
Natural gas sales | 18,729 | 8,566 | 35,966 | 23,159 | |||||||||||
Natural gas liquids sales | 46,095 | 33,041 | 96,894 | 115,138 | |||||||||||
Other | 2,761 | 2,995 | 10,119 | 5,503 | |||||||||||
Total revenues | 447,389 | 510,151 | 1,232,402 | 1,436,363 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Lease operating expenses | 53,696 | 45,719 | 188,853 | 129,587 | |||||||||||
Transportation and processing costs | 22,182 | 12,052 | 50,942 | 26,917 | |||||||||||
Production and ad valorem taxes | 31,709 | 38,235 | 92,254 | 96,386 | |||||||||||
Depreciation, depletion and amortization | 128,045 | 211,737 | 530,190 | 584,023 | |||||||||||
General and administrative expenses (including stock-based compensation) | 33,282 | 36,718 | 106,052 | 109,662 | |||||||||||
Exploration and abandonment costs | 7,983 | 11,988 | 571,616 | 35,054 | |||||||||||
Impairment | — | — | 4,374,253 | — | |||||||||||
Acquisition costs | 278 | — | 15,296 | — | |||||||||||
Accretion of asset retirement obligations | 497 | 373 | 1,414 | 1,071 | |||||||||||
Rig termination costs | (202) | — | 14,904 | — | |||||||||||
Loss (gain) on sale of property | 357 | (1,887) | 332 | (1,887) | |||||||||||
Restructuring and other termination costs | 8,134 | — | 45,431 | 1,562 | |||||||||||
Other operating expenses | 5,202 | 2,175 | 16,802 | 3,563 | |||||||||||
Total operating expenses | 291,163 | 357,110 | 6,008,339 | 985,938 | |||||||||||
OPERATING INCOME (LOSS) | 156,226 | 153,041 | (4,775,937) | 450,425 | |||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||
Interest expense, net | (40,456) | (33,578) | (122,589) | (100,177) | |||||||||||
Gain (loss) on early extinguishment of debt | 56 | — | (21,037) | — | |||||||||||
(Loss) gain on derivatives | (87,021) | 56,552 | 178,665 | (43,574) | |||||||||||
Change in TRA liability | — | — | 70,529 | — | |||||||||||
Interest income | 16 | 216 | 285 | 610 | |||||||||||
Other expense | (928) | (1,678) | (4,794) | (905) | |||||||||||
Total other (expense) income, net | (128,333) | 21,512 | 101,059 | (144,046) | |||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 27,893 | 174,553 | (4,674,878) | 306,379 | |||||||||||
INCOME TAX (EXPENSE) BENEFIT | (3,129) | (34,953) | 574,017 | (59,788) | |||||||||||
NET INCOME (LOSS) | 24,764 | 139,600 | (4,100,861) | 246,591 | |||||||||||
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (2,125) | (19,890) | 400,684 | (35,010) | |||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS | $ | 22,639 | $ | 119,710 | $ | (3,700,177) | $ | 211,581 | |||||||
Net income (loss) per common share: | |||||||||||||||
Basic | $ | 0.06 | $ | 0.43 | $ | (9.91) | $ | 0.76 | |||||||
Diluted | $ | 0.06 | $ | 0.43 | $ | (9.91) | $ | 0.76 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 377,452 | 279,961 | 373,503 | 279,491 | |||||||||||
Diluted | 378,160 | 280,547 | 373,503 | 279,954 |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Balance Sheets | |||||||
(Unaudited, in thousands) | |||||||
September 30, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 4,662 | $ | 20,739 | |||
Accounts receivable, net of allowance for doubtful accounts: | |||||||
Joint interest owners and other | 30,582 | 48,785 | |||||
Oil, natural gas and natural gas liquids | 141,720 | 192,216 | |||||
Related parties | 188 | 183 | |||||
Short-term derivative instruments, net | 81,280 | 127,632 | |||||
Other current assets | 11,461 | 8,818 | |||||
Total current assets | 269,893 | 398,373 | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Oil and natural gas properties, successful efforts method | 7,533,203 | 11,272,124 | |||||
Accumulated depreciation and depletion | (249,704) | (2,117,963) | |||||
Total oil and natural gas properties, net | 7,283,499 | 9,154,161 | |||||
Other property, plant and equipment, net | 195,449 | 170,306 | |||||
Total property, plant and equipment, net | 7,478,948 | 9,324,467 | |||||
NONCURRENT ASSETS | |||||||
Operating lease assets, net of accumulated depreciation | 85,867 | 128,529 | |||||
Long-term derivative instruments, net | 3,239 | — | |||||
Other noncurrent assets | 6,989 | 4,845 | |||||
Total noncurrent assets | 96,095 | 133,374 | |||||
TOTAL ASSETS | $ | 7,844,936 | $ | 9,856,214 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | 280,055 | $ | 416,346 | |||
Revenue and severance taxes payable | 176,618 | 154,556 | |||||
Short-term derivative instruments, net | 107,725 | 158,522 | |||||
Current operating lease liabilities | 40,029 | 61,198 | |||||
Other current liabilities | 3,886 | 5,002 | |||||
Total current liabilities | 608,313 | 795,624 | |||||
NONCURRENT LIABILITIES | |||||||
Long-term debt | 2,996,015 | 2,182,832 | |||||
Deferred tax liabilities | 8,581 | 193,409 | |||||
Operating lease liabilities | 50,259 | 69,195 | |||||
Payable pursuant to tax receivable agreement | — | 70,529 | |||||
Long-term derivative instruments, net | 24,621 | — | |||||
Asset retirement obligations | 27,622 | 20,538 | |||||
Financing lease liabilities | 1,670 | 1,320 | |||||
Other noncurrent liabilities | 428 | 119 | |||||
Total noncurrent liabilities | 3,109,196 | 2,537,942 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS' EQUITY | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | |||||
Common stock | |||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 379,339,004 shares issued and 378,610,172 shares outstanding at September 30, 2020 and 282,260,133 shares issued and 281,241,443 shares outstanding at December 31, 2019 | 3,793 | 2,822 | |||||
Class B, $0.01 par value, 125,000,000 shares authorized, 34,201,316 and 35,420,258 shares issued and outstanding at September 30, 2020 and December 31, 2019 | 342 | 355 | |||||
Additional paid in capital | 6,971,249 | 5,200,795 | |||||
(Accumulated deficit) retained earnings | (3,148,317) | 570,889 | |||||
Treasury stock, at cost, 728,832 shares and 1,018,690 shares at September 30, 2020 and December 31, 2019 | (11,165) | (17,428) | |||||
Total stockholders' equity | 3,815,902 | 5,757,433 | |||||
Noncontrolling interests | 311,525 | 765,215 | |||||
Total equity | 4,127,427 | 6,522,648 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 7,844,936 | $ | 9,856,214 |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||
Net income (loss) | $ | 24,764 | $ | 139,600 | $ | (4,100,861) | $ | 246,591 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation, depletion and amortization | 128,045 | 211,737 | 530,190 | 584,023 | |||||||||||
Leasehold abandonments and impairments | 7,933 | 11,885 | 564,445 | 34,074 | |||||||||||
Impairment of long-lived assets | — | — | 4,374,253 | — | |||||||||||
Accretion of asset retirement obligations | 497 | 373 | 1,414 | 1,071 | |||||||||||
Loss (gain) on sale of property | 357 | (1,887) | 332 | (1,887) | |||||||||||
(Gain) loss on early extinguishment of debt | (56) | — | 21,037 | — | |||||||||||
Stock-based compensation | 6,564 | 5,175 | 24,342 | 15,473 | |||||||||||
Deferred income tax expense (benefit) | 3,129 | 34,953 | (574,017) | 59,788 | |||||||||||
Change in TRA liability | — | — | (70,529) | — | |||||||||||
Loss (gain) on derivatives | 87,021 | (56,552) | (178,665) | 43,574 | |||||||||||
Net cash (paid) received for derivative settlements | (10,780) | 2,023 | 132,816 | (13,088) | |||||||||||
Net cash (paid) received for option premiums | (6,128) | (11,712) | 42,758 | (35,321) | |||||||||||
Other | 699 | 3,517 | 2,940 | 5,140 | |||||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||||||
Accounts receivable | (21,386) | (30,727) | 145,238 | (44,144) | |||||||||||
Accounts receivable—related parties | 4,076 | 511 | (5) | (287) | |||||||||||
Other current assets | (5,067) | (2,183) | (4,097) | 5,062 | |||||||||||
Other noncurrent assets | 820 | 531 | 2,632 | (274) | |||||||||||
Accounts payable and accrued expenses | 823 | 14,838 | (175,528) | 33,303 | |||||||||||
Revenue and severance taxes payable | 5,957 | 3,277 | 22,062 | 8,143 | |||||||||||
Other noncurrent liabilities | 118 | 59 | 309 | 59 | |||||||||||
Net cash provided by operating activities | 227,386 | 325,418 | 761,066 | 941,300 | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||
Development of oil and natural gas properties | (65,532) | (343,988) | (630,853) | (1,081,182) | |||||||||||
Acquisitions of oil and natural gas properties | (2,400) | (9,250) | (14,344) | (33,841) | |||||||||||
Cash acquired from the Jagged Peak acquisition | — | — | 53,347 | — | |||||||||||
Additions to other property and equipment | (8,976) | (244) | (12,138) | (28,155) | |||||||||||
Proceeds from sales of property, plant and equipment | 308 | 3,074 | 2,689 | 40,967 | |||||||||||
Other | 6 | 732 | (2,482) | 5,221 | |||||||||||
Net cash used in investing activities | (76,594) | (349,676) | (603,781) | (1,096,990) | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||
Borrowings under long-term debt | 136,000 | 175,000 | 1,421,000 | 462,000 | |||||||||||
Payments on long-term debt | (262,934) | (200,000) | (1,507,534) | (447,000) | |||||||||||
Payments on financing lease obligations | (642) | (696) | (1,941) | (2,126) | |||||||||||
Debt issuance costs | (120) | — | (11,897) | — | |||||||||||
Repurchase of common stock | (89) | (20) | (11,165) | (5,672) | |||||||||||
Dividends and distributions paid | (20,610) | (9,465) | (61,825) | (9,465) | |||||||||||
Distributions to owners from consolidated subsidiary | — | — | — | (603) | |||||||||||
Net cash used in financing activities | (148,395) | (35,181) | (173,362) | (2,866) | |||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 2,397 | (59,439) | (16,077) | (158,556) | |||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 2,265 | 64,099 | 20,739 | 163,216 | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 4,662 | $ | 4,660 | $ | 4,662 | $ | 4,660 | |||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||||||
Cash paid for interest | $ | (41,600) | $ | (13,610) | $ | (118,009) | $ | (71,774) | |||||||
Cash received for income taxes | $ | — | $ | — | $ | — | $ | 240 | |||||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||||||||||||||
Asset retirement obligations incurred, including changes in estimate | $ | 532 | $ | 411 | $ | 4,448 | $ | 1,619 | |||||||
Additions to oil and natural gas properties - change in capital accruals | $ | 19,367 | $ | (25,695) | $ | (102,872) | $ | 15,429 | |||||||
Common stock issued for oil and natural gas properties | $ | — | $ | — | $ | 1,776,199 | $ | — | |||||||
Net premiums on options that settled during the period | $ | 7,156 | $ | (11,765) | $ | 5,922 | $ | (31,513) |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income (loss) as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by the Company's management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net income (loss) before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, interest income, income tax expense, change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, impairment on long-lived assets, (gain) loss on early extinguishment of debt, gain on sale of property, rig termination costs, restructuring and other termination costs, accretion of asset retirement obligations, loss (gain) on derivatives, net settlements on derivative instruments, net premiums on options that settled during the period and other.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net loss in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structure, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net loss as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDAX is useful to investors as a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income (loss) attributable to Parsley Energy, Inc. stockholders for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted EBITDAX | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Adjusted EBITDAX reconciliation to net income (loss) attributable to Parsley Energy, Inc. stockholders: | |||||||||||||||
Net income (loss) attributable to Parsley Energy, Inc. stockholders | $ | 22,639 | $ | 119,710 | $ | (3,700,177) | $ | 211,581 | |||||||
Net income (loss) attributable to noncontrolling interests | 2,125 | 19,890 | (400,684) | 35,010 | |||||||||||
Depreciation, depletion and amortization | 128,045 | 211,737 | 530,190 | 584,023 | |||||||||||
Exploration and abandonment costs | 7,983 | 11,988 | 571,616 | 35,054 | |||||||||||
Interest expense, net | 40,456 | 33,578 | 122,589 | 100,177 | |||||||||||
Interest income | (16) | (216) | (285) | (610) | |||||||||||
Income tax expense | 3,129 | 34,953 | (574,017) | 59,788 | |||||||||||
EBITDAX | 204,361 | 431,640 | (3,450,768) | 1,025,023 | |||||||||||
Change in TRA liability | — | — | (70,529) | — | |||||||||||
Stock-based compensation | 6,564 | 5,175 | 19,592 | 15,473 | |||||||||||
Acquisition costs | 278 | — | 15,296 | — | |||||||||||
Impairment on long-lived assets | — | — | 4,374,253 | — | |||||||||||
(Gain) loss on early extinguishment of debt | (56) | — | 21,037 | — | |||||||||||
Gain on sale of property | 357 | (1,887) | 332 | (1,887) | |||||||||||
Rig termination costs | (202) | — | 14,904 | — | |||||||||||
Restructuring and other termination costs | 8,134 | — | 45,431 | 1,562 | |||||||||||
Accretion of asset retirement obligations | 497 | 373 | 1,414 | 1,071 | |||||||||||
Loss (gain) on derivatives | 87,021 | (56,552) | (178,665) | 43,574 | |||||||||||
Net settlements on derivative instruments | (23,900) | 3,686 | 158,628 | (13,108) | |||||||||||
Net premiums on options that settled during the period | 7,156 | (11,765) | 5,922 | (31,513) | |||||||||||
Other | — | — | 2,142 | — | |||||||||||
Adjusted EBITDAX | $ | 290,210 | $ | 370,670 | $ | 958,989 | $ | 1,040,195 |
Free Cash Flow
Free cash flow is not a measure of net cash provided by operating activities as determined by GAAP. Free cash flow is a supplemental non-GAAP financial measure that is used by the Company, analysts and investors as an indicator of the Company's ability to manage its operating cash flow, internally fund its exploration and development activities, pay dividends, and to service or incur additional debt, without regard to the timing of settlement of either operating assets and liabilities or accounts payable related to capital expenditures. The Company believes that this measure, as so adjusted, presents a meaningful indicator of the Company's actual sources and uses of capital associated with its operations conducted during the applicable period. The Company defines free cash flow as net cash provided by operating activities before changes in operating assets and liabilities, net of acquisitions and acquisition and cash restructuring costs related to the acquisition of Jagged Peak, less accrual-based development capital expenditures. The amounts included in the calculation of free cash flow were computed in accordance with GAAP.
Free cash flow is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of free cash flow to the GAAP financial measure of net cash provided by operating activities.
Parsley Energy, Inc. and Subsidiaries | |||||||
Free Cash Flow | |||||||
(Unaudited, in thousands) | |||||||
Three Months Ended September 30, | |||||||
2020 | 2019 | ||||||
Net cash provided by operating activities | $ | 227,386 | $ | 325,418 | |||
Net change in operating assets and liabilities, net of acquisitions | 14,659 | 13,694 | |||||
Acquisition costs related to the acquisition of Jagged Peak | 278 | — | |||||
Restructuring costs related to the acquisition of Jagged Peak (excluding non-cash) | 58 | — | |||||
Total discretionary cash flow | 242,381 | 339,112 | |||||
Development of oil and natural gas properties | (65,532) | (343,988) | |||||
Additions to oil and natural gas properties - (increase) decrease in capital accruals | (19,367) | 25,695 | |||||
Total accrual-based development capital expenditures | (84,899) | (318,293) | |||||
Free cash flow | $ | 157,482 | $ | 20,819 |
Adjusted Net Income
Adjusted net income is not a measure of net income (loss) determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by the Company's management to evaluate financial performance, prior to loss (gain) on derivatives, net settlements on derivative instruments, net premiums on options that settled during the period, loss (gain) on sale of property, rig termination costs, restructuring and other termination costs, exploration and abandonment costs, impairment of long-lived assets, acquisition costs, change in TRA liability, (gain) loss on early extinguishment of debt, and other, while adjusting for changes in noncontrolling interests, the associated changes in estimated income tax and changes to deferred tax asset valuation allowance. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net income (loss), operating income (loss), or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net income (loss) attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted Net Income and Net Income Per Share | |||||||||||||||
(Unaudited, in thousands, except per share data) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) attributable to Parsley Energy, Inc. stockholders | $ | 22,639 | $ | 119,710 | $ | (3,700,177) | $ | 211,581 | |||||||
Adjustments: | |||||||||||||||
Loss (gain) on derivatives | 87,021 | (56,552) | (178,665) | 43,574 | |||||||||||
Net settlements on derivative instruments | (23,900) | 3,686 | 158,628 | (13,108) | |||||||||||
Net premiums on options that settled during the period | 7,156 | (11,765) | 5,923 | (31,513) | |||||||||||
Loss (gain) on sale of property | 357 | (1,887) | 332 | (1,887) | |||||||||||
Rig termination costs | (202) | — | 14,904 | — | |||||||||||
Restructuring and other termination costs | 8,134 | — | 45,431 | 1,562 | |||||||||||
Exploration and abandonment costs | 7,983 | 11,988 | 571,616 | 35,054 | |||||||||||
Impairment of long-lived assets | — | — | 4,374,253 | — | |||||||||||
Acquisition costs | 278 | — | 15,296 | — | |||||||||||
Change in TRA liability | — | — | (70,529) | — | |||||||||||
(Gain) loss on early extinguishment of debt | (56) | — | 21,037 | — | |||||||||||
Other | — | — | 2,142 | — | |||||||||||
Change in noncontrolling interests | (7,473) | 6,106 | (425,398) | (4,113) | |||||||||||
Income taxes on above adjustments(1) | (19,336) | 10,675 | (351,629) | (6,565) | |||||||||||
Adjustment to deferred tax asset valuation allowance(2) | — | — | (284,727) | — | |||||||||||
Adjusted net income | $ | 82,601 | $ | 81,961 | $ | 198,437 | $ | 234,585 | |||||||
Net income (loss) per diluted share - as reported(1) | $ | 0.06 | $ | 0.43 | $ | (9.91) | $ | 0.76 | |||||||
Adjustments: | |||||||||||||||
Loss (gain) on derivatives | $ | 0.23 | $ | (0.20) | $ | (0.48) | $ | 0.16 | |||||||
Net settlements on derivative instruments | (0.06) | 0.01 | 0.42 | (0.05) | |||||||||||
Net premiums on options that settled during the period | 0.02 | (0.04) | 0.02 | (0.11) | |||||||||||
Loss (gain) on sale of property | — | (0.01) | — | (0.01) | |||||||||||
Rig termination costs | — | — | 0.04 | — | |||||||||||
Restructuring and other termination costs | 0.02 | — | 0.12 | 0.01 | |||||||||||
Exploration and abandonment costs | 0.02 | 0.04 | 1.53 | 0.13 | |||||||||||
Impairment of long-lived assets | — | — | 11.70 | — | |||||||||||
Acquisition costs | — | — | 0.04 | — | |||||||||||
Change in TRA liability | — | — | (0.19) | — | |||||||||||
Loss on early extinguishment of debt | — | — | 0.06 | — | |||||||||||
Other | — | — | 0.01 | — | |||||||||||
Change in noncontrolling interests | (0.02) | 0.02 | (1.14) | (0.01) | |||||||||||
Income taxes on above adjustments | (0.05) | 0.04 | (0.93) | (0.04) | |||||||||||
Adjustment to deferred tax asset valuation allowance | — | — | (0.76) | — | |||||||||||
Adjusted net income per diluted share(4) | $ | 0.22 | $ | 0.29 | $ | 0.53 | $ | 0.84 | |||||||
Basic weighted average shares outstanding - as reported(3) | 377,452 | 279,961 | 373,503 | 279,491 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Class B Common Stock | — | — | — | — | |||||||||||
Restricted Stock and Restricted Stock Units | 708 | 586 | — | 463 | |||||||||||
Diluted weighted average shares outstanding - as reported(3) | 378,160 | 280,547 | 373,503 | 279,954 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Class B Common Stock | — | — | — | — | |||||||||||
Restricted Stock and Restricted Stock Units | — | — | 304 | — | |||||||||||
Diluted weighted average shares outstanding for adjusted net income(4) | 378,160 | 280,547 | 373,807 | 279,954 |
(1) | The assumed income tax rate is 22% and 20% for the three and nine months ended September 30, 2020 and 2019, respectively. | ||||||
(2) | Deferred tax valuation allowance has been adjusted to reflect the assumed income tax rate of 22%. | ||||||
(3) | For the three and nine months ended September 30, 2020 and the nine months ended September 30, 2019, the number of weighted average diluted shares used to calculate actual net income (loss) per share is based on the fact that, under the "if converted" and "treasury stock" methods, Class B Common Stock and shares of restricted stock and restricted stock units, respectively, were not recognized because the effect would have been antidilutive. For the nine months ended September 30, 2019, the number of weighted average diluted shares used to calculate actual net income (loss) per share is based on the fact that, under the "if converted" method, Class B Common Stock was not recognized because the effect would have been antidilutive. | ||||||
(4) | For purposes of calculating adjusted net income per diluted share for the three and nine months ended September 30, 2020 and 2019, Class B Common Stock was not recognized because the shares would have been antidilutive using the "if converted" method. |
Open Derivatives Position | |||||||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||||||
Open Crude Oil Derivatives Positions(1) | |||||||||||||||||||||||
4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | ||||||||||||||||||
CUSHING | |||||||||||||||||||||||
Swaps - Cushing (MBbls/d)(2) | 11.0 | ||||||||||||||||||||||
Swap Price ($/Bbl) | $ | 57.87 | |||||||||||||||||||||
MIDLAND | |||||||||||||||||||||||
Three Way Collars - Midland (MBbls/d)(3) | 13.8 | ||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 51.65 | |||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 35.66 | |||||||||||||||||||||
Short Put Price ($/Bbl) | $ | 25.66 | |||||||||||||||||||||
Two Way Collars - Midland (MBbls/d)(4) | 6.5 | ||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 48.00 | |||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 43.00 | |||||||||||||||||||||
Swaps - Midland (MBbls/d)(2) | 3.3 | 5.0 | 5.0 | 5.0 | 5.0 | ||||||||||||||||||
Swap Price ($/Bbl) | $ | 32.60 | $ | 40.50 | $ | 40.50 | $ | 40.50 | $ | 40.50 | |||||||||||||
MAGELLAN EAST HOUSTON ("MEH") | |||||||||||||||||||||||
Three Way Collars - MEH (MBbls/d)(3) | 24.1 | 20.3 | 20.2 | 9.4 | 9.4 | ||||||||||||||||||
Short Call Price ($/Bbl) | $ | 51.22 | $ | 59.43 | $ | 59.39 | $ | 51.29 | $ | 51.29 | |||||||||||||
Long Put Price ($/Bbl) | $ | 37.23 | $ | 49.32 | $ | 49.30 | $ | 41.55 | $ | 41.55 | |||||||||||||
Short Put Price ($/Bbl) | $ | 27.23 | $ | 39.32 | $ | 39.30 | $ | 31.55 | $ | 31.55 | |||||||||||||
Put Spreads - MEH (MBbls/d)(5) | 17.9 | ||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 40.00 | |||||||||||||||||||||
Short Put Price ($/Bbl) | $ | 30.00 | |||||||||||||||||||||
Swaps - MEH (MBbls/d)(2) | 15.7 | 45.0 | 45.0 | 45.0 | 45.0 | 20.0 | |||||||||||||||||
Swap Price ($/Bbl) | $ | 39.28 | $ | 40.54 | $ | 40.54 | $ | 40.54 | $ | 40.54 | $ | 43.81 | |||||||||||
BRENT | |||||||||||||||||||||||
Two Way Collars - Brent (MBbls/d)(4) | 6.5 | ||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 52.30 | |||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 47.30 | |||||||||||||||||||||
Swaps - Brent (MBbls/d)(2) | 6.3 | 22.0 | 22.0 | 22.0 | 22.0 | ||||||||||||||||||
Swap Price ($/Bbl) | $ | 47.40 | $ | 44.46 | $ | 44.46 | $ | 44.46 | $ | 44.46 | |||||||||||||
Total Hedged Volumes (MBbls/d) | 105.1 | 92.3 | 92.2 | 81.4 | 81.4 | 20.0 | |||||||||||||||||
Premium Realization ($MM)(6) | $ | 7.2 | $ | (2.6) | $ | (2.6) | $ | (1.4) | $ | (1.4) | |||||||||||||
Midland-Cushing Basis Swaps (MBbls/d)(7) | 14.0 | ||||||||||||||||||||||
Basis Differential ($/Bbl) | $ | (1.44) | |||||||||||||||||||||
Rollfactor Swaps (MBbls/d)(8) | 52.2 | 10.0 | |||||||||||||||||||||
Swap Price ($/Bbl) | $ | (2.09) | $ | (0.45) | |||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||||||
Open Natural Gas Derivatives Positions(1) | |||||||||||||||||||||||
4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | ||||||||||||||||||
WAHA | |||||||||||||||||||||||
Swaps - Waha (MMBtu/d)(2) | 78,152 | 116,667 | 116,484 | 116,304 | 116,304 | 20,000 | |||||||||||||||||
Swap Price ($/MMBtu) | $ | 1.40 | $ | 2.36 | $ | 2.36 | $ | 2.36 | $ | 2.36 | $ | 2.46 | |||||||||||
(1) | Hedge position as of 10/27/2020. Prices represent the weighted average price of contracts scheduled for settlement during the period. | ||||||
(2) | Parsley receives the swap price. | ||||||
(3) | When the reference price (Midland, MEH, or Brent) is at or above the short call price, Parsley receives the short call price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | ||||||
(4) | When the reference price is above the short call price, Parsley receives the short call price. When the reference price is between the short call price and the put price, Parsley receives the reference price. When the reference price is below the put price, Parsley receives the put price. | ||||||
(5) | When the reference price is above the long put price, Parsley receives the reference price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | ||||||
(6) | Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | ||||||
(7) | Swaps that fix the basis differentials representing the index prices at which the Company sells its oil and gas produced in the Permian Basin less the WTI Cushing price and Henry Hub price, respectively. | ||||||
(8) | These positions hedge the timing risk associated with Parsley's physical sales. Parsley generally sells crude oil for the delivery month at a sales price based on the average NYMEX price during that month, plus an adjustment calculated as a spread between the weighted average prices of the delivery month, the next month, and the following month during the period when the delivery month is the first month. |
Weighted Average Shares Outstanding | |||||
Parsley Energy, Inc. and Subsidiaries | |||||
Weighted Average Shares Outstanding | |||||
(Unaudited, in thousands) | |||||
Three Months Ended September 30, | |||||
2020 | 2019 | ||||
Weighted average common shares outstanding, class A | 377,452 | 279,961 | |||
Weighted average common shares outstanding, class B | 34,681 | 35,519 | |||
Adjusted weighted average common shares outstanding(1) | 412,133 | 315,480 |
(1) | PE Units (and a corresponding number of shares of Class B common stock) can be exchanged for Class A common stock at an exchange ratio of one share of Class A common stock for each PE Unit (and corresponding share of Class B common stock) exchanged. As such, assumes the exchange of all outstanding PE Units (and corresponding shares of Class B common stock) for shares of Class A common stock. Excludes potentially dilutive restricted stock and restricted stock units of approximately 0.7 million and 0.6 million shares for the three months ended September 30, 2020 and 2019, respectively. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-third-quarter-2020-financial-and-operating-results-301162193.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Sept. 24, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) plans to report third quarter 2020 financial results on Wednesday, October 28, 2020 after the close of trading on the New York Stock Exchange. The company will host its quarterly conference call at 10:00 AM ET (9:00 AM CT) on Thursday, October 29, 2020.
By Phone: | Dial 877-709-8150 (United States/Canada) or 201-689-8354 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Thursday, November 5, 2020 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13706311. | |
By Webcast: | |
Select "Events & Presentations" under the "Investors" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration and production of unconventional oil and natural gas reserves in the Permian Basin. For more information, visit our website at www.parsleyenergy.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-schedules-third-quarter-2020-earnings-release-and-conference-call-301137843.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Sept. 1, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley" or the "Company") today released its 2019 Corporate Responsibility Report. The report outlines Parsley's commitment and approach to governance, environmental stewardship, health and safety, talent attraction and retention, and community engagement. The report can be found on the Company's website at www.parsleyenergy.com/CRR.
"Reflecting on 2019, we are proud of our many accomplishments: publishing our inaugural Corporate Responsibility Report; reconstituting our Nominating and Governance Committee to include environmental and social oversight; establishing our Safety, Sustainability, and Corporate Responsibility Planning and Disclosure Committee; and finishing the year with strong operating results and well positioned for continued free cash flow generation in 2020. Our focus on ESG initiatives now applies to an expanded asset base after our acquisition of Jagged Peak Energy Inc. in January 2020 and these objectives have remained top of mind as we navigate the unexpected macro challenges we have seen this year," said Matt Gallagher, President and CEO of Parsley.
Building off its inaugural report, Parsley's 2019 Corporate Responsibility Report references both Sustainability Accounting Standards Board (SASB) and Global Reporting Initiative (GRI) standards. The 2019 Corporate Responsibility Report includes the following highlights and achievements:
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-releases-annual-corporate-responsibility-report-301121350.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Aug. 5, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended June 30, 2020. Additionally, Parsley provided an update to its 2020 development program. The Company has posted a presentation to its website that supplements the information in this release.
Updated 2020 Outlook
Recent Highlights
Summary Comment and Outlook
"From a macro standpoint, the second quarter represented an unforgiving stress test for much of our industry," commented Matt Gallagher, Parsley's President and CEO. "The worst may be behind us - prices have found firmer footing as oil markets seek a cautious equilibrium. However, at Parsley Energy, we harbor no illusions of the difficulties facing our industry and we remain well built for that endurance test. During this challenging second quarter, our team did not merely run in place, but instead progressed our corporate sustainability efforts on multiple fronts. On the financial front, we generated robust free cash flow and remain committed to free cash flow sustainability in 2021 and beyond. On the environmental front, we reduced natural gas flaring on recently acquired properties by approximately 90% and we will continue to advance our environmental sustainability efforts with tangible goals moving forward. I am proud of the Parsley team for focusing on controlling what was within our control and for delivering on our action plan during uncertain times."
Operational Update
During January and February, Parsley operated 15 development rigs and five frac spreads before steadily dropping activity throughout March. In late April, as a result of regional oil prices trading below $20 per barrel, Parsley suspended all new drilling and completion operations and did not deploy any rigs or frac spreads during May or June.
Parsley also proactively managed production volumes through voluntary curtailments during 2Q20 based on near-term regional pricing dynamics and environmental stewardship objectives. During May, at the height of these curtailments, Parsley actively curtailed more than 20% of its net oil production. The Company restored the vast majority of these curtailed volumes in June in a safe, environmentally responsible, and efficient manner.
Parsley utilized this collective downtime to advance various environmental stewardship initiatives, including implementing various midstream solutions to mitigate natural gas flaring. Parsley closed its acquisition of Jagged Peak in January 2020, inheriting properties that had collectively flared approximately 20% of their natural gas production in 2019. After six months of operating these assets, Parsley had utilized a variety of midstream solutions to help reduce natural gas flaring by approximately 90%.
During the second quarter of 2020, the Company spud 8 and placed on production 17 gross operated horizontal wells. Parsley's average working interest on wells placed on production was approximately 85%, with an average completed lateral length of approximately 9,500 feet. The Company placed on production 13 gross operated horizontal wells in the Midland Basin, with the remainder placed on production in the Delaware Basin.
In July, Parsley reactivated two rigs and two frac spreads given more constructive oil prices consistently trading above Parsley's baseline price assumptions. Provided market fundamentals do not deteriorate, Parsley anticipates moving to a stabilized activity level of four-to-five rigs and one-to-two frac spreads in early 4Q20.
Financial Update
Healthy execution in 2Q20, under challenging conditions, translated to strong performance in key financial measures.
Profitability
During 2Q20, the Company recorded net loss attributable to its stockholders of $0.4 billion, or $0.95 per share. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, adjusted net income for 2Q20 was $10.1 million, or $0.03 per share.(1)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 2Q20 was $211.6 million.(1)
Realized Pricing
During 2Q20, Parsley reported an average hedged oil price realization of $31.47 per Bbl net of transportation costs. Given heightened volatility in regional oil prices during 2Q20, the Company elected to monetize certain financial hedges and concurrently entered into fixed price physical sales agreements with select marketers. In a rising oil price environment, this practice would result in larger realized hedge gains and lower unhedged oil price realizations, but would have no material impact to cash flow. During 2Q20, Parsley reported an average unhedged oil price realization of $18.30 per Bbl net of transportation costs. Absent any financial hedge monetization or fixed price physical agreements during 2Q20, the Company's average unhedged oil price realization would have increased by approximately $5.00 per Bbl, but there would have been no material change to the Company's average hedged oil price realization. Parsley has not entered into any additional fixed price physical agreements that would impact reported oil price realizations in the future.
Operating Costs
During the second quarter of 2020, the Company reported lease operating expense ("LOE") per Boe of $3.69, down 10% versus 1Q20 expense levels despite decreased production volumes. Favorable LOE unit cost trends were driven by supplier price reductions, the shut-in of higher per-Boe cost vertical wells, and continued utilization of the Company's integrated water handling system. Parsley is reinstating full-year 2020 LOE per Boe guidance at $3.75-$4.25, which reflects a tightening of the Company's initial guidance range of $3.50-$4.50 per Boe.
Both general and administrative expense ("G&A") per Boe and cash based G&A per Boe(1), which excludes stock-based compensation expense, decreased year-over-year to $2.21 and $1.81, respectively. Encouraging G&A cost trends are a function of ongoing corporate cost savings initiatives, including the expedient integration of Jagged Peak, which helped accelerate the timeline for synergy capture. Parsley is reinstating full-year 2020 cash G&A per Boe guidance at $1.80-$1.90, a 16% reduction to the Company's initial guidance range of $2.00-$2.40 per Boe at the midpoints. Parsley now expects full-year 2020 cash based G&A of approximately $125 million or less, a reduction of at least $5 million from the prior forecast and a reduction of approximately $40 million versus the midpoints of initial guidance.(3)
Capital Expenditures
Parsley reported capital expenditures of $64 million during the second quarter of 2020, comprised of $60 million for operated drilling, completion, and equipment activity, and $4 million associated with water infrastructure and non-operated development activity.
Return of Capital Program
Today Parsley Energy's Board of Directors declared a quarterly dividend of $0.05 per share.(2) The dividend is payable on September 18, 2020, to shareholders of record on September 8, 2020.
Liquidity and Hedging
The Company entered into an amendment to its revolving credit agreement on April 27, 2020, which reaffirmed its borrowing base at $2.7 billion, increased the elected commitment amount from $1.0 billion to $1.075 billion, and extended the maturity date by two years to October 28, 2023.
As of June 30, 2020, Parsley had approximately $640.6 million of liquidity, consisting of $2.3 million of cash and cash equivalents and an availability of $638.3 million on the Company's revolver.(4)
Consistent with the Company's strategy to methodically protect its future cash flow, Parsley recently initiated a 2022 hedge position. For details on Parsley's hedge position, please see the tables below under Supplemental Information and/or, upon availability, the Company's Quarterly Report on Form 10-Q for the three months ended June 30, 2020.
2020 Guidance(5)
The Company is narrowing its 2020 capital budget to $650-$700 million (previously less than $700 million), with reported 1H20 capital expenditures of $443 million representing more than 60% of this full-year budget. Following strong operating cost control in the second quarter of 2020, Parsley is reinstating full-year 2020 guidance on unit costs. Out of an abundance of caution, the Company has not elected to reinstate detailed guidance on production and activity given ongoing uncertainty caused by the novel coronavirus 2019, or "COVID-19." For further detail, please see the table below.
Initial | Revised | |
2020 Guidance | 2020 Guidance | |
Production | ||
Annual net oil production (MBo/d) | 125-133 | Temporarily Suspended |
Annual net total production (MBoe/d) | 200-210 | |
Capital Program | ||
Total development expenditures ($MM) | $1,600-$1,800 | $650-$700 |
Drilling, completion, & equipment ($MM) | $1,500-$1,650 | $625-$675 |
Other ($MM) | $100-$150 | ~$25 |
Activity | ||
Gross operated horizontal POPs(6) | 180-190 | |
Midland Basin (% of total) | ~65% | |
Delaware Basin (% of total) | ~35% | Temporarily Suspended |
Average lateral length | 9,500'-10,000' | |
Gross operated lateral footage (000's) | 1,710'-1,900' | |
Average working interest | ~90% | |
Unit Costs | ||
Lease operating expenses ($/Boe) | $3.50-$4.50 | $3.75-$4.25 |
Cash general and administrative expenses ($/Boe) | $2.00-$2.40 | $1.80-$1.90 |
Production and ad valorem taxes (% of total revenue) | 6%-7% | 6%-8% |
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the second quarter of 2020 on Thursday, August 6, 2020 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-709-8150 (United States/Canada) or 201-689-8354 (International) 10 minutes before the scheduled time and request the Parsley Energy earnings conference call. A telephone replay will be available through August 13, 2020 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13706311. A live broadcast will also be available on the Internet at www.parsleyenergy.com under the "Investors-Events & Presentations" section of the website. The Company has also posted a presentation to its website that supplements the information in this release.
Upcoming Conference Participation
Parsley plans to participate in the Simmons Gleneagles Virtual Conference on September 2, 2020 and the Barclays CEO Energy-Power Virtual Conference on September 9, 2020.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the Securities and Exchange Commission ("SEC"), including its most recent Annual Report on Form 10-K and any subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
- Tables to Follow -
(1) | "Cash based G&A per Boe", "Adjusted EBITDAX", "free cash flow (outspend)", and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For definitions and reconciliations of the non-GAAP financial measures of Adjusted EBITDAX, free cash flow (outspend), and adjusted net income to GAAP financial measures, please see the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. The Company is unable to present a reconciliation of forward-looking free cash flow (outspend) because components of the calculation, including changes in working capital accounts, are inherently unpredictable. Additionally, estimating the most directly comparable GAAP measure with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Furthermore, the Company's current 2020 target of at least $350 million of free cash flow is based on a WTI oil price of $35 for the remainder of the year. In the event of continued market volatility and uncertainty, Parsley may not achieve this free cash flow target. | |
(2) | Dividend to be paid to all Company equity holders, including shareholders of Class A common stock and holders of Parsley Energy, LLC units/Class B common stock. | |
(3) | The midpoints of Parsley's initial per unit cash G&A and Boe production guidance ranges were $2.20 per Boe and 205 MBoe/d, respectively. This implied 2020 cash G&A expense of approximately $165 million at the midpoints of initial guidance ranges. | |
(4) | Revolver availability is net of letters of credit. | |
(5) | Except as otherwise stated, all estimates, projections and/or guidance contained in this press release are based on $35 WTI oil price per barrel for the remainder of 2020. If the WTI oil price trades below this level during all or a portion of the remainder of 2020, investors are cautioned that these estimates, projections and/or guidance would be materially impacted. | |
(6) | Wells placed on production. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Three Months Ended | |||||||||||
June 30, 2020 | March 31, 2020 | June 30, 2019 | |||||||||
Net production volumes: | |||||||||||
Oil (MBbls) | 10,242 | 11,523 | 7,881 | ||||||||
Natural gas (MMcf) | 16,949 | 16,667 | 13,004 | ||||||||
Natural gas liquids (MBbls) | 3,600 | 3,626 | 2,701 | ||||||||
Total (MBoe) | 16,667 | 17,927 | 12,749 | ||||||||
Average daily net production (Boe/d) | 183,154 | 197,000 | 140,099 | ||||||||
Average sales prices(1) : | |||||||||||
Oil, without realized derivatives (per Bbl) | $ | 18.30 | $ | 45.32 | $ | 58.23 | |||||
Oil, with realized derivatives (per Bbl) | $ | 31.47 | $ | 49.17 | $ | 55.42 | |||||
Natural gas, without realized derivatives (per Mcf) | $ | 0.71 | $ | 0.31 | $ | 0.01 | |||||
Natural gas, with realized derivatives (per Mcf) | $ | 0.65 | $ | 0.50 | $ | 0.28 | |||||
Natural gas liquids (per Bbl) | $ | 5.10 | $ | 8.95 | $ | 14.18 | |||||
Average price per Boe, without realized derivatives | $ | 13.07 | $ | 31.23 | $ | 39.01 | |||||
Average price per Boe, with realized derivatives | $ | 21.10 | $ | 33.88 | $ | 37.54 | |||||
Average costs (per Boe): | |||||||||||
Lease operating expenses | $ | 3.69 | $ | 4.11 | $ | 3.35 | |||||
Transportation and processing costs | $ | 0.87 | $ | 0.79 | $ | 0.52 | |||||
Production and ad valorem taxes | $ | 1.40 | $ | 2.07 | $ | 2.41 | |||||
Depreciation, depletion and amortization | $ | 7.65 | $ | 15.32 | $ | 15.57 | |||||
General and administrative expenses (including stock-based compensation) | $ | 2.21 | $ | 2.01 | $ | 2.74 | |||||
General and administrative expenses (cash based) | $ | 1.81 | $ | 1.65 | $ | 2.35 |
(1) | Average prices shown in the table reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculations of such effects include both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. Realized oil prices are net of transportation costs. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
REVENUES | |||||||||||||||
Oil sales | $ | 187,447 | $ | 458,888 | $ | 709,619 | $ | 827,014 | |||||||
Natural gas sales | 12,068 | 141 | 17,237 | 14,593 | |||||||||||
Natural gas liquids sales | 18,364 | 38,312 | 50,799 | 82,097 | |||||||||||
Other | 2,331 | 1,200 | 7,358 | 2,508 | |||||||||||
Total revenues | 220,210 | 498,541 | 785,013 | 926,212 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Lease operating expenses | 61,549 | 42,696 | 135,157 | 83,868 | |||||||||||
Transportation and processing costs | 14,565 | 6,608 | 28,760 | 14,865 | |||||||||||
Production and ad valorem taxes | 23,362 | 30,744 | 60,545 | 58,151 | |||||||||||
Depreciation, depletion and amortization | 127,465 | 198,563 | 402,145 | 372,286 | |||||||||||
General and administrative expenses (including stock-based compensation) | 36,806 | 34,907 | 72,770 | 72,944 | |||||||||||
Exploration and abandonment costs | 2,022 | 72 | 563,633 | 23,066 | |||||||||||
Impairment | — | — | 4,374,253 | — | |||||||||||
Acquisition costs | 593 | — | 15,018 | — | |||||||||||
Accretion of asset retirement obligations | 482 | 353 | 917 | 698 | |||||||||||
Rig termination costs | 15,106 | — | 15,106 | — | |||||||||||
Gain on sale of property | (15) | — | (25) | — | |||||||||||
Restructuring and other termination costs | 2,528 | 1,562 | 37,297 | 1,562 | |||||||||||
Other operating expenses | 11,431 | 2,199 | 11,600 | 1,388 | |||||||||||
Total operating expenses | 295,894 | 317,704 | 5,717,176 | 628,828 | |||||||||||
OPERATING (LOSS) INCOME | (75,684) | 180,837 | (4,932,163) | 297,384 | |||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||
Interest expense, net | (40,454) | (33,597) | (82,133) | (66,599) | |||||||||||
Gain (loss) on early extinguishment of debt | 295 | — | (21,093) | — | |||||||||||
(Loss) gain on derivatives | (280,006) | 19,561 | 265,686 | (100,126) | |||||||||||
Change in TRA liability | — | — | 70,529 | — | |||||||||||
Interest income | 20 | 103 | 269 | 394 | |||||||||||
Other income (expense) | 117 | 715 | (3,866) | 773 | |||||||||||
Total other (expense) income, net | (320,028) | (13,218) | 229,392 | (165,558) | |||||||||||
(LOSS) INCOME BEFORE INCOME TAXES | (395,712) | 167,619 | (4,702,771) | 131,826 | |||||||||||
INCOME TAX BENEFIT (EXPENSE) | 6,183 | (32,625) | 577,146 | (24,835) | |||||||||||
NET (LOSS) INCOME | (389,529) | 134,994 | (4,125,625) | 106,991 | |||||||||||
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 33,113 | (19,059) | 402,809 | (15,120) | |||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS | $ | (356,416) | $ | 115,935 | $ | (3,722,816) | $ | 91,871 | |||||||
Net (loss) income per common share: | |||||||||||||||
Basic | $ | (0.95) | $ | 0.41 | $ | (10.02) | $ | 0.33 | |||||||
Diluted | $ | (0.95) | $ | 0.41 | $ | (10.02) | $ | 0.33 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 376,950 | 279,706 | 371,507 | 279,253 | |||||||||||
Diluted | 376,950 | 279,768 | 371,507 | 279,363 |
Parsley Energy, Inc. and Subsidiaries | |||||||
June 30, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 2,265 | $ | 20,739 | |||
Accounts receivable, net of allowance for doubtful accounts: | |||||||
Joint interest owners and other | 37,331 | 48,785 | |||||
Oil, natural gas and natural gas liquids | 113,072 | 192,216 | |||||
Related parties | 4,264 | 183 | |||||
Short-term derivative instruments, net | 156,460 | 127,632 | |||||
Other current assets | 20,134 | 8,818 | |||||
Total current assets | 333,526 | 398,373 | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Oil and natural gas properties, successful efforts method | 7,463,424 | 11,272,124 | |||||
Accumulated depreciation and depletion | (125,906) | (2,117,963) | |||||
Total oil and natural gas properties, net | 7,337,518 | 9,154,161 | |||||
Other property, plant and equipment, net | 183,117 | 170,306 | |||||
Total property, plant and equipment, net | 7,520,635 | 9,324,467 | |||||
NONCURRENT ASSETS | |||||||
Operating lease assets, net of accumulated depreciation | 87,442 | 128,529 | |||||
Long-term derivative instruments, net | 6,987 | — | |||||
Other noncurrent assets | 7,748 | 4,845 | |||||
Total noncurrent assets | 102,177 | 133,374 | |||||
TOTAL ASSETS | $ | 7,956,338 | $ | 9,856,214 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | 262,391 | $ | 416,346 | |||
Revenue and severance taxes payable | 170,661 | 154,556 | |||||
Short-term derivative instruments, net | 142,507 | 158,522 | |||||
Current operating lease liabilities | 33,748 | 61,198 | |||||
Other current liabilities | 3,915 | 5,002 | |||||
Total current liabilities | 613,222 | 795,624 | |||||
NONCURRENT LIABILITIES | |||||||
Long-term debt | 3,122,853 | 2,182,832 | |||||
Deferred tax liabilities | 4,974 | 193,409 | |||||
Operating lease liabilities | 56,881 | 69,195 | |||||
Payable pursuant to tax receivable agreement | — | 70,529 | |||||
Long-term derivative instruments, net | 12,780 | — | |||||
Asset retirement obligations | 26,870 | 20,538 | |||||
Financing lease liabilities | 1,481 | 1,320 | |||||
Other noncurrent liabilities | 310 | 119 | |||||
Total noncurrent liabilities | 3,226,149 | 2,537,942 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS' EQUITY | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | |||||
Common stock | |||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 378,408,302 shares issued and 377,687,889 shares outstanding at June 30, 2020 and 282,260,133 shares issued and 281,241,443 shares outstanding at December 31, 2019 | 3,784 | 2,822 | |||||
Class B, $0.01 par value, 125,000,000 shares authorized, 35,101,316 and 35,420,258 shares issued and outstanding at June 30, 2020 and December 31, 2019 | 351 | 355 | |||||
Additional paid in capital | 6,976,220 | 5,200,795 | |||||
(Accumulated deficit) retained earnings | (3,170,956) | 570,889 | |||||
Treasury stock, at cost, 720,413 shares and 1,018,690 shares at June 30, 2020 and December 31, 2019 | (11,076) | (17,428) | |||||
Total stockholders' equity | 3,798,323 | 5,757,433 | |||||
Noncontrolling interests | 318,644 | 765,215 | |||||
Total equity | 4,116,967 | 6,522,648 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 7,956,338 | $ | 9,856,214 |
Parsley Energy, Inc. and Subsidiaries | |||||||
Six Months Ended June 30, | |||||||
2020 | 2019 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net (loss) income | $ | (4,125,625) | $ | 106,991 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 402,145 | 372,286 | |||||
Leasehold abandonments and impairments | 556,512 | 22,189 | |||||
Impairment of long-lived assets | 4,374,253 | — | |||||
Accretion of asset retirement obligations | 917 | 698 | |||||
Gain on sale of property | (25) | — | |||||
Loss on early extinguishment of debt | 21,093 | — | |||||
Stock-based compensation | 17,778 | 10,298 | |||||
Deferred income tax benefit | (577,146) | 24,835 | |||||
Change in TRA liability | (70,529) | — | |||||
(Gain) loss on derivatives | (265,686) | 100,126 | |||||
Net cash received (paid) for derivative settlements | 143,596 | (15,111) | |||||
Net cash received (paid) for option premiums | 48,886 | (23,609) | |||||
Other | 2,241 | 1,623 | |||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | 166,624 | (13,417) | |||||
Accounts receivable—related parties | (4,081) | (798) | |||||
Other current assets | 970 | 7,245 | |||||
Other noncurrent assets | 1,812 | (805) | |||||
Accounts payable and accrued expenses | (176,351) | 18,465 | |||||
Revenue and severance taxes payable | 16,105 | 4,866 | |||||
Other noncurrent liabilities | 191 | — | |||||
Net cash provided by operating activities | 533,680 | 615,882 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Development of oil and natural gas properties | (565,321) | (737,194) | |||||
Acquisitions of oil and natural gas properties | (11,944) | (24,591) | |||||
Cash acquired from the Jagged Peak acquisition | 53,347 | — | |||||
Additions to other property and equipment | (3,162) | (27,911) | |||||
Proceeds from sales of property, plant and equipment | 2,381 | 37,893 | |||||
Other | (2,488) | 4,489 | |||||
Net cash used in investing activities | (527,187) | (747,314) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings under long-term debt | 1,285,000 | 352,000 | |||||
Payments on long-term debt | (1,244,600) | (312,000) | |||||
Payments on financing lease obligations | (1,299) | (1,430) | |||||
Debt issuance costs | (11,777) | — | |||||
Repurchase of common stock | (11,076) | (5,652) | |||||
Dividends and distributions paid | (41,215) | — | |||||
Distributions to owners from consolidated subsidiary | — | (603) | |||||
Net cash (used in) provided by financing activities | (24,967) | 32,315 | |||||
Net decrease in cash, cash equivalents and restricted cash | (18,474) | (99,117) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 20,739 | 163,216 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 2,265 | $ | 64,099 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||
Cash paid for interest | $ | (76,409) | $ | (58,164) | |||
Cash received for income taxes | $ | — | $ | 240 | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||||||
Asset retirement obligations incurred, including changes in estimate | $ | 3,916 | $ | 1,208 | |||
Additions to oil and natural gas properties - change in capital accruals | $ | (122,239) | $ | 41,124 | |||
Common stock issued for oil and natural gas properties | $ | 1,776,199 | $ | — | |||
Net premiums on options that settled during the period | $ | (1,234) | $ | (19,748) |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net (loss) income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by the Company's management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net (loss) income before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, interest income, income tax expense, change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, impairment on long-lived assets, (gain) loss on early extinguishment of debt, gain on sale of property, rig termination costs, restructuring and other termination costs, accretion of asset retirement obligations, loss (gain) on derivatives, net settlements on derivative instruments, net premiums on options that settled during the period and other.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net loss in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structure, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net loss as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDAX is useful to investors as a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net (loss) income attributable to Parsley Energy, Inc. stockholders for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Adjusted EBITDAX reconciliation to net (loss) income attributable to Parsley Energy, Inc. stockholders: | |||||||||||||||
Net (loss) income attributable to Parsley Energy, Inc. stockholders | $ | (356,416) | $ | 115,935 | $ | (3,722,816) | $ | 91,871 | |||||||
Net (loss) income attributable to noncontrolling interests | (33,113) | 19,059 | (402,809) | 15,120 | |||||||||||
Depreciation, depletion and amortization | 127,465 | 198,563 | 402,145 | 372,286 | |||||||||||
Exploration and abandonment costs | 2,022 | 72 | 563,633 | 23,066 | |||||||||||
Interest expense, net | 40,454 | 33,597 | 82,133 | 66,599 | |||||||||||
Interest income | (20) | (103) | (269) | (394) | |||||||||||
Income tax expense | (6,183) | 32,625 | (577,146) | 24,835 | |||||||||||
EBITDAX | (225,791) | 399,748 | (3,655,129) | 593,383 | |||||||||||
Change in TRA liability | — | — | (70,529) | — | |||||||||||
Stock-based compensation | 6,638 | 4,976 | 13,028 | 10,298 | |||||||||||
Acquisition costs | 593 | — | 15,018 | — | |||||||||||
Impairment on long-lived assets | — | — | 4,374,253 | — | |||||||||||
(Gain) loss on early extinguishment of debt | (295) | — | 21,093 | — | |||||||||||
Gain on sale of property | (15) | — | (25) | — | |||||||||||
Rig termination costs | 15,106 | — | 15,106 | — | |||||||||||
Restructuring and other termination costs | 2,528 | 1,562 | 37,297 | 1,562 | |||||||||||
Accretion of asset retirement obligations | 482 | 353 | 917 | 698 | |||||||||||
Loss (gain) on derivatives | 280,006 | (19,561) | (265,686) | 100,126 | |||||||||||
Net settlements on derivative instruments | 121,979 | (8,455) | 182,528 | (16,794) | |||||||||||
Net premiums on options that settled during the period | 11,770 | (10,232) | (1,234) | (19,748) | |||||||||||
Other | (1,427) | — | 2,142 | — | |||||||||||
Adjusted EBITDAX | $ | 211,574 | $ | 368,391 | $ | 668,779 | $ | 669,525 |
Free Cash Flow (Outspend)
Free cash flow (outspend) is not a measure of net cash provided by operating activities as determined by GAAP. Free cash flow (outspend) is a supplemental non-GAAP financial measure that is used by the Company, analysts and investors as an indicator of the Company's ability to manage its operating cash flow (outspend), internally fund its exploration and development activities, pay dividends, and to service or incur additional debt, without regard to the timing of settlement of either operating assets and liabilities or accounts payable related to capital expenditures. The Company believes that this measure, as so adjusted, presents a meaningful indicator of the Company's actual sources and uses of capital associated with its operations conducted during the applicable period. The Company defines free cash flow (outspend) as net cash provided by operating activities before changes in operating assets and liabilities, net of acquisitions and acquisition and cash restructuring costs related to the acquisition of Jagged Peak, less accrual-based development capital expenditures. The amounts included in the calculations of free cash flow (outspend) were computed in accordance with GAAP.
Free cash flow (outspend) is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of free cash flow (outspend) to the GAAP financial measure of net cash provided by operating activities.
Parsley Energy, Inc. and Subsidiaries | |||||||
Three Months Ended June 30, | |||||||
2020 | 2019 | ||||||
Net cash provided by operating activities | $ | 147,737 | $ | 402,823 | |||
Net change in operating assets and liabilities, net of acquisitions | 27,389 | (73,514) | |||||
Acquisition costs related to the acquisition of Jagged Peak | 593 | — | |||||
Restructuring costs related to the acquisition of Jagged Peak (excluding non-cash) | 2,528 | — | |||||
Total discretionary cash flow | 178,247 | 329,309 | |||||
Development of oil and natural gas properties | (283,450) | (384,544) | |||||
Additions to oil and natural gas properties - decrease (increase) in capital accruals | 219,132 | 12,530 | |||||
Total accrual-based development capital expenditures | (64,318) | (372,014) | |||||
Free cash flow (outspend) | $ | 113,929 | $ | (42,705) |
Adjusted Net Income
Adjusted net income is not a measure of net (loss) income determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by the Company's management to evaluate financial performance, prior to loss (gain) on derivatives, net settlements on derivative instruments, net premiums on options that settled during the period, gain on sale of property, rig termination costs, restructuring and other termination costs, exploration and abandonment costs, impairment of long-lived assets, acquisition costs, change in TRA liability, (gain) loss on early extinguishment of debt, and other, while adjusting for changes in noncontrolling interests, the associated changes in estimated income tax and changes to deferred tax asset valuation allowance. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net (loss) income, operating income (loss), or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net (loss) income attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Net (loss) income attributable to Parsley Energy, Inc. stockholders | $ | (356,416) | $ | 115,935 | $ | (3,722,816) | $ | 91,871 | |||||||
Adjustments: | |||||||||||||||
Loss (gain) on derivatives | 280,006 | (19,561) | (265,686) | 100,126 | |||||||||||
Net settlements on derivative instruments | 121,979 | (8,455) | 182,528 | (16,794) | |||||||||||
Net premiums on options that settled during the period | 11,770 | (10,232) | (1,234) | (19,748) | |||||||||||
Gain on sale of property | (15) | — | (25) | — | |||||||||||
Rig termination costs | 15,106 | — | 15,106 | — | |||||||||||
Restructuring and other termination costs | 2,528 | 1,562 | 37,297 | 1,562 | |||||||||||
Exploration and abandonment costs | 2,022 | 72 | 563,633 | 23,066 | |||||||||||
Impairment of long-lived assets | — | — | 4,374,253 | — | |||||||||||
Acquisition costs | 593 | — | 15,018 | — | |||||||||||
Change in TRA liability | — | — | (70,529) | — | |||||||||||
(Gain) loss on early extinguishment of debt | (295) | — | 21,093 | — | |||||||||||
Other | (1,427) | — | 2,142 | — | |||||||||||
Change in noncontrolling interests | (36,223) | 4,102 | (417,925) | (10,220) | |||||||||||
Income taxes on above adjustments(1) | (29,532) | 7,023 | (332,293) | (17,240) | |||||||||||
Adjustment to deferred tax asset valuation allowance(2) | — | — | (284,727) | — | |||||||||||
Adjusted net income | $ | 10,096 | $ | 90,446 | $ | 115,835 | $ | 152,623 | |||||||
Net (loss) income per diluted share - as reported(1) | $ | (0.95) | $ | 0.41 | $ | (10.02) | $ | 0.33 | |||||||
Adjustments: | |||||||||||||||
Loss (gain) on derivatives | $ | 0.74 | $ | (0.06) | $ | (0.71) | $ | 0.36 | |||||||
Net settlements on derivative instruments | 0.32 | (0.03) | 0.49 | (0.06) | |||||||||||
Net premiums on options that settled during the period | 0.03 | (0.04) | — | (0.07) | |||||||||||
Gain on sale of property | — | — | — | — | |||||||||||
Rig termination costs | 0.04 | — | 0.04 | — | |||||||||||
Restructuring and other termination costs | 0.01 | 0.01 | 0.10 | 0.01 | |||||||||||
Exploration and abandonment costs | 0.01 | — | 1.52 | 0.08 | |||||||||||
Impairment of long-lived assets | — | — | 11.76 | — | |||||||||||
Acquisition costs | — | — | 0.04 | — | |||||||||||
Change in TRA liability | — | — | (0.19) | — | |||||||||||
(Gain) loss on early extinguishment of debt | — | — | 0.06 | — | |||||||||||
Other | — | — | 0.01 | — | |||||||||||
Change in noncontrolling interests | (0.10) | 0.01 | (1.12) | (0.03) | |||||||||||
Income taxes on above adjustments | (0.07) | 0.02 | (0.90) | (0.07) | |||||||||||
Adjustment to deferred tax asset valuation allowance | — | — | (0.77) | — | |||||||||||
Adjusted net income per diluted share(4) | $ | 0.03 | $ | 0.32 | $ | 0.31 | $ | 0.55 | |||||||
Basic weighted average shares outstanding - as reported(3) | 376,950 | 279,706 | 371,507 | 279,253 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Class B Common Stock | — | — | — | — | |||||||||||
Restricted Stock and Restricted Stock Units | — | 62 | — | 110 | |||||||||||
Diluted weighted average shares outstanding - as reported(3) | 376,950 | 279,768 | 371,507 | 279,363 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Class B Common Stock | — | — | — | — | |||||||||||
Restricted Stock and Restricted Stock Units | 520 | — | 422 | — | |||||||||||
Diluted weighted average shares outstanding for adjusted net income(4) | 377,470 | 279,768 | 371,929 | 279,363 |
(1) | The assumed income tax rate is 23% and 19% for the three and six months ended June 30, 2020 and 2019, respectively. | |
(2) | Deferred tax valuation allowance has been adjusted to reflect the assumed income tax rate of 23%. | |
(3) | For the three and six months ended June 30, 2020, the number of weighted average diluted shares used to calculate actual net loss per share is based on the fact that, under the "if converted" and "treasury stock" methods, Class B Common Stock and shares of restricted stock and restricted stock units, respectively, were not recognized because the effect would have been antidilutive. For the three and six months ended June 30, 2019, the number of weighted average diluted shares used to calculate actual net income per share is based on the fact that, under the "if converted" method, Class B Common Stock was not recognized because the effect would have been antidilutive. | |
(4) | For purposes of calculating adjusted net income per diluted share for the three and six months ended June 30, 2020 and 2019, Class B Common Stock was not recognized because the shares would have been antidilutive using the "if converted" method. |
Open Derivatives Position | |||||||||||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||||||||||
3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | |||||||||||||||||||||
CUSHING | |||||||||||||||||||||||||||
Swaps - Cushing (MBbls/d)(2) | 11.0 | 11.0 | |||||||||||||||||||||||||
Swap Price ($/Bbl) | $ | 57.87 | $ | 57.87 | |||||||||||||||||||||||
MIDLAND | |||||||||||||||||||||||||||
Three Way Collars - Midland (MBbls/d)(3) | 4.6 | 13.8 | |||||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 55.00 | $ | 51.65 | |||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 40.00 | $ | 35.66 | |||||||||||||||||||||||
Short Put Price ($/Bbl) | $ | 30.00 | $ | 25.66 | |||||||||||||||||||||||
Two Way Collars - Midland (MBbls/d)(4) | 6.5 | 6.5 | |||||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 48.00 | $ | 48.00 | |||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 43.00 | $ | 43.00 | |||||||||||||||||||||||
Swaps - Midland (MBbls/d)(2) | 12.5 | 3.3 | 5.0 | 5.0 | 5.0 | 5.0 | |||||||||||||||||||||
Swap Price ($/Bbl) | $ | 29.69 | $ | 32.60 | $ | 40.50 | $ | 40.50 | $ | 40.50 | $ | 40.50 | |||||||||||||||
MAGELLAN EAST HOUSTON ("MEH") | |||||||||||||||||||||||||||
Three Way Collars - MEH (MBbls/d)(3) | 10.8 | 24.1 | 13.3 | 13.2 | 2.4 | 2.4 | |||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 55.00 | $ | 51.22 | $ | 64.38 | $ | 64.38 | $ | 55.00 | $ | 55.00 | |||||||||||||||
Long Put Price ($/Bbl) | $ | 40.00 | $ | 37.23 | $ | 53.13 | $ | 53.13 | $ | 40.00 | $ | 40.00 | |||||||||||||||
Short Put Price ($/Bbl) | $ | 30.00 | $ | 27.23 | $ | 43.13 | $ | 43.13 | $ | 30.00 | $ | 30.00 | |||||||||||||||
Put Spreads - MEH (MBbls/d)(5) | 17.9 | 17.9 | |||||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 40.00 | $ | 40.00 | |||||||||||||||||||||||
Short Put Price ($/Bbl) | $ | 30.00 | $ | 30.00 | |||||||||||||||||||||||
Swaps - MEH (MBbls/d)(2) | 29.0 | 15.7 | 52.0 | 52.0 | 52.0 | 52.0 | 20.0 | ||||||||||||||||||||
Swap Price ($/Bbl) | $ | 35.24 | $ | 39.28 | $ | 40.74 | $ | 40.74 | $ | 40.74 | $ | 40.74 | $ | 43.81 | |||||||||||||
BRENT | |||||||||||||||||||||||||||
Two Way Collars - Brent (MBbls/d)(4) | 6.5 | 6.5 | |||||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 52.30 | $ | 52.30 | |||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 47.30 | $ | 47.30 | |||||||||||||||||||||||
Swaps - Brent (MBbls/d)(2) | 11.2 | 6.3 | 22.0 | 22.0 | 22.0 | 22.0 | |||||||||||||||||||||
Swap Price ($/Bbl) | $ | 41.77 | $ | 47.40 | $ | 44.46 | $ | 44.46 | $ | 44.46 | $ | 44.46 | |||||||||||||||
Total Hedged Volumes (MBbls/d) | 110.0 | 105.1 | 92.3 | 92.2 | 81.4 | 81.4 | 20.0 | ||||||||||||||||||||
Premium Realization ($MM)(6) | $ | 7.2 | $ | 7.2 | $ | (2.0) | $ | (2.0) | $ | (0.7) | $ | (0.7) | |||||||||||||||
Midland-Cushing Basis Swaps (MBbls/d)(7) | 14.0 | 14.0 | |||||||||||||||||||||||||
Basis Differential ($/Bbl) | $ | (1.44) | $ | (1.44) | |||||||||||||||||||||||
Rollfactor Swaps (MBbls/d)(8) | 45.7 | 45.7 | |||||||||||||||||||||||||
Swap Price ($/Bbl) | $ | (2.32) | $ | (2.32) | |||||||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||||||||
3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | 1Q22 | |||||||||||||||||||
WA HA | |||||||||||||||||||||||||
Swaps - Waha (MMBtu/d)(2) | 51,413 | 58,152 | 66,667 | 66,484 | 66,304 | 66,304 | |||||||||||||||||||
Swap Price ($/MMBtu) | $ | 0.96 | $ | 1.04 | $ | 2.23 | $ | 2.23 | $ | 2.23 | $ | 2.23 | |||||||||||||
(1) | Hedge position as of 8/4/2020. Prices represent the weighted average price of contracts scheduled for settlement during the period. | |
(2) | Parsley receives the swap price. | |
(3) | When the reference price (Midland, MEH, or Brent) is at or above the short call price, Parsley receives the short call price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | |
(4) | When the reference price is above the short call price, Parsley receives the short call price. When the reference price is between the short call price and the put price, Parsley receives the reference price. When the reference price is below the put price, Parsley receives the put price. | |
(5) | When the reference price is above the long put price, Parsley receives the reference price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | |
(6) | Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | |
(7) | Swaps that fix the basis differentials representing the index prices at which the Company sells its oil and gas produced in the Permian Basin less the WTI Cushing price and Henry Hub price, respectively. | |
(8) | These positions hedge the timing risk associated with Parsley's physical sales. Parsley generally sells crude oil for the delivery month at a sales price based on the average NYMEX price during that month, plus an adjustment calculated as a spread between the weighted average prices of the delivery month, the next month, and the following month during the period when the delivery month is the first month. |
Weighted Average Shares Outstanding | |||||
Parsley Energy, Inc. and Subsidiaries | |||||
Three Months Ended June 30, | |||||
2020 | 2019 | ||||
Weighted average common shares outstanding, class A | 376,950 | 279,706 | |||
Weighted average common shares outstanding, class B | 35,125 | 35,722 | |||
Adjusted weighted average common shares outstanding(1) | 412,075 | 315,428 |
(1) | PE Units (and a corresponding number of shares of Class B common stock) can be exchanged for Class A common stock at an exchange ratio of one share of Class A common stock for each PE Unit (and corresponding share of Class B common stock) exchanged. As such, assumes the exchange of all outstanding PE Units (and corresponding shares of Class B common stock) for shares of Class A common stock. Excludes potentially dilutive restricted stock and restricted stock units of approximately 0.5 million and 0.1 million shares for the three months ended June 30, 2020 and 2019, respectively. | ||
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-second-quarter-2020-financial-and-operating-results-provides-update-on-2020-development-plans-301106990.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, July 1, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) plans to report second quarter 2020 financial results on Wednesday, August 5, 2020 after the close of trading on the New York Stock Exchange. The company will host its quarterly conference call at 9:00 AM ET (8:00 AM CT) on Thursday, August 6, 2020.
By Phone: | Dial 877-709-8150 (United States/Canada) or 201-689-8354 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Thursday, August 13, 2020 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13706311. | |
By Webcast: | |
Select "Events & Presentations" under the "Investors" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration and production of unconventional oil and natural gas reserves in the Permian Basin. For more information, visit our website at www.parsleyenergy.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-schedules-second-quarter-2020-earnings-release-and-conference-call-301087140.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 4, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended March 31, 2020. Additionally, Parsley provided an update to its 2020 development program. The Company has posted a presentation to its website that supplements the information in this release.
Updated 2020 Outlook
Recent Highlights
Summary Comment and Outlook
"In the face of unparalleled global demand destruction, one thing of certainty is that demand will recover from recent lows, but the magnitude and timing are less clear," commented Matt Gallagher, Parsley's President and CEO. "In these challenging times, we remain focused on controlling what we can control and making sound incremental investment decisions based on the facts at hand. Parsley responded decisively on multiple fronts to adapt to rapidly changing market conditions over the past two months and our company is well built for the endurance test now facing the industry. Parsley's 2020 activity plans will remain flexible, but we remain inflexible in our commitment to allocate incremental capital based on unhedged rates of return in prevailing market conditions. Regardless of the activity scenario we pursue for the remainder of the year, we are committed to generating healthy free cash flow in 2020, exiting the year with a solid balance sheet, ample scale, a shallower oil base decline, and visibility to sustained free cash flow in 2021 and beyond. In short, we will endure with relevance."
Operational Update
During the first quarter of 2020, the Company spud 51 and placed on production 46 gross operated horizontal wells. Parsley's working interest on wells placed on production was approximately 97%, with an average completed lateral length of approximately 9,400 feet. The Company placed on production 28 gross operated horizontal wells in the Midland Basin, with the remainder placed on production in the Delaware Basin.
During January and February, Parsley operated 15 development rigs and five frac spreads before steadily dropping activity throughout March. In April, as a result of regional oil prices trading below $20 per barrel, Parsley temporarily suspended all new drilling and completion operations. Parsley plans to reactivate operations at a stabilized activity level of four-to-five rigs and one-to-two frac spreads when oil market fundamentals are more constructive and in line with Parsley's baseline price assumptions. As a result of these reduced activity levels, Parsley estimates that it will record a charge of approximately $15 million during 2Q20 related to the early termination of certain rig contracts.
In mid-March, Parsley began voluntarily shutting in approximately 400 wells, most of which are vertical wells, for economic reasons. Net oil production associated with these higher per-Boe cost wells was approximately 1-2 MBo per day. In mid-April, Parsley voluntarily shut in several pads that were flaring natural gas, most of which were recently acquired from Jagged Peak in the Delaware Basin. These wells had combined net oil production of approximately 4-5 MBo per day. Throughout the first quarter, Parsley implemented various midstream solutions to mitigate flaring on the recently acquired assets and expects to significantly and more permanently mitigate flaring on these remaining Delaware Basin pads in the coming months.
In addition to the aforementioned shut-ins of 5-7 MBo per day, Parsley expects to voluntarily curtail up to 23 MBo per day of net oil production volumes in May based on near-term regional pricing dynamics. Parsley does not expect to incur any transportation-related deficiency expenses as a result of these temporary production curtailments. Parsley will continue to evaluate its voluntary curtailment level on a regular basis and will adjust production levels quickly and responsibly as market conditions evolve.
Financial Update
Healthy execution in 1Q20 translated to strong performance in key financial measures.
Profitability
During 1Q20, the Company recorded net loss attributable to its stockholders of $3.4 billion, or $9.20 per share. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, adjusted net income for 1Q20 was $107.2 million, or $0.29 per share.(1)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 1Q20 was $457.2 million.(1)
As a result of the recent fall in oil prices and Parsley's decision to significantly reduce its near-term development activity plans, the Company recognized a non-cash impairment charge of $4.4 billion for certain proved reserves during 1Q20. In addition, the Company recognized leasehold abandonment and impairment charges associated with unproved oil and natural gas properties of $557 million during 1Q20.
Realized Pricing
During 1Q20, Parsley reported an average unhedged oil price realization of $45.32 per Bbl net of transportation costs, representing a discount of $0.49 to the average WTI Cushing price(3) for the quarter.
Operating Costs
During the first quarter of 2020, the Company reported lease operating expense ("LOE") per Boe of $4.11. Parsley expects supplier price reductions, the shut-in of higher per-Boe cost vertical wells, and continued utilization of the Company's integrated water handling system will help offset a decrease in near-term production volumes. However, given ongoing uncertainty relating to commodity prices and the Company's production volumes, which has created a uniquely challenging operating environment, Parsley is temporarily suspending its unit cost guidance.
Both general and administrative expense ("G&A") per Boe and cash based G&A per Boe(1), which excludes stock-based compensation expense, decreased quarter-over-quarter and year-over-year to $2.01 and $1.65, respectively, representing Company-low record levels in each case. Encouraging G&A cost trends are a function of ongoing corporate cost savings initiatives including Executive Vice Presidents and more senior officers electing to reduce their respective 2020 cash compensation by at least 50% when compared to 2019. During 1Q20, Parsley incurred restructuring and other termination costs of $34.8 million and acquisition costs of $14.4 million, largely related to severance agreements, relocation expenses and advisor fees associated with Parsley's acquisition of Jagged Peak. These one-time costs are reported separately from the Company's G&A and cash based G&A. Parsley now expects full-year 2020 cash based G&A of approximately $130 million, a reduction of approximately $35 million versus the midpoints of prior guidance.(4)
Healthy realized oil pricing and continued focus on cost controls drove a strong operating cash margin of $22.34 per Boe, or 72% of the Company's average realized price per Boe.(1)
Capital Expenditures
Parsley reported capital expenditures of $379 million during the first quarter of 2020, comprised of $372 million for operated drilling, completion, and equipment activity, and $7 million associated with water infrastructure and non-operated development activity. Parsley is reducing its full-year 2020 capital guidance from less than $1.0 billion to less than $700 million.
Return of Capital Program
Parsley Energy today announced that its Board of Directors declared a quarterly dividend of $0.05 per share.(2) The dividend is payable on June 19, 2020, to shareholders of record on June 9, 2020.
Liquidity and Hedging
The Company entered into an amendment to its revolving credit agreement on April 27, 2020, which reaffirmed its borrowing base at $2.7 billion, increased the elected commitment amount from $1.0 billion to $1.075 billion, and extended the maturity date by two years to October 28, 2023. As of March 31, 2020, Parsley had approximately $739 million of liquidity, consisting of $45 million of cash and cash equivalents and an availability of $693 million on the Company's revolver.(5)
In this lower commodity price environment, Parsley proactively managed its hedge position, restructuring its existing 2020 hedge positions to provide additional protection against lower oil prices using swaps and two-way collars. Additionally, Parsley has also moved aggressively to protect its 2021 cash flow by adding swap positions.
The Company now expects net settlement gains of nearly $650 million during 2Q20 through 4Q21 under a go forward $30 WTI oil price and current basis differentials.(6) This represents an increase of more than $350 million in aggregate downside protection from the Company's hedge position on February 19, 2020. For details on Parsley's hedge position, please see the tables below under Supplemental Information and/or, upon availability, the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2020.
2020 Guidance(7)
In light of the lower commodity price environment, the Company is reducing its 2020 capital budget to less than $700 million, with reported 1Q20 capital expenditures of $379 million representing more than 50% of this revised full-year budget. Given recent market volatility and ongoing uncertainty, the Company has temporarily suspended its detailed guidance on production, activity and unit costs. For further detail, please see the table below.
Prior | Revised | |
2020 Guidance | 2020 Guidance | |
Production | ||
Annual net oil production (MBo/d) | 125-133 | Temporarily Suspended |
Annual net total production (MBoe/d) | 200-210 | |
Capital Program | ||
Total development expenditures ($MM) | $1,600-$1,800 | <$700 |
Drilling, completion, & equipment ($MM) | $1,500-$1,650 | <$650 |
Other ($MM) | $100-$150 | ~$50 |
Activity | ||
Gross operated horizontal POPs(8) | 180-190 | |
Midland Basin (% of total) | ~65% | |
Delaware Basin (% of total) | ~35% | Temporarily Suspended |
Average lateral length | 9,500'-10,000' | |
Gross operated lateral footage (000's) | 1,710'-1,900' | |
Average working interest | ~90% | |
Unit Costs | ||
Lease operating expenses ($/Boe) | $3.50-$4.50 | |
Cash general and administrative expenses ($/Boe) | $2.00-$2.40 | Temporarily Suspended |
Production and ad valorem taxes (% of total revenue) | 6%-7% |
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the first quarter of 2020 on Tuesday, May 5, 2020 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-709-8150 (United States/Canada) or 201-689-8354 (International) 10 minutes before the scheduled time and request the Parsley Energy earnings conference call. A telephone replay will be available through May 12, 2020 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13702189. A live broadcast will also be available on the Internet at www.parsleyenergy.com under the "Investors-Events & Presentations" section of the website. The Company has also posted a presentation to its website that supplements the information in this release.
Upcoming Conference Participation
Parsley plans to participate in the Citi Global Energy and Utilities Virtual Conference on May 13, 2020, the RBC Global Energy and Power Executive Conference on June 2, 2020, and the 5th Annual Wells Fargo Securities West Coast Energy Conference on June 9-10, 2020.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the Securities and Exchange Commission ("SEC"), including its most recent Annual Report on Form 10-K and any subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
(1) | "Cash based G&A per Boe", "Adjusted EBITDAX", "operating cash margin", "free cash flow (outspend)", and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For definitions and reconciliations of the non-GAAP financial measures of Adjusted EBITDAX, operating cash margin, free cash flow (outspend), and adjusted net income to GAAP financial measures, please see the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. The Company has also provided a definition and reconciliation of the non-GAAP financial measure of "Discretionary Cash Flow per Share" in the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. The Company is unable to present a reconciliation of forward-looking free cash flow (outspend) because components of the calculation, including changes in working capital accounts, are inherently unpredictable. Additionally, estimating the most directly comparable GAAP measure with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Furthermore, the Company's current 2020 target of at least $300 million of free cash flow is based on WTI oil prices of $20-$30 for the remainder of the year. In the event of continued market volatility and uncertainty, Parsley may not achieve this free cash flow target. | |
(2) | Dividend to be paid to all Company equity holders, including shareholders of Class A common stock and holders of Parsley Energy, LLC units/Class B common stock. | |
(3) | Represents Bloomberg-sourced 1Q20 average WTI Cushing price. | |
(4) | The midpoints of Parsley's prior per unit cash G&A and Boe production guidance ranges were $2.20 per Boe and 205 MBoe/d, respectively. This implied 2020 cash G&A expense of approximately $165 million at the midpoints of prior guidance ranges. | |
(5) | Revolver availability is net of letters of credit. | |
(6) | Midland, Magellan East Houston, and Brent pricing differentials to WTI Cushing based on forward strip pricing as of 5/1/2020. At $20 WTI and basis differentials as of 5/1/2020, Parsley expects more than $1 billion of net settlement gains during 2Q20-4Q21. | |
(7) | Except as otherwise stated, all estimates, projections and/or guidance contained in this press release are based on $20-$30 WTI oil price per barrel for the remainder of 2020. If the WTI oil price trades either below or above this range during all or a portion of the remainder of 2020, investors are cautioned that these estimates, projections and/or guidance would be materially impacted. | |
(8) | Wells placed on production. |
- Tables to Follow -
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Selected Operating Data | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2020 | December 31, 2019 | March 31, 2019 | |||||||||
Net production volumes: | |||||||||||
Oil (MBbls) | 11,523 | 8,241 | 7,102 | ||||||||
Natural gas (MMcf) | 16,667 | 13,966 | 10,488 | ||||||||
Natural gas liquids (MBbls) | 3,626 | 2,882 | 2,436 | ||||||||
Total (MBoe) | 17,927 | 13,451 | 11,286 | ||||||||
Average daily net production (Boe/d) | 197,000 | 146,207 | 125,400 | ||||||||
Average sales prices(1) : | |||||||||||
Oil, without realized derivatives (per Bbl) | $ | 45.32 | $ | 56.40 | $ | 51.83 | |||||
Oil, with realized derivatives (per Bbl) | $ | 49.17 | $ | 55.05 | $ | 49.40 | |||||
Natural gas, without realized derivatives (per Mcf) | $ | 0.31 | $ | 0.97 | $ | 1.38 | |||||
Natural gas, with realized derivatives (per Mcf) | $ | 0.50 | $ | 0.99 | $ | 1.33 | |||||
Natural gas liquids (per Bbl) | $ | 8.95 | $ | 14.14 | $ | 17.97 | |||||
Average price per Boe, without realized derivatives | $ | 31.23 | $ | 38.59 | $ | 37.78 | |||||
Average price per Boe, with realized derivatives | $ | 33.88 | $ | 37.79 | $ | 36.20 | |||||
Average costs (per Boe): | |||||||||||
Lease operating expenses | $ | 4.11 | $ | 3.54 | $ | 3.65 | |||||
Transportation and processing costs | $ | 0.79 | $ | 1.06 | $ | 0.73 | |||||
Production and ad valorem taxes | $ | 2.07 | $ | 2.12 | $ | 2.43 | |||||
Depreciation, depletion and amortization | $ | 15.32 | $ | 15.67 | $ | 15.39 | |||||
General and administrative expenses (including stock-based compensation) | $ | 2.01 | $ | 3.20 | $ | 3.37 | |||||
General and administrative expenses (cash based) | $ | 1.65 | $ | 2.81 | $ | 2.90 |
(1) | Average prices shown in the table reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculations of such effects include both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. Realized oil prices are net of transportation costs. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Statements of Operations | |||||||
(Unaudited, in thousands, except for per share data) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
REVENUES | |||||||
Oil sales | $ | 522,172 | $ | 368,126 | |||
Natural gas sales | 5,169 | 14,452 | |||||
Natural gas liquids sales | 32,435 | 43,785 | |||||
Other | 5,027 | 1,308 | |||||
Total revenues | 564,803 | 427,671 | |||||
OPERATING EXPENSES | |||||||
Lease operating expenses | 73,608 | 41,172 | |||||
Transportation and processing costs | 14,195 | 8,257 | |||||
Production and ad valorem taxes | 37,183 | 27,407 | |||||
Depreciation, depletion and amortization | 274,680 | 173,723 | |||||
General and administrative expenses (including stock-based compensation) | 35,964 | 38,037 | |||||
Exploration and abandonment costs | 561,611 | 22,994 | |||||
Impairment | 4,374,253 | — | |||||
Acquisition costs | 14,425 | — | |||||
Accretion of asset retirement obligations | 435 | 345 | |||||
Gain on sale of property | (10) | — | |||||
Restructuring and other termination costs | 34,769 | — | |||||
Other operating income (expense) | 169 | (811) | |||||
Total operating expenses | 5,421,282 | 311,124 | |||||
OPERATING (LOSS) INCOME | (4,856,479) | 116,547 | |||||
OTHER INCOME (EXPENSE) | |||||||
Interest expense, net | (41,679) | (33,002) | |||||
Loss on early extinguishment of debt | (21,388) | — | |||||
Gain (loss) on derivatives | 545,692 | (119,687) | |||||
Change in TRA liability | 70,529 | — | |||||
Interest income | 249 | 291 | |||||
Other (expense) income | (3,983) | 58 | |||||
Total other income (expense), net | 549,420 | (152,340) | |||||
LOSS BEFORE INCOME TAXES | (4,307,059) | (35,793) | |||||
INCOME TAX BENEFIT | 570,963 | 7,790 | |||||
NET LOSS | (3,736,096) | (28,003) | |||||
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 369,696 | 3,939 | |||||
NET LOSS ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS | $ | (3,366,400) | $ | (24,064) | |||
Net loss per common share: | |||||||
Basic | $ | (9.20) | $ | (0.09) | |||
Diluted | $ | (9.20) | $ | (0.09) | |||
Weighted average common shares outstanding: | |||||||
Basic | 366,064 | 278,794 | |||||
Diluted | 366,064 | 278,794 |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Balance Sheets | |||||||
(Unaudited, in thousands) | |||||||
March 31, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 45,274 | $ | 20,739 | |||
Accounts receivable, net of allowance for doubtful accounts: | |||||||
Joint interest owners and other | 44,709 | 48,785 | |||||
Oil, natural gas and natural gas liquids | 126,917 | 192,216 | |||||
Related parties | 5,912 | 183 | |||||
Short-term derivative instruments, net | 529,431 | 127,632 | |||||
Other current assets | 56,949 | 8,818 | |||||
Total current assets | 809,192 | 398,373 | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Oil and natural gas properties, successful efforts method | 7,389,684 | 11,272,124 | |||||
Accumulated depreciation and depletion | — | (2,117,963) | |||||
Total oil and natural gas properties, net | 7,389,684 | 9,154,161 | |||||
Other property, plant and equipment, net | 184,240 | 170,306 | |||||
Total property, plant and equipment, net | 7,573,924 | 9,324,467 | |||||
NONCURRENT ASSETS | |||||||
Operating lease assets, net of accumulated depreciation | 124,233 | 128,529 | |||||
Long-term derivative instruments, net | 95,335 | — | |||||
Other noncurrent assets | 4,430 | 4,845 | |||||
Total noncurrent assets | 223,998 | 133,374 | |||||
TOTAL ASSETS | $ | 8,607,114 | $ | 9,856,214 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | 525,913 | $ | 416,346 | |||
Revenue and severance taxes payable | 180,429 | 154,556 | |||||
Short-term derivative instruments, net | 192,599 | 158,522 | |||||
Current operating lease liabilities | 55,354 | 61,198 | |||||
Other current liabilities | 4,028 | 5,002 | |||||
Total current liabilities | 958,323 | 795,624 | |||||
NONCURRENT LIABILITIES | |||||||
Long-term debt | 2,998,688 | 2,182,832 | |||||
Deferred tax liability | 11,158 | 193,409 | |||||
Operating lease liability | 71,510 | 69,195 | |||||
Payable pursuant to tax receivable agreement | — | 70,529 | |||||
Long-term derivative instruments, net | 17,488 | — | |||||
Asset retirement obligations | 27,368 | 20,538 | |||||
Financing lease liability | 1,706 | 1,320 | |||||
Other noncurrent liabilities | 188 | 119 | |||||
Total noncurrent liabilities | 3,128,106 | 2,537,942 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS' EQUITY | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | |||||
Common stock | |||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 378,295,514 shares issued and 377,578,206 shares outstanding at March 31, 2020 and 282,260,133 shares issued and 281,241,443 shares outstanding at December 31, 2019 | 3,783 | 2,822 | |||||
Class B, $0.01 par value, 125,000,000 shares authorized, 35,147,222 and 35,420,258 shares issued and outstanding at March 31, 2020 and December 31, 2019 | 352 | 355 | |||||
Additional paid in capital | 6,994,612 | 5,200,795 | |||||
(Accumulated deficit) retained earnings | (2,814,540) | 570,889 | |||||
Treasury stock, at cost, 717,308 shares and 1,018,690 shares at March 31, 2020 and December 31, 2019 | (11,049) | (17,428) | |||||
Total stockholders' equity | 4,173,158 | 5,757,433 | |||||
Noncontrolling interests | 347,527 | 765,215 | |||||
Total equity | 4,520,685 | 6,522,648 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 8,607,114 | $ | 9,856,214 |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(Unaudited, in thousands) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net loss | $ | (3,736,096) | $ | (28,003) | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 274,680 | 173,723 | |||||
Leasehold abandonments and impairments | 556,512 | 22,189 | |||||
Impairment | 4,374,253 | — | |||||
Accretion of asset retirement obligations | 435 | 345 | |||||
Gain on sale of property | (10) | — | |||||
Loss on early extinguishment of debt | 21,388 | — | |||||
Stock-based compensation | 11,140 | 5,322 | |||||
Deferred income tax benefit | (570,963) | (7,790) | |||||
Change in TRA liability | (70,529) | — | |||||
(Gain) loss on derivatives | (545,692) | 119,687 | |||||
Net cash received (paid) for derivative settlements | 16,902 | (5,072) | |||||
Net cash received (paid) for option premiums | 17,995 | (10,440) | |||||
Other | 3,269 | 1,056 | |||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | 145,516 | (37,989) | |||||
Accounts receivable—related parties | (5,729) | (2,110) | |||||
Other current assets | (3,601) | 1,438 | |||||
Other noncurrent assets | 91 | (3,308) | |||||
Accounts payable and accrued expenses | (129,560) | (15,063) | |||||
Revenue and severance taxes payable | 25,873 | (926) | |||||
Other noncurrent liabilities | 69 | — | |||||
Net cash provided by operating activities | 385,943 | 213,059 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Development of oil and natural gas properties | (281,871) | (352,650) | |||||
Acquisitions of oil and natural gas properties | (7,411) | (13,846) | |||||
Cash acquired from the Jagged Peak acquisition | 53,347 | — | |||||
Additions to other property and equipment | (2,146) | (11,106) | |||||
Proceeds from sales of property, plant and equipment | 265 | 17,486 | |||||
Other | (1,142) | 809 | |||||
Net cash used in investing activities | (238,958) | (359,307) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings under long-term debt | 1,140,000 | 120,000 | |||||
Payments on long-term debt | (1,223,752) | (120,000) | |||||
Payments on financing lease obligations | (639) | (676) | |||||
Debt issuance costs | (6,407) | — | |||||
Repurchase of common stock | (11,049) | (5,309) | |||||
Dividends and distributions paid | (20,603) | — | |||||
Distributions to owners from consolidated subsidiary | — | (603) | |||||
Net cash used in financing activities | (122,450) | (6,588) | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 24,535 | (152,836) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 20,739 | 163,216 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 45,274 | $ | 10,380 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||
Cash paid for interest | $ | (38,049) | $ | (30,493) | |||
Cash received for income taxes | $ | — | $ | 240 | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||||||
Asset retirement obligations incurred, including changes in estimate | $ | 3,556 | $ | 219 | |||
Additions to oil and natural gas properties - change in capital accruals | $ | 96,893 | $ | 53,654 | |||
Common stock issued for oil and natural gas properties | $ | 1,776,199 | $ | — | |||
Net premiums on options that settled during the period | $ | (13,004) | $ | (9,516) |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net loss as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by the Company's management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net loss before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, interest income, income tax expense, change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, impairment on long-lived assets, loss on early extinguishment of debt, gain on sale of property, restructuring and other termination costs, accretion of asset retirement obligations, (gain) loss on derivatives, net settlements on derivative instruments, net premiums on options that settled during the period and other expenses.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net loss in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structure, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net loss as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDAX is useful to investors as a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net loss attributable to Parsley Energy, Inc. stockholders for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||
Adjusted EBITDAX | |||||||
(Unaudited, in thousands) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Adjusted EBITDAX reconciliation to net loss attributable to Parsley, Energy, Inc. stockholders: | |||||||
Net loss attributable to Parsley Energy, Inc. stockholders | $ | (3,366,400) | $ | (24,064) | |||
Net loss attributable to noncontrolling interests | (369,696) | (3,939) | |||||
Depreciation, depletion and amortization | 274,680 | 173,723 | |||||
Exploration and abandonment costs | 561,611 | 22,994 | |||||
Interest expense, net | 41,679 | 33,002 | |||||
Interest income | (249) | (291) | |||||
Income tax expense | (570,963) | (7,790) | |||||
EBITDAX | (3,429,338) | 193,635 | |||||
Change in TRA liability | (70,529) | — | |||||
Stock-based compensation | 6,390 | 5,322 | |||||
Acquisition costs | 14,425 | — | |||||
Impairment on long-lived assets | 4,374,253 | — | |||||
Loss on early extinguishment of debt | 21,388 | ||||||
Gain on sale of property | (10) | — | |||||
Restructuring and other termination costs | 34,769 | — | |||||
Accretion of asset retirement obligations | 435 | 345 | |||||
(Gain) loss on derivatives | (545,692) | 119,687 | |||||
Net settlements on derivative instruments | 60,549 | (8,339) | |||||
Net premiums on options that settled during the period | (13,004) | (9,516) | |||||
Other expenses | 3,569 | — | |||||
Adjusted EBITDAX | $ | 457,205 | $ | 301,134 |
Operating Cash Margin
Operating cash margin is not a measure of operating income as determined by GAAP. Operating cash margin is a supplemental non-GAAP performance measure used by the Company as an indicator of the Company's profitability and ability to manage its operating income. The Company defines operating cash margin as net loss before income tax benefit, other revenues, depreciation, depletion and amortization, exploration and abandonment costs, stock-based compensation, impairment on long-lived assets, acquisition costs, accretion of asset retirement obligations, other operating expense, net interest expense, gain on sale of property, restructuring and other termination costs, loss on early extinguishment of debt, (gain) loss on derivatives, change in TRA liability, interest income, and other income. The amounts included in the calculations of operating cash margin were computed in accordance with GAAP.
Operating cash margin is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of operating cash margin to the GAAP financial measure of net loss attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries | |||||||
Operating Cash Margin | |||||||
(Unaudited, in thousands, except for per unit data) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Operating cash margin reconciliation to net loss attributable to Parsley Energy Inc. stockholders: | |||||||
Net loss attributable to Parsley Energy, Inc. stockholders | $ | (3,366,400) | $ | (24,064) | |||
Net loss attributable to noncontrolling interests | (369,696) | (3,939) | |||||
Income tax benefit | (570,963) | (7,790) | |||||
Other revenues | (5,027) | (1,308) | |||||
Depreciation, depletion and amortization | 274,680 | 173,723 | |||||
Exploration and abandonment costs | 561,611 | 22,994 | |||||
Stock-based compensation | 6,390 | 5,322 | |||||
Impairment on long-lived assets | 4,374,253 | — | |||||
Acquisition costs | 14,425 | — | |||||
Accretion of asset retirement obligations | 435 | 345 | |||||
Other operating expense | 169 | (811) | |||||
Interest expense, net | 41,679 | 33,002 | |||||
Gain on sale of property | (10) | — | |||||
Restructuring and other termination costs(1) | 30,018 | — | |||||
Loss on early extinguishment of debt | 21,388 | — | |||||
(Gain) loss on derivatives | (545,692) | 119,687 | |||||
Change in TRA liability | (70,529) | — | |||||
Interest income | (249) | (291) | |||||
Other income | 3,983 | (58) | |||||
Operating cash margin | $ | 400,465 | $ | 316,812 | |||
Operating cash margin per Boe | $ | 22.34 | $ | 28.07 | |||
Average price per Boe, without realized derivatives | $ | 31.23 | $ | 37.78 | |||
Operating cash margin percentage | 72 | % | 74 | % |
(1) | Excludes $4.8 million of non-cash costs incurred related to accelerated vesting of stock-based compensation |
Free Cash Flow (Outspend)
Free cash flow (outspend) is not a measure of net cash provided by operating activities as determined by GAAP. Free cash flow (outspend) is a supplemental non-GAAP financial measure that is used by the Company as an indicator of the Company's ability to manage its operating cash flow (outspend), internally fund its exploration and development activities, pay dividends, and to service or incur additional debt. The Company defines free cash flow (outspend) as net cash provided by operating activities before changes in operating assets and liabilities, net of acquisitions and acquisition and cash restructuring costs related to the acquisition of Jagged Peak, less accrual-based development capital expenditures. The amounts included in the calculations of free cash flow (outspend) were computed in accordance with GAAP.
Free cash flow (outspend) is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of free cash flow (outspend) to the GAAP financial measure of net cash provided by operating activities.
Parsley Energy, Inc. and Subsidiaries | |||||||
Free Cash Flow (Outspend) | |||||||
(Unaudited, in thousands) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net cash provided by operating activities | $ | 385,943 | $ | 213,059 | |||
Net change in operating assets and liabilities, net of acquisitions | (32,659) | 57,958 | |||||
Acquisition costs related to the acquisition of Jagged Peak | 14,425 | — | |||||
Restructuring costs related to the acquisition of Jagged Peak (excluding non-cash) | 30,018 | — | |||||
Total discretionary cash flow | 397,727 | 271,017 | |||||
Development of oil and natural gas properties | (281,871) | (352,650) | |||||
Additions to oil and natural gas properties - change in capital accruals | (96,893) | (53,654) | |||||
Total accrual-based development capital expenditures | (378,764) | (406,304) | |||||
Free cash flow (outspend) | $ | 18,963 | $ | (135,287) |
Discretionary Cash Flow Per Share
Discretionary cash flow is not a measure of net cash provided by operating activities as determined by GAAP. Discretionary cash flow is a supplemental non-GAAP financial measure that is used by the Company as an indicator of the drivers of trends in our operating cash flows, such as production, realized sales prices and operating costs, because it disregards the timing of settlement of operating assets and liabilities. The Company defines discretionary cash flow as net cash provided by operating activities before changes in operating assets and liabilities, net of acquisitions and acquisition and cash restructuring costs related to the acquisition of Jagged Peak. The amounts included in the calculations of discretionary cash flow were computed in accordance with GAAP.
Discretionary cash flow is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of discretionary cash flow (outspend) to the GAAP financial measure of net cash provided by operating activities.
Parsley Energy, Inc. and Subsidiaries | |||||||
Discretionary Cash Flow Per Share | |||||||
(Unaudited, in thousands) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net cash provided by operating activities | $ | 385,943 | $ | 213,059 | |||
Net change in operating assets and liabilities, net of acquisitions | (32,659) | 57,958 | |||||
Acquisition costs related to the acquisition of Jagged Peak | 14,425 | — | |||||
Restructuring costs related to the acquisition of Jagged Peak (excluding non-cash) | 30,018 | — | |||||
Total discretionary cash flow | $ | 397,727 | $ | 271,017 | |||
Discretionary cash flow per diluted share | $ | 0.99 | $ | 0.86 | |||
Weighted average common shares outstanding, class A | 366,064 | 278,794 | |||||
Weighted average common shares outstanding, class B | 35,199 | 36,403 | |||||
Adjusted weighted average common shares outstanding(1) | 401,263 | 315,197 |
(1) | PE Units (and a corresponding number of shares of Class B common stock) can be exchanged for Class A common stock at an exchange ratio of one share of Class A common stock for each PE Unit (and corresponding share of Class B common stock) exchanged. As such, assumes the exchange of all outstanding PE Units (and corresponding shares of Class B common stock) for shares of Class A common stock. |
Adjusted Net Income
Adjusted net income is not a measure of net income determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by the Company's management to evaluate financial performance, prior to (gain) loss on derivatives, net settlements on derivative instruments, net premiums on options that settled during the period, gain on sale of property, restructuring and other termination costs, exploration and abandonment costs, impairment of long-lived assets, acquisition costs, change in TRA liability, loss on early extinguishment of debt, and other expenses, while adjusting for changes in noncontrolling interests, the associated changes in estimated income tax and changes to deferred tax asset valuation allowance. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net income (loss), operating income (loss), or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net loss attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries | |||||||
Adjusted Net Income and Net Income Per Share | |||||||
(Unaudited, in thousands, except per share data) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net loss attributable to Parsley Energy, Inc. stockholders | $ | (3,366,400) | $ | (24,064) | |||
Adjustments: | |||||||
(Gain) loss on derivatives | (545,692) | 119,687 | |||||
Net settlements on derivative instruments | 60,549 | (8,339) | |||||
Net premiums on options that settled during the period | (13,004) | (9,516) | |||||
Gain on sale of property | (10) | — | |||||
Restructuring and other termination costs | 34,769 | — | |||||
Exploration and abandonment costs | 561,611 | 22,994 | |||||
Impairment of long-lived assets | 4,374,253 | — | |||||
Acquisition costs | 14,425 | — | |||||
Change in TRA liability | (70,529) | — | |||||
Loss on early extinguishment of debt | 21,388 | — | |||||
Other expenses | 3,569 | — | |||||
Change in noncontrolling interests | (379,881) | (14,321) | |||||
Income taxes on above adjustments(1) | (303,144) | (24,132) | |||||
Adjustment to deferred tax asset valuation allowance(2) | (284,727) | — | |||||
Adjusted net income | $ | 107,177 | $ | 62,309 | |||
Net loss per diluted share - as reported(1) | $ | (9.20) | $ | (0.09) | |||
Adjustments: | |||||||
(Gain) loss on derivatives | (1.49) | 0.42 | |||||
Net settlements on derivative instruments | 0.17 | (0.02) | |||||
Net premiums on options that settled during the period | (0.04) | (0.03) | |||||
Gain on sale of property | — | — | |||||
Restructuring and other termination costs | 0.09 | — | |||||
Exploration and abandonment costs | 1.53 | 0.08 | |||||
Impairment of long-lived assets | 11.93 | — | |||||
Acquisition costs | 0.04 | — | |||||
Change in TRA liability | (0.19) | — | |||||
Loss on early extinguishment of debt | 0.06 | — | |||||
Other expenses | 0.01 | — | |||||
Change in noncontrolling interests | (1.04) | (0.05) | |||||
Income taxes on above adjustments | (0.83) | (0.09) | |||||
Adjustment to deferred tax asset valuation allowance | (0.77) | — | |||||
Adjustment for change in weighted average share count | 0.02 | — | |||||
Adjusted net income per diluted share(4) | $ | 0.29 | $ | 0.22 | |||
Basic weighted average shares outstanding - as reported(3) | 366,064 | 278,794 | |||||
Effect of dilutive securities: | |||||||
Class B Common Stock | — | — | |||||
Restricted Stock and Restricted Stock Units | — | — | |||||
Diluted weighted average shares outstanding - as reported(3) | 366,064 | 278,794 | |||||
Effect of dilutive securities: | |||||||
Class B Common Stock | — | — | |||||
Restricted Stock and Restricted Stock Units | 610 | 369 | |||||
Diluted weighted average shares outstanding for adjusted net income(4) | 366,674 | 279,163 |
(1) | The assumed income tax rate is 27% for all periods. | |
(2) | Deferred tax valuation allowance has been adjusted to reflect the assumed income tax rate of 27% for all periods. | |
(3) | For the three months ended March 31, 2020 and 2019, the number of weighted average diluted shares used to calculate actual net loss per share is based on the fact that, under the "if converted" and "treasury stock" methods, Class B Common Stock and shares of restricted stock and restricted stock units, respectively, were not recognized because the effect would have been antidilutive. | |
(4) | For purposes of calculating adjusted net income per diluted share for the three months ended March 31, 2020 and 2019, Class B Common Stock was not recognized because the shares would have been antidilutive using the "if converted" method. |
Open Derivatives Positions | |||||||||||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||||||||||
Open Crude Oil Derivatives Positions(1) | |||||||||||||||||||||||||||
2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | |||||||||||||||||||||
CUSHING | |||||||||||||||||||||||||||
Swaps - Cushing (MBbls/d)(2) | 11.0 | 11.0 | 11.0 | ||||||||||||||||||||||||
Swap Price ($/Bbl) | $ | 57.87 | $ | 57.87 | $ | 57.87 | |||||||||||||||||||||
MIDLAND | |||||||||||||||||||||||||||
Three Way Collars - Midland (MBbls/d)(3) | 4.6 | 13.8 | |||||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 55.00 | $ | 51.65 | |||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 40.00 | $ | 35.66 | |||||||||||||||||||||||
Short Put Price ($/Bbl) | $ | 30.00 | $ | 25.66 | |||||||||||||||||||||||
Put Spreads - Midland (MBbls/d)(4) | 3.3 | ||||||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 50.00 | |||||||||||||||||||||||||
Short Put Price ($/Bbl) | $ | 40.00 | |||||||||||||||||||||||||
Two Way Collars - Midland (MBbls/d)(5) | 6.6 | 6.5 | 6.5 | ||||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 48.00 | $ | 48.00 | $ | 48.00 | |||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 43.00 | $ | 43.00 | $ | 43.00 | |||||||||||||||||||||
Swaps - Midland (MBbls/d)(2) | 21.5 | 12.5 | 3.3 | 5.0 | 5.0 | 5.0 | 5.0 | ||||||||||||||||||||
Swap Price ($/Bbl) | $ | 31.83 | $ | 29.69 | $ | 32.60 | $ | 40.50 | $ | 40.50 | $ | 40.50 | $ | 40.50 | |||||||||||||
MAGELLAN EAST HOUSTON ("MEH") | |||||||||||||||||||||||||||
Three Way Collars - MEH (MBbls/d)(3) | 7.9 | 10.8 | 24.1 | 13.3 | 13.2 | 2.4 | 2.4 | ||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 55.00 | $ | 55.00 | $ | 51.22 | $ | 64.38 | $ | 64.38 | $ | 55.00 | $ | 55.00 | |||||||||||||
Long Put Price ($/Bbl) | $ | 40.00 | $ | 40.00 | $ | 37.23 | $ | 53.13 | $ | 53.13 | $ | 40.00 | $ | 40.00 | |||||||||||||
Short Put Price ($/Bbl) | $ | 30.00 | $ | 30.00 | $ | 27.23 | $ | 43.13 | $ | 43.13 | $ | 30.00 | $ | 30.00 | |||||||||||||
Put Spreads - MEH (MBbls/d)(4) | 8.2 | 29.3 | 29.3 | ||||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 50.00 | $ | 36.11 | $ | 36.11 | |||||||||||||||||||||
Short Put Price ($/Bbl) | $ | 40.00 | $ | 26.11 | $ | 26.11 | |||||||||||||||||||||
Swaps - MEH (MBbls/d)(2) | 35.8 | 29.0 | 15.7 | 52.0 | 52.0 | 52.0 | 52.0 | ||||||||||||||||||||
Swap Price ($/Bbl) | $ | 29.58 | $ | 35.24 | $ | 39.28 | $ | 40.74 | $ | 40.74 | $ | 40.74 | $ | 40.74 | |||||||||||||
BRENT | |||||||||||||||||||||||||||
Two Way Collars - Brent (MBbls/d)(5) | 3.3 | 6.5 | 6.5 | ||||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 52.10 | $ | 52.30 | $ | 52.30 | |||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 47.10 | $ | 47.30 | $ | 47.30 | |||||||||||||||||||||
Swaps - Brent (MBbls/d)(2) | 7.9 | 11.2 | 6.3 | 22.0 | 22.0 | 22.0 | 22.0 | ||||||||||||||||||||
Swap Price ($/Bbl) | $ | 44.81 | $ | 41.77 | $ | 47.40 | $ | 44.46 | $ | 44.46 | $ | 44.46 | $ | 44.46 | |||||||||||||
Total Hedged Volumes (MBbls/d) | 105.6 | 121.4 | 116.5 | 92.3 | 92.2 | 81.4 | 81.4 | ||||||||||||||||||||
Premium Realization ($MM)(6) | $ | 8.1 | $ | 7.3 | $ | 7.3 | $ | (2.0) | $ | (2.0) | $ | (0.7) | $ | (0.7) | |||||||||||||
Fixed Future Settlements ($MM)(7) | $ | 16.7 | |||||||||||||||||||||||||
Midland-Cushing Basis Swaps (MBbls/d)(8) | 18.9 | 14.0 | 14.0 | ||||||||||||||||||||||||
Basis Differential ($/Bbl) | $ | (1.00) | $ | (1.44) | $ | (1.44) | |||||||||||||||||||||
Rollfactor Swaps (MBbls/d)(9) | 12.1 | 35.9 | 35.9 | ||||||||||||||||||||||||
Swap Price ($/Bbl) | $ | (2.44) | $ | (2.44) | $ | (2.44) |
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Open Natural Gas Derivatives Positions(1) | |||||||||||
2Q20 | 3Q20 | 4Q20 | |||||||||
WAHA | |||||||||||
Swaps - Waha (MMBtu/d)(2) | 48,242 | 48,152 | 48,152 | ||||||||
Swap Price ($/MMBtu) | $ | 0.70 | $ | 0.90 | $ | 0.86 | |||||
(1) | Hedge positions as of 5/1/2020. Prices represent the weighted average price of contracts scheduled for settlement during the period. | |
(2) | Parsley receives the swap price. | |
(3) | When the reference price (Midland, MEH, or Brent) is at or above the short call price, Parsley receives the short call price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | |
(4) | When the reference price is above the long put price, Parsley receives the reference price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | |
(5) | When the reference price is above the short call price, Parsley receives the short call price. When the reference price is between the short call price and the put price, Parsley receives the reference price. When the reference price is below the put price, Parsley receives the put price. | |
(6) | Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | |
(7) | Dollar value of expected net settlements from monetization of certain MEH and Midland swap contracts. Monetized swap contracts have been eliminated by offsetting swaps and are not represented in the chart above. | |
(8) | Swaps that fix the basis differentials representing the index prices at which the Company sells its oil and gas produced in the Permian Basin less the WTI Cushing price and Henry Hub price, respectively. | |
(9) | These positions hedge the timing risk associated with Parsley's physical sales. Parsley generally sells crude oil for the delivery month at a sales price based on the average NYMEX price during that month, plus an adjustment calculated as a spread between the weighted average prices of the delivery month, the next month, and the following month during the period when the delivery month is the first month. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-first-quarter-2020-financial-and-operating-results-provides-update-on-2020-development-plans-301052209.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, April 28, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced that it has entered into an amendment to its revolving credit facility, which reaffirms the Company's $2.7 billion borrowing base, increases the elected commitment amount from $1.0 billion to $1.075 billion, and extends the maturity date by two years to October 28, 2023.
"Extending the maturity date and increasing the commitment amount for our credit facility in this challenging commodity environment speaks to the credit quality of Parsley and highlights strong support from our bank group," commented Ryan Dalton, Parsley's CFO. "These liquidity enhancing measures are another example of the proactive steps Parsley has taken to weather the COVID-19-driven downturn."
For further details, please see the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on April 28, 2020.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-increase-to-commitment-amount-reaffirmed-borrowing-base-and-extension-of-maturity-date-for-its-revolving-credit-facility-301047933.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, April 14, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) plans to report first quarter 2020 financial results on Monday, May 4, 2020 after the close of trading on the New York Stock Exchange. The company will host its quarterly conference call at 9:00 AM ET (8:00 AM CT) on Tuesday, May 5, 2020.
By Phone: | Dial 877-709-8150 (United States/Canada) or 201-689-8354 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Tuesday, May 12, 2020 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13702189. | |
By Webcast: | |
Select "Events & Presentations" under the "Investors" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration and production of unconventional oil and natural gas reserves in the Permian Basin. For more information, visit our website at www.parsleyenergy.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-schedules-first-quarter-2020-earnings-release-and-conference-call-301040388.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, March 18, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today provided a supplementary update on its 2020 development program that was outlined on March 9, 2020.
Supplementary Update for 2020 Outlook
Summary Comment and Outlook
"This is not a time for indecision or half measures," commented Matt Gallagher, Parsley's President and CEO. "Parsley has acted swiftly and aggressively to protect its balance sheet and dividend as well as preserve long-term shareholder value in a $30-$35 WTI oil price environment. We are committed to allocating capital based on prevailing market conditions. These activity levels provide for a sustaining and healthy operating model at these prices should they hold long term. Despite having over $1 billion in hedge settlements if oil drops to the low $20s through the end of 2021, we will continue to evaluate unhedged returns when prescribing activity levels. Our work is far from done and our team will continue to be adaptive and responsive in these challenging times."
Hedging Update
In this lower commodity price environment, Parsley continues to proactively manage its hedge position. The Company has restructured portions of its 2020 hedge position and increased downside protection by adding supplemental hedge positions for 2020 and 2021. Additionally, Parsley's hedge restructuring since March 4, 2020 has brought in $41 million of cash as well as lowered future deferred premiums by $47 million.
For details on Parsley's updated hedge position as of March 17, 2020, please see the tables below.
Oil Derivative Positions (2) | ||||||||
1Q20 | 2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | |
OPTION CONTRACTS: | ||||||||
CUSHING | ||||||||
Swaps - Cushing (MBbls/d)(3) | 11.0 | 11.0 | 11.0 | 11.0 | ||||
Swap Price ($/Bbl) | $ 57.87 | $ 57.87 | $ 57.87 | $ 57.87 | ||||
MIDLAND | ||||||||
Three Way Collars - Midland (MBbls/d)(4) | 27.0 | 22.5 | 17.1 | 17.1 | ||||
Short Call Price ($/Bbl) | $ 61.81 | $ 53.30 | $ 52.29 | $ 52.29 | ||||
Long Put Price ($/Bbl) | $ 51.10 | $ 39.38 | $ 36.49 | $ 36.49 | ||||
Short Put Price ($/Bbl) | $ 41.10 | $ 29.38 | $ 26.49 | $ 26.49 | ||||
Put Spreads - Midland (MBbls/d)(5) | 1.1 | 3.3 | ||||||
Long Put Price ($/Bbl) | $ 50.00 | $ 50.00 | ||||||
Short Put Price ($/Bbl) | $ 40.00 | $ 40.00 | ||||||
Two Way Collars - Midland (MBbls/d)(6) | 2.2 | 6.6 | 6.5 | 6.5 | ||||
Short Call Price ($/Bbl) | $ 48.00 | $ 48.00 | $ 48.00 | $ 48.00 | ||||
Long Put Price ($/Bbl) | $ 43.00 | $ 43.00 | $ 43.00 | $ 43.00 | ||||
Swaps - Midland (MBbls/d)(3) | 3.3 | 3.3 | 5.0 | 5.0 | 5.0 | 5.0 | ||
Swap Price ($/Bbl) | $ 55.20 | $ 55.20 | $ 40.50 | $ 40.50 | $ 40.50 | $ 40.50 | ||
MAGELLAN EAST HOUSTON ("MEH") | ||||||||
Three Way Collars - MEH (MBbls/d)(4) | 46.4 | 51.0 | 33.9 | 33.9 | 13.3 | 13.2 | 2.4 | 2.4 |
Short Call Price ($/Bbl) | $ 70.71 | $ 50.92 | $ 51.06 | $ 51.06 | $ 64.38 | $ 64.38 | $ 55.00 | $ 55.00 |
Long Put Price ($/Bbl) | $ 56.16 | $ 37.88 | $ 38.03 | $ 38.03 | $ 53.13 | $ 53.13 | $ 40.00 | $ 40.00 |
Short Put Price ($/Bbl) | $ 46.16 | $ 27.88 | $ 28.03 | $ 28.03 | $ 43.13 | $ 43.13 | $ 30.00 | $ 30.00 |
Put Spreads - MEH (MBbl/d)(5) | 2.7 | 8.2 | 24.5 | 24.5 | ||||
Long Put Price ($/Bbl) | $ 50.00 | $ 50.00 | $ 40.00 | $ 40.00 | ||||
Short Put Price ($/Bbl) | $ 40.00 | $ 40.00 | $ 30.00 | $ 30.00 | ||||
Swaps - MEH (MBbls/d)(3) | 4.4 | 10.8 | 10.8 | 52.0 | 52.0 | 52.0 | 52.0 | |
Swap Price ($/Bbl) | $32.52 | $ 41.89 | $ 41.89 | $ 41.17 | $ 41.17 | $ 41.17 | $ 41.17 | |
BRENT | ||||||||
Two Way Collars - Brent (MBbls/d)(6) | 3.3 | 6.5 | 6.5 | |||||
Short Call Price ($/Bbl) | $ 52.10 | $ 52.30 | $ 52.30 | |||||
Long Put Price ($/Bbl) | $ 47.10 | $ 47.30 | $ 47.30 | |||||
Swaps - Brent (MBbls/d)(4) | 7.9 | 6.3 | 6.3 | 22.0 | 22.0 | 22.0 | 22.0 | |
Swap Price ($/Bbl) | $ 44.81 | $ 47.40 | $ 47.40 | $ 44.44 | $ 44.44 | $ 44.44 | $ 44.44 | |
Total Hedged Volumes (MBbls/d) | 93.8 | 121.5 | 116.5 | 116.5 | 92.3 | 92.2 | 81.4 | 81.4 |
Premium Realization ($MM)(7) | ($13.4) | $14.5 | $8.5 | $8.5 | ($2.0) | ($2.0) | ($0.7) | ($0.7) |
BASIS SWAPS: | ||||||||
Midland-Cushing Basis Swaps (MBbls/d)(8) | 18.9 | 18.9 | 14.0 | 14.0 | ||||
Basis Differential ($/Bbl) | $(1.00) | $(1.00) | $(1.44) | $(1.44) | ||||
Gas Derivative Positions (2) | ||||||||
1Q20 | 2Q20 | 3Q20 | 4Q20 | 1Q21 | 2Q21 | 3Q21 | 4Q21 | |
OPTION CONTRACTS: | ||||||||
WAHA | ||||||||
Swaps - Waha (MMBtu/d)(3) | 48.2 | 48.2 | 48.2 | 48.2 | ||||
Swap Price ($/MMBtu) | $ 1.08 | $ 0.70 | $ 0.90 | $ 0.86 | ||||
Total Hedged Volumes (MMBtu/d) | 48.2 | 48.2 | 48.2 | 48.2 |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
(1) | As used in this news release, free cash flow, a non-GAAP financial measure, means net cash provided by operating activities before transaction expenses related to the acquisition of Jagged Peak Energy Inc. ("Jagged Peak") and changes in operating assets and liabilities, net of acquisitions, less accrual-based development capital expenditures. The Company is unable to present a reconciliation of forward-looking free cash flow because components of the calculation, including changes in working capital accounts, are inherently unpredictable. Additionally, estimating the most directly comparable GAAP measure with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. | |
(2) | As of 03/17/2020. Prices represent the weighted average price of contracts scheduled for settlement during the period. | |
(3) | Parsley receives the swap price. | |
(4) | When the reference price (Midland, MEH, or Brent) is at or above the short call price, Parsley receives the short call price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | |
(5) | When the reference price is above the long put price, Parsley receives the reference price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | |
(6) | When the reference price is above the short call price, Parsley receives the short call price. When the reference price is between the short call price and the put price, Parsley receives the reference price. When the reference price is below the put price, Parsley receives the put price. | |
(7) | Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | |
(8) | Swaps that fix the basis differentials representing the index prices at which Parsley sells its oil and gas produced in the Permian Basin less the WTI Cushing price. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-provides-supplementary-update-on-2020-development-plans-301026097.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Feb. 19, 2020 /PRNewswire/ -- 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
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(4), 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."
Operational Update
During the fourth quarter of 2019, the Company spud 38 and placed on production 37 gross operated horizontal wells. Parsley's working interest on wells placed on production was approximately 93%, with an average completed lateral length of approximately 11,000 feet. A significant majority of completion activity was in the Midland Basin, where the Company placed on production 33 gross operated horizontal wells, with the remainder placed on production in the Delaware Basin.
Consistent improvement in drilling efficiency(5) throughout the year enabled Parsley to drop from 11 development rigs to 10 development rigs during the fourth quarter. At the closing of the Jagged Peak acquisition in early January, Jagged Peak was running five development rigs. Parsley anticipates that sustained efficiency gains will facilitate a further equipment reduction from 15 to 14 development rigs in the coming months.
"Throughout 2019, the Parsley team recalibrated drilling and completion operations to a higher efficiency level," said David Dell'Osso, Parsley's COO. "This culminated in an especially strong fourth quarter that helped drive our capital spending below our full-year budgeted range. Looking into 2020, we remain excited about sustaining these capital efficiency gains across our recently expanded acreage footprint."
Financial Update
Healthy execution in 4Q19 translated to strong performance in key financial measures.
Profitability
The Company recorded 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.(4)
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.(4)
Realized Pricing
During 4Q19, Parsley reported an average unhedged oil price realization of $56.40/Bbl net of transportation costs, representing a discount of $0.47 to the average WTI Cushing price(6) for the quarter.
Operating Costs
During the fourth quarter of 2019, the Company reported LOE per Boe of $3.54. Parsley is reiterating full-year 2020 LOE per Boe guidance of $3.50-$4.50, a modest increase from $3.45 per Boe during 2019.
Both 4Q19 general and administrative expense ("G&A") per Boe and 4Q19 cash based G&A per Boe, which excludes stock-based compensation expense, decreased year-over-year to $3.20(4) and $2.81,(4) respectively. Parsley expects synergies associated with the Jagged Peak acquisition to drive encouraging G&A cost trends in 2020. Parsley is reiterating full-year 2020 cash based G&A per Boe guidance of $2.00-$2.40, which would represent a decrease from 2019 levels of $2.57 per Boe.
Healthy realized oil pricing and proactive cost control drove a robust 4Q19 operating cash margin of $29.06 per Boe, or 75% of the Company's average realized price per Boe.(4)
Capital Expenditures
Parsley reported capital expenditures of $276 million during the fourth quarter of 2019, comprised of $274 million for drilling, completion and equipment and $2 million for other expenditures(7). The Company's 4Q19 capital expenditures decreased 13% from 3Q19 levels, driven by lower well costs, conservative spending on facilities and infrastructure, and minimal non-operated activity.
Return of Capital Program
During 1Q20, Parsley's Board of Directors approved an increase to the Company's quarterly dividend from $0.03 per share to $0.05 per share(1). The dividend is payable on March 20, 2020, to shareholders of record on March 10, 2020.
Debt Refinancing
On February 11, 2020, Parsley Energy, LLC and Parsley Finance Corp. (the "Issuers"), subsidiaries of the Company, issued $400 million aggregate principal amount of 4.125% senior unsecured notes due 2028 in an offering that was exempt from registration under the Securities Act of 1933, as amended (the "2028 Notes Offering"). The Company intends to use the proceeds from the 2028 Notes Offering and borrowings under its revolving credit facility to redeem all of the Issuers' 6.250% senior unsecured notes due 2024 (the "2024 Notes") at a redemption price of 104.688%, plus accrued and unpaid interest to the redemption date, pursuant to the terms of the indenture relating to the 2024 Notes (the "2024 Notes Redemption"). Parsley expects the redemption date for the 2024 Notes Redemption to be March 7, 2020.
Liquidity and Hedging
As of December 31, 2019, Parsley had approximately $1.0 billion of liquidity, consisting of $20.7 million of cash and cash equivalents and an undrawn amount of $993.3 million on the Company's revolver.(8) Pro forma for the closing of the Jagged Peak acquisition, the 2028 Notes Offering and the 2024 Notes Redemption, the Company's liquidity as of December 31, 2019 was approximately $674.7 million.
A significant majority of Parsley's expected 2020 oil production is subject to hedge protection. Parsley's portfolio of option contracts protects its balance sheet and anticipated cash flow while retaining significant exposure to higher commodity prices. The Company has also entered into various basis swaps to protect against expansion of regional oil price differentials. For details on Parsley's hedge position, please see the tables below under Supplemental Information and/or the Company's Annual Report on Form 10-K, upon availability, for the year ended December 31, 2019.
2020 Guidance
Parsley is reiterating its 2020 guidance issued in January and plans to deploy 14-15 development rigs and four-to-five frac spreads on average in 2020. Parsley's baseline capital budget assumes a $50 WTI oil price. During 1Q20, the Company expects to place approximately 50 gross operated horizontal wells on production(9) with average net oil production of 123-129 MBo/d. For further detail, please see the tables below.
Parsley 2019 | 2020 Guidance | ||
Production | |||
Annual net oil production (MBo/d) | 86.8 | 125.0-133.0 | |
Annual net total production (MBoe/d) | 140.6 | 200.0-210.0 | |
Capital Program | |||
Total development expenditures ($MM) | $1,373 | $1,600-$1,800 | |
Drilling, completion, and equipment ($MM) | $1,332 | $1,500-$1,650 | |
Other ($MM)(7) | $41 | $100-$150 | |
Activity | |||
Gross operated horizontal POPs(9) | 145 | ~180-190 | |
Midland Basin (% of total) | 83% | ~65% | |
Delaware Basin (% of total) | 17% | ~35% | |
Average lateral length | ~10,200' | 9,500'-10,000' | |
Gross operated lateral footage (000's) | 1,480' | 1,710'-1,900' | |
Average working interest | 95% | ~90% | |
Unit Costs | |||
Lease operating expenses ($/Boe) | $3.45 | $3.50-$4.50 | |
Cash general and administrative expenses ($/Boe)(4) | $2.57 | $2.00-$2.40 | |
Production and ad valorem taxes (% of total revenue) | 6.4% | 6%-7% |
Year-end 2019 Reserves
Parsley posted strong reserves growth in 2019. The Company's proved reserves as of December 31, 2019 totaled 592.3 MMBoe, consisting of 326.5 MMBbls of oil, 709.2 Bcf of natural gas, and 147.7 MMBbls of natural gas liquids ("NGLs").
Proved Reserve Highlights
Changes in reserves for the year ended December 31, 2019 are summarized in the table below:
(MMBoe) | |||
Balance, December 31, 2018 | 521.7 | ||
Purchases of reserves in place | 0.6 | ||
Divestures of reserves in place | (3.1) | ||
Extensions and discoveries | 138.7 | ||
Revisions of previous estimates | (14.3) | ||
Production | (51.3) | ||
Balance, December 31, 2019 | 592.3 |
Parsley's internally prepared estimated proved reserves as of December 31, 2019 were audited by Netherland, Sewell & Associates, Inc., the Company's independent reserve engineer. These estimates have been prepared in accordance with the definitions and regulations promulgated by the SEC and, with the exception of the exclusion of future income taxes, conform to the FASB Accounting Standards Codification Topic 932, Extractive Activities – Oil and Gas. Prices used are based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period January through December 2019. Adjusting for quality, transportation fees, and market differentials, the prices used are as follows: $53.97 per barrel of oil, $15.46 per barrel of NGLs, and $0.71 per Mcf of gas. The estimates of the Company's net reserves as of December 31, 2019 are summarized in the table below:
Net Reserves | ||||||||||||
Oil (MMBbls) | Gas (Bcf) | NGLs (MMBbls) | Total (MMBoe) | |||||||||
PD | 206.9 | 472.2 | 96.2 | 381.7 | ||||||||
PUD | 119.6 | 237.0 | 51.5 | 210.6 | ||||||||
Total Proved | 326.5 | 709.2 | 147.7 | 592.3 |
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the fourth quarter of 2019 on Thursday, February 20, 2020 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-709-8150 (United States/Canada) or 201-689-8354 (International) 10 minutes before the scheduled time and request the Parsley Energy earnings conference call. A telephone replay will be available shortly after the call through February 27, 2020 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13698261. A live broadcast will also be available at www.parsleyenergy.com under the "Investors-Events & Presentations" section of the website. The Company has also posted a presentation to its website that supplements the information in this release.
Upcoming Conference Participation
Parsley plans to participate in the Credit Suisse 25th Annual Energy Summit in Vail, Colorado on March 2-3, 2020 and the Simmons Energy 20th Annual Energy Conference in Las Vegas, Nevada on March 23-24, 2020.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K and its subsequently filed Quarterly Reports on Form 10-Q. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
- Tables to Follow -
(1) | Dividend to be paid to all Company equity holders, including shareholders of Class A common stock and holders of Parsley Energy, LLC units/Class B common stock. | ||||||||||||||
(2) | As of February 19, 2020, Moody's and S&P Global's corporate ratings for Parsley were Ba2 and BB, respectively. | ||||||||||||||
(3) | On February 11, 2020, the Issuers issued $400 million in aggregate principal amount of 4.125% senior unsecured notes due 2028 (the "2028 Notes Offering"). Utilizing net proceeds from the 2028 Notes Offering and borrowings under Parsley's revolving credit facility, Parsley expects to redeem all of the Issuers' outstanding 6.250% senior unsecured notes due 2024 on March 7, 2020. | ||||||||||||||
(4) | "Cash based G&A per Boe," "Adjusted EBITDAX," "operating cash margin," "free cash flow (outspend)," "adjusted net income," and "PV-10" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For definitions and reconciliations of the non-GAAP financial measures of adjusted EBITDAX, operating cash margin, free cash flow (outspend), adjusted net income, and PV-10 to GAAP financial measures, please see the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. | ||||||||||||||
(5) | "Drilling efficiency" is measured based on drilled feet per operational day. "Operational days" are measured as days equipment is active and do not include mobilization or other idle time. | ||||||||||||||
(6) | Represents Bloomberg-sourced 4Q19 average WTI Cushing price. | ||||||||||||||
(7) | Other capital expenditures includes non-operated activity, water infrastructure, gas gathering infrastructure, and geological/geophysical. | ||||||||||||||
(8) | Fully undrawn revolver balance as of December 31, 2019 was net of letters of credit. | ||||||||||||||
(9) | Wells placed on production. Includes wells placed on production by Jagged Peak between January 1, 2020 and January 10, 2020. | ||||||||||||||
(10) | "Organic reserves replacement" is calculated as total 2019 reserve additions and revisions (technical and pricing) divided by total 2019 production, excluding acquisitions and divestitures. Please see the Supplemental Information below for more information. |
Parsley Energy, Inc. and Subsidiaries Selected Operating Data (Unaudited) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net production volumes: | |||||||||||||||
Oil (MBbls) | 8,241 | 7,087 | 31,664 | 25,356 | |||||||||||
Natural gas (MMcf) | 13,966 | 9,696 | 51,933 | 37,365 | |||||||||||
Natural gas liquids (MBbls) | 2,882 | 2,323 | 11,002 | 8,353 | |||||||||||
Total (MBoe) | 13,451 | 11,026 | 51,322 | 39,937 | |||||||||||
Average net daily production (Boe/d) | 146,207 | 119,848 | 140,608 | 109,416 | |||||||||||
Average sales prices(1): | |||||||||||||||
Oil, without realized derivatives (per Bbl) | $ | 56.40 | $ | 54.22 | $ | 55.50 | $ | 60.59 | |||||||
Oil, with realized derivatives (per Bbl) | $ | 55.05 | $ | 52.69 | $ | 53.62 | $ | 58.07 | |||||||
Natural gas, without realized derivatives (per Mcf) | $ | 0.97 | $ | 0.90 | $ | 0.71 | $ | 1.37 | |||||||
Natural gas, with realized derivatives (per Mcf) | $ | 0.99 | $ | 0.94 | $ | 0.78 | $ | 1.38 | |||||||
NGLs (per Bbl) | $ | 14.14 | $ | 25.00 | $ | 14.17 | $ | 27.21 | |||||||
Total, without realized derivatives (per Boe) | $ | 38.59 | $ | 40.91 | $ | 37.99 | $ | 45.44 | |||||||
Total, with realized derivatives (per Boe) | $ | 37.79 | $ | 39.96 | $ | 36.91 | $ | 43.85 | |||||||
Average costs (per Boe): | |||||||||||||||
Lease operating expenses | $ | 3.54 | $ | 3.61 | $ | 3.45 | $ | 3.61 | |||||||
Transportation and processing costs | $ | 1.06 | $ | 1.03 | $ | 0.80 | $ | 0.82 | |||||||
Production and ad valorem taxes | $ | 2.12 | $ | 2.38 | $ | 2.43 | $ | 2.71 | |||||||
Depreciation, depletion and amortization | $ | 15.67 | $ | 14.58 | $ | 15.49 | $ | 14.64 | |||||||
General and administrative expenses (including stock-based compensation) | $ | 3.20 | $ | 3.85 | $ | 2.98 | $ | 3.78 | |||||||
General and administrative expenses (cash based) | $ | 2.81 | $ | 3.42 | $ | 2.57 | $ | 3.28 |
(1) | Average prices shown in the table reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculations of such effects include both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. |
Parsley Energy, Inc. and Subsidiaries Consolidated Statements of Operations(1) (Unaudited, in thousands, except for per share data) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
REVENUES | |||||||||||||||
Oil sales | $ | 464,752 | $ | 384,267 | $ | 1,757,315 | $ | 1,536,244 | |||||||
Natural gas sales | 13,615 | 8,762 | 36,774 | 51,231 | |||||||||||
Natural gas liquids sales | 40,750 | 58,083 | 155,888 | 227,272 | |||||||||||
Other | 3,334 | 3,768 | 8,837 | 11,684 | |||||||||||
Total revenues | 522,451 | 454,880 | 1,958,814 | 1,826,431 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Lease operating expenses | 47,561 | 39,779 | 177,148 | 144,292 | |||||||||||
Transportation and processing costs | 14,281 | 11,340 | 41,198 | 32,573 | |||||||||||
Production and ad valorem taxes | 28,575 | 26,221 | 124,961 | 108,342 | |||||||||||
Depreciation, depletion and amortization | 210,717 | 160,754 | 794,740 | 584,857 | |||||||||||
General and administrative expenses | 43,038 | 42,414 | 152,700 | 150,955 | |||||||||||
Exploration and abandonment costs | 65,157 | 142,622 | 100,211 | 162,539 | |||||||||||
Acquisition costs | 7,616 | 165 | 7,616 | 167 | |||||||||||
Accretion of asset retirement obligations | 394 | 348 | 1,465 | 1,422 | |||||||||||
Rig termination costs | 13,250 | — | 13,250 | — | |||||||||||
Gain on sale of property | (208) | (16) | (2,095) | (6,454) | |||||||||||
Restructuring and other termination costs | — | — | 1,562 | — | |||||||||||
Other operating expenses | 5,225 | 9,082 | 8,788 | 19,863 | |||||||||||
Total operating expenses | 435,606 | 432,709 | 1,421,544 | 1,198,556 | |||||||||||
OPERATING INCOME | 86,845 | 22,171 | 537,270 | 627,875 | |||||||||||
OTHER INCOME (EXPENSES) | |||||||||||||||
Interest expense, net | (33,463) | (32,880) | (133,640) | (131,460) | |||||||||||
(Loss) gain on derivatives | (87,638) | 93,115 | (131,212) | 50,342 | |||||||||||
Change in TRA liability | — | (355) | — | (437) | |||||||||||
Interest income | 191 | 600 | 801 | 5,464 | |||||||||||
Other expenses | (459) | (799) | (1,364) | (340) | |||||||||||
Total other (expenses) income, net | (121,369) | 59,681 | (265,415) | (76,431) | |||||||||||
(LOSS) INCOME BEFORE INCOME TAXES | (34,524) | 81,852 | 271,855 | 551,444 | |||||||||||
INCOME TAX EXPENSE | (1,649) | (16,453) | (61,437) | (105,475) | |||||||||||
NET (LOSS) INCOME | (36,173) | 65,399 | 210,418 | 445,969 | |||||||||||
LESS: NET INCOME ATTRIBUTABLE TONONCONTROLLING INTERESTS | (196) | (11,626) | (35,206) | (76,842) | |||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO PARSLEY ENERGY INC. STOCKHOLDERS | $ | (36,369) | $ | 53,773 | $ | 175,212 | $ | 369,127 | |||||||
Net (loss) income per common share: | |||||||||||||||
Basic | $ | (0.13) | $ | 0.19 | $ | 0.63 | $ | 1.36 | |||||||
Diluted | $ | (0.13) | $ | 0.19 | $ | 0.63 | $ | 1.35 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 280,064 | 278,052 | 279,636 | 272,226 | |||||||||||
Diluted | 280,064 | 278,789 | 280,172 | 272,884 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. and Subsidiaries Consolidated Balance Sheets (Unaudited) | |||||||
December 31, 2019 | December 31, 2018 | ||||||
(In thousands, except share data) | |||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 20,739 | $ | 163,216 | |||
Accounts receivable, net of allowance for doubtful accounts: | |||||||
Joint interest owners and other | 48,785 | 39,564 | |||||
Oil, natural gas and NGLs | 192,216 | 136,209 | |||||
Related parties | 183 | 94 | |||||
Short-term derivative instruments | 127,632 | 191,297 | |||||
Other current assets | 8,818 | 10,332 | |||||
Total current assets | 398,373 | 540,712 | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Oil and natural gas properties, successful efforts method | 11,272,124 | 9,948,246 | |||||
Accumulated depreciation, depletion, amortization and impairment | (2,117,963) | (1,295,098) | |||||
Total oil and natural gas properties, net | 9,154,161 | 8,653,148 | |||||
Other property, plant and equipment net | 170,306 | 170,739 | |||||
Total property, plant and equipment, net | 9,324,467 | 8,823,887 | |||||
NONCURRENT ASSETS | |||||||
Operating lease assets, net of accumulated depreciation | 128,529 | — | |||||
Long-term derivative instruments | — | 20,124 | |||||
Other noncurrent assets | 4,845 | 6,640 | |||||
Total noncurrent assets | 133,374 | 26,764 | |||||
TOTAL ASSETS | $ | 9,856,214 | $ | 9,391,363 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | 416,346 | $ | 364,803 | |||
Revenue and severance taxes payable | 154,556 | 127,265 | |||||
Current operating lease liabilities | 61,198 | — | |||||
Short-term derivative instruments | 158,522 | 152,330 | |||||
Other current liabilities | 5,002 | 4,547 | |||||
Total current liabilities | 795,624 | 648,945 | |||||
NONCURRENT LIABILITIES | |||||||
Long-term debt | 2,182,832 | 2,181,667 | |||||
Operating lease liabilities | 69,195 | — | |||||
Asset retirement obligations | 20,538 | 24,750 | |||||
Deferred tax liability, net | 193,409 | 131,523 | |||||
Payable pursuant to tax receivable agreement | 70,529 | 68,110 | |||||
Financing lease liabilities | 1,320 | — | |||||
Long-term derivative instruments | — | 16,633 | |||||
Other noncurrent liabilities | 119 | — | |||||
Total noncurrent liabilities | 2,537,942 | 2,422,683 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS' EQUITY | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | |||||
Common stock | |||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 282,260,133 shares issued and 281,241,443 shares outstanding at December 31, 2019 and 280,827,038 shares issued and 280,205,293 shares outstanding at December 31, 2018 | 2,822 | 2,808 | |||||
Class B, $0.01 par value, 125,000,000 shares authorized, 35,420,258 and 36,547,731 issued and outstanding at December 31, 2019 and December 31, 2018 | 355 | 366 | |||||
Additional paid in capital | 5,200,795 | 5,163,987 | |||||
Retained earnings | 570,889 | 412,646 | |||||
Treasury stock, at cost, 1,018,690 shares and 621,745 at December 31, 2019 and December 31, 2018 | (17,428) | (11,749) | |||||
Total stockholders' equity | 5,757,433 | 5,568,058 | |||||
Noncontrolling interest | 765,215 | 751,677 | |||||
Total equity | 6,522,648 | 6,319,735 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 9,856,214 | $ | 9,391,363 |
Parsley Energy, Inc. and Subsidiaries Consolidated Statements of Cash Flows (Unaudited) | |||||||||||
Year Ended December 31, | |||||||||||
2019 | 2018 | 2017 | |||||||||
(In thousands) | |||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | 210,418 | $ | 445,969 | $ | 123,920 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation, depletion and amortization | 794,740 | 584,857 | 352,247 | ||||||||
Leasehold abandonments and impairments | 99,225 | 160,834 | 32,872 | ||||||||
Accretion of asset retirement obligations | 1,465 | 1,422 | 971 | ||||||||
Gain on sale of property | (2,095) | (6,454) | 14,332 | ||||||||
Loss on early extinguishment of debt | — | — | 3,891 | ||||||||
Deferred income tax expense | 61,437 | 105,475 | 5,752 | ||||||||
Change in TRA liability | — | 437 | (35,847) | ||||||||
Stock-based compensation expense | 20,682 | 19,877 | 19,619 | ||||||||
Loss (gain) on derivatives | 131,212 | (50,342) | 66,135 | ||||||||
Net cash (paid) received for derivative settlements | (10,022) | 6,279 | 16,172 | ||||||||
Net cash paid for option premiums | (46,242) | (47,644) | (28,426) | ||||||||
Other | 9,028 | 7,762 | 6,111 | ||||||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | (64,570) | (12,956) | (95,239) | ||||||||
Accounts receivable—related parties | (89) | 294 | (98) | ||||||||
Other current assets | 3,690 | (689) | 45,417 | ||||||||
Other noncurrent assets | 524 | (100) | (536) | ||||||||
Accounts payable and accrued expenses | 49,466 | (13,395) | 122,992 | ||||||||
Revenue and severance taxes payable | 27,291 | 17,348 | 40,465 | ||||||||
Other noncurrent liabilities | 119 | — | — | ||||||||
Net cash provided by operating activities | 1,286,279 | 1,218,974 | 690,750 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Development of oil and natural gas properties | (1,373,095) | (1,787,673) | (1,089,256) | ||||||||
Acquisitions of oil and natural gas properties | (52,020) | (136,972) | (2,192,093) | ||||||||
Additions to other property and equipment | (22,915) | (93,457) | (54,896) | ||||||||
Proceeds from sales of property, plant and equipment | 41,326 | 233,647 | 30,537 | ||||||||
Maturity of short-term investments | — | 149,331 | — | ||||||||
Other | 5,905 | 41,088 | (1,869) | ||||||||
Net cash used in investing activities | (1,400,799) | (1,594,036) | (3,456,860) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Borrowings under long-term debt | 617,000 | — | 1,152,780 | ||||||||
Payments on long-term debt | (617,000) | (2,888) | (74,769) | ||||||||
Payments on financing lease obligations | (2,746) | — | — | ||||||||
Debt issuance costs | — | (47) | (17,371) | ||||||||
Proceeds from issuance of common stock, net | — | — | 2,123,344 | ||||||||
Purchases of common stock | (5,679) | (11,014) | (354) | ||||||||
Dividends and distributions paid | (18,929) | — | — | ||||||||
Distributions to owner of consolidated subsidiary | (603) | (1,962) | — | ||||||||
Net cash (used in) provided by financing activities | (27,957) | (15,911) | 3,183,630 | ||||||||
Net (decrease) increase in cash and cash equivalents | (142,477) | (390,973) | 417,520 | ||||||||
Cash, cash equivalents, and restricted cash at beginning of year | 163,216 | 554,189 | 136,669 | ||||||||
Cash, cash equivalents, and restricted cash at end of year | $ | 20,739 | $ | 163,216 | $ | 554,189 | |||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||||||
Cash paid for interest | $ | (129,387) | $ | (127,668) | $ | (63,170) | |||||
Cash received (paid) for income taxes | $ | 302 | $ | — | $ | (350) | |||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||||||||||
Asset retirement obligations incurred, including changes in estimate | $ | (4,087) | $ | 2,111 | $ | 15,428 | |||||
(Reductions) additions to oil and natural gas properties - change in capital accruals | $ | (176) | $ | (25,455) | $ | 118,145 | |||||
Net premiums paid on options that settled during the period | $ | (43,278) | $ | (71,566) | $ | (37,103) | |||||
Common stock issued for oil and natural gas properties | $ | — | $ | — | $ | 1,183,501 |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net income (loss) before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, interest income, income tax expense, stock-based compensation, acquisition costs, asset retirement obligation accretion expense, rig termination costs, gain on sale of property, restructuring and other termination costs, loss (gain) on derivatives, net settlements on derivative instruments, net premium realization on options that settled during the period, change in Tax Receivable Agreement ("TRA") liability, and other expenses.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDAX is useful to investors as a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income (loss) for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries Adjusted EBITDAX(1) (Unaudited, in thousands) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Adjusted EBITDAX reconciliation to net income (loss): | |||||||||||||||
Net (loss) income attributable to Parsley Energy, Inc. stockholders | $ | (36,369) | $ | 53,773 | $ | 175,212 | $ | 369,127 | |||||||
Net income attributable to noncontrolling interests | 196 | 11,626 | 35,206 | 76,842 | |||||||||||
Depreciation, depletion and amortization | 210,717 | 160,754 | 794,740 | 584,857 | |||||||||||
Exploration and abandonment costs | 65,157 | 142,622 | 100,211 | 162,539 | |||||||||||
Interest expense, net | 33,463 | 32,880 | 133,640 | 131,460 | |||||||||||
Interest income | (191) | (600) | (801) | (5,464) | |||||||||||
Income tax expense | 1,649 | 16,453 | 61,437 | 105,475 | |||||||||||
EBITDAX | 274,622 | 417,508 | 1,299,645 | 1,424,836 | |||||||||||
Stock-based compensation | 5,209 | 4,757 | 20,682 | 19,877 | |||||||||||
Acquisition costs | 7,616 | 165 | 7,616 | 167 | |||||||||||
Accretion of asset retirement obligations | 394 | 348 | 1,465 | 1,422 | |||||||||||
Rig termination costs | 13,250 | — | 13,250 | — | |||||||||||
Gain on sale of property | (208) | (16) | (2,095) | (6,454) | |||||||||||
Restructuring and other termination costs | — | — | 1,562 | — | |||||||||||
Loss (gain) on derivatives | 87,638 | (93,115) | 131,212 | (50,342) | |||||||||||
Net settlements on derivative instruments | 902 | 8,600 | (12,206) | 8,084 | |||||||||||
Net premium realization on options that settled during the period | (11,765) | (19,115) | (43,278) | (71,566) | |||||||||||
Change in TRA liability | — | 355 | — | 437 | |||||||||||
Other expenses | 2,636 | — | 2,636 | 495 | |||||||||||
Adjusted EBITDAX | $ | 380,294 | $ | 319,487 | $ | 1,420,489 | $ | 1,326,956 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Operating Cash Margin
Operating cash margin is not a measure of operating income as determined by GAAP. Operating cash margin is a supplemental non-GAAP performance measure used by the Company as an indicator of the Company's profitability and ability to manage its operating income. The Company defines operating cash margin as net income (loss) before income tax expense, other revenues, depreciation, depletion and amortization, stock-based compensation, exploration and abandonment costs, acquisition costs, asset retirement obligation accretion expense, rig termination costs, gain on sale of property, restructuring and other termination costs, other operating expenses, net interest expense, loss (gain) on derivatives, change in TRA liability, interest income, income tax expense and other expenses. The amounts included in the calculations of operating cash margin were computed in accordance with GAAP.
Operating cash margin is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of operating cash margin to net income attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries Operating Cash Margin (Unaudited, in thousands, except for per unit data)(1) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net (loss) income attributable to Parsley Energy, Inc. stockholders | $ | (36,369) | $ | 53,773 | $ | 175,212 | $ | 369,127 | |||||||
Net income attributable to noncontrolling interests | 196 | 11,626 | 35,206 | 76,842 | |||||||||||
Other revenues | (3,334) | (3,768) | (8,837) | (11,684) | |||||||||||
Depreciation, depletion and amortization | 210,717 | 160,754 | 794,740 | 584,857 | |||||||||||
Stock-based compensation | 5,209 | 4,757 | 20,682 | 19,877 | |||||||||||
Exploration and abandonment costs | 65,157 | 142,622 | 100,211 | 162,539 | |||||||||||
Acquisition costs | 7,616 | 165 | 7,616 | 167 | |||||||||||
Accretion of asset retirement obligations | 394 | 348 | 1,465 | 1,422 | |||||||||||
Rig termination costs | 13,250 | — | 13,250 | — | |||||||||||
Gain on sale of property | (208) | (16) | (2,095) | (6,454) | |||||||||||
Restructuring and other termination costs | — | — | 1,562 | — | |||||||||||
Other operating expenses | 5,225 | 9,082 | 8,788 | 19,863 | |||||||||||
Interest expense, net | 33,463 | 32,880 | 133,640 | 131,460 | |||||||||||
Loss (gain) on derivatives | 87,638 | (93,115) | 131,212 | (50,342) | |||||||||||
Change in TRA liability | — | 355 | — | 437 | |||||||||||
Interest income | (191) | (600) | (801) | (5,464) | |||||||||||
Income tax expense | 1,649 | 16,453 | 61,437 | 105,475 | |||||||||||
Other expenses | 459 | 799 | 1,364 | 340 | |||||||||||
Operating cash margin | $ | 390,871 | $ | 336,115 | $ | 1,474,652 | $ | 1,398,462 | |||||||
Operating cash margin per Boe | $ | 29.06 | $ | 30.48 | $ | 28.73 | $ | 35.02 | |||||||
Average price per Boe, without realized derivatives | $ | 38.59 | $ | 40.91 | $ | 37.99 | $ | 45.44 | |||||||
Operating cash margin percentage | 75 | % | 75 | % | 76 | % | 77 | % |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Free Cash Flow (Outspend)
Free cash flow (outspend) is not a measure of net cash provided by operating activities as determined by GAAP. Free cash flow (outspend) is a supplemental non-GAAP financial measure that is used by the Company as an indicator of the Company's ability to manage its operating cash flow (outspend), internally fund its exploration and development activities, pay dividends, and to service or incur additional debt. The Company defines free cash flow (outspend) as net cash provided by operating activities before transaction expenses related to the acquisition of Jagged Peak and changes in operating assets and liabilities, net of acquisitions, less accrual-based development capital expenditures. The amounts included in the calculations of free cash flow (outspend) were computed in accordance with GAAP.
Free cash flow (outspend) is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of free cash flow (outspend) to the GAAP financial measure of net cash provided by operating activities.
Parsley Energy, Inc. and Subsidiaries Free Cash Flow (Outspend) (Unaudited, in thousands) | |||||||||||
Six Months | Six Months | Year Ended | |||||||||
June 30, 2019 | December 31, 2019 | ||||||||||
Net cash provided by operating activities | $ | 615,882 | $ | 670,397 | $ | 1,286,279 | |||||
Net change in operating assets and liabilities, net of acquisitions | (15,556) | (875) | (16,431) | ||||||||
Transaction expenses related to the acquisition of Jagged Peak | — | 7,413 | 7,413 | ||||||||
Total discretionary cash flow | $ | 600,326 | $ | 676,935 | $ | 1,277,261 | |||||
Development of oil and natural gas properties | (737,194) | (635,901) | (1,373,095) | ||||||||
(Additions) reductions to oil and natural gas properties - change in capital accruals | (41,124) | 41,300 | 176 | ||||||||
Total accrual-based development capital expenditures | (778,318) | (594,601) | (1,372,919) | ||||||||
Free cash flow (outspend) | $ | (177,992) | $ | 82,334 | $ | (95,658) |
Adjusted Net Income
Adjusted net income is not a measure of net income determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by management to evaluate financial performance, prior to exploration and abandonment costs, acquisition costs, rig termination costs, gain on sale of property, restructuring and other termination costs, loss (gain) on derivatives, net settlements on derivative instruments, net premiums received on options that settled during the period, change in TRA liability, and other expenses, while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net income (loss).
Parsley Energy, Inc. and Subsidiaries Adjusted Net Income and Net Income Per Share (Unaudited, in thousands, except per share data)(1) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net (loss) income - as reported | $ | (36,369) | $ | 53,773 | $ | 175,212 | $ | 369,127 | |||||||
Adjustments: | |||||||||||||||
Exploration and abandonment costs | 65,157 | 142,622 | 100,211 | 162,539 | |||||||||||
Acquisition costs | 7,616 | 165 | 7,616 | 167 | |||||||||||
Rig termination costs | 13,250 | — | 13,250 | — | |||||||||||
Gain on sale of property | (208) | (16) | (2,095) | (6,454) | |||||||||||
Restructuring and other termination costs | — | — | 1,562 | — | |||||||||||
Loss (gain) on derivatives | 87,638 | (93,115) | 131,212 | (50,342) | |||||||||||
Net settlements on derivative instruments | 902 | 8,600 | (12,206) | 8,084 | |||||||||||
Net premium realization on options that settled during the period | (11,765) | (19,115) | (43,278) | (71,566) | |||||||||||
Change in TRA liability | — | 355 | — | 437 | |||||||||||
Other expenses | 2,636 | — | 2,636 | 495 | |||||||||||
Noncontrolling interest | (17,652) | (4,542) | (21,765) | (19,561) | |||||||||||
Change in estimated income tax | (31,695) | (6,221) | (38,260) | (7,832) | |||||||||||
Adjusted net income | $ | 79,510 | $ | 82,506 | $ | 314,095 | $ | 385,094 | |||||||
Net (loss) income per diluted share - as reported | $ | (0.13) | $ | 0.19 | $ | 0.63 | $ | 1.35 | |||||||
Adjustments: | |||||||||||||||
Exploration and abandonment costs | $ | 0.23 | $ | 0.51 | $ | 0.36 | $ | 0.60 | |||||||
Acquisition costs | 0.03 | — | 0.03 | — | |||||||||||
Rig termination costs | 0.05 | — | 0.05 | — | |||||||||||
Gain on sale of property | — | — | (0.01) | (0.02) | |||||||||||
Restructuring and other termination costs | — | — | 0.01 | — | |||||||||||
Loss (gain) on derivatives | 0.31 | (0.33) | 0.47 | (0.18) | |||||||||||
Net settlements on derivative instruments | — | 0.03 | (0.04) | 0.03 | |||||||||||
Net premium realization on options that settled during the period | (0.04) | (0.07) | (0.15) | (0.26) | |||||||||||
Change in TRA liability | — | — | — | — | |||||||||||
Other expenses | 0.01 | — | 0.01 | — | |||||||||||
Noncontrolling interest | (0.06) | (0.01) | (0.09) | (0.08) | |||||||||||
Change in estimated income tax | (0.12) | (0.02) | (0.15) | (0.03) | |||||||||||
Adjusted net income per diluted share | $ | 0.28 | $ | 0.30 | $ | 1.12 | $ | 1.41 | |||||||
Basic weighted average shares outstanding - as reported | 280,064 | 278,052 | 279,636 | 272,226 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Class B Common Stock | — | — | — | — | |||||||||||
Restricted Stock and Restricted Stock Units | — | 737 | 536 | 658 | |||||||||||
Diluted weighted average shares outstanding - as reported | 280,064 | 278,789 | 280,172 | 272,884 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Class B Common Stock | — | — | — | — | |||||||||||
Restricted Stock and Restricted Stock Units | 761 | — | — | — | |||||||||||
Diluted weighted average shares outstanding for adjusted net income(2) | 280,825 | 278,789 | 280,172 | 272,884 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. | |||||||||||||
(2) | For the three months and year ended December 31, 2018 the number of weighted average diluted shares used to calculate reported net income per share and adjusted net income per share is based on the fact that, under the "if converted" Class B common stock was not recognized because they would have been antidilutive. |
PV-10
PV-10 is a non-GAAP financial measure and generally differs from the Standardized Measure, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes on future net reserves. Neither PV-10 nor Standardized Measure represents an estimate of the fair market value of our oil and natural gas properties. We and others in the industry use PV-10 as a measure to compare the relative size and value of proved reserves held by companies without regard to the specific tax characteristics of such companies.
The following table provides a reconciliation of PV-10 to the GAAP financial measure of Standardized Measure as of December 31, 2019:
As of December 31, 2019 | |||
(in millions) | |||
Standardized Measure | $ | 4,962.5 | |
Present value of future income tax discounted at 10% | 693.3 | ||
PV-10 of proved reserves | $ | 5,655.8 |
Organic Reserves Replacement Ratio
Parsley uses the organic reserves replacement ratio as an indicator of the Company's ability to replace the reserves that it has developed and to increase its reserves over time. The ratio is not a representation of value creation and has a number of limitations that should be considered. For example, the ratio does not incorporate the costs or timing of developing future reserves. The organic reserves replacement ratio of 243% was calculated as total 2019 reserve additions and revisions (technical and pricing), divided by total 2019 net production. The ratio calculation excludes acquisitions and divestitures.
Open Derivatives Positions | |||||||||||||||
Parsley Energy, Inc. and Subsidiaries Open Crude Oil Derivatives Positions(1) | |||||||||||||||
1Q20 | 2Q20 | 3Q20 | 4Q20 | ||||||||||||
OPTION CONTRACTS: | |||||||||||||||
Swaps - Cushing (MBbls/d)(2) | 11.0 | 11.0 | 11.0 | 11.0 | |||||||||||
Swap Price ($/Bbl) | $ | 57.87 | $ | 57.87 | $ | 57.87 | $ | 57.87 | |||||||
MIDLAND | |||||||||||||||
Three Way Collars - Midland (MBbls/d)(3) | 30.3 | 32.4 | 22.3 | 22.3 | |||||||||||
Short Call Price ($/Bbl) | $ | 68.04 | $ | 68.01 | $ | 65.67 | $ | 65.67 | |||||||
Long Put Price ($/Bbl) | $ | 56.54 | $ | 56.51 | $ | 55.27 | $ | 55.27 | |||||||
Short Put Price ($/Bbl) | $ | 46.54 | $ | 46.51 | $ | 45.27 | $ | 45.27 | |||||||
Swaps - Midland (MBbls/d)(2) | 3.3 | 3.3 | |||||||||||||
Swap Price ($/Bbl) | $ | 55.20 | $ | 55.20 | |||||||||||
MAGELLAN EAST HOUSTON ("MEH") | |||||||||||||||
Three Way Collars - MEH (MBbls/d)(3) | 50.1 | 52.2 | 46.8 | 46.8 | |||||||||||
Short Call Price ($/Bbl) | $ | 74.06 | $ | 73.80 | $ | 71.16 | $ | 71.16 | |||||||
Long Put Price ($/Bbl) | $ | 58.97 | $ | 58.93 | $ | 58.00 | $ | 58.00 | |||||||
Short Put Price ($/Bbl) | $ | 48.97 | $ | 48.93 | $ | 48.00 | $ | 48.00 | |||||||
Swaps - MEH (MBbls/d)(2) | 4.2 | 4.2 | |||||||||||||
Swap Price ($/Bbl) | $ | 56.30 | $ | 56.30 | |||||||||||
BRENT | |||||||||||||||
Three Way Collars - Brent (MBbls/d)(3) | 11.5 | 13.0 | 13.0 | ||||||||||||
Short Call Price ($/Bbl) | $ | 74.29 | $ | 73.13 | $ | 73.13 | |||||||||
Long Put Price ($/Bbl) | $ | 62.29 | $ | 62.25 | $ | 62.25 | |||||||||
Short Put Price ($/Bbl) | $ | 52.29 | $ | 52.25 | $ | 52.25 | |||||||||
Total Option Contracts (MBbls/d) | 94.7 | 110.4 | 97.3 | 97.3 | |||||||||||
Premium Realization ($MM)(4) | $ | (17.0) | $ | (19.8) | $ | (17.6) | $ | (17.6) | |||||||
BASIS SWAPS: | |||||||||||||||
Midland-Cushing Basis Swaps (MBbls/d)(5) | 18.9 | 18.9 | 14.0 | 14.0 | |||||||||||
Basis Differential ($/Bbl) | $ | (1.00) | $ | (1.00) | $ | (1.44) | $ | (1.44) | |||||||
Parsley Energy, Inc. and Subsidiaries Open Natural Gas Derivatives Positions(1) | |||||||||||||||
1Q20 | 2Q20 | 3Q20 | 4Q20 | ||||||||||||
OPTION CONTRACTS: | |||||||||||||||
WAHA | |||||||||||||||
Swaps - Waha (MMBtu/d)(2) | 48,242 | 48,242 | 48,152 | 48,152 | |||||||||||
Swap Price ($/MMBtu) | $ | 1.08 | $ | 0.70 | $ | 0.90 | $ | 0.86 | |||||||
Total Option Contracts (MMBtu/d) | 48,242 | 48,242 | 48,152 | 48,152 | |||||||||||
(1) | As of 2/19/2020. Prices represent the weighted average price of contracts scheduled for settlement during the period. | ||||||||||
(2) | Parsley receives the swap price. | ||||||||||
(3) | When the reference price (Midland, MEH, or Brent) is at or above the call price, Parsley receives the call price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | ||||||||||
(4) | Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | ||||||||||
(5) | Swaps that fix the basis differentials representing the index prices at which Parsley sells its oil and gas produced in the Permian Basin less the WTI Cushing price. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-fourth-quarter-2019-financial-and-operating-results-301007806.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Feb. 6, 2020 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp. (together with Parsley, the "Issuers"), announced today the pricing of their previously announced private offering (the "Notes Offering") of $400 million in aggregate principal amount of senior unsecured notes due 2028 (the "2028 Notes"). The 2028 Notes, which are priced at par, will mature on February 15, 2028 and will pay interest at an annual rate of 4.125%. Parsley Inc. will not guarantee the 2028 Notes.
Parsley intends to use the net proceeds from the Notes Offering and borrowings under its revolving credit facility to redeem (the "Redemption") all of the Issuers' outstanding 6.250% senior unsecured notes due 2024 (the "2024 Notes") at a redemption price of 104.688%, plus accrued and unpaid interest to the redemption date, pursuant to the terms of the indenture relating to the 2024 Notes. The Issuers intend to issue a conditional notice of redemption with respect to the Redemption, and they expect the redemption date will be March 7, 2020. The Redemption will be conditioned on the completion of the Notes Offering.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The securities will be available for resale only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This news release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the Securities Exchange Commission ("SEC"), including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2018 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s filings with the SEC could cause actual results to differ materially from those contained in any forward-looking statement.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-llc-announces-pricing-of-400-million-private-offering-of-senior-unsecured-notes-due-2028-to-refinance-outstanding-indebtedness-301000682.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Feb. 6, 2020 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp. (together with Parsley, the "Issuers"), announced today that they have commenced, subject to market conditions and other factors, a private offering of $400 million in aggregate principal amount of senior unsecured notes due 2028 to eligible purchasers (the "Notes Offering").
Parsley intends to use the net proceeds from the Notes Offering and borrowings under its revolving credit facility to redeem (the "Redemption") all of the Issuers' outstanding 6.250% senior unsecured notes due 2024 (the "2024 Notes") at a redemption price of 104.688%, plus accrued and unpaid interest to the redemption date, pursuant to the terms of the indenture relating to the 2024 Notes. The Issuers intend to issue a conditional notice of redemption with respect to the Redemption. The Redemption will be conditioned on the completion of the Notes Offering.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The securities will be available for resale only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This news release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the Securities and Exchange Commission ("SEC"), including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2018 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s filings with the SEC could cause actual results to differ materially from those contained in any forward-looking statement.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-llc-announces-400-million-private-offering-of-senior-unsecured-notes-due-2028-to-refinance-outstanding-indebtedness-301000270.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Jan. 23, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced that its Board of Directors increased the Company's quarterly dividend from $0.03 per share to $0.05 per share(1). Additionally, Parsley provided an overview of its 2020 development program and updated expectations for certain full-year 2019 results.
Summary Comment and Outlook
"Parsley's 2019 action plan was a resounding success as our team delivered a step-change improvement in capital efficiency and inflected to free cash flow generation ahead of schedule," commented Matt Gallagher, Parsley's President and CEO. "We remain committed to an enhanced free cash flow profile in 2020, and, importantly, we have reinforced this commitment with a meaningful increase to our regular dividend program. Integration of our Jagged Peak acquisition has our urgent focus and I am proud of our teams' collective dedication and efforts out of the gate. Ultimately, though, 'well done' is better than 'well said'. We look forward to delivering on our 2020 objectives in the coming quarters."
2020 Guidance
Parsley is reiterating the development plan outlined in its preliminary 2020 outlook issued on October 14, 2019, and plans to deploy 15 development rigs and four-to-five frac spreads on average in 2020. Parsley is also reaffirming its pro forma 2020 oil production outlook, but is decreasing its pro forma 2020 capital budget range at the midpoint, reflecting continued efficiency gains and savings on services following a comprehensive integrated budgeting process. Parsley is also providing initial guidance on its projected unit costs for 2020.
Parsley's baseline capital budget assumes a $50 WTI oil price. In this context, the Company would expect to generate free cash flow(2) of at least $200 million during 2020. In a higher oil price scenario, Parsley would expect to generate additional free cash flow and would not plan to increase its development activity in 2020. For further detail on Parsley's 2020 guidance, please see the table below.
Preliminary | Closing | Updated | |
2020 Outlook(3) | Adjustment(4) | 2020 Guidance | |
Production | |||
Annual net oil production (MBo/d) | 126.0-134.0 | (1.0) | 125.0-133.0 |
Annual net total production (MBoe/d) | 200.0-210.0 | ||
Capital Program | |||
Total development expenditures ($MM) | $1,600-$1,900 | ($15) | $1,600-$1,800 |
Drilling, Completion, & Equipment ($MM) | $1,500-$1,650 | ||
Other ($MM)(5) | $100-$150 | ||
Activity | |||
Gross operated horizontal POPs(6) | 180-190 | ||
Midland Basin (% of total) | ~65% | ||
Delaware Basin (% of total) | ~35% | ||
Average lateral length | 9,500'-10,000' | ||
Gross operated lateral footage (000's) | 1,710'-1,900' | ||
Average working interest | ~90% | ||
Unit Costs | |||
Lease operating expenses ($/Boe) | $3.50-$4.50 | ||
Cash general and administrative expenses ($/Boe)(7) | $2.00-$2.40 | ||
Production and ad valorem taxes (% of total revenue) | 6%-7% |
Return of Capital Program
Parsley's Board of Directors approved an increase to the Company's quarterly dividend from $0.03 per share to $0.05 per share(1). The dividend is payable on March 20, 2020, to shareholders of record on March 10, 2020.
1Q20 Guidance
Parsley closed its acquisition of Jagged Peak on January 10, 2020. After adjusting for the transaction closing date(4), the Company expects first quarter 2020 net oil production to average 123-129 MBo/d. With a full quarter of contribution from Jagged Peak, Parsley would expect first quarter pro forma 2020 net oil production to average 126-132 MBo/d.
Fourth Quarter and Full-Year 2019 Update
Activity Overview
During the fourth quarter of 2019, Parsley placed on production 37 gross operated horizontal wells with more than half of those wells coming online in December. Parsley expects to report fourth quarter capital expenditures of approximately $275-285 million, translating to full-year 2019 capital expenditures below the low end of the full-year guidance range of $1.40-$1.47 billion. Fourth quarter development spending decreased relative to third quarter spending, driven by lower well costs and quarter-over-quarter decreases in facilities and infrastructure spending. For the fourth quarter of 2019, Parsley expects net oil production of 89.5-89.7 MBo per day.
Parsley continues to lower its cost structure in the Delaware Basin, recently completing a four-well project in Pecos County with an estimated average drilling, completion and equipment cost of under $1,100 per lateral foot.
"The Parsley team finished the year strong, carrying efficient operational momentum through year-end and paving the way for a compelling start to 2020," said David Dell'Osso, Parsley's COO. "I am proud of the strides our team continues to make in the Delaware Basin, and look forward to delivering the capital efficiency gains we have previously outlined across our recently expanded acreage footprint."
4Q19 Earnings Release and Conference Call Information
Parsley Energy plans to report fourth quarter 2019 financial results on Wednesday, February 19, 2020 after the close of trading on the New York Stock Exchange. The Company will host its quarterly conference call at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) on Thursday, February 20, 2020. Participants should call 877-709-8150 (United States/Canada) or 201-689-8354 (International) 10 minutes before the scheduled time and request the Parsley Energy earnings conference call. A telephone replay will be available through February 27, 2020 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13698261. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Investors-Events & Presentations" section of the website.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
(1) | Dividend to be paid to all Company equity holders, including shareholders of Class A common stock and holders of Parsley Energy, LLC units/Class B common stock. | |
(2) | As used in this news release, free cash flow (outspend), a non-GAAP financial measure, means net cash provided by operating activities before transaction expenses related to the acquisition of Jagged Peak Energy Inc. ("Jagged Peak") and changes in operating assets and liabilities, net of acquisitions, less accrual-based development capital expenditures. The Company is unable to present a reconciliation of forward-looking free cash flow (outspend) because components of the calculation, including changes in working capital accounts, are inherently unpredictable. Additionally, estimating the most directly comparable GAAP measure with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. | |
(3) | Assumes full-year contribution of the acquisition of Jagged Peak Energy announced October 14, 2019 and closed on January 10, 2020. | |
(4) | "Closing Adjustment" reflects net oil production and development expenditures attributable to Jagged Peak during the period beginning on January 1, 2020 and ending on the closing of the acquisition of Jagged Peak on January 10, 2020. | |
(5) | Other capital expenditures includes non-operated activity, water infrastructure, gas gathering infrastructure, and geological/geophysical. | |
(6) | Wells placed on production. Includes wells placed on production by Jagged Peak between January 1, 2020 and January 10, 2020. | |
(7) | Cash general and administrative expense ("cash G&A") is a non-GAAP financial measure. As used in this news release, cash G&A means GAAP general and administrative expense, exclusive of the Company's stock based compensation. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-increases-quarterly-dividend-by-67-lowers-2020-capital-budget-and-provides-2020-guidance-300992358.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Jan. 17, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) plans to report fourth quarter 2019 financial results on Wednesday, February 19, 2020 after the close of trading on the New York Stock Exchange. The company will host its quarterly conference call at 9:00 AM ET (8:00 AM CT) on Thursday, February 20, 2020.
By Phone: | Dial 877-709-8150 (United States/Canada) or 201-689-8354 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Thursday, February 27, 2020 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13698261. | |
By Webcast: | |
Select "Events & Presentations" under the "Investors" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration and production of unconventional oil and natural gas reserves in the Permian Basin. For more information, visit our website at www.parsleyenergy.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-schedules-fourth-quarter-2019-earnings-release-and-conference-call-300988604.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Jan. 10, 2020 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," or "Parsley Energy") today announced that it has completed its acquisition of Jagged Peak Energy Inc. (NYSE: JAG) ("Jagged Peak"). The acquisition was previously approved by Parsley shareholders at a special meeting held on January 9, 2020, where more than 99.5% of the votes cast by Parsley stockholders were voted in favor of the proposal to issue Parsley common stock to the holders of Jagged Peak common stock as consideration for the acquisition.
Acquisition Details
At the effective time of the acquisition, each share of Jagged Peak common stock was converted into the right to receive 0.447 shares of Parsley Class A common stock. As a result of the transaction, Jagged Peak common stock will no longer be listed for trading on NYSE, and Jagged Peak will suspend its reporting obligations under the Securities Exchange Act of 1934.
In connection with the closing of the transaction, Parsley announced the appointment of S. Wil VanLoh, Jr. and Jim Kleckner to its Board of Directors. Mr. VanLoh is the Founder and Chief Executive Officer of Quantum Energy Partners and formerly served as a Jagged Peak director. Mr. Kleckner was formerly President and Chief Executive Officer of Jagged Peak and also served as a Jagged Peak director.
Management Commentary
"We first publicly announced our proposed combination with Jagged Peak less than ninety days ago," said Matt Gallagher, Parsley's President and CEO. "This collective expediency to closing allows our team to hit the ground running on these complementary, high margin assets and start capturing tangible synergies that will enhance value for our combined shareholder base. Execution will continue to speak louder than words, and our integration efforts will retain the sense of urgency and accountability that defined our successful 2019 action plan. Ultimately, we expect that the culmination of this hard work will be a more capital efficient enterprise with more free cash flow. Finally, I am excited to formally welcome Wil and Jim to our Board. I believe the Company and our shareholders will be well served by their sound financial acumen, considerable experience, and extensive network of industry contacts."
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit Parsley's website at www.parsleyenergy.com.
Cautionary Statements Regarding Forward Looking Statements
The foregoing contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, included in this press release that address activities, events or developments that Parsley expects, believes or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements contained in this press release specifically include statements relating to benefits of the acquisition of Jagged Peak. The words "estimate," "project," "predict," "believe," "expect," "anticipate," "potential," "could," "may," "foresee," "plan," "will," "guidance," "outlook," "goal" or other similar expressions that convey the uncertainty of future events or outcomes are intended to identify forward-looking statements, which generally are not historical in nature. However, the absence of these words does not mean that the statements are not forward-looking. These statements are based on certain assumptions and analyses made by Parsley based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although Parsley believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond Parsley's control, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the risk factors discussed or referenced in Parsley's most recent Annual Report on Form 10-K and other filings with the SEC. Any forward-looking statement speaks only as of the date on which such statement is made, and Parsley undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-completes-acquisition-of-jagged-peak-energy-300984916.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Dec. 19, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley" or the "Company") today released its inaugural Corporate Responsibility Report. The report outlines Parsley's commitment and approach to governance, ethics, environmental stewardship, health and safety, talent attraction and retention, and community engagement. The report can be found on the Company's website at www.parsleyenergy.com/CRR.
"At Parsley Energy, we understand the importance of developing and producing domestic natural resources sustainably and safely to enhance the overall quality of everyday life," said Matt Gallagher, President and CEO of Parsley. "I am proud of the strides we have made to consistently execute at a high level while lowering costs and keeping our environmental and social impacts at the forefront of our decision making. I am proud to introduce our inaugural corporate responsibility report and look forward to keeping the market updated on our progress."
To assist Parsley in identifying the topics that were included in the Corporate Responsibility Report, Parsley completed a materiality process that followed the Global Reporting Initiative steps of topic identification, prioritization, and senior leader validation of the results. During this process, Parsley engaged in a series of discussions with Parsley's internal and external stakeholders, including Parsley's executive team, investors, customers, landowners, regulators, NGOs, trade associations and the media, to gain a broader perspective of potential sustainability-related issues, impacts, risks and opportunities. The results of that process, along with feedback from Parsley's Safety, Sustainability and Corporate Responsibility Committee, an internal committee led by Parsley's Chief Operating Officer, informed the topics discussed in the report.
Upcoming Conference Participation
Parsley plans to participate in the Goldman Sachs Global Energy Conference in Miami on January 6-7, 2020.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-releases-inaugural-corporate-responsibility-report-300977245.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Nov. 5, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended September 30, 2019. The Company has posted a presentation to its website that supplements the information in this release.
Third Quarter 2019 Highlights
Summary Comment and Outlook
"Parsley has executed with a sense of urgency throughout 2019 and the third quarter was no different," said Matt Gallagher, Parsley's President and CEO. "With an inflection to free cash flow and a step-change improvement in capital efficiency, we have delivered on critical objectives of our 2019 action plan, underscoring the resiliency of our Permian asset base. Furthermore, Parsley recently announced a low-premium, all-stock acquisition of Jagged Peak, which will enhance our corporate free cash flow profile and help sustain these capital efficiency gains moving forward. I am excited by the prospects of what the combination of Parsley and Jagged Peak can deliver for shareholders in 2020 and beyond."
Operational Update
Activity Overview
During the third quarter of 2019, the Company spud 34 and placed on production 35 gross operated horizontal wells. Parsley's working interest on wells placed on production was approximately 95%, with an average completed lateral length of approximately 10,000 feet. The Company placed on production 30 gross operated horizontal wells in the Midland Basin, with the remainder placed on production in the Delaware Basin.
During 3Q19, Parsley utilized three-to-four frac spreads and proactively managed its completion schedule. The Company intends to continue this practice through the end of 2019, translating to approximately 32 gross (27 net) operated horizontal wells placed on production during 4Q19. Parsley believes this steady capital investment pace through year-end will help avoid the operational friction costs associated with budget exhaustion and will facilitate strong organic growth in early 2020.
"The Parsley team has raised the bar throughout 2019 and this is being borne out by persistent capital efficiency gains," said David Dell'Osso, Parsley's COO. "Simply put, we are delivering more footage and more oil production for less capital. I am particularly pleased with the significant improvement we have achieved in our Delaware Basin cost structure over the past year. Looking forward, Parsley's collective sense of urgency is aimed at sustaining our execution momentum while working to capture synergies for our shareholders as we plan to integrate Jagged Peak's complementary asset base into our 2020 plans."
Financial Update
Healthy execution in 3Q19 translated to strong performance in key financial measures.
Profitability
During 3Q19, the Company recorded net income attributable to its stockholders of $119.7 million, or $0.43 per share. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, adjusted net income for 3Q19 was $82.0 million, or $0.29 per share.(1)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 3Q19 was $370.7 million.(1)
Realized Pricing
During 3Q19, Parsley reported an average unhedged oil price realization of $55.16/Bbl net of transportation costs, representing a discount of $1.28 to the average WTI Cushing price(3) for the quarter.
Operating Costs
Parsley registered favorable trends in operating costs and margins during the third quarter of 2019. The Company reported LOE per Boe of $3.30, down 2% versus 2Q19 expense levels. Favorable LOE unit cost trends were driven by artificial lift optimization, continued utilization of the Company's integrated water handling system, and increased production volumes. Parsley is tightening full-year 2019 LOE per Boe guidance from $3.40-$3.90 to $3.40-$3.65.
Both G&A per Boe and cash based G&A per Boe(1), which excludes stock-based compensation expense, decreased quarter-over-quarter and year-over-year to $2.65 and $2.28, respectively, representing Company-low record levels in each case. Encouraging G&A cost trends are a function of ongoing corporate cost savings initiatives. Parsley is lowering full-year 2019 cash G&A per Boe guidance from $2.60-$2.90 to $2.50-$2.70.
Healthy realized oil pricing and favorable trends in the aforementioned cash operating costs drove a strong operating cash margin of $27.44 per Boe, or 75% of the Company's average realized price per Boe.(1)
Capital Expenditures
Parsley reported capital expenditures of $318 million during the third quarter of 2019, comprised of $273 million for operated drilling and completion activity, $42 million for operated facilities and infrastructure, and $3 million associated with non-operated development activity. Parsley is tightening full-year 2019 capital guidance from $1.40-$1.49 billion to $1.40-$1.47 billion.
Return of Capital Program
Parsley Energy today announced that its Board of Directors declared a quarterly dividend of $0.03 per share.(2) The dividend is payable on December 20, 2019, to shareholders of record on December 10, 2019.
Liquidity and Hedging
As of September 30, 2019, Parsley had approximately $981 million of liquidity, consisting of $5 million of cash and cash equivalents and an availability of $976 million on the Company's revolver.(4)
The Company also recently added to its 2020 hedge positions and, pro forma for the previously announced pending acquisition of Jagged Peak, expects that a majority of the two businesses' estimated 2020 oil production will be subject to hedge protection. Parsley's portfolio of option contracts provides significant protection for its balance sheet and anticipated cash flow while retaining meaningful exposure to higher commodity prices. For details on Parsley's standalone and pro forma hedge position, please see the tables below under Supplemental Information. For details on Parsley's standalone hedge position please see, upon availability, the Company's Quarterly Report on Form 10-Q for the three months ended September 30, 2019.
2019 Guidance
Parsley is tightening its 2019 capital budget range, increasing its full-year 2019 net oil production guidance and decreasing its full-year 2019 unit operating cost guidance, reflecting strong execution across the organization. The Company expects fourth quarter 2019 net oil production to average 88.5-92.0 MBo/d. The updated 2019 guidance does not take in effect the pending acquisition of Jagged Peak, which is expected to close in the first quarter of 2020, subject to customary closing conditions, including shareholder and regulatory approvals. For further detail, please see the table below.
Previous | Updated | |
2019 Guidance | 2019 Guidance | |
Production | ||
Annual net oil production (MBo/d) | 85.0-86.5 | 86.4-87.4 |
Annual net total production (MBoe/d) | 134.0-139.0 | 138.0-142.0 |
Capital Program | ||
Total development expenditures ($MM) | $1,400-$1,490 | $1,400-$1,470 |
Drilling and completion (% of total) | ~85% | ~85% |
Facilities, Infrastructure & Other (% of total) | ~15% | ~15% |
Activity | ||
Gross operated horizontal POPs(5) | 135-140 | ~140 |
Midland Basin (% of total) | ~85% | ~85% |
Delaware Basin (% of total) | ~15% | ~15% |
Average lateral length | 10,100'-10,500' | 10,200'-10,500' |
Gross operated lateral footage (000's) | 1,365'-1,470' | 1,430'-1,470' |
Average working interest | 93%-94% | 93%-94% |
Unit Costs | ||
Lease operating expenses ($/Boe) | $3.40-$3.90 | $3.40-$3.65 |
Cash general and administrative expenses ($/Boe) | $2.60-$2.90 | $2.50-$2.70 |
Production and ad valorem taxes (% of total revenue) | 6%-7% | 6%-7% |
Preliminary Pro Forma 2020 Outlook
Parsley is reiterating its preliminary pro forma 2020 outlook issued on October 14, 2019. Both production and capital expenditure range estimates assume a full-year of contribution from Jagged Peak.
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the third quarter of 2019 on Wednesday, November 6 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-709-8150 (United States/Canada) or 201-689-8354 (International) 10 minutes before the scheduled time and request the Parsley Energy earnings conference call. A telephone replay will be available through November 13 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13695516. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Investors-Events & Presentations" section of the website. The Company has also posted a presentation to its website that supplements the information in this release.
Upcoming Conference Participation
Parsley plans to participate in the Bank of America Merrill Lynch Global Energy Conference in Miami on November 12-13, the Raymond James Growth & Value Conference in Boston on November 18-19, and the Capital One Securities Energy Conference in Houston on December 11.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
- Tables to Follow -
(1) | "Cash based G&A per Boe", "Adjusted EBITDAX", "operating cash margin", "free cash flow (outspend)", and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For definitions and reconciliations of the non-GAAP financial measures of adjusted EBITDAX, operating cash margin, free cash flow (outspend), and adjusted net income to GAAP financial measures, please see the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. | |
(2) | Dividend to be paid to all Company equity holders, including shareholders of Class A common stock and holders of Parsley Energy, LLC units/Class B common stock. | |
(3) | Represents Bloomberg-sourced 3Q19 average WTI Cushing price. | |
(4) | Revolver availability is net of letters of credit. | |
(5) | Wells placed on production. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Selected Operating Data | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
September 30, 2019 | June 30, 2019 | September 30, 2018 | |||||||||
Net production volumes: | |||||||||||
Oil (MBbls) | 8,440 | 7,881 | 6,763 | ||||||||
Natural gas (MMcf) | 14,475 | 13,004 | 9,878 | ||||||||
Natural gas liquids (MBbls) | 2,983 | 2,701 | 2,281 | ||||||||
Total (MBoe) | 13,836 | 12,749 | 10,690 | ||||||||
Average daily net production (Boe/d) | 150,391 | 140,099 | 116,196 | ||||||||
Average sales prices(1) : | |||||||||||
Oil, without realized derivatives (per Bbl) | $ | 55.16 | $ | 58.23 | $ | 62.78 | |||||
Oil, with realized derivatives (per Bbl) | $ | 54.12 | $ | 55.42 | $ | 61.44 | |||||
Natural gas, without realized derivatives (per Mcf) | $ | 0.59 | $ | 0.01 | $ | 1.30 | |||||
Natural gas, with realized derivatives (per Mcf) | $ | 0.64 | $ | 0.28 | $ | 1.35 | |||||
NGLs (per Bbl) | $ | 11.08 | $ | 14.18 | $ | 31.26 | |||||
Average price per Boe, without realized derivatives | $ | 36.65 | $ | 39.01 | $ | 47.58 | |||||
Average price per Boe, with realized derivatives | $ | 36.07 | $ | 37.54 | $ | 46.79 | |||||
Average costs (per Boe): | |||||||||||
Lease operating expenses | $ | 3.30 | $ | 3.35 | $ | 3.72 | |||||
Transportation and processing costs | $ | 0.87 | $ | 0.52 | $ | 0.79 | |||||
Production and ad valorem taxes | $ | 2.76 | $ | 2.41 | $ | 2.86 | |||||
Depreciation, depletion and amortization | $ | 15.30 | $ | 15.57 | $ | 14.72 | |||||
General and administrative expenses (including stock-based compensation) | $ | 2.65 | $ | 2.74 | $ | 3.51 | |||||
General and administrative expenses (cash based) | $ | 2.28 | $ | 2.35 | $ | 3.07 |
(1) | Average prices shown in the table reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculations of such effects include both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. Realized oil prices are net of transportation costs. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(Unaudited, in thousands, except for per share data)(1) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
REVENUES | |||||||||||||||
Oil sales | $ | 465,549 | $ | 424,549 | $ | 1,292,563 | $ | 1,151,977 | |||||||
Natural gas sales | 8,566 | 12,810 | 23,159 | 42,469 | |||||||||||
Natural gas liquids sales | 33,041 | 71,294 | 115,138 | 169,189 | |||||||||||
Other | 2,995 | 2,369 | 5,503 | 7,916 | |||||||||||
Total revenues | 510,151 | 511,022 | 1,436,363 | 1,371,551 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Lease operating expenses | 45,719 | 39,777 | 129,587 | 104,513 | |||||||||||
Transportation and processing costs | 12,052 | 8,495 | 26,917 | 21,233 | |||||||||||
Production and ad valorem taxes | 38,235 | 30,604 | 96,386 | 82,121 | |||||||||||
Depreciation, depletion and amortization | 211,737 | 157,352 | 584,023 | 424,103 | |||||||||||
General and administrative expenses (including stock-based compensation) | 36,718 | 37,555 | 109,662 | 108,541 | |||||||||||
Exploration and abandonment costs | 11,988 | 11,140 | 35,054 | 19,917 | |||||||||||
Acquisition costs | — | — | — | 2 | |||||||||||
Accretion of asset retirement obligations | 373 | 361 | 1,071 | 1,074 | |||||||||||
Gain on sale of property | (1,887) | (1,383) | (1,887) | (6,438) | |||||||||||
Restructuring and other termination costs | — | — | 1,562 | — | |||||||||||
Other operating expenses | 2,175 | 6,129 | 3,563 | 10,781 | |||||||||||
Total operating expenses | 357,110 | 290,030 | 985,938 | 765,847 | |||||||||||
OPERATING INCOME | 153,041 | 220,992 | 450,425 | 605,704 | |||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||
Interest expense, net | (33,578) | (32,854) | (100,177) | (98,580) | |||||||||||
Gain (loss) on derivatives | 56,552 | (22,514) | (43,574) | (42,773) | |||||||||||
Change in TRA liability | — | — | — | (82) | |||||||||||
Interest income | 216 | 1,055 | 610 | 4,864 | |||||||||||
Other (expense) income | (1,678) | (76) | (905) | 459 | |||||||||||
Total other income (expense), net | 21,512 | (54,389) | (144,046) | (136,112) | |||||||||||
INCOME BEFORE INCOME TAXES | 174,553 | 166,603 | 306,379 | 469,592 | |||||||||||
INCOME TAX EXPENSE | (34,953) | (32,454) | (59,788) | (89,022) | |||||||||||
NET INCOME | 139,600 | 134,149 | 246,591 | 380,570 | |||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (19,890) | (20,840) | (35,010) | (65,216) | |||||||||||
NET INCOME ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS | $ | 119,710 | $ | 113,309 | $ | 211,581 | $ | 315,354 | |||||||
Net income per common share: | |||||||||||||||
Basic | $ | 0.43 | $ | 0.41 | $ | 0.76 | $ | 1.17 | |||||||
Diluted | $ | 0.43 | $ | 0.41 | $ | 0.76 | $ | 1.16 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 279,961 | 277,705 | 279,491 | 270,262 | |||||||||||
Diluted | 280,547 | 278,396 | 279,954 | 270,846 |
(1) | Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Balance Sheets | |||||||
(Unaudited, in thousands) | |||||||
September 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 4,660 | $ | 163,216 | |||
Accounts receivable, net of allowance for doubtful accounts: | |||||||
Joint interest owners and other | 43,656 | 39,564 | |||||
Oil, natural gas and NGLs | 176,261 | 136,209 | |||||
Related parties | 381 | 94 | |||||
Short-term derivative instruments, net | 216,525 | 191,297 | |||||
Other current assets | 10,101 | 10,332 | |||||
Total current assets | 451,584 | 540,712 | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Oil and natural gas properties, successful efforts method | 10,988,657 | 9,948,246 | |||||
Accumulated depreciation, depletion and impairment | (1,851,971) | (1,295,098) | |||||
Total oil and natural gas properties, net | 9,136,686 | 8,653,148 | |||||
Other property, plant and equipment, net | 179,409 | 170,739 | |||||
Total property, plant and equipment, net | 9,316,095 | 8,823,887 | |||||
NONCURRENT ASSETS | |||||||
Operating lease assets, net of accumulated depreciation | 167,316 | — | |||||
Long-term derivative instruments, net | 54,741 | 20,124 | |||||
Other noncurrent assets | 5,960 | 6,640 | |||||
Total noncurrent assets | 228,017 | 26,764 | |||||
TOTAL ASSETS | $ | 9,995,696 | $ | 9,391,363 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | 410,001 | $ | 364,803 | |||
Revenue and severance taxes payable | 135,408 | 127,265 | |||||
Short-term derivative instruments, net | 177,716 | 152,330 | |||||
Current operating lease liabilities | 83,145 | — | |||||
Other current liabilities | 3,465 | 4,547 | |||||
Total current liabilities | 809,735 | 648,945 | |||||
NONCURRENT LIABILITIES | |||||||
Long-term debt | 2,197,093 | 2,181,667 | |||||
Deferred tax liability | 191,596 | 131,523 | |||||
Operating lease liability | 87,217 | — | |||||
Payable pursuant to tax receivable agreement | 71,077 | 68,110 | |||||
Long-term derivative instruments, net | 46,822 | 16,633 | |||||
Asset retirement obligations | 27,604 | 24,750 | |||||
Financing lease liability | 1,768 | — | |||||
Other noncurrent liabilities | 59 | — | |||||
Total noncurrent liabilities | 2,623,236 | 2,422,683 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS' EQUITY | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | |||||
Common stock | |||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 282,256,544 shares issued and 281,238,301 shares outstanding at September 30, 2019 and 280,827,038 shares issued and 280,205,293 shares outstanding at December 31, 2018 | 2,822 | 2,808 | |||||
Class B, $0.01 par value, 125,000,000 shares authorized, 35,420,258 and 36,547,731 shares issued and outstanding at | 355 | 366 | |||||
Additional paid in capital | 5,195,144 | 5,163,987 | |||||
Retained earnings | 615,743 | 412,646 | |||||
Treasury stock, at cost, 1,018,243 shares and 621,745 shares at September 30, 2019 and December 31, 2018 | (17,421) | (11,749) | |||||
Total stockholders' equity | 5,796,643 | 5,568,058 | |||||
Noncontrolling interests | 766,082 | 751,677 | |||||
Total equity | 6,562,725 | 6,319,735 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 9,995,696 | $ | 9,391,363 |
(1) | Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(Unaudited, in thousands) | |||||||
Nine Months Ended September 30, | |||||||
2019 | 2018 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 246,591 | $ | 380,570 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 584,023 | 424,103 | |||||
Leasehold abandonments and impairments | 34,074 | 18,319 | |||||
Accretion of asset retirement obligations | 1,071 | 1,074 | |||||
Gain on sale of property | (1,887) | (6,438) | |||||
Stock-based compensation | 15,473 | 15,118 | |||||
Deferred income tax expense | 59,788 | 89,022 | |||||
Change in TRA liability | — | 82 | |||||
Loss on derivatives | 43,574 | 42,773 | |||||
Net cash (paid) received for derivative settlements | (13,088) | 94 | |||||
Net cash paid for option premiums | (35,321) | (40,087) | |||||
Other | 5,140 | 3,375 | |||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (44,144) | (45,089) | |||||
Accounts receivable—related parties | (287) | 240 | |||||
Other current assets | 5,062 | (696) | |||||
Other noncurrent assets | (274) | (386) | |||||
Accounts payable and accrued expenses | 33,303 | (7,964) | |||||
Revenue and severance taxes payable | 8,143 | 25,767 | |||||
Other noncurrent liabilities | 59 | — | |||||
Net cash provided by operating activities | 941,300 | 899,877 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Development of oil and natural gas properties | (1,081,182) | (1,364,755) | |||||
Acquisitions of oil and natural gas properties | (33,841) | (96,702) | |||||
Additions to other property and equipment | (28,155) | (62,542) | |||||
Proceeds from sales of property, plant and equipment | 40,967 | 87,954 | |||||
Maturity of short-term investments | — | 149,331 | |||||
Other | 5,221 | 13,657 | |||||
Net cash used in investing activities | (1,096,990) | (1,273,057) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings under long-term debt | 462,000 | — | |||||
Payments on long-term debt | (447,000) | (2,203) | |||||
Payments on financing lease obligations | (2,126) | — | |||||
Debt issuance costs | — | (45) | |||||
Repurchase of common stock | (5,672) | (10,941) | |||||
Dividends and distributions paid | (9,465) | — | |||||
Distributions to owners from consolidated subsidiary | (603) | — | |||||
Net cash used in financing activities | (2,866) | (13,189) | |||||
Net decrease in cash, cash equivalents and restricted cash | (158,556) | (386,369) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 163,216 | 554,189 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 4,660 | $ | 167,820 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||
Cash paid for interest | $ | (71,774) | $ | (94,392) | |||
Cash received for income taxes | $ | 240 | $ | — | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||||||
Asset retirement obligations incurred, including changes in estimate | $ | 1,619 | $ | 1,665 | |||
Additions (reductions) to oil and natural gas properties - change in capital accruals | $ | 15,429 | $ | (19,244) | |||
Net premiums on options that settled during the period | $ | (31,513) | $ | (52,451) |
(1) | Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by the Company's management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net income before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, interest income, income tax expense, change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, gain on sale of property, restructuring and other termination costs, accretion of asset retirement obligations, inventory write down, (gain) loss on derivatives, net settlements on derivative instruments and net premiums on options that settled during the period.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income attributable to Parsley Energy, Inc. stockholders for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted EBITDAX | |||||||||||||||
(Unaudited, in thousands)(1) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Adjusted EBITDAX reconciliation to net income: | |||||||||||||||
Net income attributable to Parsley Energy, Inc. stockholders | $ | 119,710 | $ | 113,309 | $ | 211,581 | $ | 315,354 | |||||||
Net income attributable to noncontrolling interests | 19,890 | 20,840 | 35,010 | 65,216 | |||||||||||
Depreciation, depletion and amortization | 211,737 | 157,352 | 584,023 | 424,103 | |||||||||||
Exploration and abandonment costs | 11,988 | 11,140 | 35,054 | 19,917 | |||||||||||
Interest expense, net | 33,578 | 32,854 | 100,177 | 98,580 | |||||||||||
Interest income | (216) | (1,055) | (610) | (4,864) | |||||||||||
Income tax expense | 34,953 | 32,454 | 59,788 | 89,022 | |||||||||||
EBITDAX | 431,640 | 366,894 | 1,025,023 | 1,007,328 | |||||||||||
Change in TRA liability | — | — | — | 82 | |||||||||||
Stock-based compensation | 5,175 | 4,686 | 15,473 | 15,118 | |||||||||||
Acquisition costs | — | — | — | 2 | |||||||||||
Gain on sale of property | (1,887) | (1,383) | (1,887) | (6,438) | |||||||||||
Restructuring and other termination costs | — | — | 1,562 | — | |||||||||||
Accretion of asset retirement obligations | 373 | 361 | 1,071 | 1,074 | |||||||||||
Inventory write down | — | 451 | — | 495 | |||||||||||
(Gain) loss on derivatives | (56,552) | 22,514 | 43,574 | 42,773 | |||||||||||
Net settlements on derivative instruments | 3,686 | 9,376 | (13,108) | (516) | |||||||||||
Net premiums on options that settled during the period | (11,765) | (17,853) | (31,513) | (52,451) | |||||||||||
Adjusted EBITDAX | $ | 370,670 | $ | 385,046 | $ | 1,040,195 | $ | 1,007,467 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Operating Cash Margin
Operating cash margin is not a measure of operating income as determined by GAAP. Operating cash margin is a supplemental non-GAAP performance measure used by the Company as an indicator of the Company's profitability and ability to manage its operating income. The Company defines operating cash margin as net income before income tax expense, other revenues, depreciation, depletion and amortization, exploration and abandonment costs, stock-based compensation, acquisition costs, accretion of asset retirement obligations, other operating expense, net interest expense, (gain) loss on sale of property, restructuring and other termination costs, (gain) loss on derivatives, change in TRA liability, interest income, and other income. The amounts included in the calculations of operating cash margin were computed in accordance with GAAP.
Operating cash margin is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of operating cash margin to the GAAP financial measure of net income attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Operating Cash Margin | |||||||||||||||
(Unaudited, in thousands, except for per unit data)(1) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating cash margin reconciliation to net income: | |||||||||||||||
Net income attributable to Parsley Energy, Inc. stockholders | $ | 119,710 | $ | 113,309 | $ | 211,581 | $ | 315,354 | |||||||
Net income attributable to noncontrolling interests | 19,890 | 20,840 | 35,010 | 65,216 | |||||||||||
Income tax expense | 34,953 | 32,454 | 59,788 | 89,022 | |||||||||||
Other revenues | (2,995) | (2,369) | (5,503) | (7,916) | |||||||||||
Depreciation, depletion and amortization | 211,737 | 157,352 | 584,023 | 424,103 | |||||||||||
Exploration and abandonment costs | 11,988 | 11,140 | 35,054 | 19,917 | |||||||||||
Stock-based compensation | 5,175 | 4,686 | 15,473 | 15,118 | |||||||||||
Acquisition costs | — | — | — | 2 | |||||||||||
Accretion of asset retirement obligations | 373 | 361 | 1,071 | 1,074 | |||||||||||
Other operating expense | 2,175 | 6,129 | 3,563 | 10,781 | |||||||||||
Interest expense, net | 33,578 | 32,854 | 100,177 | 98,580 | |||||||||||
Gain on sale of property | (1,887) | (1,383) | (1,887) | (6,438) | |||||||||||
Restructuring and other termination costs | — | — | 1,562 | — | |||||||||||
(Gain) loss on derivatives | (56,552) | 22,514 | 43,574 | 42,773 | |||||||||||
Change in TRA liability | — | — | — | 82 | |||||||||||
Interest income | (216) | (1,055) | (610) | (4,864) | |||||||||||
Other income | 1,678 | 76 | 905 | (459) | |||||||||||
Operating cash margin | $ | 379,607 | $ | 396,908 | $ | 1,083,781 | $ | 1,062,345 | |||||||
Operating cash margin per Boe | $ | 27.44 | $ | 37.13 | $ | 28.62 | $ | 36.75 | |||||||
Average price per Boe, without realized derivatives | $ | 36.65 | $ | 47.58 | $ | 37.78 | $ | 47.17 | |||||||
Operating cash margin percentage | 75 | % | 78 | % | 76 | % | 78 | % |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Free Cash Flow (Outspend)
Free cash flow (outspend) is not a measure of net cash provided by operating activities as determined by GAAP. Free cash flow (outspend) is a supplemental non-GAAP financial measure that is used by the Company as an indicator of the Company's ability to manage its operating cash flow (outspend), internally fund its exploration and development activities, pay dividends, and to service or incur additional debt. The Company defines free cash flow (outspend) as net cash provided by operating activities before changes in operating assets and liabilities, net of acquisitions, less accrual-based development capital expenditures. The amounts included in the calculations of free cash flow (outspend) were computed in accordance with GAAP.
Free cash flow (outspend) is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of free cash flow (outspend) to the GAAP financial measure of net cash provided by operating activities.
Parsley Energy, Inc. and Subsidiaries | |||||||
Free Cash Flow (Outspend) | |||||||
(Unaudited, in thousands) | |||||||
Three Months | Nine Months | ||||||
September 30, 2019 | |||||||
Net cash provided by operating activities | $ | 325,418 | $ | 941,300 | |||
Net change in operating assets and liabilities, net of acquisitions | 13,694 | (1,862) | |||||
Total discretionary cash flow | 339,112 | $ | 939,438 | ||||
Development of oil and natural gas properties | (343,988) | (1,081,182) | |||||
Reductions (additions) to oil and natural gas properties - change in capital accruals | 25,695 | (15,429) | |||||
Total accrual-based development capital expenditures | (318,293) | (1,096,611) | |||||
Free cash flow (outspend) | $ | 20,819 | $ | (157,173) |
Adjusted Net Income
Adjusted net income is not a measure of net income determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by the Company's management to evaluate financial performance, prior to (gains) losses on derivatives, net settlements on derivative instruments, net premiums received on options that settled during the period, gain on sale of property, restructuring and other termination costs, exploration and abandonment costs, acquisition costs, and change in TRA liability, while adjusting for noncontrolling interests and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net income attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted Net Income and Net Income Per Share | |||||||||||||||
(Unaudited, in thousands, except per share data)(1) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income attributable to Parsley Energy, Inc. stockholders | $ | 119,710 | $ | 113,309 | $ | 211,581 | $ | 315,354 | |||||||
Adjustments: | |||||||||||||||
(Gain) loss on derivatives | (56,552) | 22,514 | 43,574 | 42,773 | |||||||||||
Net settlements on derivative instruments | 3,686 | 9,376 | (13,108) | (516) | |||||||||||
Net premiums on options that settled during the period | (11,765) | (17,853) | (31,513) | (52,451) | |||||||||||
Gain on sale of property | (1,887) | (1,383) | (1,887) | (6,438) | |||||||||||
Restructuring and other termination costs | — | — | 1,562 | — | |||||||||||
Exploration and abandonment costs | 11,988 | 11,140 | 35,054 | 19,917 | |||||||||||
Acquisition costs | — | — | — | 2 | |||||||||||
Change in TRA liability | — | — | — | 82 | |||||||||||
Change in noncontrolling interests | 6,106 | (2,745) | (4,113) | (410) | |||||||||||
Change in estimated income tax | 10,675 | (8,130) | (6,565) | (4,647) | |||||||||||
Adjusted net income | $ | 81,961 | $ | 126,228 | $ | 234,585 | $ | 313,666 | |||||||
Net income per diluted share - as reported(2) | $ | 0.43 | $ | 0.41 | $ | 0.76 | $ | 1.16 | |||||||
Adjustments: | |||||||||||||||
(Gain) loss on derivatives | $ | (0.20) | $ | 0.08 | $ | 0.16 | $ | 0.16 | |||||||
Net settlements on derivative instruments | 0.01 | 0.03 | (0.05) | — | |||||||||||
Net premiums on options that settled during the period | (0.04) | (0.06) | (0.11) | (0.19) | |||||||||||
Gain on sale of property | (0.01) | — | (0.01) | (0.02) | |||||||||||
Restructuring and other termination costs | — | — | 0.01 | — | |||||||||||
Exploration and abandonment costs | 0.04 | 0.04 | 0.13 | 0.07 | |||||||||||
Acquisition costs | — | — | — | — | |||||||||||
Change in TRA liability | — | — | — | — | |||||||||||
Change in noncontrolling interests | 0.02 | (0.01) | (0.01) | — | |||||||||||
Change in estimated income tax | 0.04 | (0.04) | (0.04) | (0.02) | |||||||||||
Adjusted net income per diluted share(3) | $ | 0.29 | $ | 0.45 | $ | 0.84 | $ | 1.16 | |||||||
Basic weighted average shares outstanding - as reported(2) | 279,961 | 277,705 | 279,491 | 270,262 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Class B Common Stock | — | — | — | — | |||||||||||
Restricted Stock and Restricted Stock Units | 586 | 691 | 463 | 584 | |||||||||||
Diluted weighted average shares outstanding - as reported(2) | 280,547 | 278,396 | 279,954 | 270,846 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Class B Common Stock | — | — | — | — | |||||||||||
Restricted Stock and Restricted Stock Units | — | — | — | — | |||||||||||
Diluted weighted average shares outstanding for adjusted net income(3) | 280,547 | 278,396 | 279,954 | 270,846 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. | |
(2) | For the three and nine months ended September 30, 2019 and 2018, the number of weighted average diluted shares used to calculate actual net income per share is based on the fact that, under the "if converted" method, Class B Common Stock was not recognized because it would have been antidilutive. | |
(3) | For purposes of calculating adjusted net income per diluted share for the three and nine months ended September 30, 2019 and 2018, Class B Common Stock was not recognized because the shares would have been antidilutive using the "if converted" method. |
Standalone Open Derivatives Positions | |||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||
Open Crude Oil Derivatives Positions(1) | |||||||||||||||||||
4Q19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | |||||||||||||||
OPTION CONTRACTS: | |||||||||||||||||||
CUSHING | |||||||||||||||||||
Put Spreads - Cushing (MBbls/d)(2) | 19.6 | ||||||||||||||||||
Long Put Price ($/Bbl) | $ | 57.29 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 47.29 | |||||||||||||||||
Three Way Collars - Cushing (MBbls/d)(3) | 26.1 | ||||||||||||||||||
Short Call Price ($/Bbl) | $ | 72.69 | |||||||||||||||||
Long Put Price ($/Bbl) | $ | 51.88 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 42.81 | |||||||||||||||||
Collars - Cushing (MBbls/d)(4) | 21.2 | ||||||||||||||||||
Short Call Price ($/Bbl) | $ | 58.37 | |||||||||||||||||
Long Put Price ($/Bbl) | $ | 54.56 | |||||||||||||||||
MIDLAND | |||||||||||||||||||
Put Spreads - Midland (MBbls/d)(2) | 4.9 | ||||||||||||||||||
Long Put Price ($/Bbl) | $ | 60.00 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 50.00 | |||||||||||||||||
Three Way Collars - Midland (MBbls/d)(3) | 4.9 | 23.1 | 23.1 | 9.8 | 9.8 | ||||||||||||||
Short Call Price ($/Bbl) | $ | 64.65 | $ | 68.57 | $ | 68.57 | $ | 65.00 | $ | 65.00 | |||||||||
Long Put Price ($/Bbl) | $ | 50.00 | $ | 56.86 | $ | 56.86 | $ | 54.67 | $ | 54.67 | |||||||||
Short Put Price ($/Bbl) | $ | 45.00 | $ | 46.86 | $ | 46.86 | $ | 44.67 | $ | 44.67 | |||||||||
Swaps - Midland (MBbls/d)(5) | 3.3 | 3.3 | |||||||||||||||||
Swap Price ($/Bbl) | $ | 55.20 | $ | 55.20 | |||||||||||||||
MAGELLAN EAST HOUSTON ("MEH") | |||||||||||||||||||
Put Spreads - MEH (MBbls/d)(2) | 4.9 | ||||||||||||||||||
Long Put Price ($/Bbl) | $ | 60.00 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 50.00 | |||||||||||||||||
Three Way Collars - MEH (MBbls/d)(3) | 3.3 | 46.2 | 46.2 | 37.5 | 37.5 | ||||||||||||||
Short Call Price ($/Bbl) | $ | 75.00 | $ | 74.62 | $ | 74.62 | $ | 72.28 | $ | 72.28 | |||||||||
Long Put Price ($/Bbl) | $ | 60.00 | $ | 59.05 | $ | 59.05 | $ | 58.08 | $ | 58.08 | |||||||||
Short Put Price ($/Bbl) | $ | 50.00 | $ | 49.05 | $ | 49.05 | $ | 48.08 | $ | 48.08 | |||||||||
Swaps - MEH (MBbls/d)(5) | 4.2 | 4.2 | |||||||||||||||||
Swap Price ($/Bbl) | $ | 56.30 | $ | 56.30 | |||||||||||||||
BRENT | |||||||||||||||||||
Three Way Collars - Brent (MBbls/d)(3) | 11.5 | 9.8 | 9.8 | ||||||||||||||||
Short Call Price ($/Bbl) | $ | 74.29 | $ | 74.17 | $ | 74.17 | |||||||||||||
Long Put Price ($/Bbl) | $ | 62.29 | $ | 62.33 | $ | 62.33 | |||||||||||||
Short Put Price($/Bbl) | $ | 52.29 | $ | 52.33 | $ | 52.33 | |||||||||||||
Total Option Contracts (MBbls/d) | 84.9 | 72.6 | 84.1 | 61.3 | 61.3 | ||||||||||||||
Premium Realization ($MM)(6) | $ | (10.9) | $ | (14.1) | $ | (15.7) | $ | (11.5) | $ | (11.5) | |||||||||
BASIS SWAPS: | |||||||||||||||||||
Midland-Cushing Basis Swaps (MBbls/d)(7) | 35.9 | 4.9 | 4.9 | ||||||||||||||||
Basis Differential ($/Bbl) | $ | (0.78) | $ | 0.25 | $ | 0.25 | |||||||||||||
Midland-MEH Basis Swaps (MBbls/d)(7) | 2.1 | ||||||||||||||||||
Basis Differential ($/Bbl) | $ | 5.10 |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||
Open Natural Gas Derivatives Positions(1) | |||||||||||||||||||
4Q19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | |||||||||||||||
OPTION CONTRACTS: | |||||||||||||||||||
HENRY HUB | |||||||||||||||||||
Three Way Collars - Henry Hub (MMBtu/d)(3) | 32,609 | ||||||||||||||||||
Short Call Price ($/MMBtu) | $ | 3.93 | |||||||||||||||||
Put Price ($/MMBtu) | $ | 3.00 | |||||||||||||||||
Short Put Price ($/MMBtu) | $ | 2.50 | |||||||||||||||||
WAHA | |||||||||||||||||||
Swaps - Waha (MMBtu/d)(5) | 48,242 | 48,242 | 48,152 | 48,152 | |||||||||||||||
Swap Price ($/MMBtu) | $ | 1.08 | $ | 0.70 | $ | 0.90 | $ | 0.86 | |||||||||||
Total Option Contracts (MMBtu/d) | 32,609 | 48,242 | 48,242 | 48,152 | 48,152 | ||||||||||||||
BASIS SWAPS: | |||||||||||||||||||
Waha-Henry Hub Basis Swaps (MMBtu/d)(7) | 32,609 | ||||||||||||||||||
Basis Differential ($/MMBtu) | $ | (1.64) |
Pro Forma Open Derivatives Positions | |||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||
Pro Forma Open Crude Oil Derivatives Positions(1)(8) | |||||||||||||||||||
4Q19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | |||||||||||||||
OPTION CONTRACTS: | |||||||||||||||||||
CUSHING | |||||||||||||||||||
Put Spreads - Cushing (MBbls/d)(2) | 19.6 | ||||||||||||||||||
Long Put Price ($/Bbl) | $ | 57.29 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 47.29 | |||||||||||||||||
Three Way Collars - Cushing (MBbls/d)(3) | 26.1 | ||||||||||||||||||
Short Call Price ($/Bbl) | $ | 72.69 | |||||||||||||||||
Long Put Price ($/Bbl) | $ | 51.88 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 42.81 | |||||||||||||||||
Collars - Cushing (MBbls/d)(4) | 21.2 | ||||||||||||||||||
Short Call Price ($/Bbl) | $ | 58.37 | |||||||||||||||||
Long Put Price ($/Bbl) | $ | 54.56 | |||||||||||||||||
Swaps - Cushing (MBbls/d)(5) | 20.0 | 20.0 | 20.0 | 20.0 | |||||||||||||||
Swap Price ($/Bbl) | $ | 58.25 | $ | 58.25 | $ | 58.25 | $ | 58.25 | |||||||||||
MIDLAND | |||||||||||||||||||
Put Spreads - Midland (MBbls/d)(2) | 4.9 | ||||||||||||||||||
Long Put Price ($/Bbl) | $ | 60.00 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 50.00 | |||||||||||||||||
Three Way Collars - Midland (MBbls/d)(3) | 4.9 | 23.1 | 23.1 | 9.8 | 9.8 | ||||||||||||||
Short Call Price ($/Bbl) | $ | 64.65 | $ | 68.57 | $ | 68.57 | $ | 65.00 | $ | 65.00 | |||||||||
Long Put Price ($/Bbl) | $ | 50.00 | $ | 56.86 | $ | 56.86 | $ | 54.67 | $ | 54.67 | |||||||||
Short Put Price ($/Bbl) | $ | 45.00 | $ | 46.86 | $ | 46.86 | $ | 44.67 | $ | 44.67 | |||||||||
Swaps - Midland (MBbls/d)(5) | 3.3 | 3.3 | |||||||||||||||||
Swap Price ($/Bbl) | $ | 55.20 | $ | 55.20 | |||||||||||||||
MAGELLAN EAST HOUSTON ("MEH") | |||||||||||||||||||
Put Spreads - MEH (MBbls/d)(2) | 4.9 | ||||||||||||||||||
Long Put Price ($/Bbl) | $ | 60.00 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 50.00 | |||||||||||||||||
Three Way Collars - MEH (MBbls/d)(3) | 3.3 | 46.2 | 46.2 | 37.5 | 37.5 | ||||||||||||||
Short Call Price ($/Bbl) | $ | 75.00 | $ | 74.62 | $ | 74.62 | $ | 72.28 | $ | 72.28 | |||||||||
Long Put Price ($/Bbl) | $ | 60.00 | $ | 59.05 | $ | 59.05 | $ | 58.08 | $ | 58.08 | |||||||||
Short Put Price ($/Bbl) | $ | 50.00 | $ | 49.05 | $ | 49.05 | $ | 48.08 | $ | 48.08 | |||||||||
Swaps - MEH (MBbls/d)(5) | 4.2 | 4.2 | |||||||||||||||||
Swap Price ($/Bbl) | $ | 56.30 | $ | 56.30 | |||||||||||||||
BRENT | |||||||||||||||||||
Three Way Collars - Brent (MBbls/d)(3) | 11.5 | 9.8 | 9.8 | ||||||||||||||||
Short Call Price ($/Bbl) | $ | 74.29 | $ | 74.17 | $ | 74.17 | |||||||||||||
Long Put Price ($/Bbl) | $ | 62.29 | $ | 62.33 | $ | 62.33 | |||||||||||||
Short Put Price ($/Bbl) | $ | 52.29 | $ | 52.33 | $ | 52.33 | |||||||||||||
Total Option Contracts (MBbls/d) | 84.9 | 92.6 | 104.1 | 81.3 | 81.3 | ||||||||||||||
Premium Realization ($MM)(6) | $ | (10.9) | $ | (14.1) | $ | (15.7) | $ | (11.5) | $ | (11.5) | |||||||||
BASIS SWAPS: | |||||||||||||||||||
Midland-Cushing Basis Swaps (MBbls/d)(7) | 35.9 | 30.9 | 30.9 | 26.0 | 26.0 | ||||||||||||||
Basis Differential ($/Bbl) | $ | (0.78) | $ | (1.06) | $ | (1.06) | $ | (1.31) | $ | (1.31) | |||||||||
Midland-MEH Basis Swaps (MBbls/d)(7) | 2.1 | ||||||||||||||||||
Basis Differential ($/Bbl) | $ | 5.10 |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||
Pro Forma Open Natural Gas Derivatives Positions(1)(8) | |||||||||||||||||||
4Q19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | |||||||||||||||
OPTION CONTRACTS: | |||||||||||||||||||
HENRY HUB | |||||||||||||||||||
Three Way Collars - Henry Hub (MMBtu/d)(3) | 32,609 | ||||||||||||||||||
Short Call Price ($/MMBtu) | $ | 3.93 | |||||||||||||||||
Put Price ($/MMBtu) | $ | 3.00 | |||||||||||||||||
Short Put Price ($/MMBtu) | $ | 2.50 | |||||||||||||||||
WAHA | |||||||||||||||||||
Swaps - Waha (MMBtu/d)(5) | 48,242 | 48,242 | 48,152 | 48,152 | |||||||||||||||
Swap Price ($/MMBtu) | $ | 1.08 | $ | 0.70 | $ | 0.90 | $ | 0.86 | |||||||||||
Total Option Contracts (MMBtu/d) | 48,242 | 48,242 | 48,152 | 48,152 | |||||||||||||||
BASIS SWAPS: | |||||||||||||||||||
Waha-Henry Hub Basis Swaps (MMBtu/d)(7) | 32,609 | ||||||||||||||||||
Basis Differential ($/MMBtu) | $ | (1.64) |
(1) | Hedge positions as of 11/5/2019. Prices represent the weighted average price of contracts scheduled for settlement during the period. | |
(2) | When the reference price (WTI, Midland, or MEH, Brent, or Henry Hub) is above the long put price, Parsley receives the reference price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | |
(3) | Functions similarly to put spreads except when the reference price is at or above the call price, Parsley receives the call price. | |
(4) | When the reference price (WTI) is above the call price, Parsley receives the call price. When the reference price is below the long put price, Parsley receives the long put price. When the reference price is between the short call and long put prices, Parsley receives the reference price. | |
(5) | Parsley receives the swap price. | |
(6) | Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | |
(7) | Swaps that fix the basis differentials representing the index prices at which the Company sells its oil and gas produced in the Permian Basin less the WTI Cushing price and Henry Hub price, respectively. | |
(8) | 4Q19 positions reflect Parsley standalone. 2020 positions are pro forma for pending Jagged Peak acquisition announced 10/14/2019. |
No Offer or Solicitation
Communications in this news release do not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Additional Information for Shareholders
In connection with the proposed transaction, Parsley and Jagged Peak have filed materials with the Securities and Exchange Commission ("SEC"), including a Registration Statement on Form S-4 of Parsley (the "Registration Statement") that includes a preliminary joint proxy statement/prospectus of Parsley and Jagged Peak. The information in the Registration Statement is not complete and may be changed. After the Registration Statement is declared effective by the SEC, Parsley and Jagged Peak intend to mail a definitive proxy statement/prospectus to the shareholders of Parsley and the shareholders of Jagged Peak. This news release is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Parsley or Jagged Peak may file with the SEC and send to Parsley's shareholders and/or Jagged Peak's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF PARSLEY AND JAGGED PEAK ARE URGED TO CAREFULLY AND THOROUGHLY READ THE JOINT PROXY STATEMENT AND THE REGISTRATION STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY PARSLEY AND JAGGED PEAK WITH THE SEC, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PARSLEY, JAGGED PEAK, THE PROPOSED TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Parsley and Jagged Peak with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Parsley will be available free of charge from Parsley's website at www.parsleyenergy.com under the "Investors" tab or by contacting Parsley's Investor Relations Department at (512) 505-5199 or IR@parsleyenergy.com. Copies of documents filed with the SEC by Jagged Peak will be available free of charge from Jagged Peak's website at www.jaggedpeakenergy.com under the "Investor Relations" tab or by contacting Jagged Peak's Investor Relations Department at (720) 215-3754 or jedwards@jaggedpeakenergy.com.
Participants in the Proxy Solicitation
Parsley, Jagged Peak and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Parsley's shareholders and Jagged Peak's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Parsley is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 8, 2019. Information regarding the executive officers and directors of Jagged Peak is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 10, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this news release concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Parsley's or Jagged Peak's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. Specific forward-looking statements include statements regarding Parsley and Jagged Peak's plans and expectations with respect to the proposed transaction and the anticipated impact of the proposed transaction on the combined company's results of operations, financial position, growth opportunities and competitive position. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, the possibility that shareholders of Parsley may not approve the issuance of new shares of Parsley Class A common stock in the transaction or that shareholders of Jagged Peak may not approve the merger agreement; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Parsley and Jagged Peak; the effects of the business combination of Parsley and Jagged Peak, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; the risks of oil and gas activities; and the fact that operating costs and business disruption may be greater than expected following the public announcement or consummation of the proposed transaction. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Parsley's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequently filed Quarterly Reports on Form 10-Q, each of which is on file with the SEC and available from Parsley's website at www.parsleyenergy.com under the "Investors" tab, and in other documents Parsley files with the SEC, and in Jagged Peak's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequently filed Quarterly Reports on Form 10-Q, each of which is on file with the SEC and available from Jagged Peak's website at www.jaggedpeakenergy.com under the "Investor Relations" tab, and in other documents Jagged Peak files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Parsley nor Jagged Peak assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-third-quarter-2019-financial-and-operating-results-tightens-capital-budget-range-raises-production-guidance-and-lowers-unit-cost-estimates-300952196.html
SOURCE Parsley Energy, Inc.
SAN DIEGO, Oct. 14, 2019 /PRNewswire/ -- Shareholder rights law firm Johnson Fistel, LLP has launched an investigation into whether the board members of Jagged Peak Energy Inc. (NYSE: JAG) ("Jagged") breached their fiduciary duties in connection with the proposed sale of the Company to Parsley Energy, Inc. (NYSE: PE) ("Parsley").
On October 14, 2019, Jagged announced that it had signed a definitive merger agreement with Parsley. Under the terms of the agreement, Jagged shareholders will receive a fixed exchange ratio of 0.447 shares of Parsley Class A common stock for each share of Jagged common stock they own; this represents $7.59 per Jagged share based on Parsley's closing price on October 11, 2019.
The investigation concerns whether the Jagged board failed to satisfy its duties to the Company shareholders, including whether the board adequately pursued alternatives to the acquisition and whether the board obtained the best price possible for Jagged shares of common stock. Nationally recognized Johnson Fistel is investigating whether the proposed deal represents adequate consideration, especially given one Wall Street analyst has a $14.00 price target on the stock. The 52-week high for Jagged was $14.26.
If you are a shareholder of Jagged and believe the proposed buyout price is too low or you're interested in learning more about the investigation or your legal rights and remedies, please contact lead analyst Jim Baker (jimb@johnsonfistel.com) at 619-814-4471. If emailing, please include a phone number.
Additionally, you can [Click here to join this action]. There is no cost or obligation to you.
About Johnson Fistel, LLP:
Johnson Fistel, LLP is a nationally recognized shareholder rights law firm with offices in California, New York, and Georgia. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits. For more information about the firm and its attorneys, please visit https://www.johnsonfistel.com. Attorney advertising. Past results do not guarantee future outcomes.
Contact:
Johnson Fistel, LLP
Jim Baker, 619-814-4471
jimb@johnsonfistel.com
[Click here to join this action]
View original content:http://www.prnewswire.com/news-releases/jagged-jag-alert-johnson-fistel-investigates-proposed-sale-of-jagged-peak-energy-inc-are-shareholders-getting-a-fair-deal-300937815.html
SOURCE Johnson Fistel, LLP
AUSTIN, Texas and DENVER, Oct. 14, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," or "Parsley Energy") and Jagged Peak Energy Inc. (NYSE: JAG) ("Jagged Peak") today announced they have entered into a definitive merger agreement under which Parsley will acquire Jagged Peak in an all-stock transaction valued at approximately $2.27 billion, including Jagged Peak's net debt of approximately $625 million as of June 30, 2019. Under the terms of the agreement, Jagged Peak shareholders will receive a fixed exchange ratio of 0.447 shares of Parsley Class A common stock for each share of Jagged Peak common stock they own. This represents $7.59 per Jagged Peak share based on Parsley's closing price on October 11, 2019, and a premium of 1.5% compared to Jagged Peak's 30-day volume weighted average price and 11.2% compared to Jagged Peak's closing price on October 11, 2019.
The transaction, which is expected to close in the first quarter of 2020, has been unanimously approved by each company's board of directors. Following the close of the transaction, Parsley shareholders will own approximately 77% of the combined company, and Jagged Peak shareholders will own approximately 23% of the combined company, in each case on a fully diluted basis. The all-stock transaction is intended to be tax-free to Jagged Peak shareholders.
Key Transaction Highlights
Management Commentary
"The combination of Parsley and Jagged Peak is a natural fit," said Matt Gallagher, Parsley's President and CEO. "Jagged Peak's oily, high-margin asset base slots in nicely to our returns-focused development approach, its acreage footprint and water infrastructure dovetails into our legacy Delaware Basin position, and its corporate culture aligns with our core values. In short, we now have a premier Delaware Basin business that rivals our foundational Midland Basin business. This transaction also creates tangible synergies that will enhance our corporate free cash flow profile and will be shared by the combined shareholder base. Ultimately, I am proud of the high level of execution Parsley has delivered throughout 2019, and I am excited by the prospects of what the combination of Parsley and Jagged Peak can deliver for shareholders in 2020."
Jim Kleckner, President and Chief Executive Officer of Jagged Peak, commented, "The combined assets of Jagged Peak and Parsley Energy are a great fit that create a stronger combined Permian company. The pro-forma company provides our shareholders with premier acreage in both the Midland and Delaware sub-basins, while providing additional scale, significant operational synergies, and free cash flow in this competitive environment. Our team has made tremendous progress to increase efficiencies as we evolved to pad development on our acreage position. We look forward to working closely with Parsley to ensure that we provide an efficient changeover of asset-level institutional knowledge, so our shareholders and the shareholders of Parsley Energy can reap the maximized benefits of this transaction."
S. Wil VanLoh, Jr., a Jagged Peak director and the Founder and Chief Executive Officer of Quantum Energy Partners, Jagged Peak's controlling shareholder, commented, "The inevitable consolidation in the Permian has started and Jagged Peak made a decisive move to team up with the right partner. Quantum has known Bryan, Matt and the Parsley team for many years and has tremendous respect for the industry-leading execution capabilities and top-tier rock they possess. The combination of the two companies will create a unique platform that will benefit from scale, capital allocation optionality, and peer-leading economics (IRRs, oil-weighting and netback margins) that we believe will represent one of the most compelling investment vehicles in the Permian. We look forward to partnering with the Parsley team as they mature into a Permian pure-play large cap. I would also like to thank every current and former employee of Jagged Peak for creating a great private equity success story and for positioning Jagged Peak's shareholders for continued value creation in a very tough macro energy environment. It's been an honor being your partner."
Third Quarter Operational Update
Activity Overview
For the third quarter of 2019, Parsley expects net oil production of 91.2-91.7 MBo per day, translating to 5-6% quarter-over-quarter growth. During 3Q19, Parsley placed on production 35 gross operated horizontal wells with an average working interest of approximately 95% and an average completed lateral length of approximately 10,000 feet. Parsley expects to report third quarter capital expenditures of approximately $315-325 million. Third quarter development spending decreased relative to second quarter spending, driven by lower well costs, fewer net completions, and quarter-over-quarter decreases in facilities and infrastructure spending.
Preliminary Pro Forma 2020 Outlook
Governance and Leadership
The boards of directors at both Parsley and Jagged Peak have unanimously approved the transaction, and recommended that their respective shareholder groups approve the transaction.
Upon closing, Parsley's board of directors will be expanded to eleven directors to include two members from the current Jagged Peak board of directors. The combined company will be led by Parsley's executive management team and will remain headquartered in Austin, Texas.
Timing and Approvals
The transaction, which is expected to close during the first quarter of 2020, is subject to customary closing conditions and regulatory approvals, including the approval of Parsley and Jagged Peak shareholders. Jagged Peak's controlling shareholder, Quantum Energy Partners, which owns approximately 68 percent of the outstanding voting shares of Jagged Peak, has committed to vote its shares in favor of the transaction.
Advisors
Tudor, Pickering, Holt & Co is serving as exclusive financial advisor to Parsley Energy, and Kirkland & Ellis LLP is serving as Parsley's legal counsel. Citi and RBC Capital Markets, LLC are serving as financial advisors to Jagged Peak and Vinson & Elkins L.L.P. is serving as Jagged Peak's legal counsel.
Conference Call Information
Parsley Energy will host a conference call and webcast on Monday, October 14 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time, 7:00 a.m. Mountain Time). Participants should call 877-709-8150 (United States/Canada) or 201-689-8354 (International) ten minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available through October 21 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13695703. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Investors-Events & Presentations" section of the Parsley website and at www.jaggedpeakenergy.com under the "News" section of the Jagged Peak website. Each company has also posted a presentation to its website that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
About Jagged Peak Energy, Inc.
Jagged Peak Energy Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and associated liquids-rich natural gas reserves in the southern Delaware Basin, a sub-basin of the Permian Basin of West Texas.
No Offer or Solicitation
Communications in this news release do not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Additional Information for Shareholders
In connection with the proposed transaction, Parsley and Jagged Peak intend to file materials with the Securities and Exchange Commission ("SEC"), including a Registration Statement on Form S-4 of Parsley (the "Registration Statement") that will include a joint proxy statement/prospectus of Parsley and Jagged Peak. After the Registration Statement is declared effective by the SEC, Parsley and Jagged Peak intend to mail a definitive proxy statement/prospectus to the shareholders of Parsley and the shareholders of Jagged Peak. This news release is not a substitute for the joint proxy statement/prospectus or the Registration Statement or for any other document that Parsley or Jagged Peak may file with the SEC and send to Parsley's shareholders and/or Jagged Peak's shareholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF PARSLEY AND JAGGED PEAK ARE URGED TO CAREFULLY AND THOROUGHLY READ THE JOINT PROXY STATEMENT AND THE REGISTRATION STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY PARSLEY AND JAGGED PEAK WITH THE SEC, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PARSLEY, JAGGED PEAK, THE PROPOSED TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS.
Investors will be able to obtain free copies of the Registration Statement and joint proxy statement/prospectus, as each may be amended from time to time, and other relevant documents filed by Parsley and Jagged Peak with the SEC (when they become available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Parsley will be available free of charge from Parsley's website at www.parsleyenergy.com under the "Investors" tab or by contacting Parsley's Investor Relations Department at (512) 505-5199 or IR@parsleyenergy.com. Copies of documents filed with the SEC by Jagged Peak will be available free of charge from Jagged Peak's website at www.jaggedpeakenergy.com under the "Investor Relations" tab or by contacting Jagged Peak's Investor Relations Department at (720) 215-3754 or jedwards@jaggedpeakenergy.com.
Participants in the Proxy Solicitation
Parsley, Jagged Peak and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Parsley's shareholders and Jagged Peak's shareholders in connection with the proposed transaction. Information regarding the executive officers and directors of Parsley is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 8, 2019. Information regarding the executive officers and directors of Jagged Peak is included in its definitive proxy statement for its 2019 annual meeting filed with the SEC on April 10, 2019. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Registration Statement and joint proxy statement/prospectus and other materials when they are filed with the SEC in connection with the proposed transaction. Free copies of these documents may be obtained as described in the paragraphs above.
Cautionary Statement Regarding Forward-Looking Information
Certain statements in this news release concerning the proposed transaction, including any statements regarding the expected timetable for completing the proposed transaction, the results, effects, benefits and synergies of the proposed transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Parsley's or Jagged Peak's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are "forward-looking" statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely" "plan," "positioned," "strategy," and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. Specific forward-looking statements include statements regarding Parsley and Jagged Peak's plans and expectations with respect to the proposed transaction and the anticipated impact of the proposed transaction on the combined company's results of operations, financial position, growth opportunities and competitive position. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, the possibility that shareholders of Parsley may not approve the issuance of new shares of Parsley Class A common stock in the transaction or that shareholders of Jagged Peak may not approve the merger agreement; the risk that a condition to closing of the proposed transaction may not be satisfied, that either party may terminate the merger agreement or that the closing of the proposed transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Parsley and Jagged Peak; the effects of the business combination of Parsley and Jagged Peak, including the combined company's future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the combined company to finance operations in the manner expected; regulatory approval of the transaction; the effects of commodity prices; the risks of oil and gas activities; and the fact that operating costs and business disruption may be greater than expected following the public announcement or consummation of the proposed transaction. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for our operations, oil and natural gas market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Parsley's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequently filed Quarterly Reports on Form 10-Q, each of which is on file with the SEC and available from Parsley's website at www.parsleyenergy.com under the "Investors" tab, and in other documents Parsley files with the SEC, and in Jagged Peak's Annual Report on Form 10-K for the year ended December 31, 2018 and in its subsequently filed Quarterly Reports on Form 10-Q, each of which is on file with the SEC and available from Jagged Peak's website at www.jaggedpeakenergy.com under the "Investor Relations" tab, and in other documents Jagged Peak files with the SEC.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Parsley nor Jagged Peak assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by federal securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
(1) | As used in this press release, free cash flow, a non-GAAP financial measure, is defined as cash flow from operations before changes in operating assets and liabilities less accrual-based development capital expenditures. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-acquisition-of-jagged-peak-energy-in-all-stock-transaction-modest-premium-acquisition-enhances-2020-free-cash-flow-300937735.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Oct. 10, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) plans to report third quarter 2019 financial results on Tuesday, November 5, 2019 after the close of trading on the New York Stock Exchange. The company will host its quarterly conference call at 9:00 AM ET (8:00 AM CT) on Wednesday, November 6, 2019.
By Phone: | Dial 877-709-8150 (United States/Canada) or 201-689-8354 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Wednesday, November 13, 2019 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13695516. | |
By Webcast: | |
Select "Events & Presentations" under the "Investors" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration and production of unconventional oil and natural gas reserves in the Permian Basin. For more information, visit our website at www.parsleyenergy.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-schedules-third-quarter-2019-earnings-release-and-conference-call-300936618.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Aug. 26, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) (the "Company") today announced that its Board of Directors approved the initiation of a quarterly dividend of $0.03 per share on the Company's Class A common stock, payable on September 30, 2019, to shareholders of record on September 20, 2019.
"The initiation of a regular dividend program coincides with Parsley's inflection to sustainable free cash," commented Matt Gallagher, Parsley's President and CEO. "This return of capital to shareholders during the third quarter of 2019 is evidence that our returns-focused strategy is yielding fruit ahead of schedule. We now expect our third quarter 2019 oil production to be in the upper half of our previous guidance range of 87-90 MBo/d. I am proud of the high level of execution being consistently delivered across our organization. As we enter our formal budgeting process in the coming months, we will remain disciplined and committed to a trajectory of growing free cash flow."
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-initiation-of-quarterly-dividend-300906950.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Aug. 6, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended June 30, 2019. The Company has posted a presentation to its website that supplements the information in this release.
Second Quarter 2019 Highlights
Summary Comment and Outlook
"When we unveiled our 2019 development plan, we pointed to this year representing a critical next step in Parsley's corporate evolution. We set a course aiming to take a step forward to sustainable free cash flow, while delivering a step-change improvement in capital efficiency," said Matt Gallagher, Parsley's President and CEO. "I am proud of the strides we have made on our 2019 action plan and our updated guidance ranges reflect the high level of execution delivered across the organization. We are now positioned to generate free cash flow for the remainder of the year, which will cement a core tenet of our 2019 action plan. Furthermore, I am excited that Parsley Energy is now on a trajectory toward growing free cash flow, ultimately increasing visibility for the return of capital to shareholders."
Operational Update
Activity Overview
During the second quarter of 2019, the Company spud 41 and placed on production 39 gross operated horizontal wells. Parsley's working interest on wells placed on production was approximately 99%, with an average completed lateral length of approximately 9,750 feet. Completion activity was weighted toward the Midland Basin, where the Company placed on production 33 gross operated horizontal wells, with the remainder placed on production in the Delaware Basin. Parsley expects that development activity will remain weighted to the Midland Basin for the remainder of the year, consistent with prior commentary.
Parsley maintained operational momentum during the second quarter of 2019, including an 8% improvement in drilling efficiency(2) compared to the first quarter of 2019. These drilling efficiency gains enabled the Company to drop from 12 development rigs to 11 development rigs in mid-June. Parsley expects to run a maximum of 11 development rigs and three-to-four frac spreads through the end of 2019. Parsley intends to proactively manage its schedule to adhere to its full-year capital budget expectations and preserve operational momentum into 2020.
"Our 2019 action plan sought to build upon operational efficiency gains captured during 2018. Our teams are delivering on this key objective, and we are now generating more footage with less equipment," said David Dell'Osso, Parsley's COO. "Importantly, this incremental footage coincides with a commitment to a narrowed capital budget range, translating to a more capital efficient program in 2019. Finally, Parsley is targeting a consistent capital investment pace through the end of the year as the Company expects to carry operational momentum into next year."
Notable Well Results
Parsley's returns-focused strategy targeted increased development activity in its Upton County area during 2019. Over the past six months, Upton County has been the Company's most active area with 25 wells turned to production. These recent wells included three wells on the Hanks Family lease, which were completed in the Wolfcamp B zone with an upsized proppant loading of approximately 2,400 pounds per lateral foot. Early results from these three 6,500' lateral wells are promising, with 30-day peak production rates averaging 1,342 Boe/d (74% oil). More broadly, the Company's 2019 Upton County wells are delivering encouraging early results in the aggregate, registering a higher oil productivity than comparable 2018 wells.
Financial Update
Healthy execution in 2Q19 translated to strong performance in key financial measures.
Profitability
During 2Q19, the Company recorded net income attributable to its stockholders of $115.9 million, or $0.41 per share. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, adjusted net income for 2Q19 was $90.4 million, or $0.32 per share.(1)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 2Q19 was $368.4 million.(1)
Realized Pricing
During 2Q19, Parsley reported an average unhedged oil price realization of $58.23/Bbl net of transportation costs, representing a discount of $1.68 to the average WTI Cushing price(3) for the quarter.
Operating Costs
Parsley registered favorable trends in operating costs and margins during the second quarter of 2019. The Company reported LOE per Boe of $3.35, down 8% versus 1Q19 expense levels. Favorable LOE unit cost trends were driven by artificial lift optimization, continued utilization of the Company's integrated water handling system, and increased production volumes. Parsley is lowering full-year 2019 LOE per Boe guidance from $3.50-$4.50 to $3.40-$3.90.
Both G&A per Boe and cash based G&A per Boe(1), which excludes stock-based compensation expense, decreased quarter-over-quarter and year-over-year to $2.74 and $2.35, respectively, representing Company-record levels in each case. Encouraging G&A cost trends are a function of ongoing corporate cost savings initiatives, including a previously disclosed reduction in workforce. During 2Q19, Parsley incurred one-time restructuring and other termination costs of $1.6 million as part of its continuing effort to reduce future general and administrative expenses. These one-time costs are reported separately from the Company's G&A and cash based G&A. Parsley is lowering full-year 2019 cash G&A per Boe guidance from $2.75-$3.25 to $2.60-$2.90.
Healthy realized oil pricing and favorable trends in the aforementioned cash operating costs drove a strong operating cash margin of $30.38 per Boe, or 78% of the Company's average realized price per Boe.(1)
Capital Expenditures
Parsley reported capital expenditures of $372 million during the second quarter of 2019, comprised of $290 million for operated drilling and completion activity, $76 million for operated facilities and infrastructure, and $6 million associated with non-operated development activity.
Liquidity and Hedging
As of June 30, 2019, Parsley had approximately $1.0 billion of liquidity, consisting of $64 million of cash and cash equivalents and an availability of $951 million on the Company's revolver.(4)
A significant majority of Parsley's expected 2019 oil production remains subject to hedge protection. The Company also recently added to its 2020 hedge positions, including new Brent contracts that further align Parsley's hedge position with its regional price exposure. Parsley's portfolio of option contracts provides significant protection for its balance sheet and anticipated cash flow while retaining meaningful exposure to higher commodity prices. For details on Parsley's hedge position, please see the tables below under Supplemental Information and/or, upon availability, the Company's Quarterly Report on Form 10-Q for the three months ended June 30, 2019.
2019 Guidance
Parsley is tightening its 2019 capital budget range, increasing its full-year 2019 net oil production guidance and decreasing its full-year 2019 unit operating cost guidance, reflecting strong execution across the organization. The Company expects third quarter 2019 net oil production to average 87-90 MBo/d. For further detail, please see the table below.
Previous | Updated | |
2019 Guidance | 2019 Guidance | |
Production | ||
Annual net oil production (MBo/d) | 80.0-85.0 | 85.0-86.5 |
Annual net total production (MBoe/d) | 124.0-134.0 | 134.0-139.0 |
Capital Program | ||
Total development expenditures ($MM) | $1,350-$1,550 | $1,400-$1,490 |
Drilling and completion (% of total) | ~85% | ~85% |
Facilities, Infrastructure & Other (% of total) | ~15% | ~15% |
Activity | ||
Gross operated horizontal POPs(5) | 130-140 | 135-140 |
Midland Basin (% of total) | ~85% | ~85% |
Delaware Basin (% of total) | ~15% | ~15% |
Average lateral length | 10,000'-10,500' | 10,100'-10,500' |
Gross operated lateral footage (000's) | 1,350'-1,470' | 1,365'-1,470' |
Average working interest | ~90% | 93%-94% |
Unit Costs | ||
Lease operating expenses ($/Boe) | $3.50-$4.50 | $3.40-$3.90 |
Cash general and administrative expenses ($/Boe) | $2.75-$3.25 | $2.60-$2.90 |
Production and ad valorem taxes (% of total revenue) | 6%-7% | 6%-7% |
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the second quarter of 2019 on Wednesday, August 7 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-709-8150 (United States/Canada) or 201-689-8354 (International) 10 minutes before the scheduled time and request the Parsley Energy earnings conference call. A telephone replay will be available through September 6 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13692133. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Investors-Events & Presentations" section of the website. The Company has also posted a presentation to its website that supplements the information in this release.
Upcoming Conference Participation
Parsley plans to participate in the Heikkinen Energy Conference in Houston, Texas on August 13-14 and the Barclays Global CEO-Energy Power Conference in New York, New York on September 3-5.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
- Tables to Follow -
(1) | "Cash based G&A per Boe", "Adjusted EBITDAX", "operating cash margin", and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For definitions and reconciliations of the non-GAAP financial measures of adjusted EBITDAX, operating cash margin, and adjusted net income to GAAP financial measures, please see the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. | |
(2) | "Drilling efficiency" is measured based on drilled feet per operational day. "Operational days" are measured as days equipment is active and do not include mobilization or other idle time. | |
(3) | Represents Bloomberg-sourced 2Q19 average WTI Cushing price. | |
(4) | Revolver availability is net of letters of credit. | |
(5) | Wells placed on production. | |
Note | As used in this press release, free cash flow, a non-GAAP financial measure, is defined as cash flow from operations before changes in operating assets and liabilities less accrual-based development capital expenditures. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Selected Operating Data | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
June 30, 2019 | March 31, 2019 | June 30, 2018 | |||||||||
Net production volumes: | |||||||||||
Oil (MBbls) | 7,881 | 7,102 | 6,165 | ||||||||
Natural gas (MMcf) | 13,004 | 10,488 | 9,235 | ||||||||
Natural gas liquids (MBbls) | 2,701 | 2,436 | 2,106 | ||||||||
Total (MBoe) | 12,749 | 11,286 | 9,811 | ||||||||
Average daily net production (Boe/d) | 140,099 | 125,400 | 107,813 | ||||||||
Average sales prices(1) : | |||||||||||
Oil, without realized derivatives (per Bbl) | $ | 58.23 | $ | 51.83 | $ | 64.29 | |||||
Oil, with realized derivatives (per Bbl) | $ | 55.42 | $ | 49.40 | $ | 60.11 | |||||
Natural gas, without realized derivatives (per Mcf) | $ | 0.01 | $ | 1.38 | $ | 1.32 | |||||
Natural gas, with realized derivatives (per Mcf) | $ | 0.28 | $ | 1.33 | $ | 1.40 | |||||
NGLs (per Bbl) | $ | 14.18 | $ | 17.97 | $ | 27.20 | |||||
Average price per Boe, without realized derivatives | $ | 39.01 | $ | 37.78 | $ | 47.48 | |||||
Average price per Boe, with realized derivatives | $ | 37.54 | $ | 36.20 | $ | 44.92 | |||||
Average costs (per Boe): | |||||||||||
Lease operating expenses | $ | 3.35 | $ | 3.65 | $ | 3.66 | |||||
Transportation and processing costs | $ | 0.52 | $ | 0.73 | $ | 0.66 | |||||
Production and ad valorem taxes | $ | 2.41 | $ | 2.43 | $ | 2.79 | |||||
Depreciation, depletion and amortization | $ | 15.57 | $ | 15.39 | $ | 14.84 | |||||
General and administrative expenses (including stock-based compensation) | $ | 2.74 | $ | 3.37 | $ | 3.67 | |||||
General and administrative expenses (cash based) | $ | 2.35 | $ | 2.90 | $ | 3.12 |
(1) | Average prices shown in the table reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculations of such effects include both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. Realized oil prices are net of transportation costs. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(Unaudited, in thousands, except for per share data)(1) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
REVENUES | |||||||||||||||
Oil sales | $ | 458,888 | $ | 396,325 | $ | 827,014 | $ | 727,428 | |||||||
Natural gas sales | 141 | 12,235 | 14,593 | 29,659 | |||||||||||
Natural gas liquids sales | 38,312 | 57,275 | 82,097 | 97,895 | |||||||||||
Other | 1,200 | 1,953 | 2,508 | 5,547 | |||||||||||
Total revenues | 498,541 | 467,788 | 926,212 | 860,529 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Lease operating expenses | 42,696 | 35,904 | 83,868 | 64,736 | |||||||||||
Transportation and processing costs | 6,608 | 6,471 | 14,865 | 12,738 | |||||||||||
Production and ad valorem taxes | 30,744 | 27,331 | 58,151 | 51,517 | |||||||||||
Depreciation, depletion and amortization | 198,563 | 145,552 | 372,286 | 266,751 | |||||||||||
General and administrative expenses (including stock-based compensation) | 34,907 | 35,991 | 72,944 | 70,986 | |||||||||||
Exploration and abandonment costs | 72 | 3,366 | 23,066 | 8,777 | |||||||||||
Acquisition costs | — | (2) | — | 2 | |||||||||||
Accretion of asset retirement obligations | 353 | 359 | 698 | 713 | |||||||||||
Gain on sale of property | — | (5,166) | — | (5,055) | |||||||||||
Restructuring and other termination costs | 1,562 | — | 1,562 | — | |||||||||||
Other operating expenses | 2,199 | 2,477 | 1,388 | 4,652 | |||||||||||
Total operating expenses | 317,704 | 252,283 | 628,828 | 475,817 | |||||||||||
OPERATING INCOME | 180,837 | 215,505 | 297,384 | 384,712 | |||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||
Interest expense, net | (33,597) | (33,758) | (66,599) | (65,726) | |||||||||||
Gain (loss) on derivatives | 19,561 | (9,466) | (100,126) | (20,259) | |||||||||||
Change in TRA liability | — | — | — | (82) | |||||||||||
Interest income | 103 | 1,686 | 394 | 3,809 | |||||||||||
Other income | 715 | 234 | 773 | 535 | |||||||||||
Total other expense, net | (13,218) | (41,304) | (165,558) | (81,723) | |||||||||||
INCOME BEFORE INCOME TAXES | 167,619 | 174,201 | 131,826 | 302,989 | |||||||||||
INCOME TAX EXPENSE | (32,625) | (33,243) | (24,835) | (56,568) | |||||||||||
NET INCOME | 134,994 | 140,958 | 106,991 | 246,421 | |||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (19,059) | (21,803) | (15,120) | (44,376) | |||||||||||
NET INCOME ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS | $ | 115,935 | $ | 119,155 | $ | 91,871 | $ | 202,045 | |||||||
Net income per common share: | |||||||||||||||
Basic | $ | 0.41 | $ | 0.44 | $ | 0.33 | $ | 0.76 | |||||||
Diluted | $ | 0.41 | $ | 0.44 | $ | 0.33 | $ | 0.76 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 279,706 | 272,239 | 279,253 | 266,479 | |||||||||||
Diluted | 279,768 | 272,846 | 279,363 | 267,043 |
(1) | Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Balance Sheets | |||||||
(Unaudited, in thousands) | |||||||
June 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 64,099 | $ | 163,216 | |||
Accounts receivable, net of allowance for doubtful accounts: | |||||||
Joint interest owners and other | 30,273 | 39,564 | |||||
Oil, natural gas and NGLs | 158,917 | 136,209 | |||||
Related parties | 892 | 94 | |||||
Short-term derivative instruments, net | 134,103 | 191,297 | |||||
Other current assets | 7,420 | 10,332 | |||||
Total current assets | 395,704 | 540,712 | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Oil and natural gas properties, successful efforts method | 10,675,629 | 9,948,246 | |||||
Accumulated depreciation, depletion and impairment | (1,647,036) | (1,295,098) | |||||
Total oil and natural gas properties, net | 9,028,593 | 8,653,148 | |||||
Other property, plant and equipment, net | 188,144 | 170,739 | |||||
Total property, plant and equipment, net | 9,216,737 | 8,823,887 | |||||
NONCURRENT ASSETS | |||||||
Operating lease assets, net of accumulated depreciation | 179,066 | — | |||||
Long-term derivative instruments, net | 39,750 | 20,124 | |||||
Other noncurrent assets | 6,809 | 6,640 | |||||
Total noncurrent assets | 225,625 | 26,764 | |||||
TOTAL ASSETS | $ | 9,838,066 | $ | 9,391,363 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | 423,145 | $ | 364,803 | |||
Revenue and severance taxes payable | 132,131 | 127,265 | |||||
Short-term derivative instruments, net | 150,427 | 152,330 | |||||
Current operating lease liabilities | 79,719 | — | |||||
Other current liabilities | 3,846 | 4,547 | |||||
Total current liabilities | 789,268 | 648,945 | |||||
NONCURRENT LIABILITIES | |||||||
Long-term debt | 2,221,355 | 2,181,667 | |||||
Deferred tax liability | 156,159 | 131,523 | |||||
Operating lease liability | 102,479 | — | |||||
Payable pursuant to tax receivable agreement | 71,077 | 68,110 | |||||
Long-term derivative instruments, net | 40,485 | 16,633 | |||||
Asset retirement obligations | 26,948 | 24,750 | |||||
Financing lease liability | 2,294 | — | |||||
Total noncurrent liabilities | 2,620,797 | 2,422,683 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS' EQUITY | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | |||||
Common stock | |||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 282,134,006 shares issued and 281,116,921 shares outstanding at June 30, 2019 and 280,827,038 shares issued and 280,205,293 shares outstanding at December 31, 2018 | 2,821 | 2,808 | |||||
Class B, $0.01 par value, 125,000,000 shares authorized, 35,538,145 and 36,547,731 shares issued and outstanding at June 30, 2019 and December 31, 2018 | 356 | 366 | |||||
Additional paid in capital | 5,190,453 | 5,163,987 | |||||
Retained earnings | 504,517 | 412,646 | |||||
Treasury stock, at cost, 1,017,085 shares and 621,745 shares at June 30, 2019 and December 31, 2018 | (17,401) | (11,749) | |||||
Total stockholders' equity | 5,680,746 | 5,568,058 | |||||
Noncontrolling interests | 747,255 | 751,677 | |||||
Total equity | 6,428,001 | 6,319,735 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 9,838,066 | $ | 9,391,363 |
(1) | Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(Unaudited, in thousands) | |||||||
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 106,991 | $ | 246,421 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 372,286 | 266,751 | |||||
Leasehold abandonments and impairments | 22,189 | 8,323 | |||||
Accretion of asset retirement obligations | 698 | 713 | |||||
Gain on sale of property | — | (5,055) | |||||
Stock-based compensation | 10,298 | 10,432 | |||||
Deferred income tax expense | 24,835 | 56,568 | |||||
Change in TRA liability | — | 82 | |||||
Loss on derivatives | 100,126 | 20,259 | |||||
Net cash paid for derivative settlements | (15,111) | (7,211) | |||||
Net cash paid for option premiums | (23,609) | (26,330) | |||||
Other | 1,623 | 2,001 | |||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (13,417) | (42,993) | |||||
Accounts receivable—related parties | (798) | 147 | |||||
Other current assets | 7,245 | (31,419) | |||||
Other noncurrent assets | (805) | (318) | |||||
Accounts payable and accrued expenses | 18,465 | (32,213) | |||||
Revenue and severance taxes payable | 4,866 | 24,823 | |||||
Net cash provided by operating activities | 615,882 | 490,981 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Development of oil and natural gas properties | (737,194) | (854,228) | |||||
Acquisitions of oil and natural gas properties | (24,591) | (56,014) | |||||
Additions to other property and equipment | (27,911) | (48,047) | |||||
Proceeds from sales of property, plant and equipment | 37,893 | 42,553 | |||||
Maturity of short-term investments | — | 49,627 | |||||
Other | 4,489 | 35,018 | |||||
Net cash used in investing activities | (747,314) | (831,091) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings under long-term debt | 352,000 | — | |||||
Payments on long-term debt | (312,000) | (1,461) | |||||
Payments on financing lease obligations | (1,430) | — | |||||
Debt issuance costs | — | (45) | |||||
Repurchase of common stock | (5,652) | (10,871) | |||||
Distributions to owners from consolidated subsidiary | (603) | — | |||||
Net cash provided by (used in) financing activities | 32,315 | (12,377) | |||||
Net decrease in cash, cash equivalents and restricted cash | (99,117) | (352,487) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 163,216 | 554,189 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 64,099 | $ | 201,702 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||
Cash paid for interest | $ | (58,164) | $ | (64,047) | |||
Cash received for income taxes | $ | 240 | $ | — | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||||||
Asset retirement obligations incurred, including changes in estimate | $ | 1,208 | $ | 940 | |||
Additions to oil and natural gas properties - change in capital accruals | $ | 41,124 | $ | 46,969 | |||
Net premiums on options that settled during the period | $ | (19,748) | $ | (34,598) |
(1) | Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by the Company's management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net income before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, interest income, income tax expense, change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, gain on sale of property, restructuring and other termination costs, accretion of asset retirement obligations, inventory write down, (gain) loss on derivatives, net settlements on derivative instruments and net premiums on options that settled during the period.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income attributable to Parsley Energy, Inc. stockholders for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted EBITDAX | |||||||||||||||
(Unaudited, in thousands)(1) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Adjusted EBITDAX reconciliation to net income: | |||||||||||||||
Net income attributable to Parsley Energy, Inc. stockholders | $ | 115,935 | $ | 119,155 | $ | 91,871 | $ | 202,045 | |||||||
Net income attributable to noncontrolling interests | 19,059 | 21,803 | 15,120 | 44,376 | |||||||||||
Depreciation, depletion and amortization | 198,563 | 145,552 | 372,286 | 266,751 | |||||||||||
Exploration and abandonment costs | 72 | 3,366 | 23,066 | 8,777 | |||||||||||
Interest expense, net | 33,597 | 33,758 | 66,599 | 65,726 | |||||||||||
Interest income | (103) | (1,686) | (394) | (3,809) | |||||||||||
Income tax expense | 32,625 | 33,243 | 24,835 | 56,568 | |||||||||||
EBITDAX | 399,748 | 355,191 | 593,383 | 640,434 | |||||||||||
Change in TRA liability | — | — | — | 82 | |||||||||||
Stock-based compensation | 4,976 | 5,363 | 10,298 | 10,432 | |||||||||||
Acquisition costs | — | (2) | — | 2 | |||||||||||
Gain on sale of property | — | (5,166) | — | (5,055) | |||||||||||
Restructuring and other termination costs | 1,562 | — | 1,562 | — | |||||||||||
Accretion of asset retirement obligations | 353 | 359 | 698 | 713 | |||||||||||
Inventory write down | — | (17) | — | 44 | |||||||||||
(Gain) loss on derivatives | (19,561) | 9,466 | 100,126 | 20,259 | |||||||||||
Net settlements on derivative instruments | (8,455) | (7,019) | (16,794) | (9,892) | |||||||||||
Net premiums on options that settled during the period | (10,232) | (18,072) | (19,748) | (34,598) | |||||||||||
Adjusted EBITDAX | $ | 368,391 | $ | 340,103 | $ | 669,525 | $ | 622,421 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Operating Cash Margin
Operating cash margin is not a measure of operating income as determined by GAAP. Operating cash margin is a supplemental non-GAAP performance measure used by the Company as an indicator of the Company's profitability and ability to manage its operating income. The Company defines operating cash margin as net income before income tax expense, other revenues, depreciation, depletion and amortization, exploration and abandonment costs, stock-based compensation, acquisition costs, accretion of asset retirement obligations, other operating expense, net interest expense, gain on sale of property, restructuring and other termination costs, (gain) loss on derivatives, change in TRA liability, interest income, and other income. The amounts included in the calculations of operating cash margin were computed in accordance with GAAP.
Operating cash margin is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of operating cash margin to net income attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Operating Cash Margin | |||||||||||||||
(Unaudited, in thousands, except for per unit data)(1) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating cash margin reconciliation to net income: | |||||||||||||||
Net income attributable to Parsley Energy, Inc. stockholders | $ | 115,935 | $ | 119,155 | $ | 91,871 | $ | 202,045 | |||||||
Net income attributable to noncontrolling interests | 19,059 | 21,803 | 15,120 | 44,376 | |||||||||||
Income tax expense | 32,625 | 33,243 | 24,835 | 56,568 | |||||||||||
Other revenues | (1,200) | (1,953) | (2,508) | (5,547) | |||||||||||
Depreciation, depletion and amortization | 198,563 | 145,552 | 372,286 | 266,751 | |||||||||||
Exploration and abandonment costs | 72 | 3,366 | 23,066 | 8,777 | |||||||||||
Stock-based compensation | 4,976 | 5,363 | 10,298 | 10,432 | |||||||||||
Acquisition costs | — | (2) | — | 2 | |||||||||||
Accretion of asset retirement obligations | 353 | 359 | 698 | 713 | |||||||||||
Other operating expense | 2,199 | 2,477 | 1,388 | 4,652 | |||||||||||
Interest expense, net | 33,597 | 33,758 | 66,599 | 65,726 | |||||||||||
Gain on sale of property | — | (5,166) | — | (5,055) | |||||||||||
Restructuring and other termination costs | 1,562 | — | 1,562 | — | |||||||||||
(Gain) loss on derivatives | (19,561) | 9,466 | 100,126 | 20,259 | |||||||||||
Change in TRA liability | — | — | — | 82 | |||||||||||
Interest income | (103) | (1,686) | (394) | (3,809) | |||||||||||
Other income | (715) | (234) | (773) | (535) | |||||||||||
Operating cash margin | $ | 387,362 | $ | 365,501 | $ | 704,174 | $ | 665,437 | |||||||
Operating cash margin per Boe | $ | 30.38 | $ | 37.25 | $ | 29.30 | $ | 36.52 | |||||||
Average price per Boe, without realized derivatives | $ | 39.01 | $ | 47.48 | $ | 38.43 | $ | 46.92 | |||||||
Operating cash margin percentage | 78 | % | 78 | % | 76 | % | 78 | % |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income
Adjusted net income is not a measure of net income determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by the Company's management to evaluate financial performance, prior to (gains) losses on derivatives, net settlements on derivative instruments, net premiums received on options that settled during the period, gain on sale of property, restructuring and other termination costs, exploration and abandonment costs, acquisition costs, and change in TRA liability, while adjusting for noncontrolling interests and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net income attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted Net Income and Net Income Per Share | |||||||||||||||
(Unaudited, in thousands, except per share data)(1) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income attributable to Parsley Energy, Inc. stockholders | $ | 115,935 | $ | 119,155 | $ | 91,871 | $ | 202,045 | |||||||
Adjustments: | |||||||||||||||
(Gain) loss on derivatives | (19,561) | 9,466 | 100,126 | 20,259 | |||||||||||
Net settlements on derivative instruments | (8,455) | (7,019) | (16,794) | (9,892) | |||||||||||
Net premiums on options that settled during the period | (10,232) | (18,072) | (19,748) | (34,598) | |||||||||||
Gain on sale of property | — | (5,166) | — | (5,055) | |||||||||||
Restructuring and other termination costs | 1,562 | — | 1,562 | — | |||||||||||
Exploration and abandonment costs | 72 | 3,366 | 23,066 | 8,777 | |||||||||||
Acquisition costs | — | (2) | — | 2 | |||||||||||
Change in TRA liability | — | — | — | 82 | |||||||||||
Change in noncontrolling interests | 4,102 | 1,688 | (10,220) | 2,334 | |||||||||||
Change in estimated income tax | 7,023 | 2,961 | (17,240) | 3,482 | |||||||||||
Adjusted net income | $ | 90,446 | $ | 106,377 | $ | 152,623 | $ | 187,436 | |||||||
Net income per diluted share - as reported(2) | $ | 0.41 | $ | 0.44 | $ | 0.33 | $ | 0.76 | |||||||
Adjustments: | |||||||||||||||
(Gain) loss on derivatives | $ | (0.06) | $ | 0.03 | $ | 0.36 | $ | 0.08 | |||||||
Net settlements on derivative instruments | (0.03) | (0.02) | (0.06) | (0.04) | |||||||||||
Net premiums on options that settled during the period | (0.04) | (0.07) | (0.07) | (0.13) | |||||||||||
Gain on sale of property | — | (0.02) | — | (0.02) | |||||||||||
Restructuring and other termination costs | 0.01 | — | 0.01 | — | |||||||||||
Exploration and abandonment costs | — | 0.01 | 0.08 | 0.03 | |||||||||||
Change in noncontrolling interests | 0.01 | 0.01 | (0.03) | 0.01 | |||||||||||
Change in estimated income tax | 0.02 | 0.01 | (0.07) | 0.01 | |||||||||||
Adjusted net income per diluted share(3) | $ | 0.32 | $ | 0.39 | $ | 0.55 | $ | 0.70 | |||||||
Basic weighted average shares outstanding - as reported(2) | 279,706 | 272,239 | 279,253 | 266,479 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Restricted Stock and Restricted Stock Units | 62 | 607 | 110 | 564 | |||||||||||
Diluted weighted average shares outstanding - as reported(2) | 279,768 | 272,846 | 279,363 | 267,043 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Restricted Stock and Restricted Stock Units | — | — | — | — | |||||||||||
Diluted weighted average shares outstanding for adjusted net income(3) | 279,768 | 272,846 | 279,363 | 267,043 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. | |
(2) | For the three and six months ended June 30, 2019 and 2018, the number of weighted average diluted shares used to calculate actual net income per share is based on the fact that, under the "if converted" method, Class B Common Stock was not recognized because it would have been antidilutive. | |
(3) | For purposes of calculating adjusted net income per diluted share for the three and six months ended June 30, 2019 and 2018, Class B Common Stock was not recognized because the shares would have been antidilutive using the "if converted" method. |
Open Derivatives Positions
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||||||
Open Crude Oil Derivatives Positions(1) | |||||||||||||||||||||||
3Q19 | 4Q19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | ||||||||||||||||||
OPTION CONTRACTS: | |||||||||||||||||||||||
CUSHING | |||||||||||||||||||||||
Put Spreads - Cushing (MBbls/d)(2) | 19.6 | 19.6 | |||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 57.29 | $ | 57.29 | |||||||||||||||||||
Short Put Price ($/Bbl) | $ | 47.29 | $ | 47.29 | |||||||||||||||||||
Three Way Collars - Cushing (MBbls/d)(3) | 26.1 | 26.1 | |||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 72.69 | $ | 72.69 | |||||||||||||||||||
Long Put Price ($/Bbl) | $ | 51.88 | $ | 51.88 | |||||||||||||||||||
Short Put Price ($/Bbl) | $ | 42.81 | $ | 42.81 | |||||||||||||||||||
Collars - Cushing (MBbls/d)(4) | 21.2 | 21.2 | |||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 58.26 | $ | 58.37 | |||||||||||||||||||
Long Put Price ($/Bbl) | $ | 54.50 | $ | 54.56 | |||||||||||||||||||
MIDLAND | |||||||||||||||||||||||
Put Spreads - Midland (MBbls/d)(2) | 4.9 | 4.9 | |||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 60.00 | $ | 60.00 | |||||||||||||||||||
Short Put Price ($/Bbl) | $ | 50.00 | $ | 50.00 | |||||||||||||||||||
Three Way Collars - Midland (MBbls/d)(3) | 4.9 | 4.9 | 6.7 | 6.6 | |||||||||||||||||||
Short Call Price ($/Bbl) | $ | 64.65 | $ | 64.65 | $ | 77.50 | $ | 77.50 | |||||||||||||||
Long Put Price ($/Bbl) | $ | 50.00 | $ | 50.00 | $ | 61.25 | $ | 61.25 | |||||||||||||||
Short Put Price ($/Bbl) | $ | 45.00 | $ | 45.00 | $ | 51.25 | $ | 51.25 | |||||||||||||||
MAGELLAN EAST HOUSTON ("MEH") | |||||||||||||||||||||||
Put Spreads - MEH (MBbls/d)(2) | 4.9 | 4.9 | 5.0 | 4.9 | |||||||||||||||||||
Long Put Price ($/Bbl) | $ | 60.00 | $ | 60.00 | $ | 70.00 | $ | 70.00 | |||||||||||||||
Short Put Price ($/Bbl) | $ | 50.00 | $ | 50.00 | $ | 60.00 | $ | 60.00 | |||||||||||||||
Three Way Collars - MEH (MBbls/d)(3) | 3.3 | 3.3 | 36.7 | 36.3 | 19.6 | 19.6 | |||||||||||||||||
Short Call Price ($/Bbl) | $ | 75.00 | $ | 75.00 | $ | 75.98 | $ | 75.98 | $ | 76.63 | $ | 76.63 | |||||||||||
Long Put Price ($/Bbl) | $ | 60.00 | $ | 60.00 | $ | 59.57 | $ | 59.57 | $ | 58.79 | $ | 58.79 | |||||||||||
Short Put Price ($/Bbl) | $ | 50.00 | $ | 50.00 | $ | 49.58 | $ | 49.58 | $ | 48.79 | $ | 48.79 | |||||||||||
BRENT | |||||||||||||||||||||||
Three Way Collars - Brent (MBbls/d)(3) | 8.2 | 8.2 | 8.2 | ||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 75.00 | $ | 75.00 | $ | 75.00 | |||||||||||||||||
Long Put Price ($/Bbl) | $ | 62.40 | $ | 62.40 | $ | 62.40 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 52.40 | $ | 52.40 | $ | 52.40 | |||||||||||||||||
Total Option Contracts (MBbls/d) | 84.8 | 84.8 | 48.4 | 56.0 | 27.8 | 27.8 | |||||||||||||||||
Premium Realization ($MM)(5) | $ | (11.8) | $ | (11.8) | $ | (12.2) | $ | (12.6) | $ | (6.9) | $ | (6.9) | |||||||||||
BASIS SWAPS: | |||||||||||||||||||||||
Midland-Cushing Basis Swaps (MBbls/d)(6) | 35.9 | 35.9 | 5.0 | 5.0 | |||||||||||||||||||
Basis Differential ($/Bbl) | $ | (1.63) | $ | (0.78) | $ | 0.25 | $ | 0.25 | |||||||||||||||
MEH-Cushing Basis Swaps (MBbls/d)(6) | 2.1 | 2.1 | |||||||||||||||||||||
Basis Differential ($/Bbl) | $ | 5.10 | $ | 5.10 |
Parsley Energy, Inc. and Subsidiaries | |||||||
Open Natural Gas Derivatives Positions(1) | |||||||
3Q19 | 4Q19 | ||||||
OPTION CONTRACTS: | |||||||
HENRY HUB | |||||||
Three Way Collars - Henry Hub (MMBtu/d)(3) | 32,609 | 32,609 | |||||
Short Call Price ($/MMBtu) | $ | 3.93 | $ | 3.93 | |||
Long Put Price ($/MMBtu) | $ | 3.00 | $ | 3.00 | |||
Short Put Price ($/MMBtu) | $ | 2.50 | $ | 2.50 | |||
Total MMBtu/d Hedged | 32,609 | 32,609 | |||||
BASIS SWAPS: | |||||||
Waha-Henry Hub Basis Swaps (MMBtu/d)(6) | 32,609 | 32,609 | |||||
Basis Differential ($/MMBtu) | $ | (1.78) | $ | (1.64) |
(1) | As of 8/6/2019. Prices represent the weighted average price of contracts scheduled for settlement during the period. | |
(2) | When the reference price (WTI, Midland, MEH, or Brent) is above the long put price, Parsley receives the reference price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | |
(3) | Functions similarly to put spreads except that when the index price is at or above the call price, Parsley receives the call price. | |
(4) | When the reference price (WTI) is above the call price, Parsley receives the call price. When the reference price is below the long put price, Parsley receives the long put price. When the reference price is between the short call and long put prices, Parsley receives the reference price. | |
(5) | Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | |
(6) | Swaps that fix the basis differentials representing the index prices at which the Company sells its oil and gas produced in the Permian Basin less the WTI Cushing price and Henry Hub price, respectively. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-second-quarter-2019-financial-and-operating-results-tightens-capital-budget-range-raises-production-guidance-and-lowers-unit-cost-estimates-300897423.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, June 26, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) plans to report second quarter 2019 financial results on Tuesday, August 6, 2019 after the close of trading on the New York Stock Exchange. The company will host its quarterly conference call at 9:00 AM ET (8:00 AM CT) on Wednesday, August 7, 2019.
By Phone: | Dial 877-709-8150 (United States/Canada) or 201-689-8354 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Friday, September 6, 2019 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13692133. | |
By Webcast: | |
Select "Events & Presentations" under the "Investors" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration and production of unconventional oil and natural gas reserves in the Permian Basin in west Texas. For more information, visit our website at www.parsleyenergy.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-schedules-second-quarter-2019-earnings-release-and-conference-call-300875716.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, June 10, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) (the "Company") today announced that the Company will participate in the 2019 J.P. Morgan Energy Conference in New York, NY on Tuesday, June 18, 2019.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-to-participate-in-upcoming-conference-300864652.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 1, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended March 31, 2019. The Company has posted a presentation to its website that supplements the information in this release.
First Quarter 2019 Highlights
Summary Comment and Outlook
"With our 2019 development plan, we set a course that prioritized a progression to sustainable free cash flow generation and an improvement in capital efficiency in a $50 oil world. Parsley Energy is on track to deliver on this action plan," said Matt Gallagher, Parsley's President and CEO. "The recent rise in oil prices provides an opportunity to compress our timeline to self-funded growth, but does not alter the Company's activity plans or returns-focused mindset."
Operational Update
Parsley delivered healthy execution across multiple disciplines during the first quarter of 2019, highlighted by efficient development operations.
Notable Well Results
Parsley turned nine wells to production in the Delaware Basin during 1Q19, comprised of four pads spread across the Company's acreage footprint in Pecos and Reeves Counties. Early results from these two-mile lateral wells are consistently strong, with all nine wells registering peak 24-hour oil rates over 1,400 Bo per day. This well set includes the Trees State 51-54 pad, which represents the eastern-most wells Parsley has completed in Pecos County to date. Early results from these two wells targeting the Lower Wolfcamp A zone are encouraging, with average peak 24-hour rates of 2,238 Boe per day (88% oil) and recent oil production averaging 1,750 Bo/d after more than 30 days online. The wells have not reached anticipated peak 30-day rates.
Cost control remains a key priority for Parsley in the Delaware Basin. On this front, Parsley delivered a meaningful improvement in drilling and completion efficiency versus 2017-2018 averages, translating to faster cycle times and lower equipment rental costs. The Company also recorded promising results from its first completion utilizing local sand, a design change that resulted in savings of over $0.5 million per well. The Company has additional local sand tests planned in the Delaware Basin later this year.
"I am encouraged by the positive recent developments in our Delaware Basin assets," said David Dell'Osso, Parsley's COO. "Furthermore, our sizable mineral ownership in this area helps amplify any capital efficiency improvements we are able to capture. Overall, our teams continue to build on the operational momentum they generated during 2018."
Activity Overview
During the first quarter of 2019, the Company spud 35 and placed on production 34 gross operated horizontal wells. Parsley's working interest on wells placed on production was approximately 93%, with an average completed lateral length of approximately 10,100 feet. Completion activity was weighted toward the Midland Basin, where the Company placed on production 25 gross operated horizontal wells, with the remainder placed on production in the Delaware Basin. Parsley expects that development activity will be more heavily weighted to the Midland Basin for the remainder of the year, consistent with prior commentary.
As part of the Company's ongoing focus to bolster operational efficiency, Parsley high-graded its rig fleet and dropped two rigs in aggregate during 1Q19. Parsley expects to maintain an activity level of 12 development rigs and three-to-four frac spreads through the end of 2019, as the Company intends to continue to operate in conformity with full-year capital spending expectations.
Financial Update
Healthy execution in 1Q19 translated to strong performance in key financial measures.
Profitability
During 1Q19, the Company recorded net loss attributable to its stockholders of $24.1 million, or $0.09 per share. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, adjusted net income for 1Q19 was $62.3 million, or $0.22 per share.(1)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 1Q19 was $301.1 million.(1)
Realized Pricing
During 1Q19, Parsley reported an average unhedged oil price realization of $51.83/Bbl net of transportation costs, representing a discount of $3.07 to the average WTI Cushing price(2) for the quarter.
Operating Costs
Parsley registered favorable overall trends in operating costs and margins during the first quarter of 2019. Both G&A per Boe and cash based G&A per Boe(1), which excludes stock-based compensation expense, decreased quarter-over-quarter and year-over-year to $3.37 and $2.90, respectively, representing Company-record levels in each case. Encouraging G&A cost trends are a function of ongoing corporate cost savings initiatives, including an eight percent reduction to our total employee count since year-end 2018.
Healthy realized oil pricing and favorable trends in the aforementioned cash operating costs drove a strong operating cash margin of $28.07 per Boe, or 74% of the Company's average realized price per Boe.(1)
The Company reported LOE per Boe of $3.65, up only 1% versus 4Q18 expense levels. Stable LOE costs were driven by the Company's cost-effective water management system and lower than anticipated workover activity.
Capital Expenditures
Parsley reported capital expenditures of $406 million during the first quarter of 2019, comprised of $335 million for operated drilling and completion activity, $63 million for operated facilities and infrastructure, and $8 million associated with non-operated development activity.
Liquidity and Hedging
The Company entered into an amendment to its revolving credit facility on April 23, 2019, which increased its borrowing base from $2.3 billion to $2.7 billion while maintaining an elected commitment amount of $1.0 billion. As of March 31, 2019, Parsley had approximately $1.0 billion of liquidity, consisting of $10 million of cash and cash equivalents and an undrawn amount of $991 million on the Company's revolver.(3)
After recent additions to its hedge positions, a significant majority of Parsley's expected 2019 oil production is subject to hedge protection. The Company also recently added to its 2020 hedge positions. Parsley's portfolio of option contracts provides significant protection for its balance sheet and anticipated cash flow while retaining meaningful exposure to higher commodity prices. The Company has also entered into various basis swaps to protect against expansion of regional oil and gas price differentials. For details on Parsley's hedge position, please see the tables below under Supplemental Information and/or, upon availability, the Company's Quarterly Report on Form 10-Q for the three months ended March 31, 2019.
2019 Guidance
Parsley reiterates its 2019 annual guidance outlined in February. The Company expects second quarter 2019 net oil production to average 81-85 MBo/d. For further detail, please see the tables below.
2019E | |
Production | |
Annual net oil production (MBo/d) | 80.0-85.0 |
Annual net total production (MBoe/d) | 124.0-134.0 |
Capital Program | |
Total development expenditures ($MM) | $1,350-$1,550 |
Drilling and completion (% of total) | ~85% |
Facilities, Infrastructure & Other (% of total) | ~15% |
Activity | |
Gross operated horizontal POPs(4) | 130-140 |
Midland Basin (% of total) | ~85% |
Delaware Basin (% of total) | ~15% |
Average lateral length | 10,000'-10,500' |
Gross operated lateral footage (000's) | 1,350'-1,470' |
Average working interest | ~90% |
Unit Costs | |
Lease operating expenses ($/Boe) | $3.50-$4.50 |
Cash general and administrative expenses ($/Boe) | $2.75-$3.25 |
Production and ad valorem taxes (% of total revenue) | 6%-7% |
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the first quarter of 2019 on Thursday, May 2 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-709-8150 (United States/Canada) or 201-689-8354 (International) 10 minutes before the scheduled time and request the Parsley Energy earnings conference call. A telephone replay will be available through May 9 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13689547. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Investors-Events & Presentations" section of the website. The Company has also posted a presentation to its website that supplements the information in this release.
Upcoming Conference Participation
Parsley plans to participate in Tudor, Pickering, Holt & Co.'s 15th Annual Hotter 'N Hell conference in Houston, Texas on May 14 and the UBS Global Oil and Gas Conference in Austin, Texas on May 21-22.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
- Tables to Follow -
(1) | "Cash based G&A per Boe", "Adjusted EBITDAX", "operating cash margin", and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For definitions and reconciliations of the non-GAAP financial measures of adjusted EBITDAX, operating cash margin, and adjusted net income to GAAP financial measures, please see the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. | |
(2) | Represents Bloomberg-sourced 1Q19 average WTI Cushing price. | |
(3) | Fully undrawn revolver balance is net of letters of credit. | |
(4) | Wells placed on production. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Selected Operating Data | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2019 | December 31, 2018 | March 31, 2018 | |||||||||
Net production volumes: | |||||||||||
Oil (MBbls) | 7,102 | 7,087 | 5,341 | ||||||||
Natural gas (MMcf) | 10,488 | 9,696 | 8,556 | ||||||||
Natural gas liquids (MBbls) | 2,436 | 2,323 | 1,643 | ||||||||
Total (MBoe) | 11,286 | 11,026 | 8,410 | ||||||||
Average daily net production (Boe/d) | 125,400 | 119,848 | 93,444 | ||||||||
Average sales prices(1) : | |||||||||||
Oil, without realized derivatives (per Bbl) | $ | 51.83 | $ | 54.22 | $ | 61.99 | |||||
Oil, with realized derivatives (per Bbl) | $ | 49.40 | $ | 52.69 | $ | 58.32 | |||||
Natural gas, without realized derivatives (per Mcf) | $ | 1.38 | $ | 0.90 | $ | 2.04 | |||||
Natural gas, with realized derivatives (per Mcf) | $ | 1.33 | $ | 0.94 | $ | 2.06 | |||||
NGLs (per Bbl) | $ | 17.97 | $ | 25.00 | $ | 24.72 | |||||
Average price per Boe, without realized derivatives | $ | 37.78 | $ | 40.91 | $ | 46.27 | |||||
Average price per Boe, with realized derivatives | $ | 36.20 | $ | 39.96 | $ | 43.97 | |||||
Average costs (per Boe): | |||||||||||
Lease operating expenses | $ | 3.65 | $ | 3.61 | $ | 3.43 | |||||
Transportation and processing costs | $ | 0.73 | $ | 1.03 | $ | 0.75 | |||||
Production and ad valorem taxes | $ | 2.43 | $ | 2.38 | $ | 2.88 | |||||
Depreciation, depletion and amortization | $ | 15.39 | $ | 14.58 | $ | 14.41 | |||||
General and administrative expenses (including stock-based compensation) | $ | 3.37 | $ | 3.85 | $ | 4.16 | |||||
General and administrative expenses (cash based) | $ | 2.90 | $ | 3.42 | $ | 3.56 |
(1) | Average prices shown in the table reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculations of such effects include both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. Realized oil prices are net of transportation costs. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Statements of Operations | |||||||
(Unaudited, in thousands, except for per share data)(1) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
REVENUES | |||||||
Oil sales | $ | 368,126 | $ | 331,103 | |||
Natural gas sales | 14,452 | 17,424 | |||||
Natural gas liquids sales | 43,785 | 40,620 | |||||
Other | 1,308 | 3,594 | |||||
Total revenues | 427,671 | 392,741 | |||||
OPERATING EXPENSES | |||||||
Lease operating expenses | 41,172 | 28,832 | |||||
Transportation and processing costs | 8,257 | 6,267 | |||||
Production and ad valorem taxes | 27,407 | 24,186 | |||||
Depreciation, depletion and amortization | 173,723 | 121,199 | |||||
General and administrative expenses (including stock-based compensation) | 38,037 | 34,995 | |||||
Exploration and abandonment costs | 22,994 | 5,411 | |||||
Acquisition costs | — | 4 | |||||
Accretion of asset retirement obligations | 345 | 354 | |||||
Loss on sale of property | — | 111 | |||||
Other operating (income) expenses | (811) | 2,175 | |||||
Total operating expenses | 311,124 | 223,534 | |||||
OPERATING INCOME | 116,547 | 169,207 | |||||
OTHER INCOME (EXPENSE) | |||||||
Interest expense, net | (33,002) | (31,968) | |||||
Loss on derivatives | (119,687) | (10,793) | |||||
Change in TRA liability | — | (82) | |||||
Interest income | 291 | 2,123 | |||||
Other income | 58 | 301 | |||||
Total other expense, net | (152,340) | (40,419) | |||||
(LOSS) INCOME BEFORE INCOME TAXES | (35,793) | 128,788 | |||||
INCOME TAX BENEFIT (EXPENSE) | 7,790 | (23,325) | |||||
NET (LOSS) INCOME | (28,003) | 105,463 | |||||
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS | 3,939 | (22,573) | |||||
NET (LOSS) INCOME ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS | $ | (24,064) | $ | 82,890 | |||
Net (loss) income per common share: | |||||||
Basic | $ | (0.09) | $ | 0.32 | |||
Diluted | $ | (0.09) | $ | 0.32 | |||
Weighted average common shares outstanding: | |||||||
Basic | 278,794 | 260,654 | |||||
Diluted | 278,794 | 261,639 |
(1) | Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Balance Sheets | |||||||
(Unaudited, in thousands) | |||||||
March 31, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 10,380 | $ | 163,216 | |||
Accounts receivable, net of allowance for doubtful accounts: | |||||||
Joint interest owners and other | 36,657 | 36,062 | |||||
Oil, natural gas and NGLs | 176,381 | 138,987 | |||||
Related parties | 2,204 | 94 | |||||
Short-term derivative instruments, net | 82,327 | 191,297 | |||||
Other current assets | 9,618 | 11,056 | |||||
Total current assets | 317,567 | 540,712 | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Oil and natural gas properties, successful efforts method | 10,327,178 | 9,948,246 | |||||
Accumulated depreciation, depletion and impairment | (1,464,040) | (1,295,098) | |||||
Total oil and natural gas properties, net | 8,863,138 | 8,653,148 | |||||
Other property, plant and equipment, net | 178,854 | 170,739 | |||||
Total property, plant and equipment, net | 9,041,992 | 8,823,887 | |||||
NONCURRENT ASSETS | |||||||
Operating lease assets, net of accumulated depreciation | 157,655 | — | |||||
Long-term derivative instruments, net | 27,301 | 20,124 | |||||
Other noncurrent assets | 9,632 | 6,640 | |||||
Total noncurrent assets | 194,588 | 26,764 | |||||
TOTAL ASSETS | $ | 9,554,147 | $ | 9,391,363 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | 402,496 | $ | 364,803 | |||
Revenue and severance taxes payable | 126,339 | 127,265 | |||||
Short-term derivative instruments, net | 138,784 | 152,330 | |||||
Current operating lease liabilities | 69,104 | — | |||||
Other current liabilities | 4,657 | 4,547 | |||||
Total current liabilities | 741,380 | 648,945 | |||||
NONCURRENT LIABILITIES | |||||||
Long-term debt | 2,180,616 | 2,181,667 | |||||
Deferred tax liability | 121,336 | 131,523 | |||||
Operating lease liability | 92,793 | — | |||||
Payable pursuant to tax receivable agreement | 71,077 | 68,110 | |||||
Long-term derivative instruments, net | 29,212 | 16,633 | |||||
Asset retirement obligations | 25,315 | 24,750 | |||||
Financing lease liability | 1,847 | — | |||||
Total noncurrent liabilities | 2,522,196 | 2,422,683 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS' EQUITY | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | |||||
Common stock | |||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 281,525,513 shares issued and 280,567,240 shares outstanding at March 31, 2019 and 280,827,038 shares issued and 280,205,293 shares outstanding at December 31, 2018 | 2,815 | 2,808 | |||||
Class B, $0.01 par value, 125,000,000 shares authorized, 36,127,731 and 36,547,731 shares issued and outstanding at March 31, 2019 and December 31, 2018 | 362 | 366 | |||||
Additional paid in capital | 5,175,012 | 5,163,987 | |||||
Retained earnings | 388,582 | 412,646 | |||||
Treasury stock, at cost, 958,273 shares and 621,745 shares at March 31, 2019 and December 31, 2018 | (17,058) | (11,749) | |||||
Total stockholders' equity | 5,549,713 | 5,568,058 | |||||
Noncontrolling interest | 740,858 | 751,677 | |||||
Total equity | 6,290,571 | 6,319,735 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 9,554,147 | $ | 9,391,363 |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(Unaudited, in thousands) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net (loss) income | $ | (28,003) | $ | 105,463 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 173,723 | 121,199 | |||||
Leasehold abandonments and impairments | 22,189 | 5,179 | |||||
Accretion of asset retirement obligations | 345 | 354 | |||||
Loss on sale of property | — | 111 | |||||
Stock-based compensation | 5,322 | 5,069 | |||||
Deferred income tax (benefit) expense | (7,790) | 23,325 | |||||
Change in TRA liability | — | 82 | |||||
Loss on derivatives | 119,687 | 10,793 | |||||
Net cash paid for derivative settlements | (5,072) | (1,903) | |||||
Net cash paid for option premiums | (10,440) | (13,506) | |||||
Other | 1,056 | 1,096 | |||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (37,989) | (43,214) | |||||
Accounts receivable—related parties | (2,110) | 77 | |||||
Other current assets | 1,438 | 3,835 | |||||
Other noncurrent assets | (3,308) | (635) | |||||
Accounts payable and accrued expenses | (15,063) | (5,427) | |||||
Revenue and severance taxes payable | (926) | 15,057 | |||||
Net cash provided by operating activities | 213,059 | 226,955 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Development of oil and natural gas properties | (352,650) | (411,073) | |||||
Acquisitions of oil and natural gas properties | (13,846) | (27,447) | |||||
Additions to other property and equipment | (11,106) | (28,248) | |||||
Proceeds from sales of property, plant and equipment | 17,486 | 43,228 | |||||
Other | 809 | 349 | |||||
Net cash used in investing activities | (359,307) | (423,191) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings under long-term debt | 120,000 | — | |||||
Payments on long-term debt | (120,000) | (694) | |||||
Payments on financing lease obligations | (676) | — | |||||
Debt issuance costs | — | (32) | |||||
Repurchase of common stock | (5,309) | (6,465) | |||||
Distributions to owners from consolidated subsidiary | (603) | — | |||||
Net cash used in financing activities | (6,588) | (7,191) | |||||
Net decrease in cash, cash equivalents and restricted cash | (152,836) | (203,427) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 163,216 | 554,189 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 10,380 | $ | 350,762 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||
Cash paid for interest | $ | (30,493) | $ | (29,455) | |||
Cash received for income taxes | $ | 240 | $ | — | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||||||
Asset retirement obligations incurred, including changes in estimate | $ | 219 | $ | 359 | |||
Additions to oil and natural gas properties - change in capital accruals | $ | 53,654 | $ | 13,013 | |||
Net premiums on options that settled during the period | $ | (9,516) | $ | (16,526) |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by the Company's management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net (loss) income before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, interest income, income tax (benefit) expense, change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, loss on sale of property, accretion of asset retirement obligations, inventory write down, loss on derivatives, net settlements on derivative instruments and net premiums on options that settled during the period.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net (loss) income for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||
Adjusted EBITDAX | |||||||
(Unaudited, in thousands)(1) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Adjusted EBITDAX reconciliation to net income: | |||||||
Net (loss) income attributable to Parsley Energy, Inc. stockholders | $ | (24,064) | $ | 82,890 | |||
Net (loss) income attributable to noncontrolling interests | (3,939) | 22,573 | |||||
Depreciation, depletion and amortization | 173,723 | 121,199 | |||||
Exploration and abandonment costs | 22,994 | 5,411 | |||||
Interest expense, net | 33,002 | 31,968 | |||||
Interest income | (291) | (2,123) | |||||
Income tax (benefit) expense | (7,790) | 23,325 | |||||
EBITDAX | 193,635 | 285,243 | |||||
Change in TRA liability | — | 82 | |||||
Stock-based compensation | 5,322 | 5,069 | |||||
Acquisition costs | — | 4 | |||||
Loss on sale of property | — | 111 | |||||
Accretion of asset retirement obligations | 345 | 354 | |||||
Inventory write down | — | 61 | |||||
Loss on derivatives | 119,687 | 10,793 | |||||
Net settlements on derivative instruments | (8,339) | (2,873) | |||||
Net premiums on options that settled during the period | (9,516) | (16,526) | |||||
Adjusted EBITDAX | $ | 301,134 | $ | 282,318 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Operating Cash Margin
Operating cash margin is not a measure of operating income as determined by GAAP. Operating cash margin is a supplemental non-GAAP performance measure used by the Company as an indicator of the Company's profitability and ability to manage its operating income. The Company defines operating cash margin as net (loss) income before income tax (benefit) expense, other revenues, depreciation, depletion and amortization, exploration and abandonment costs, stock-based compensation, acquisition costs, accretion of asset retirement obligations, other operating (income) expense, net interest expense, loss on sale of property, derivative loss, change in TRA liability, interest income, and other income. The amounts included in the calculations of operating cash margin were computed in accordance with GAAP.
Operating cash margin is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of operating cash margin to net income attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries | |||||||
Operating Cash Margin | |||||||
(Unaudited, in thousands, except for per unit data)(1) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net (loss) income attributable to Parsley Energy, Inc. stockholders | $ | (24,064) | $ | 82,890 | |||
Net (loss) income attributable to noncontrolling interests | (3,939) | 22,573 | |||||
Income tax (benefit) expense | (7,790) | 23,325 | |||||
Other revenues | (1,308) | (3,594) | |||||
Depreciation, depletion and amortization | 173,723 | 121,199 | |||||
Exploration and abandonment costs | 22,994 | 5,411 | |||||
Stock-based compensation | 5,322 | 5,069 | |||||
Acquisition costs | — | 4 | |||||
Accretion of asset retirement obligations | 345 | 354 | |||||
Other operating (income) expense | (811) | 2,175 | |||||
Interest expense, net | 33,002 | 31,968 | |||||
Loss on sale of property | — | 111 | |||||
Derivative loss | 119,687 | 10,793 | |||||
Change in TRA liability | — | 82 | |||||
Interest income | (291) | (2,123) | |||||
Other income | (58) | (301) | |||||
Operating cash margin | $ | 316,812 | $ | 299,936 | |||
Operating cash margin per Boe | $ | 28.07 | $ | 35.66 | |||
Average price per Boe, without realized derivatives | $ | 37.78 | $ | 46.27 | |||
Operating cash margin percentage | 74 | % | 77 | % |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income
Adjusted net income is not a measure of net income determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by the Company's management to evaluate financial performance, prior to (gains) losses on derivatives, net settlements on derivative instruments, net premiums received on options that settled during the period, loss on sale of property, exploration and abandonment costs, acquisition costs, and change in TRA liability, while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net income (loss).
Parsley Energy, Inc. and Subsidiaries | |||||||
Adjusted Net Income and Net Income Per Share | |||||||
(Unaudited, in thousands, except per share data)(1) | |||||||
Three Months Ended March 31, | |||||||
2019 | 2018 | ||||||
Net (loss) income - as reported | $ | (24,064) | $ | 82,890 | |||
Adjustments: | |||||||
Loss on derivatives | 119,687 | 10,793 | |||||
Net settlements on derivative instruments | (8,339) | (2,873) | |||||
Net premiums on options that settled during the period | (9,516) | (16,526) | |||||
Loss on sale of property | — | 111 | |||||
Exploration and abandonment costs | 22,994 | 5,411 | |||||
Acquisition costs | — | 4 | |||||
Change in TRA liability | — | 82 | |||||
Change in noncontrolling interest | (14,321) | 647 | |||||
Change in estimated income tax | (24,132) | 522 | |||||
Adjusted net income | $ | 62,309 | $ | 81,061 | |||
Net (loss) income per diluted share - as reported(2) | $ | (0.09) | $ | 0.32 | |||
Adjustments: | |||||||
Loss on derivatives | $ | 0.42 | $ | 0.04 | |||
Net settlements on derivative instruments | (0.02) | (0.01) | |||||
Net premiums on options that settled during the period | (0.03) | (0.06) | |||||
Loss on sale of property | — | — | |||||
Exploration and abandonment costs | 0.08 | 0.02 | |||||
Change in noncontrolling interest | (0.05) | — | |||||
Change in estimated income tax | (0.09) | — | |||||
Adjusted net income per diluted share(3) | $ | 0.22 | $ | 0.31 | |||
Basic weighted average shares outstanding - as reported(2) | 278,794 | 260,654 | |||||
Effect of dilutive securities: | |||||||
Restricted Stock and Restricted Stock Units | — | 985 | |||||
Diluted weighted average shares outstanding - as reported(2) | 278,794 | 261,639 | |||||
Effect of dilutive securities: | |||||||
Restricted Stock and Restricted Stock Units | 369 | — | |||||
Diluted weighted average shares outstanding for adjusted net income(3) | 279,163 | 261,639 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. | |
(2) | For the three months ended March 31, 2019 and 2018, the number of weighted average diluted shares used to calculate actual net income per share is based on the fact that, under the "if converted" method, Class B Common Stock was not recognized because it would have been antidilutive. | |
(3) | For purposes of calculating adjusted net income per diluted share for the three months ended March 31, 2019 and 2018, Class B Common Stock was not recognized because the shares would have been antidilutive using the "if converted" method. |
Open Derivatives Positions | |||||||||||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||||||||||
Open Crude Oil Derivatives Positions(1) | |||||||||||||||||||||||||||
2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | 3Q20 | 4Q20 | |||||||||||||||||||||
OPTION CONTRACTS: | |||||||||||||||||||||||||||
CUSHING | |||||||||||||||||||||||||||
Put Spreads - Cushing (MBbls/d)(2) | 11.5 | 19.6 | 19.6 | ||||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 51.43 | $ | 59.79 | $ | 59.79 | |||||||||||||||||||||
Short Put Price ($/Bbl) | $ | 44.29 | $ | 49.79 | $ | 49.79 | |||||||||||||||||||||
Three Way Collars - Cushing (MBbls/d)(3) | 21.4 | 26.1 | 26.1 | ||||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 70.89 | $ | 72.69 | $ | 72.69 | |||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 48.85 | $ | 51.88 | $ | 51.88 | |||||||||||||||||||||
Short Put Price ($/Bbl) | $ | 41.15 | $ | 42.81 | $ | 42.81 | |||||||||||||||||||||
Collars - Cushing (MBbls/d)(4) | 24.7 | 21.2 | 21.2 | ||||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 57.67 | $ | 58.26 | $ | 58.37 | |||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 53.94 | $ | 54.50 | $ | 54.56 | |||||||||||||||||||||
MIDLAND | |||||||||||||||||||||||||||
Put Spreads - Midland (MBbls/d)(2) | 14.8 | 4.9 | 4.9 | ||||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 50.56 | $ | 60.00 | $ | 60.00 | |||||||||||||||||||||
Short Put Price ($/Bbl) | $ | 40.56 | $ | 50.00 | $ | 50.00 | |||||||||||||||||||||
Three Way Collars - Midland (MBbls/d)(3) | 4.9 | 4.9 | 6.7 | 6.6 | |||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 64.65 | $ | 64.65 | $ | 77.50 | $ | 77.50 | |||||||||||||||||||
Long Put Price ($/Bbl) | $ | 50.00 | $ | 50.00 | $ | 61.25 | $ | 61.25 | |||||||||||||||||||
Short Put Price ($/Bbl) | $ | 45.00 | $ | 45.00 | $ | 51.25 | $ | 51.25 | |||||||||||||||||||
MAGELLAN EAST HOUSTON ("MEH") | |||||||||||||||||||||||||||
Put Spreads - MEH (MBbls/d)(2) | 3.3 | 8.2 | 8.2 | 5.0 | 4.9 | ||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 70.00 | $ | 64.00 | $ | 64.00 | $ | 70.00 | $ | 70.00 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 60.00 | $ | 54.00 | $ | 54.00 | $ | 60.00 | $ | 60.00 | |||||||||||||||||
Three Way Collars - MEH (MBbls/d)(3) | 31.7 | 31.3 | 11.4 | 11.4 | |||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 76.53 | $ | 76.53 | $ | 80.00 | $ | 80.00 | |||||||||||||||||||
Long Put Price ($/Bbl) | $ | 60.13 | $ | 60.13 | $ | 61.07 | $ | 61.07 | |||||||||||||||||||
Short Put Price ($/Bbl) | $ | 50.14 | $ | 50.14 | $ | 51.07 | $ | 51.07 | |||||||||||||||||||
Total Option Contracts (MBbls/d) | 75.7 | 84.9 | 84.9 | 43.4 | 42.8 | 11.4 | 11.4 | ||||||||||||||||||||
Premium Realization ($MM)(5) | $ | (10.2) | $ | (14.5) | $ | (14.5) | $ | (9.9) | $ | (9.9) | $ | (2.9) | $ | (2.9) | |||||||||||||
BASIS SWAPS: | |||||||||||||||||||||||||||
Midland-Cushing Basis Swaps (MBbls/d)(6) | 25.4 | 35.9 | 35.9 | 5.0 | 5.0 | ||||||||||||||||||||||
Basis Differential ($/Bbl) | $ | (5.10) | $ | (1.63) | $ | (0.78) | $ | 0.25 | $ | 0.25 | |||||||||||||||||
MEH-Cushing Basis Swaps (MBbls/d)(6) | 2.1 | 2.1 | 2.1 | ||||||||||||||||||||||||
Basis Differential ($/Bbl) | $ | 5.10 | $ | 5.10 | $ | 5.10 |
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Open Natural Gas Derivatives Positions(1) | |||||||||||
2Q19 | 3Q19 | 4Q19 | |||||||||
OPTION CONTRACTS: | |||||||||||
HENRY HUB | |||||||||||
Three Way Collars (MMBtu/d)(3) | 32,967 | 32,609 | 32,609 | ||||||||
Short Call Price ($/MMBtu) | $ | 3.93 | $ | 3.93 | $ | 3.93 | |||||
Long Put Price ($/MMBtu) | $ | 3.00 | $ | 3.00 | $ | 3.00 | |||||
Short Put Price ($/MMBtu) | $ | 2.50 | $ | 2.50 | $ | 2.50 | |||||
Total MMBtu/d Hedged | 32,967 | 32,609 | 32,609 | ||||||||
BASIS SWAPS: | |||||||||||
Waha-Henry Hub Basis Swaps (MMBtu/d)(6) | 32,967 | 32,609 | 32,609 | ||||||||
Basis Differential ($/MMBtu) | $ | (1.92) | $ | (1.78) | $ | (1.64) |
(1) | As of 5/1/2019. Prices represent the weighted average price of contracts scheduled for settlement during the period. | |
(2) | When the reference price (WTI, Midland, or MEH) is above the long put price, Parsley receives the reference price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | |
(3) | Functions similarly to put spreads except that when the index price is at or above the call price, Parsley receives the call price. | |
(4) | When the reference price (WTI) is above the call price, Parsley receives the call price. When the reference price is below the long put price, Parsley receives the long put price. When the reference price is between the short call and long put prices, Parsley receives the reference price. | |
(5) | Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | |
(6) | Swaps that fix the basis differentials representing the index prices at which the Company sells its oil and gas produced in the Permian Basin less the WTI Cushing price and Henry Hub price, respectively. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-first-quarter-2019-financial-and-operating-results-300842131.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, April 4, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) plans to report first quarter 2019 financial results on Wednesday, May 1, 2019 after the close of trading on the New York Stock Exchange. The company will host its quarterly conference call at 9:00 AM ET (8:00 AM CT) on Thursday, May 2, 2019.
By Phone: | Dial 877-709-8150 (United States/Canada) or 201-689-8354 (International) approximately 10 minutes before |
A telephone replay will be available through Thursday, May 9, 2019 by dialing 877-660-6853 (United | |
By Webcast: | |
Select "Events & Presentations" under the "Investors" section of the Company's website. Please log on at |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration and production of unconventional oil and natural gas reserves in the Permian Basin in west Texas. For more information, visit our website at www.parsleyenergy.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-schedules-first-quarter-2019-earnings-release-and-conference-call-300825043.html
SOURCE Parsley Energy, Inc.
NEW ORLEANS, Feb. 22, 2019 /PRNewswire/ -- Former Attorney General of Louisiana, Charles C. Foti, Jr., Esq., a partner at the law firm of Kahn Swick & Foti, LLC ("KSF"), announces that KSF has commenced an investigation into Parsley Energy, Inc. (NYSE: PE).
On January 2, 2019, The Wall Street Journal reported in an article titled "Fracking's Secret Problem—Oil Wells Aren't Producing as Much as Forecast" that, according to a review of available public data on production, many of the Company's shale wells, specifically those involved in the fracking process, were producing oil and gas at a much lower rate than the Company had forecasted to investors. For example, wells in the Midland section of the Permian Basin that the Company had informed investors in 2015 were expected to produce 1,050,000 barrels of oil and gas apiece now appear on track to miss forecasts for every year from 2014 to 2017 by an average of 25%. Further, the report noted that "findings suggest current production levels may be hard to sustain without greater spending because operators will have to drill more wells to meet growth targets."
KSF's investigation is focusing on whether Parsley's officers and/or directors breached their fiduciary duties to Parsley's shareholders or otherwise violated state or federal laws.
If you have information that would assist KSF in its investigation, or have been a long-term holder of Parsley shares and would like to discuss your legal rights, you may, without obligation or cost to you, call toll-free at 1-877-515-1850 or email KSF Managing Partner Lewis Kahn (lewis.kahn@ksfcounsel.com), or visit https://www.ksfcounsel.com/cases/nyse-pe/ to learn more.
About Kahn Swick & Foti, LLC
KSF, whose partners include the Former Louisiana Attorney General Charles C. Foti, Jr., is a law firm focused on securities, antitrust and consumer class actions, along with merger & acquisition and breach of fiduciary litigation against publicly traded companies on behalf of shareholders. The firm has offices in New York, California and Louisiana.
To learn more about KSF, you may visit www.ksfcounsel.com.
Contact:
Kahn Swick & Foti, LLC
Lewis Kahn, Managing Partner
lewis.kahn@ksfcounsel.com
1-877-515-1850
1100 Poydras St., Suite 3200
New Orleans, LA 70163
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-investigation-initiated-by-former-louisiana-attorney-general--kahn-swick--foti-llc-investigates-the-officers-and-directors-of-parsley-energy-inc---pe-300800474.html
SOURCE Kahn Swick & Foti, LLC
AUSTIN, Texas, Feb. 21, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended December 31, 2018. The Company has posted a presentation to its website that supplements the information in this release.
Fourth Quarter 2018 Highlights
Summary Comment and Outlook
"By any measure 2018 was a strong operational year for Parsley Energy, as we both expanded operating margins to Company-record levels and greatly enhanced our operational efficiency," said Matt Gallagher, Parsley's President and CEO. "As we turn to 2019, our top priorities are demonstrating meaningful progress toward sustainable free cash flow generation and recording a tangible year-over-year improvement in capital efficiency. Underpinning these key objectives is a deliberate shift in our development approach to prioritize project-level rate of return, a strategy enabled by our deep, high-quality inventory."
Operational Update
Parsley achieved improved operational efficiency during the fourth quarter of 2018.
Activity Overview
During the fourth quarter of 2018, the Company spud 38 and placed on production 43 gross operated horizontal wells. Parsley's working interest on wells placed on production was approximately 96%, with an average completed lateral length of approximately 9,300 feet. Completion activity was weighted toward the Midland Basin, where the Company placed on production 37 gross operated horizontal wells, with the remainder placed on production in the Delaware Basin.
Consistent with prior commentary, Parsley reduced its activity levels from 16 development rigs and five frac spreads to 14 development rigs and four frac spreads during 4Q18. Notwithstanding this reduction in equipment, the Company completed over 400,000 lateral feet during the fourth quarter of 2018, translating to a new Company record for completion efficiency.(2)
"Recapturing the top-tier operational efficiency Parsley expects was a key focus during 2018," said David Dell'Osso, Parsley's COO. "Our teams delivered results over and above our high standards, and we expect to preserve and build upon these operational efficiency gains in 2019."
Notable Well Results
Parsley intends to increase development activity in its Northern Midland County area during 2019, a development approach made possible by close collaboration and solid execution across multiple disciplines within the organization. The Company has turned 14 wells to production in this area over the past six months, with encouraging early results. These wells included three wells on the Massey lease, which targeted the Lower Spraberry, Wolfcamp A and Wolfcamp B in a stacked configuration. Early results from these three 2.5-mile lateral wells are promising, with production averaging approximately 1,900 Boe per day (82% oil) after more than 50 days online and having not reached anticipated peak 30-day rates.
Also in its Northern Midland County area, Parsley recently drilled a three-mile lateral Wolfcamp well, representing one of the longest laterals ever drilled in the Permian Basin. The Company executed this technical feat in only 25 days, with less than nine days spent drilling the three-mile lateral segment.
Financial Update
Healthy execution in 4Q18 translated to strong performance in key financial measures.
Profitability
The Company recorded net income attributable to its stockholders of $53.8 million, or $0.19 per share, in 4Q18 and $369.1 million, or $1.35 per share, for the year. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, adjusted net income was $82.5 million, or $0.30 per share, in 4Q18 and $385.1 million, or $1.41 per share, for the year.(3)
Consistent with the Company's commitment to capital discipline and in response to recent commodity price trends, Parsley has announced reductions in rig and frac spread counts and intends to reduce its 2019 capital leasing and acquisition spending. As a result, in 4Q18, the Company recorded non-cash leasehold impairment expense of $127.0 million relating to acreage expiring in future periods because there are no current plans to drill or extend the leases prior to their expiration in 2019.
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") was $319.5 million in 4Q18 and $1,327.0 million for the year.(3)
Realized Pricing
During 4Q18, Parsley reported an average unhedged oil price realization of $54.22/Bbl net of transportation costs, representing a premium to the average Midland price(4) for the quarter. Parsley's positive pricing uplift versus Midland prices during 2018 was the product of a proactive marketing strategy to diversify regional pricing exposure beginning in mid-2017. Parsley's future firm transport agreements maintain favorable pricing elements by pricing a significant portion of the Company's barrels relative to Gulf Coast and international benchmarks.
Operating Costs
Parsley registered favorable trends in operating costs and margins during the fourth quarter of 2018. The Company reported LOE per Boe of $3.61,(1) a 3% reduction versus 3Q18. Favorable LOE cost trends were driven by lower workover activity and the divestiture of properties with higher unit cost vertical production. Parsley is initiating full-year 2019 LOE per Boe guidance of $3.50-$4.50, a modest increase from 2018 average driven in part by a higher mix of planned development activity in the northern Midland Basin.
During 4Q18, Parsley reported general and administrative expense ("G&A") per Boe and cash based G&A per Boe, which excludes stock-based compensation expense, of $3.85(1) and $3.42,(1) respectively. Parsley is initiating full-year 2019 cash G&A per Boe guidance of $2.75-$3.25, which would represent a decrease from 2018 levels. Parsley has recently implemented numerous corporate cost savings initiatives and expects to capture additional benefits from scale during 2019.
Healthy realized oil pricing and proactive cost control drove a robust operating cash margin of $30.48 per Boe, or 75% of the Company's average realized price per Boe.(3)
Capital Expenditures
Parsley reported capital expenditures of $416 million during the fourth quarter of 2018, comprised of $362 million for drilling and completion activity and $54 million for facilities and infrastructure. The Company's 4Q18 capital expenditures decreased 6% from 3Q18 levels, reflecting Parsley's efforts to accelerate progress toward sustainable free cash flow by reducing rig and frac spread counts during the quarter.
Liquidity and Hedging
As of December 31, 2018, Parsley had approximately $1.2 billion of liquidity, consisting of $163.2 million of cash and cash equivalents and an undrawn amount of $991.3 million on the Company's revolver.(5)
After recent additions to its hedge positions, a significant majority of Parsley's expected 2019 oil production is subject to hedge protection. The Company also recently added to its 2020 hedge positions. Parsley's portfolio of option contracts protects its balance sheet and anticipated cash flow while retaining significant exposure to higher commodity prices. The Company has also entered into various basis swaps to protect against expansion of regional oil price differentials. For details on Parsley's hedge position, please see the tables below under Supplemental Information and/or the Company's Annual Report on Form 10-K, upon availability, for the year ended December 31, 2018.
2019 Guidance
Parsley reiterates the development plan, capital budget, and production guidance outlined in its preliminary 2019 outlook issued in mid-December. Parsley's baseline capital budget assumes a $50 WTI oil price. The Company expects first quarter 2019 net oil production to average 75.5-78.0 MBo/d. For further detail, please see the tables below.
2018A | 2019E | ||
Production | |||
Annual net oil production (MBo/d) | 69.5 | 80.0-85.0 | |
Annual net total production (MBoe/d) | 109.4 | 124.0-134.0 | |
Capital Program | |||
Total development expenditures ($MM) | $1,762 | $1,350-$1,550 | |
Drilling and completion (% of total) | ~85% | ~85% | |
Facilities, Infrastructure & Other (% of total) | ~15% | ~15% | |
Activity | |||
Gross operated horizontal POPs(6) | 175 | 130-140 | |
Midland Basin (% of total) | ~75% | ~85% | |
Delaware Basin (% of total) | ~25% | ~15% | |
Average lateral length | ~9,100' | 10,000'-10,500' | |
Gross operated lateral footage (000's) | ~1,595' | 1,350'-1,470' | |
Average working interest | 97% | ~90% | |
Unit Costs | |||
Lease operating expenses ($/Boe) | $3.61 | $3.50-$4.50 | |
Cash general and administrative expenses ($/Boe) | $3.28 | $2.75-$3.25 | |
Production and ad valorem taxes (% of total revenue) | 6% | 6%-7% |
Year-end 2018 Reserves
Parsley posted strong reserves growth in 2018. The Company's proved reserves as of December 31, 2018 totaled 521.7 MMBoe, consisting of 294.4 MMBbl of oil, 572.0 Bcf of natural gas, and 131.9 MMboe of natural gas liquids ("NGLs").
Proved Reserve Highlights
Changes in reserves for the year ended December 31, 2018 are summarized in the table below:
(MMBoe) | |||
Balance, December 31, 2017 | 416.4 | ||
Purchases of reserves in place | 5.6 | ||
Divestures of reserves in place | (22.5) | ||
Extensions and discoveries | 159.8 | ||
Revisions of previous estimates | 2.3 | ||
Production | (39.9) | ||
Balance, December 31, 2018 | 521.7 |
Parsley's internally prepared estimated proved reserves as of December 31, 2018 were audited by Netherland, Sewell & Associates, the Company's independent reserve engineer. These estimates have been prepared in accordance with the definitions and regulations promulgated by the SEC and conform to the FASB Accounting Standards Codification Topic 932, Extractive Activities – Oil and Gas. Prices used are based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period January through December 2018. Adjusting for quality, transportation fees, and market differentials, the prices used are as follows: $61.88 per barrel of oil, $28.05 per barrel of NGLs, and $1.64 per Mcf of gas. The estimates of the Company's net reserves as of December 31, 2018 are summarized in the table below:
Net Reserves | ||||||||||||
Oil (MMbo) | Gas (Bcf) | NGLs (MMboe) | Total (MMboe) | |||||||||
PDP | 169.8 | 357.4 | 80.6 | 310.0 | ||||||||
PNP | 0.7 | 1.3 | 0.4 | 1.3 | ||||||||
PUD | 123.9 | 213.3 | 50.9 | 210.4 | ||||||||
Total Proved | 294.4 | 572.0 | 131.9 | 521.7 |
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the fourth quarter of 2018 on Friday, February 22 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-709-8150 (United States/Canada) or 201-689-8354 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through March 1, 2019 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13686913. A live broadcast will also be available at www.parsleyenergy.com under the "Investor Relations" section of the website. The Company has also posted a presentation to its website that supplements the information in this release.
Upcoming Conference Participation
Parsley plans to participate in the Raymond James 40th Annual Institutional Investors Conference in Orlando, Florida on March 5-6, 2019 and the Scotia Howard Weil 47th Annual Energy Conference in New Orleans, Louisiana on March 26-27, 2019.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition, development, exploration, and production of unconventional oil and natural gas properties in the Permian Basin in west Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
- Tables to Follow -
(1) | Natural gas and NGLs sales and associated production volumes for the three months and years ended December 31, 2017 and December 31, 2018 reflect adjustments associated with Parsley's adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC 606"), effective January 1, 2018. Accordingly, all references to, and comparisons between and among, 4Q17, 3Q18 and 4Q18 production volumes and per Boe unit costs likewise reflect this adoption, which has the effect of increasing certain natural gas and NGLs volumes and revenues, offset by a corresponding transportation and processing cost such that there is no change to reported net income. The recognition and presentation of oil volumes and associated revenues and expenses are unaffected by the adoption of ASC 606. For more information on ASC 606 and a reconciliation of 4Q18 production and unit costs under Accounting Standards Codification Topic 605 ("ASC 605") and as adjusted under ASC 606, please see the table and associated commentary below under Supplemental Information and/or the Company's Annual Report on Form 10-K, upon availability, for the three and twelve months ended December 31, 2018. | |
(2) | "Completion efficiency" is measured based on completed lateral feet per operational day. "Operational days" are measured as days equipment is active and do not include mobilization or other idle time. | |
(3) | "Adjusted EBITDAX", "operating cash margin", "adjusted net income", and "PV-10" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For definitions and reconciliations of the non-GAAP financial measures of adjusted EBITDAX, operating cash margin, adjusted net income, and PV-10 to GAAP financial measures, please see the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. | |
(4) | Midland price represents Bloomberg-sourced 4Q18 and full fiscal year 2018 average WTI Midland prices. | |
(5) | Fully undrawn revolver balance is net of letters of credit. | |
(6) | Wells placed on production. | |
(7) | "Organic reserves replacement" is calculated as total 2018 reserve additions and revisions (technical and pricing) divided by total 2018 production; excludes acquisitions and divestitures. Please see the Supplemental Information below for more information. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Selected Operating Data | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net production volumes: | |||||||||||||||
Oil (MBbls) | 7,087 | 4,737 | 25,356 | 16,390 | |||||||||||
Natural gas (MMcf)(1) | 9,696 | 7,221 | 37,365 | 23,326 | |||||||||||
Natural gas liquids (MBbls)(1) | 2,323 | 1,449 | 8,353 | 4,512 | |||||||||||
Total (MBoe) | 11,026 | 7,390 | 39,937 | 24,792 | |||||||||||
Average net daily production (Boe/d) | 119,848 | 80,327 | 109,416 | 67,923 | |||||||||||
Average sales prices(2): | |||||||||||||||
Oil, without realized derivatives (per Bbl) | $ | 54.22 | $ | 53.95 | $ | 60.59 | $ | 48.95 | |||||||
Oil, with realized derivatives (per Bbl) | $ | 52.69 | $ | 50.88 | $ | 58.07 | $ | 47.68 | |||||||
Natural gas, without realized derivatives (per Mcf) | $ | 0.90 | $ | 2.15 | $ | 1.37 | $ | 2.43 | |||||||
Natural gas, with realized derivatives (per Mcf) | $ | 0.94 | $ | 2.13 | $ | 1.38 | $ | 2.40 | |||||||
NGLs (per Bbl) | $ | 25.00 | $ | 26.84 | $ | 27.21 | $ | 22.87 | |||||||
Total, without realized derivatives (per Boe) | $ | 40.91 | $ | 41.94 | $ | 45.44 | $ | 38.80 | |||||||
Total, with realized derivatives (per Boe) | $ | 39.96 | $ | 39.96 | $ | 43.85 | $ | 37.94 | |||||||
Average costs (per Boe)(3): | |||||||||||||||
Lease operating expenses | $ | 3.61 | $ | 3.44 | $ | 3.61 | $ | 4.12 | |||||||
Transportation and processing costs | $ | 1.03 | $ | — | $ | 0.82 | $ | — | |||||||
Production and ad valorem taxes | $ | 2.38 | $ | 3.01 | $ | 2.71 | $ | 2.41 | |||||||
Depreciation, depletion and amortization | $ | 14.58 | $ | 14.23 | $ | 14.64 | $ | 14.21 | |||||||
General and administrative expenses (including stock-based compensation) | $ | 3.85 | $ | 4.72 | $ | 3.78 | $ | 5.01 | |||||||
General and administrative expenses (cash based) | $ | 3.42 | $ | 4.04 | $ | 3.28 | $ | 4.22 | |||||||
(1) | Natural gas and NGLs volumes for the three months and year ended December 31, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. | |
(2) | Average prices shown in the table reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculations of such effects include both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. Realized oil prices are net of transportation costs. Realized prices for certain gas and NGLs volumes are net of transportation, gathering, and processing costs as stipulated by ASC 606. For more information, please see associated commentary below under Supplemental Information and/or the Company's Annual Report on Form 10-K, upon availability, for the three and twelve months ended December 31, 2018. | |
(3) | Average costs per Boe for the three months and year ended December 31, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Consolidated Statements of Operations(1) | |||||||||||||||
(Unaudited, in thousands, except for per share data) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
REVENUES | |||||||||||||||
Oil sales | $ | 384,267 | $ | 255,554 | $ | 1,536,244 | $ | 802,230 | |||||||
Natural gas sales(2) | 8,762 | 15,520 | 51,231 | 56,571 | |||||||||||
Natural gas liquids sales(2) | 58,083 | 38,897 | 227,272 | 103,193 | |||||||||||
Other | 3,768 | 1,517 | 11,684 | 5,050 | |||||||||||
Total revenues | 454,880 | 311,488 | 1,826,431 | 967,044 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Lease operating expenses | 39,779 | 25,386 | 144,292 | 102,169 | |||||||||||
Transportation and processing costs(2) | 11,340 | — | 32,573 | — | |||||||||||
Production and ad valorem taxes | 26,221 | 22,274 | 108,342 | 59,641 | |||||||||||
Depreciation, depletion and amortization | 160,754 | 105,143 | 584,857 | 352,247 | |||||||||||
General and administrative expenses | 42,414 | 34,879 | 150,955 | 124,255 | |||||||||||
Exploration and abandonment costs | 142,622 | 35,122 | 162,539 | 39,345 | |||||||||||
Acquisition costs | 165 | 8 | 167 | 10,977 | |||||||||||
Accretion of asset retirement obligations | 348 | 374 | 1,422 | 971 | |||||||||||
(Gain) loss on sale of property | (16) | 14,332 | (6,454) | 14,332 | |||||||||||
Other operating expenses | 9,082 | 2,363 | 19,863 | 10,638 | |||||||||||
Total operating expenses | 432,709 | 239,881 | 1,198,556 | 714,575 | |||||||||||
OPERATING INCOME | 22,171 | 71,607 | 627,875 | 252,469 | |||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||
Interest expense, net | (32,880) | (32,402) | (131,460) | (97,381) | |||||||||||
Loss on early extinguishment of debt | — | — | — | (3,891) | |||||||||||
Gain (loss) on derivatives | 93,115 | (72,310) | 50,342 | (66,135) | |||||||||||
Change in TRA liability | (355) | 56,396 | (437) | 35,847 | |||||||||||
Interest income | 600 | 2,374 | 5,464 | 7,936 | |||||||||||
Other (expense) income | (799) | (498) | (340) | 783 | |||||||||||
Total other income (expense), net | 59,681 | (46,440) | (76,431) | (122,841) | |||||||||||
INCOME BEFORE INCOME TAXES | 81,852 | 25,167 | 551,444 | 129,628 | |||||||||||
INCOME TAX (EXPENSE) BENEFIT | (16,453) | 19,830 | (105,475) | (5,708) | |||||||||||
NET INCOME | 65,399 | 44,997 | 445,969 | 123,920 | |||||||||||
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (11,626) | 4,922 | (76,842) | (17,146) | |||||||||||
NET INCOME ATTRIBUTABLE TO PARSLEY ENERGY INC. STOCKHOLDERS | $ | 53,773 | $ | 49,919 | $ | 369,127 | $ | 106,774 | |||||||
Net income per common share: | |||||||||||||||
Basic | $ | 0.19 | $ | 0.20 | $ | 1.36 | $ | 0.44 | |||||||
Diluted | $ | 0.19 | $ | 0.16 | $ | 1.35 | $ | 0.42 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 278,052 | 249,659 | 272,226 | 240,733 | |||||||||||
Diluted | 278,789 | 314,864 | 272,884 | 296,512 | |||||||||||
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. | |
(2) | Natural gas and NGLs sales and transportation and processing costs for the three months and year ended December 31, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Consolidated Balance Sheets | |||||||
December 31, 2018 | December 31, 2017 | ||||||
(In thousands, except share data) | |||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 163,216 | $ | 554,189 | |||
Short-term investments | — | 149,283 | |||||
Accounts receivable, net of allowance for doubtful accounts: | |||||||
Joint interest owners and other | 36,062 | 42,174 | |||||
Oil, natural gas and NGLs | 138,987 | 123,147 | |||||
Related parties | 94 | 388 | |||||
Short-term derivative instruments | 191,297 | 41,957 | |||||
Assets held for sale | — | 1,790 | |||||
Other current assets | 11,056 | 6,558 | |||||
Total current assets | 540,712 | 919,486 | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Oil and natural gas properties, successful efforts method | 9,948,246 | 8,551,314 | |||||
Accumulated depreciation, depletion, amortization and impairment | (1,295,098) | (822,459) | |||||
Total oil and natural gas properties, net | 8,653,148 | 7,728,855 | |||||
Other property, plant and equipment net | 170,739 | 106,587 | |||||
Total property, plant and equipment, net | 8,823,887 | 7,835,442 | |||||
NONCURRENT ASSETS | |||||||
Assets held for sale, net | — | 14,985 | |||||
Long-term derivative instruments | 20,124 | 15,732 | |||||
Other noncurrent assets | 6,640 | 7,553 | |||||
Total noncurrent assets | 26,764 | 38,270 | |||||
TOTAL ASSETS | $ | 9,391,363 | $ | 8,793,198 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | 364,803 | $ | 407,698 | |||
Revenue and severance taxes payable | 127,265 | 109,917 | |||||
Current portion of long-term debt | 2,413 | 2,352 | |||||
Short-term derivative instruments | 152,330 | 84,919 | |||||
Current portion of asset retirement obligations | 2,134 | 7,203 | |||||
Total current liabilities | 648,945 | 612,089 | |||||
NONCURRENT LIABILITIES | |||||||
Liabilities related to assets held for sale | — | 405 | |||||
Long-term debt | 2,181,667 | 2,179,525 | |||||
Asset retirement obligations | 24,750 | 19,967 | |||||
Deferred tax liability, net | 131,523 | 21,403 | |||||
Payable pursuant to tax receivable agreement | 68,110 | 58,479 | |||||
Long-term derivative instruments | 16,633 | 20,624 | |||||
Total noncurrent liabilities | 2,422,683 | 2,300,403 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS' EQUITY | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | |||||
Common stock | |||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 280,827,038 shares issued and 280,205,293 shares outstanding at December 31, 2018 and 252,419,601 shares issued and 252,260,300 shares outstanding at December 31, 2017 | 2,808 | 2,524 | |||||
Class B, $0.01 par value, 125,000,000 shares authorized, 36,547,731 and 62,128,257 issued and outstanding at December 31, 2018 and December 31, 2017 | 366 | 622 | |||||
Additional paid in capital | 5,163,987 | 4,666,365 | |||||
Retained earnings | 412,646 | 43,519 | |||||
Treasury stock, at cost, 621,745 shares and 159,301 at December 31, 2018 and December 31, 2017 | (11,749) | (735) | |||||
Total stockholders' equity | 5,568,058 | 4,712,295 | |||||
Noncontrolling interest | 751,677 | 1,168,411 | |||||
Total equity | 6,319,735 | 5,880,706 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 9,391,363 | $ | 8,793,198 |
Parsley Energy, Inc. and Subsidiaries | |||||||
Consolidated Statements of Cash Flows | |||||||
Year Ended December 31, | |||||||
2018 | 2017 | ||||||
(In thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 445,969 | $ | 123,920 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 584,857 | 352,247 | |||||
Leasehold abandonments | 160,834 | 32,872 | |||||
Accretion of asset retirement obligations | 1,422 | 971 | |||||
(Gain) loss on sale of property | (6,454) | 14,332 | |||||
Loss on early extinguishment of debt | — | 3,891 | |||||
Amortization and write off of deferred loan origination costs | 4,745 | 4,720 | |||||
Amortization of bond premium | (516) | (516) | |||||
Deferred income tax expense (benefit) | 105,475 | 5,752 | |||||
Change in TRA liability | 437 | (35,847) | |||||
Stock-based compensation expense | 19,877 | 19,619 | |||||
(Gain) loss on derivatives | (50,342) | 66,135 | |||||
Net cash received for derivative settlements | 6,279 | 16,172 | |||||
Net cash paid for option premiums | (47,644) | (28,426) | |||||
Other | 3,533 | 1,907 | |||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (12,956) | (95,239) | |||||
Accounts receivable—related parties | 294 | (98) | |||||
Other current assets | (689) | 45,417 | |||||
Other noncurrent assets | (100) | (536) | |||||
Accounts payable and accrued expenses | (13,395) | 122,992 | |||||
Revenue and severance taxes payable | 17,348 | 40,465 | |||||
Net cash provided by operating activities | 1,218,974 | 690,750 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Development of oil and natural gas properties | (1,787,673) | (1,089,256) | |||||
Acquisitions of oil and natural gas properties | (136,972) | (2,192,093) | |||||
Additions to other property and equipment | (93,457) | (54,896) | |||||
Proceeds from sale of property | 233,647 | 30,537 | |||||
Maturity of short-term investments | 149,331 | — | |||||
Purchases of short-term investments | — | (149,283) | |||||
Other | 41,088 | (1,869) | |||||
Net cash used in investing activities | (1,594,036) | (3,456,860) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings under long-term debt | — | 1,152,780 | |||||
Payments on long-term debt | (2,888) | (74,769) | |||||
Debt issue costs | (47) | (17,371) | |||||
Proceeds from issuance of common stock, net | — | 2,123,344 | |||||
Purchases of common stock | (11,014) | (354) | |||||
Vesting of restricted stock units | — | — | |||||
Distribution to owner of consolidated subsidiary | (1,962) | — | |||||
Net cash (used in) provided by financing activities | (15,911) | 3,183,630 | |||||
Net (decrease) increase in cash and cash equivalents | (390,973) | 417,520 | |||||
Cash, cash equivalents, and restricted cash at beginning of year | 554,189 | 136,669 | |||||
Cash, cash equivalents, and restricted cash at end of year | $ | 163,216 | $ | 554,189 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||
Cash paid for interest | $ | 127,668 | $ | 63,170 | |||
Cash paid for income taxes | $ | — | $ | 350 | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||||||
Asset retirement obligations incurred, including changes in estimate | $ | 2,111 | $ | 15,428 | |||
(Reductions) additions to oil and natural gas properties - change in capital accruals | $ | (25,455) | $ | 118,145 | |||
Additions to other property and equipment funded by capital lease borrowings | $ | 2,180 | $ | 3,904 | |||
Net premiums (paid) received on options that settled during the period | $ | (71,566) | $ | (37,103) | |||
Common stock issued for oil and natural gas properties | $ | — | $ | 1,183,501 |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net income (loss) before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, interest income, income tax expense (benefit), change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, asset retirement obligation accretion expense, loss (gain) on sale of property, loss on early extinguishment of debt, inventory write down, loss (gain) on derivatives, net settlements on derivative instruments, net premium realization on options that settled during the period, and certain additional items.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDAX is useful to investors as a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income (loss) for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted EBITDAX(1) | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Adjusted EBITDAX reconciliation to net income (loss): | |||||||||||||||
Net income attributable to Parsley Energy, Inc. stockholders | $ | 53,773 | $ | 49,919 | $ | 369,127 | $ | 106,774 | |||||||
Net income (loss) attributable to noncontrolling interests | 11,626 | (4,922) | 76,842 | 17,146 | |||||||||||
Depreciation, depletion and amortization | 160,754 | 105,143 | 584,857 | 352,247 | |||||||||||
Exploration and abandonment costs | 142,622 | 35,122 | 162,539 | 39,345 | |||||||||||
Interest expense, net | 32,880 | 32,402 | 131,460 | 97,381 | |||||||||||
Interest income | (600) | (2,374) | (5,464) | (7,936) | |||||||||||
Income tax expense (benefit) | 16,453 | (19,830) | 105,475 | 5,708 | |||||||||||
EBITDAX | 417,508 | 195,460 | 1,424,836 | 610,665 | |||||||||||
Change in TRA liability | 355 | (56,396) | 437 | (35,847) | |||||||||||
Stock-based compensation | 4,757 | 4,989 | 19,877 | 19,619 | |||||||||||
Acquisition costs | 165 | 8 | 167 | 10,977 | |||||||||||
Accretion of asset retirement obligations | 348 | 374 | 1,422 | 971 | |||||||||||
(Gain) loss on sale of property | (16) | 14,332 | (6,454) | 14,332 | |||||||||||
Loss on early extinguishment of debt | — | — | — | 3,891 | |||||||||||
Inventory write down | — | 1,060 | 495 | 1,060 | |||||||||||
(Gain) loss on derivatives | (93,115) | 72,310 | (50,342) | 66,135 | |||||||||||
Net settlements on derivative instruments | 8,600 | 16 | 8,084 | 15,670 | |||||||||||
Net premium realization on options that settled during the period | (19,115) | (14,699) | (71,566) | (37,103) | |||||||||||
Adjusted EBITDAX | $ | 319,487 | $ | 217,454 | $ | 1,326,956 | $ | 670,370 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Operating Cash Margin
Operating cash margin is not a measure of operating income as determined by GAAP. The amounts included in the calculations of operating cash margin were computed in accordance with GAAP. Operating cash margin is presented herein and reconciled to the GAAP measure of net income attributable to Parsley Energy, Inc. stockholders. The Company defines operating cash margin as net income (loss) before income tax expense (benefit), other revenues, depreciation, depletion and amortization, exploration and abandonment costs, stock-based compensation, acquisition costs, asset retirement obligation accretion expense, other operating expenses, net interest expense, (gain) loss on sale of property, prepayment premium on extinguished debt, derivative (gain) loss, change in TRA liability, interest income, and other (income) expense. The Company uses operating cash margin as an indicator of the Company's profitability and ability to manage its operating income. This measure is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of operating cash margin to net income attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Operating Cash Margin | |||||||||||||||
(Unaudited, in thousands, except for per unit data)(1) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income attributable to Parsley Energy, Inc. stockholders | $ | 53,773 | $ | 49,919 | $ | 369,127 | $ | 106,774 | |||||||
Net income (loss) attributable to noncontrolling interests | 11,626 | (4,922) | 76,842 | 17,146 | |||||||||||
Income tax expense (benefit) | 16,453 | (19,830) | 105,475 | 5,708 | |||||||||||
Other revenues | (3,768) | (1,517) | (11,684) | (5,050) | |||||||||||
Depreciation, depletion and amortization | 160,754 | 105,143 | 584,857 | 352,247 | |||||||||||
Exploration and abandonment costs | 142,622 | 35,122 | 162,539 | 39,345 | |||||||||||
Stock-based compensation | 4,757 | 4,989 | 19,877 | 19,619 | |||||||||||
Acquisition costs | 165 | 8 | 167 | 10,977 | |||||||||||
Accretion of asset retirement obligations | 348 | 374 | 1,422 | 971 | |||||||||||
Other operating expenses | 9,082 | 2,363 | 19,863 | 10,638 | |||||||||||
Interest expense, net | 32,880 | 32,402 | 131,460 | 97,381 | |||||||||||
(Gain) loss on sale of property | (16) | 14,332 | (6,454) | 14,332 | |||||||||||
Prepayment premium on extinguishment of debt | — | — | — | 3,891 | |||||||||||
Derivative (gain) loss | (93,115) | 72,310 | (50,342) | 66,135 | |||||||||||
Change in TRA liability | 355 | (56,396) | 437 | (35,847) | |||||||||||
Interest income | (600) | (2,374) | (5,464) | (7,936) | |||||||||||
Other expense (income) | 799 | 498 | 340 | (783) | |||||||||||
Operating cash margin | $ | 336,115 | $ | 232,421 | $ | 1,398,462 | $ | 695,548 | |||||||
Operating cash margin per Boe | $ | 30.48 | $ | 31.45 | $ | 35.02 | $ | 28.06 | |||||||
Average price per Boe, without realized derivatives | $ | 40.91 | $ | 41.94 | $ | 45.44 | $ | 38.80 | |||||||
Operating cash margin percentage | 75 | % | 75 | % | 77 | % | 72 | % | |||||||
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income
Adjusted net income is not a measure of net income determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, change in TRA liability, loss (gain) on sale of property, exploration and abandonment costs, acquisition costs, inventory write down, and loss on early extinguishment of debt while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net loss.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted Net Income and Net Income Per Share | |||||||||||||||
(Unaudited, in thousands, except per share data)(1) | |||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income - as reported | $ | 53,773 | $ | 49,919 | $ | 369,127 | $ | 106,774 | |||||||
Adjustments: | |||||||||||||||
(Gain) loss on derivatives | (93,115) | 72,310 | (50,342) | 66,135 | |||||||||||
Net settlements on derivative instruments | 8,600 | 16 | 8,084 | 15,670 | |||||||||||
Net premium realization on options that settled during the period | (19,115) | (14,699) | (71,566) | (37,103) | |||||||||||
Change in TRA liability | 355 | (56,396) | 437 | (35,847) | |||||||||||
(Gain) loss on sale of property | (16) | 14,332 | (6,454) | 14,332 | |||||||||||
Exploration and abandonment costs | 142,622 | 35,122 | 162,539 | 39,345 | |||||||||||
Acquisition costs | 165 | 8 | 167 | 10,977 | |||||||||||
Inventory write down | — | 1,060 | 495 | 1,060 | |||||||||||
Loss on early extinguishment of debt | — | — | — | 3,891 | |||||||||||
Noncontrolling interest | (4,542) | (3,891) | (19,561) | 19,225 | |||||||||||
Change in estimated income tax | (6,221) | (1,919) | (7,832) | (865) | |||||||||||
Adjusted net income | $ | 82,506 | $ | 95,862 | $ | 385,094 | $ | 203,594 | |||||||
Net income per diluted share - as reported | $ | 0.19 | $ | 0.16 | $ | 1.35 | $ | 0.42 | |||||||
Adjustments: | |||||||||||||||
(Gain) loss on derivatives | $ | (0.33) | $ | 0.23 | $ | (0.18) | $ | 0.22 | |||||||
Net settlements on derivative instruments | 0.03 | — | 0.03 | 0.05 | |||||||||||
Net premium realization on options that settled during the period | (0.07) | (0.05) | (0.26) | (0.13) | |||||||||||
Change in TRA liability | — | (0.18) | — | (0.12) | |||||||||||
(Gain) loss on sale of property | — | 0.05 | (0.02) | 0.05 | |||||||||||
Exploration and abandonment costs | 0.51 | 0.11 | 0.60 | 0.13 | |||||||||||
Acquisition costs | — | — | — | 0.04 | |||||||||||
Inventory write down | — | — | — | — | |||||||||||
Loss on early extinguishment of debt | — | — | — | 0.01 | |||||||||||
Noncontrolling interest | (0.01) | (0.01) | (0.08) | 0.01 | |||||||||||
Change in estimated income tax | (0.02) | (0.01) | (0.03) | 0.01 | |||||||||||
Adjusted net income per diluted share | $ | 0.30 | $ | 0.30 | $ | 1.41 | $ | 0.69 | |||||||
Basic weighted average shares outstanding - as reported | 278,052 | 249,659 | 272,226 | 240,733 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Class B Common Stock | — | 63,946 | — | 54,665 | |||||||||||
Restricted Stock and Restricted Stock Units | 737 | 1,259 | 658 | 1,114 | |||||||||||
Diluted weighted average shares outstanding - as reported(2) | 278,789 | 314,864 | 272,884 | 296,512 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Class B Common Stock | — | — | — | — | |||||||||||
Restricted Stock and Restricted Stock Units | — | — | — | — | |||||||||||
Diluted weighted average shares outstanding for adjusted net income(2) | 278,789 | 314,864 | 272,884 | 296,512 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. | |
(2) | For the three months and year ended December 31, 2018 the number of weighted average diluted shares used to calculate reported net income per share and adjusted net income per share is based on the fact that, under the "if converted" Class B Common Stock was not recognized because they would have been antidilutive. |
PV-10
PV-10 is a non-GAAP financial measure and generally differs from the Standardized Measure, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes on future net reserves. Neither PV-10 nor Standardized Measure represents an estimate of the fair market value of our oil and natural gas properties. We and others in the industry use PV-10 as a measure to compare the relative size and value of proved reserves held by companies without regard to the specific tax characteristics of such companies.
The following table provides a reconciliation of PV-10 to the GAAP financial measure of Standardized Measure as of December 31, 2018:
As of December 31, 2018 | |||
(in millions) | |||
Standardized Measure | $ | 5,893.9 | |
Present value of future income tax discounted at 10% | 881.0 | ||
PV-10 of proved reserves | $ | 6,774.9 |
Supplemental Information
Impact of ASC 606 Adoption
Parsley adopted ASC 606 effective January 1, 2018 using the modified retrospective approach. As a result, the Company changed its accounting policy for revenue recognition, which resulted in the following adjustments:
Three Months Ended December 31, 2018 | |||||||||||
ASC 605 | Adjustment | ASC 606 | |||||||||
Production revenues (in thousands): | |||||||||||
Oil sales | $ | 384,267 | $ | — | $ | 384,267 | |||||
Natural gas sales | 6,843 | 1,919 | 8,762 | ||||||||
Natural gas liquids sales | 48,662 | 9,421 | 58,083 | ||||||||
Total production revenues | 439,772 | 11,340 | 451,112 | ||||||||
Operating expenses | |||||||||||
Transportation and processing costs | — | 11,340 | 11,340 | ||||||||
Production revenues less transportation and processing costs | $ | 439,772 | $ | — | $ | 439,772 | |||||
Net income attributable to Parsley Energy, Inc. stockholders (in thousands) | $ | 53,773 | $ | — | $ | 53,773 | |||||
Production: | |||||||||||
Oil (MBbls) | 7,087 | — | 7,087 | ||||||||
Natural gas (MMcf) | 8,432 | 1,264 | 9,696 | ||||||||
Natural gas liquids (MBbls) | 2,027 | 296 | 2,323 | ||||||||
Total (MBoe) | 10,519 | 507 | 11,026 | ||||||||
Average daily production volume: | |||||||||||
Oil (Bbls) | 77,033 | — | 77,033 | ||||||||
Natural gas (Mcf) | 91,652 | 13,739 | 105,391 | ||||||||
Natural gas liquids (Bbls) | 22,033 | 3,217 | 25,250 | ||||||||
Total (Boe) | 114,337 | 5,511 | 119,848 | ||||||||
Certain unit costs (per Boe): | |||||||||||
Lease operating expenses | $ | 3.78 | $ | (0.17) | $ | 3.61 | |||||
Transportation and processing costs | $ | — | $ | 1.03 | $ | 1.03 | |||||
Production and ad valorem taxes | $ | 2.49 | $ | (0.11) | $ | 2.38 | |||||
Depreciation, depletion and amortization | $ | 15.28 | $ | (0.70) | $ | 14.58 | |||||
General and administrative expenses (including stock-based compensation) | $ | 4.03 | $ | (0.18) | $ | 3.85 | |||||
General and administrative expenses (cash based) | $ | 3.58 | $ | (0.16) | $ | 3.42 | |||||
Year Ended December 31, 2018 | |||||||||||
ASC 605 | Adjustment | ASC 606 | |||||||||
Production revenues (in thousands): | |||||||||||
Oil sales | $ | 1,536,244 | $ | — | $ | 1,536,244 | |||||
Natural gas sales | 45,032 | 6,199 | 51,231 | ||||||||
Natural gas liquids sales | 200,898 | 26,374 | 227,272 | ||||||||
Total production revenues | 1,782,174 | 32,573 | 1,814,747 | ||||||||
Operating expenses | |||||||||||
Transportation and processing costs | — | 32,573 | 32,573 | ||||||||
Production revenues less transportation and processing costs | $ | 1,782,174 | $ | — | $ | 1,782,174 | |||||
Net income attributable to Parsley Energy, Inc. stockholders (in thousands) | $ | 369,127 | $ | — | $ | 369,127 | |||||
Production: | |||||||||||
Oil (MBbls) | 25,356 | — | 25,356 | ||||||||
Natural gas (MMcf) | 33,492 | 3,873 | 37,365 | ||||||||
Natural gas liquids (MBbls) | 7,356 | 997 | 8,353 | ||||||||
Total (MBoe) | 38,293 | 1,644 | 39,937 | ||||||||
Average daily production volume: | |||||||||||
Oil (Bbls) | 69,468 | — | 69,468 | ||||||||
Natural gas (Mcf) | 91,759 | 10,611 | 102,370 | ||||||||
Natural gas liquids (Bbls) | 20,153 | 2,732 | 22,885 | ||||||||
Total (Boe) | 104,912 | 4,504 | 109,416 | ||||||||
Certain unit costs (per Boe): | |||||||||||
Lease operating expenses | $ | 3.77 | $ | (0.16) | $ | 3.61 | |||||
Transportation and processing costs | $ | — | $ | 0.82 | $ | 0.82 | |||||
Production and ad valorem taxes | $ | 2.83 | $ | (0.12) | $ | 2.71 | |||||
Depreciation, depletion and amortization | $ | 15.27 | $ | (0.63) | $ | 14.64 | |||||
General and administrative expenses (including stock-based compensation) | $ | 3.94 | $ | (0.16) | $ | 3.78 | |||||
General and administrative expenses (cash based) | $ | 3.42 | $ | (0.14) | $ | 3.28 |
Open Derivatives Positions | |||||||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||||||
Open Crude Oil Derivatives Positions(1) | |||||||||||||||||||||||
1Q19 | 2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | ||||||||||||||||||
OPTION CONTRACTS: | |||||||||||||||||||||||
CUSHING | |||||||||||||||||||||||
Put Spreads - Cushing (MBbls/d)(2) | 11.7 | 11.5 | 19.6 | 19.6 | |||||||||||||||||||
Long Put Price ($/Bbl) | $ | 51.43 | $ | 51.43 | $ | 59.79 | $ | 59.79 | |||||||||||||||
Short Put Price ($/Bbl) | $ | 44.29 | $ | 44.29 | $ | 49.79 | $ | 49.79 | |||||||||||||||
Three Way Collars - Cushing (MBbls/d)(3) | 23.3 | 21.4 | 26.1 | 26.1 | |||||||||||||||||||
Short Call Price ($/Bbl) | $ | 70.48 | $ | 70.89 | $ | 72.69 | $ | 72.69 | |||||||||||||||
Long Put Price ($/Bbl) | $ | 48.21 | $ | 48.85 | $ | 51.88 | $ | 51.88 | |||||||||||||||
Short Put Price ($/Bbl) | $ | 40.71 | $ | 41.15 | $ | 42.81 | $ | 42.81 | |||||||||||||||
Collars - Cushing (MBbls/d)(4) | 3.3 | 24.7 | 21.2 | 21.2 | |||||||||||||||||||
Short Call Price ($/Bbl) | $ | 56.30 | $ | 57.67 | $ | 58.26 | $ | 58.37 | |||||||||||||||
Long Put Price ($/Bbl) | $ | 52.70 | $ | 53.94 | $ | 54.50 | $ | 54.56 | |||||||||||||||
MIDLAND | |||||||||||||||||||||||
Put Spreads - Midland (MBbls/d)(2) | 11.7 | 14.8 | 4.9 | 4.9 | |||||||||||||||||||
Long Put Price ($/Bbl) | $ | 50.71 | $ | 50.56 | $ | 60.00 | $ | 60.00 | |||||||||||||||
Short Put Price ($/Bbl) | $ | 40.71 | $ | 40.56 | $ | 50.00 | $ | 50.00 | |||||||||||||||
Three Way Collars - Midland (MBbls/d)(3) | 4.9 | 4.9 | |||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 64.65 | $ | 64.65 | |||||||||||||||||||
Long Put Price ($/Bbl) | $ | 50.00 | $ | 50.00 | |||||||||||||||||||
Short Put Price ($/Bbl) | $ | 45.00 | $ | 45.00 | |||||||||||||||||||
MAGELLAN EAST HOUSTON ("MEH") | |||||||||||||||||||||||
Put Spreads - MEH (MBbls/d)(2) | 3.3 | 3.3 | 8.2 | 8.2 | 5.0 | 4.9 | |||||||||||||||||
Long Put Price ($/Bbl) | $ | 70.00 | $ | 70.00 | $ | 64.00 | $ | 64.00 | $ | 70.00 | $ | 70.00 | |||||||||||
Short Put Price ($/Bbl) | $ | 60.00 | $ | 60.00 | $ | 54.00 | $ | 54.00 | $ | 60.00 | $ | 60.00 | |||||||||||
Three Way Collars - MEH (MBbls/d)(3) | 3.3 | 3.3 | |||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 72.00 | $ | 72.00 | |||||||||||||||||||
Long Put Price ($/Bbl) | $ | 57.50 | $ | 57.50 | |||||||||||||||||||
Short Put Price ($/Bbl) | $ | 47.58 | $ | 47.58 | |||||||||||||||||||
Total Option Contracts (MBbls/d) | 53.3 | 75.7 | 84.9 | 84.9 | 8.3 | 8.2 | |||||||||||||||||
Premium Realization ($MM)(5) | $ | (6.3) | $ | (10.2) | $ | (14.5) | $ | (14.5) | $ | (2.2) | $ | (2.2) | |||||||||||
BASIS SWAPS: | |||||||||||||||||||||||
Midland-Cushing Basis Swaps (MBbls/d)(6) | 31.7 | 25.4 | 27.7 | 27.7 | |||||||||||||||||||
Swap Price ($/Bbl) | $ | (7.51) | $ | (5.10) | $ | (1.74) | $ | (0.91) | |||||||||||||||
MEH-Cushing Basis Swaps (MBbls/d)(6) | 2.2 | 2.1 | 2.1 | 2.1 | |||||||||||||||||||
Swap Price ($/Bbl) | $ | 5.10 | $ | 5.10 | $ | 5.10 | $ | 5.10 |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Open Natural Gas Derivatives Positions (1) | |||||||||||||||
1Q19 | 2Q19 | 3Q19 | 4Q19 | ||||||||||||
OPTION CONTRACTS: | |||||||||||||||
HENRY HUB | |||||||||||||||
Three Way Collars (MMBtu/d)(3) | 33,333 | 32,967 | 32,609 | 32,609 | |||||||||||
Short Call Price ($/MMBtu) | $ | 3.93 | $ | 3.93 | $ | 3.93 | $ | 3.93 | |||||||
Long Put Price ($/MMBtu) | $ | 3.00 | $ | 3.00 | $ | 3.00 | $ | 3.00 | |||||||
Short Put Price ($/MMBtu) | $ | 2.50 | $ | 2.50 | $ | 2.50 | $ | 2.50 | |||||||
Total MMBtu/d Hedged | 33,333 | 32,967 | 32,609 | 32,609 | |||||||||||
BASIS SWAPS: | |||||||||||||||
Waha-Henry Hub Basis Swaps (MBbls/d)(6) | 28,889 | 32,967 | 32,609 | 32,609 | |||||||||||
Swap Price ($/Bbl) | $ | (1.84) | $ | (1.92) | $ | (1.78) | $ | (1.64) |
Organic Reserves Replacement Ratio
Parsley uses the organic reserves replacement ratio as an indicator of the Company's ability to replace the reserves that it has developed and to increase its reserves over time. The ratio is not a representation of value creation and has a number of limitations that should be considered. For example, the ratio does not incorporate the costs or timing of developing future reserves. The organic reserves replacement ratio of 406% was calculated as total 2018 reserve additions and revisions (technical and pricing), divided by total 2018 production. The ratio calculation excludes acquisitions and divestitures.
(1) | As of 2/20/2019. Prices represent the weighted average price of contracts scheduled for settlement during the period. | |
(2) | When the reference price (WTI, Midland, or MEH) is above the long put price, Parsley receives the reference price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | |
(3) | Functions similarly to put spreads except that when the index price is at or above the call price, Parsley receives the call price. | |
(4) | When the reference price (WTI) is above the call price, Parsley receives the call price. When the reference price is below the long put price, Parsley receives the long put price. When the reference price is between the short call and long put prices, Parsley receives the reference price. | |
(5) | Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | |
(6) | Parsley receives the swap price. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-fourth-quarter-2018-financial-and-operating-results-300799998.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Jan. 23, 2019 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) plans to report fourth quarter 2018 financial results on Thursday, February 21, 2019 after the close of trading on the New York Stock Exchange. The company will host its quarterly conference call at 9:00 AM ET (8:00 AM CT) on Friday, February 22, 2019.
By Phone: | Dial 877-709-8150 (United States/Canada) or 201-689-8354 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Friday, March 1, 2019 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13686913. | |
By Webcast: | |
Select "Events & Presentations" under the "Investors" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-schedules-fourth-quarter-2018-earnings-release-and-conference-call-300783218.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Dec. 19, 2018 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today provided an initial overview of its 2019 development program and also updated expectations for certain full-year 2018 results.
Preliminary 2019 Outlook
"Our balance sheet remains strong and our commitment to capital discipline is steadfast," stated Matt Gallagher, Parsley's President. "The proposed development program is consistent with our strategic framework oriented to discipline, foresight, and stability. Despite a less favorable commodity price environment, we still intend to take a significant step toward free cash flow generation in 2019. In fact, we are committed to a material reduction in operational outspend no matter the commodity price environment. In the event of incremental and sustained oil price weakness, we have the operational flexibility to slow activity further even as our hedge book protects a portion of our cash flow; if oil prices rise, our timeline to self-funded growth would shorten. In either case, we expect that the low breakeven economics associated with our resilient Permian Basin asset base will enable us to generate healthy returns on each dollar spent."
Recent Divestitures
Parsley recently closed previously announced acreage divestitures in central Reagan County, southern Upton County, and northern Howard County, receiving combined proceeds of approximately $164 million, subject to customary post-closing adjustments. Parsley's 2019 production guidance accounts for divested volumes of approximately 1,200 Boe per day.
Fourth Quarter and Full-Year 2018 Update
Parsley expects to report 2018 capital expenditures at or near the top of the full-year guidance range of $1.65-$1.75 billion. The Company expects to place at least 40 gross horizontal wells on production during 4Q18, reflecting favorable trends in completion efficiency. Parsley expects to report net oil production and net total production at or slightly above the midpoints of full-year guidance ranges of 68.0-70.5 MBo per day and 106.0-111.0 MBoe per day, respectively, including the effect of recent divestitures. Updated full-year production guidance is based on projected 4Q18 net production of 76-78 MBo per day and 118-121 MBoe per day.
Upcoming Conference Participation
Parsley plans to participate in the 2019 Goldman Sachs Global Energy Conference in Miami, Florida on January 7-8.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
(1) | "Free cash flow" and "outspend" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). "Free cash flow" and "outspend" are defined as cash flow from operations before changes in operating assets and liabilities minus development capital expenditures.
|
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-provides-preliminary-2019-outlook-300769104.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Nov. 1, 2018 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended September 30, 2018. The Company has posted to its website a presentation that supplements the information in this release.
Third Quarter 2018 Highlights
Summary Comment and Outlook
"Parsley Energy's development program in 2018 has centered on operational continuity, and that focus has made us a more efficient organization," said Bryan Sheffield, Parsley's Chairman and CEO. "Since stabilizing our activity levels 12 months ago, Parsley has built operational momentum while expanding operating margins to Company-record levels. Looking ahead, we intend to keep a disciplined eye on cost control and operational efficiency while maintaining a steady development pace until we are in position to fund incremental activity with operating cash flow. This plan accelerates our progress toward a self-sustaining organic growth model, and at current commodity prices we expect to generate free cash flow by the end of 2019. This is the natural next step in Parsley's corporate evolution, and I am excited that we have assembled the right team to create shareholder value from our extensive inventory of high-quality assets."
Operational Update
Parsley delivered healthy execution across multiple disciplines during the third quarter, highlighted by efficient development operations and the successful pursuit of transactions that streamline the Company's premier Permian Basin acreage position.
Activity Overview
During the third quarter, the Company spud 46 and placed on production 46 gross operated horizontal wells. Parsley's working interest on wells placed on production was approximately 98%, with an average completed lateral length of approximately 9,400 feet. Completion activity was weighted toward the Midland Basin, where the Company placed on production 38 gross operated horizontal wells, with the remainder placed on production in the Delaware Basin. Faster drilling and completion operations translated to a new Company record for completed lateral footage in one quarter despite deliberately reduced equipment utilization as Parsley prioritized adherence to its stated budget. Analogous decisions regarding rig and frac spread utilization may characterize fourth quarter development operations as the Company again intends to emphasize conformity with full-year capital spending expectations.
"We challenged our teams to deliver more footage with the same equipment and they have delivered throughout 2018," said Matt Gallagher, Parsley's President. "The path to strong corporate returns and robust cash flow growth runs through west Texas, and our field personnel are setting the pace for the rest of the organization as we embrace new challenges and objectives."
Acreage Optimization
Parsley recently high-graded the Company's acreage portfolio by agreeing to multiple transactions that serve to divest approximately 11,850 net acres in central Reagan County, southern Upton County, and northern Howard County for combined proceeds of approximately $170 million, subject to customary post-closing adjustments. These transactions include multiple divestitures and a trade through which Parsley exchanged acreage for other acreage and cash. Production on the divested and net traded assets was approximately 1,200 net Boe per day during 3Q18. All sales are expected to close by the end of 2018.
Notable Well Results
Parsley turned six wells to production in Martin County during 3Q18, comprised of two three-well pads targeting the Wolfcamp A and Wolfcamp B zones in a staggered configuration. Early results from these two-mile lateral wells are promising, with peak 30-day production rates averaging approximately 1,500 Boe per day (77% oil). One of these projects registered the Company's strongest 30-day oil rate from a three-well pad to date.
Also in Martin County, Parsley successfully utilized recycled water from its initial recycling pilot program during completion operations on one of the aforementioned pads, with reductions in both water sourcing and disposal costs. Following this successful initiative, Parsley intends to scale up its water recycling efforts on a targeted basis over the next several quarters.
Takeaway Positioning
During 3Q18, Parsley reported an average unhedged oil price realization of $62.78/Bbl net of transportation costs, representing a premium of $7.43/Bbl to the average Midland price(2) for the quarter. Parsley's reduced exposure to less favorable Midland basis differentials is the product of a proactive marketing strategy that began diversifying regional pricing exposure nearly 18 months ago. Parsley has also captured recent strength in NGL prices, reporting a 3Q18 NGL realization of $31.26/Bbl, representing a 15% quarter-over-quarter increase.
Parsley finalized previously disclosed marketing agreements with large oil purchasers during 3Q18, supplementing its advantaged takeaway position. These firm transport agreements increase Parsley's crude deliverability during 2019 and maintain favorable pricing elements by pricing a significant portion of the Company's barrels relative to Gulf Coast and international benchmarks.
Financial Update
Healthy execution in 3Q18 translated to strong performance in key financial measures.
Profitability
During 3Q18, the Company recorded net income attributable to its stockholders of $113.3 million, or $0.41 per share, compared to net income attributable to its stockholders of $119.2 million, or $0.44 per share, during 2Q18. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, adjusted net income for 3Q18 was $126.2 million, or $0.45 per share, compared to $106.4 million, or $0.39 per share, in 2Q18.(3)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 3Q18 was $385.0 million, up 13% quarter-over-quarter and up more than 130% when compared to the same measure in 3Q17.(3)
Operating Costs
Parsley registered favorable trends in operating costs and margins during the third quarter of 2018. The Company reported LOE per Boe of $3.72,(1) up only slightly versus the peer-leading expense the Company posted in 2Q18. Stable LOE costs were driven by expansion of Parsley's cost-effective water management system and lower than anticipated workover activity.
Both G&A per Boe and cash based G&A per Boe, which excludes stock-based compensation expense, decreased quarter-over-quarter and year-over-year to $3.51(1) and $3.07(1) respectively. Encouraging G&A cost trends are a function of ongoing production growth on a stable development pace following a period of increasing development activity.
Strong realized oil and NGL pricing and favorable trends in the aforementioned cash operating costs drove a robust operating cash margin of $37.13 per Boe, or 78% of the Company's average realized price per Boe.(3)
Capital Expenditures
Parsley reported capital expenditures of $444 million during the quarter, comprised of $383 million for operated drilling and completion activity, $52 million for operated facilities and infrastructure, and $9 million associated with non-operated development activity. The combination of cycle time compression, longer average lateral lengths, and a higher proportion of local sand usage translated to a 9% quarter-over-quarter reduction in average drilling and completion cost per lateral foot during the third quarter.
Liquidity and Hedging
As of September 30, 2018, Parsley had approximately $1.2 billion of liquidity, consisting of $168 million of cash and cash equivalents and an undrawn amount of $991 million on the Company's revolver.(4) Pro forma for the recently announced divestiture and acreage trade, the Company had approximately $1.3 billion of liquidity, including $333 million of cash and cash equivalents.
Almost all of Parsley's expected 2018 oil production is subject to hedge protection, and the Company recently added to its 2019 and 2020 hedge positions. Parsley's portfolio of option contracts protects its balance sheet and anticipated cash flow while retaining significant exposure to higher commodity prices. The Company has also entered into various basis swaps to protect against expansion of regional oil price differentials. For details on Parsley's hedge position, please see the tables below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the three months ended September 30, 2018.
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the third quarter of 2018 on Friday, November 2 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-709-8150 (United States/Canada) or 201-689-8354 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through November 9 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13684065. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Events & Presentations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
(1) | Natural gas and natural gas liquids ("NGLs") sales and associated production volumes for the three months ended June 30, 2018 and September 30, 2018 reflect adjustments associated with Parsley's adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC 606"), effective January 1, 2018. Accordingly, all references to, and comparisons between, 2Q18 and 3Q18 production volumes and per Boe unit costs likewise reflect this adoption, which has the effect of increasing certain natural gas and NGLs volumes and revenues, offset by a corresponding transportation and processing cost such that there is no change to reported net income. The recognition and presentation of oil volumes and associated revenues and expenses are unaffected by the adoption of ASC 606. Previously provided full-year guidance for production volumes and unit costs incorporate the anticipated effect of the adoption of ASC 606. For more information on ASC 606 and a reconciliation of 3Q18 production and unit costs under ASC 605 and as adjusted under ASC 606, please see the table and associated commentary below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the three and nine months ended September 30, 2018. | ||||||||||||
(2) | Midland price represent Bloomberg-sourced 3Q18 average WTI Midland price. | ||||||||||||
(3) | "Adjusted EBITDAX", "operating cash margin", and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For definitions and reconciliations of the non-GAAP financial measures of adjusted EBITDAX, operating cash margin, and adjusted net income to GAAP financial measures, please see the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. | ||||||||||||
(4) | Fully undrawn revolver balance is net of letters of credit. |
Parsley Energy, Inc. and Subsidiaries Selected Operating Data (Unaudited) | |||||||||||
Three Months Ended | |||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | |||||||||
Net production volumes: | |||||||||||
Oil (MBbls) | 6,763 | 6,165 | 4,342 | ||||||||
Natural gas (MMcf)(1) | 9,878 | 9,235 | 6,265 | ||||||||
Natural gas liquids (MBbls)(1) | 2,281 | 2,106 | 1,194 | ||||||||
Total (MBoe) | 10,690 | 9,811 | 6,581 | ||||||||
Average daily net production (Boe/d) | 116,196 | 107,813 | 71,533 | ||||||||
Average sales prices(2) : | |||||||||||
Oil, without realized derivatives (per Bbl) | $ | 62.78 | $ | 64.29 | $ | 45.80 | |||||
Oil, with realized derivatives (per Bbl) | $ | 61.44 | $ | 60.11 | $ | 45.51 | |||||
Natural gas, without realized derivatives (per Mcf) | $ | 1.30 | $ | 1.32 | $ | 2.49 | |||||
Natural gas, with realized derivatives (per Mcf) | $ | 1.35 | $ | 1.40 | $ | 2.45 | |||||
NGLs (per Bbl) | $ | 31.26 | $ | 27.20 | $ | 22.23 | |||||
Average price per Boe, without realized derivatives | $ | 47.58 | $ | 47.48 | $ | 36.62 | |||||
Average price per Boe, with realized derivatives | $ | 46.79 | $ | 44.92 | $ | 36.39 | |||||
Average costs (per Boe)(3): | |||||||||||
Lease operating expenses | $ | 3.72 | $ | 3.66 | $ | 4.49 | |||||
Transportation and processing costs | $ | 0.79 | $ | 0.66 | $ | — | |||||
Production and ad valorem taxes | $ | 2.86 | $ | 2.79 | $ | 2.25 | |||||
Depreciation, depletion and amortization | $ | 14.72 | $ | 14.84 | $ | 14.41 | |||||
General and administrative expenses (including stock-based compensation) | $ | 3.51 | $ | 3.67 | $ | 5.10 | |||||
General and administrative expenses (cash based) | $ | 3.07 | $ | 3.12 | $ | 4.32 |
(1) | Natural gas and NGLs volumes for the three months ended September 30 and June 30, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. | |||||||||
(2) | Average prices shown in the table reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculations of such effects include both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. Realized oil prices are net of transportation costs. Realized prices for certain gas and NGLs volumes are net of transportation, gathering, and processing costs as stipulated by ASC 606. For more information, please see associated commentary below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the three and nine months ended September 30, 2018. | |||||||||
(3) | Average costs per Boe for the three months ended September 30 and June 30, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. |
Parsley Energy, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited, in thousands, except for per share data)(1) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
REVENUES | |||||||||||||||
Oil sales | $ | 424,549 | $ | 198,865 | $ | 1,151,977 | $ | 546,676 | |||||||
Natural gas sales(2) | 12,810 | 15,601 | 42,469 | 41,051 | |||||||||||
Natural gas liquids sales(2) | 71,294 | 26,547 | 169,189 | 64,296 | |||||||||||
Other | 2,369 | 8 | 7,916 | 3,533 | |||||||||||
Total revenues | 511,022 | 241,021 | 1,371,551 | 655,556 | |||||||||||
OPERATING EXPENSES | |||||||||||||||
Lease operating expenses | 39,777 | 29,525 | 104,513 | 76,783 | |||||||||||
Transportation and processing costs(2) | 8,495 | — | 21,233 | — | |||||||||||
Production and ad valorem taxes | 30,604 | 14,808 | 82,121 | 37,367 | |||||||||||
Depreciation, depletion and amortization | 157,352 | 94,819 | 424,103 | 247,104 | |||||||||||
General and administrative expenses (including stock-based compensation) | 37,555 | 33,573 | 108,541 | 89,376 | |||||||||||
Exploration and abandonment costs | 11,140 | 88 | 19,917 | 4,223 | |||||||||||
Acquisition costs | — | 2,449 | 2 | 10,969 | |||||||||||
Accretion of asset retirement obligations | 361 | 268 | 1,074 | 597 | |||||||||||
Other operating expenses | 6,129 | 2,419 | 10,781 | 8,275 | |||||||||||
Total operating expenses | 291,413 | 177,949 | 772,285 | 474,694 | |||||||||||
OPERATING INCOME | 219,609 | 63,072 | 599,266 | 180,862 | |||||||||||
OTHER INCOME (EXPENSE) | |||||||||||||||
Interest expense, net | (32,854) | (22,879) | (98,580) | (64,979) | |||||||||||
Gain on sale of property | 1,383 | — | 6,438 | — | |||||||||||
Loss on early extinguishment of debt | — | — | — | (3,891) | |||||||||||
(Loss) gain on derivatives | (22,514) | (61,955) | (42,773) | 6,175 | |||||||||||
Change in TRA liability | — | — | (82) | (20,549) | |||||||||||
Interest income | 1,055 | 1,013 | 4,864 | 5,562 | |||||||||||
Other (expense) income | (76) | 508 | 459 | 1,281 | |||||||||||
Total other expense, net | (53,006) | (83,313) | (129,674) | (76,401) | |||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 166,603 | (20,241) | 469,592 | 104,461 | |||||||||||
INCOME TAX (EXPENSE) BENEFIT | (32,454) | 5,080 | (89,022) | (25,538) | |||||||||||
NET INCOME (LOSS) | 134,149 | (15,161) | 380,570 | 78,923 | |||||||||||
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (20,840) | 1,828 | (65,216) | (22,068) | |||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS | $ | 113,309 | $ | (13,333) | $ | 315,354 | $ | 56,855 | |||||||
Net income (loss) per common share: | |||||||||||||||
Basic | $ | 0.41 | $ | (0.05) | $ | 1.17 | $ | 0.24 | |||||||
Diluted | $ | 0.41 | $ | (0.05) | $ | 1.16 | $ | 0.24 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 277,705 | 246,518 | 270,262 | 237,725 | |||||||||||
Diluted | 278,396 | 246,518 | 270,846 | 238,785 |
(1) | Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. | ||||||||||
(2) | Natural gas and NGLs sales and transportation and processing costs for the three and nine months ended September 30, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. |
Parsley Energy, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited, in thousands) | |||||||
September 30, 2018 | December 31, 2017 | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 167,820 | $ | 554,189 | |||
Short-term investments | — | 149,283 | |||||
Accounts receivable: | |||||||
Joint interest owners and other | 30,583 | 42,174 | |||||
Oil, natural gas and NGLs | 179,827 | 123,147 | |||||
Related parties | 148 | 388 | |||||
Short-term derivative instruments, net | 30,394 | 41,957 | |||||
Assets held for sale | — | 1,790 | |||||
Other current assets | 11,062 | 6,558 | |||||
Total current assets | 419,834 | 919,486 | |||||
PROPERTY, PLANT AND EQUIPMENT | |||||||
Oil and natural gas properties, successful efforts method | 9,893,801 | 8,551,314 | |||||
Accumulated depreciation, depletion and impairment | (1,222,868) | (822,459) | |||||
Total oil and natural gas properties, net | 8,670,933 | 7,728,855 | |||||
Other property, plant and equipment, net | 145,130 | 106,587 | |||||
Total property, plant and equipment, net | 8,816,063 | 7,835,442 | |||||
NONCURRENT ASSETS | |||||||
Assets held for sale, net | — | 14,985 | |||||
Long-term derivative instruments, net | 13,770 | 15,732 | |||||
Other noncurrent assets | 7,244 | 7,553 | |||||
Total noncurrent assets | 21,014 | 38,270 | |||||
TOTAL ASSETS | $ | 9,256,911 | $ | 8,793,198 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | 380,251 | $ | 407,698 | |||
Revenue and severance taxes payable | 135,684 | 109,917 | |||||
Current portion of long-term debt | 2,373 | 2,352 | |||||
Short-term derivative instruments, net | 74,337 | 84,919 | |||||
Current portion of asset retirement obligations | 8,484 | 7,203 | |||||
Total current liabilities | 601,129 | 612,089 | |||||
NONCURRENT LIABILITIES | |||||||
Liabilities related to assets held for sale | — | 405 | |||||
Long-term debt | 2,181,054 | 2,179,525 | |||||
Asset retirement obligations | 20,429 | 19,967 | |||||
Deferred tax liability | 130,566 | 21,403 | |||||
Payable pursuant to tax receivable agreement | 65,039 | 58,479 | |||||
Long-term derivative instruments, net | 19,862 | 20,624 | |||||
Total noncurrent liabilities | 2,416,950 | 2,300,403 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
STOCKHOLDERS' EQUITY | |||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding | — | — | |||||
Common stock | |||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 280,546,336 shares issued and 279,955,944 shares outstanding at September 30, 2018 and 252,419,601 shares issued and 252,260,300 shares outstanding at December 31, 2017 | 2,805 | 2,524 | |||||
Class B, $0.01 par value, 125,000,000 shares authorized, 36,821,331 and 62,128,257 shares issued and outstanding | 368 | 622 | |||||
Additional paid in capital | 5,140,120 | 4,666,365 | |||||
Retained earnings | 358,873 | 43,519 | |||||
Treasury stock, at cost, 590,392 shares and 159,301 shares at September 30, 2018 and December 31, 2017 | (11,676) | (735) | |||||
Total stockholders' equity | 5,490,490 | 4,712,295 | |||||
Noncontrolling interest | 748,342 | 1,168,411 | |||||
Total equity | 6,238,832 | 5,880,706 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 9,256,911 | $ | 8,793,198 |
Parsley Energy, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) | |||||||
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 380,570 | $ | 78,923 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and amortization | 424,103 | 247,104 | |||||
Accretion of asset retirement obligations | 1,074 | 597 | |||||
Gain on sale of property | (6,438) | — | |||||
Loss on early extinguishment of debt | — | 3,891 | |||||
Amortization and write off of deferred loan origination costs | 3,560 | 2,826 | |||||
Amortization of bond premium | (387) | (387) | |||||
Stock-based compensation | 15,118 | 14,630 | |||||
Deferred income tax expense | 89,022 | 25,538 | |||||
Change in TRA liability | 82 | 20,549 | |||||
Loss (gain) on derivatives | 42,773 | (6,175) | |||||
Net cash received for derivative settlements | 94 | 13,845 | |||||
Net cash paid for option premiums | (40,087) | (19,905) | |||||
Other | 18,521 | 366 | |||||
Changes in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (45,089) | (54,793) | |||||
Accounts receivable—related parties | 240 | 83 | |||||
Other current assets | (696) | 45,139 | |||||
Other noncurrent assets | (386) | (739) | |||||
Accounts payable and accrued expenses | (7,964) | 94,442 | |||||
Revenue and severance taxes payable | 25,767 | 26,487 | |||||
Net cash provided by operating activities | 899,877 | 492,421 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Development of oil and natural gas properties | (1,364,755) | (733,179) | |||||
Acquisitions of oil and natural gas properties | (96,702) | (2,131,361) | |||||
Additions to other property and equipment | (62,542) | (31,947) | |||||
Proceeds from sales of property, plant and equipment | 87,954 | 13,366 | |||||
Maturity of short-term investments | 149,331 | — | |||||
Other | 13,657 | 2,893 | |||||
Net cash used in investing activities | (1,273,057) | (2,880,228) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings under long-term debt | — | 452,780 | |||||
Payments on long-term debt | (2,203) | (68,410) | |||||
Debt issuance costs | (45) | (9,281) | |||||
Proceeds from issuance of common stock, net | — | 2,123,344 | |||||
Repurchase of common stock | (10,941) | (300) | |||||
Net cash (used in) provided by financing activities | (13,189) | 2,498,133 | |||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (386,369) | 110,326 | |||||
Cash, cash equivalents and restricted cash at beginning of period | 554,189 | 136,669 | |||||
Cash, cash equivalents and restricted cash at end of period | $ | 167,820 | $ | 246,995 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||||||
Cash paid for interest | $ | 94,392 | $ | 49,565 | |||
Cash paid for income taxes | $ | — | $ | 350 | |||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||||||
Asset retirement obligations incurred, including changes in estimate | $ | 1,665 | $ | 8,144 | |||
(Reductions) additions to oil and natural gas properties - change in capital accruals | $ | (19,244) | $ | 57,014 | |||
Additions to other property and equipment funded by capital lease borrowings | $ | 1,579 | $ | 3,571 | |||
Common stock issued for oil and natural gas properties | $ | — | $ | 1,183,501 | |||
Net premiums on options that settled during the period | $ | (52,451) | $ | (22,404) |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net income (loss) before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, interest income, income tax expense (benefit), change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, idle charges, (gain) loss on sale of property, asset retirement obligation accretion expense, loss on early extinguishment of debt, inventory write down, (gain) loss on derivatives, net settlements on derivative instruments and net premiums on options that settled during the period.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measure of other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net (loss) income for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries Adjusted EBITDAX (Unaudited, in thousands)(1) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Adjusted EBITDAX reconciliation to net income: | |||||||||||||||
Net income (loss) attributable to Parsley Energy, Inc. stockholders | $ | 113,309 | $ | (13,333) | $ | 315,354 | $ | 56,855 | |||||||
Net income (loss) attributable to noncontrolling interests | 20,840 | (1,828) | 65,216 | 22,068 | |||||||||||
Depreciation, depletion and amortization | 157,352 | 94,819 | 424,103 | 247,104 | |||||||||||
Exploration and abandonment costs | 11,140 | 88 | 19,917 | 4,223 | |||||||||||
Interest expense, net | 32,854 | 22,879 | 98,580 | 64,979 | |||||||||||
Interest income | (1,055) | (1,013) | (4,864) | (5,562) | |||||||||||
Income tax expense (benefit) | 32,454 | (5,080) | 89,022 | 25,538 | |||||||||||
EBITDAX | 366,894 | 96,532 | 1,007,328 | 415,205 | |||||||||||
Change in TRA liability | — | — | 82 | 20,549 | |||||||||||
Stock-based compensation | 4,686 | 5,170 | 15,118 | 14,630 | |||||||||||
Acquisition costs | — | 2,449 | 2 | 10,969 | |||||||||||
Gain on sale of property | (1,383) | — | (6,438) | — | |||||||||||
Accretion of asset retirement obligations | 361 | 268 | 1,074 | 597 | |||||||||||
Loss on early extinguishment of debt | — | — | — | 3,891 | |||||||||||
Inventory write down | 451 | — | 495 | — | |||||||||||
Loss (gain) on derivatives | 22,514 | 61,955 | 42,773 | (6,175) | |||||||||||
Net settlements on derivative instruments | 9,376 | 10,982 | (516) | 15,654 | |||||||||||
Net premiums on options that settled during the period | (17,853) | (12,487) | (52,451) | (22,404) | |||||||||||
Adjusted EBITDAX | $ | 385,046 | $ | 164,869 | $ | 1,007,467 | $ | 452,916 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Operating Cash Margin
The Company defines operating cash margin as net income (loss) before income tax expense (benefit), other revenues, depreciation, depletion and amortization, exploration and abandonment costs, stock-based compensation, acquisition costs, asset retirement obligation accretion expense, other operating expenses, net interest expense, (gain) loss on sale of property, prepayment premium on extinguished debt, derivative (gain) loss, change in TRA liability, interest income, and other (income) expense. Operating cash margin is not a measure of operating income as determined by GAAP. The amounts included in the calculations of operating cash margin were computed in accordance with GAAP. Operating cash margin is presented herein and reconciled to the GAAP measure of net income attributable to Parsley Energy, Inc. stockholders. The Company uses operating cash margin as an indicator of the Company's profitability and ability to manage its operating income. This measure is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in the Company's condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in its SEC filings and posted on its website. The following table provides a reconciliation of operating cash margin to net income attributable to Parsley Energy, Inc. stockholders.
Parsley Energy, Inc. and Subsidiaries Operating Cash Margin (Unaudited, in thousands, except for per unit data)(1) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) attributable to Parsley Energy, Inc. stockholders | $ | 113,309 | $ | (13,333) | $ | 315,354 | $ | 56,855 | |||||||
Net income (loss) attributable to noncontrolling interests | 20,840 | (1,828) | 65,216 | 22,068 | |||||||||||
Income tax expense (benefit) | 32,454 | (5,080) | 89,022 | 25,538 | |||||||||||
Other revenues | (2,369) | (8) | (7,916) | (3,533) | |||||||||||
Depreciation, depletion and amortization | 157,352 | 94,819 | 424,103 | 247,104 | |||||||||||
Exploration and abandonment costs | 11,140 | 88 | 19,917 | 4,223 | |||||||||||
Stock-based compensation | 4,686 | 5,170 | 15,118 | 14,630 | |||||||||||
Acquisition costs | — | 2,449 | 2 | 10,969 | |||||||||||
Accretion of asset retirement obligations | 361 | 268 | 1,074 | 597 | |||||||||||
Other operating expenses | 6,129 | 2,419 | 10,781 | 8,275 | |||||||||||
Interest expense, net | 32,854 | 22,879 | 98,580 | 64,979 | |||||||||||
Gain on sale of property | (1,383) | — | (6,438) | — | |||||||||||
Prepayment premium on extinguishment of debt | — | — | — | 3,891 | |||||||||||
Derivative loss (gain) | 22,514 | 61,955 | 42,773 | (6,175) | |||||||||||
Change in TRA liability | — | — | 82 | 20,549 | |||||||||||
Interest income | (1,055) | (1,013) | (4,864) | (5,562) | |||||||||||
Other expense (income) | 76 | (508) | (459) | (1,281) | |||||||||||
Operating cash margin | $ | 396,908 | $ | 168,277 | $ | 1,062,345 | $ | 463,127 | |||||||
Operating cash margin per Boe | $ | 37.13 | $ | 25.57 | $ | 36.75 | $ | 26.61 | |||||||
Average price per Boe, without realized derivatives | $ | 47.58 | $ | 36.62 | $ | 47.17 | $ | 37.47 | |||||||
Operating cash margin percentage | 78% | 70% | 78% | 71% |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income
Adjusted net income is not a measure of net income determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by the Company's management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, (gain) loss on sale of property, exploration and abandonment costs, acquisition costs, idle charges, loss on early extinguishment of debt, and change in TRA liability, while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net income (loss).
Parsley Energy, Inc. and Subsidiaries Adjusted Net Income and Net Income Per Share (Unaudited, in thousands, except per share data)(1) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) - as reported | $ | 113,309 | $ | (13,333) | $ | 315,354 | $ | 56,855 | |||||||
Adjustments: | |||||||||||||||
Loss (gain) on derivatives | 22,514 | 61,955 | 42,773 | (6,175) | |||||||||||
Net settlements on derivative instruments | 9,376 | 10,982 | (516) | 15,654 | |||||||||||
Net premiums on options that settled during the period | (17,853) | (12,487) | (52,451) | (22,404) | |||||||||||
Gain on sale of property | (1,383) | — | (6,438) | — | |||||||||||
Exploration and abandonment costs | 11,140 | 88 | 19,917 | 4,223 | |||||||||||
Acquisition costs | — | 2,449 | 2 | 10,969 | |||||||||||
Loss on early extinguishment of debt | — | — | — | 3,891 | |||||||||||
Change in TRA liability | — | — | 82 | 20,549 | |||||||||||
Noncontrolling interest | (2,745) | (13,472) | (410) | (6,872) | |||||||||||
Change in estimated income tax | (8,130) | (6,839) | (4,647) | 4,819 | |||||||||||
Adjusted net income | $ | 126,228 | $ | 29,343 | $ | 313,666 | $ | 81,509 | |||||||
Net income (loss) per diluted share - as reported(2) | $ | 0.41 | $ | (0.05) | $ | 1.16 | $ | 0.24 | |||||||
Adjustments: | |||||||||||||||
Loss (gain) on derivatives | $ | 0.08 | $ | 0.25 | $ | 0.16 | $ | (0.03) | |||||||
Net settlements on derivative instruments | 0.03 | 0.04 | — | 0.07 | |||||||||||
Net premiums on options that settled during the period | (0.06) | (0.05) | (0.19) | (0.09) | |||||||||||
Gain on sale of property | — | — | (0.02) | — | |||||||||||
Exploration and abandonment costs | 0.04 | — | 0.07 | 0.02 | |||||||||||
Acquisition costs | — | 0.01 | — | 0.05 | |||||||||||
Loss on early extinguishment of debt | — | — | — | 0.02 | |||||||||||
Change in TRA liability | — | — | — | 0.08 | |||||||||||
Noncontrolling interest | (0.01) | (0.05) | — | (0.03) | |||||||||||
Change in estimated income tax | (0.04) | (0.03) | (0.02) | 0.02 | |||||||||||
Adjusted net income per diluted share(3) | $ | 0.45 | $ | 0.12 | $ | 1.16 | $ | 0.35 | |||||||
Basic weighted average shares outstanding - as reported(2) | 277,705 | 246,518 | 270,262 | 237,725 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Restricted Stock and Restricted Stock Units | 691 | — | 584 | 1,060 | |||||||||||
Diluted weighted average shares outstanding - as reported(2) | 278,396 | 246,518 | 270,846 | 238,785 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Restricted Stock and Restricted Stock Units | — | 1,141 | — | — | |||||||||||
Diluted weighted average shares outstanding for adjusted net income(3) | 278,396 | 247,659 | 270,846 | 238,785 |
(1) | Certain reclassifications to prior period amounts have been made to conform with current presentation. | |||||||||||
(2) | For the three and nine months ended September 30, 2018 and 2017, the number of weighted average diluted shares used to calculate actual net income per share is based on the fact that, under the "if converted" method, Class B Common Stock was not recognized because it would have been antidilutive and for the three months ended September 30, 2017, restricted stock and restricted stock units were not recognized because they would have been antidilutive using the treasury stock method. | |||||||||||
(3) | For purposes of calculating adjusted net income per diluted share for the three and nine months ended September 30, 2018 and 2017, Class B Common Stock was not recognized because the shares would have been antidilutive using the "if converted" method. |
Supplemental Information
Impact of ASC 606 Adoption
Parsley adopted ASC 606 effective January 1, 2018 using the modified retrospective approach. As a result, the Company changed its accounting policy for revenue recognition, which resulted in the following adjustments:
Three Months Ended September 30, 2018 | |||||||||||
ASC 605 | Adjustment | ASC 606 | |||||||||
Production revenues (in thousands): | |||||||||||
Oil sales | $ | 424,549 | $ | — | $ | 424,549 | |||||
Natural gas sales | 11,509 | 1,301 | 12,810 | ||||||||
Natural gas liquids sales | 64,100 | 7,194 | 71,294 | ||||||||
Total production revenues | 500,158 | 8,495 | 508,653 | ||||||||
Operating expenses | |||||||||||
Transportation and processing costs | — | 8,495 | 8,495 | ||||||||
Production revenues less transportation and processing costs | $ | 500,158 | $ | — | $ | 500,158 | |||||
Net income attributable to Parsley Energy, Inc. stockholders (in thousands) | $ | 113,309 | $ | — | $ | 113,309 | |||||
Production: | |||||||||||
Oil (MBbls) | 6,763 | — | 6,763 | ||||||||
Natural gas (MMcf) | 8,791 | 1,087 | 9,878 | ||||||||
Natural gas liquids (MBbls) | 2,012 | 269 | 2,281 | ||||||||
Total (MBoe) | 10,240 | 450 | 10,690 | ||||||||
Average daily production volume: | |||||||||||
Oil (Bbls) | 73,511 | — | 73,511 | ||||||||
Natural gas (Mcf) | 95,554 | 11,816 | 107,370 | ||||||||
Natural gas liquids (Bbls) | 21,870 | 2,923 | 24,793 | ||||||||
Total (Boe) | 111,304 | 4,892 | 116,196 | ||||||||
Certain unit costs (per Boe): | |||||||||||
Lease operating expenses | $ | 3.88 | $ | (0.16) | $ | 3.72 | |||||
Transportation and processing costs | $ | — | $ | 0.79 | $ | 0.79 | |||||
Production and ad valorem taxes | $ | 2.99 | $ | (0.13) | $ | 2.86 | |||||
Depreciation, depletion and amortization | $ | 15.37 | $ | (0.65) | $ | 14.72 | |||||
General and administrative expenses (including stock-based compensation) | $ | 3.67 | $ | (0.16) | $ | 3.51 | |||||
General and administrative expenses (cash based) | $ | 3.21 | $ | (0.14) | $ | 3.07 |
Nine Months Ended September 30, 2018 | |||||||||||
ASC 605 | Adjustment | ASC 606 | |||||||||
Production revenues (in thousands): | |||||||||||
Oil sales | $ | 1,151,977 | $ | — | $ | 1,151,977 | |||||
Natural gas sales | 38,189 | 4,280 | 42,469 | ||||||||
Natural gas liquids sales | 152,236 | 16,953 | 169,189 | ||||||||
Total production revenues | 1,342,402 | 21,233 | 1,363,635 | ||||||||
Operating expenses | |||||||||||
Transportation and processing costs | — | 21,233 | 21,233 | ||||||||
Production revenues less transportation and processing costs | $ | 1,342,402 | $ | — | $ | 1,342,402 | |||||
Net income attributable to Parsley Energy, Inc. stockholders (in thousands) | $ | 315,354 | $ | — | $ | 315,354 | |||||
Production: | |||||||||||
Oil (MBbls) | 18,269 | — | 18,269 | ||||||||
Natural gas (MMcf) | 25,060 | 2,609 | 27,669 | ||||||||
Natural gas liquids (MBbls) | 5,329 | 701 | 6,030 | ||||||||
Total (MBoe) | 27,774 | 1,137 | 28,911 | ||||||||
Average daily production volume: | |||||||||||
Oil (Bbls) | 66,919 | — | 66,919 | ||||||||
Natural gas (Mcf) | 91,795 | 9,557 | 101,352 | ||||||||
Natural gas liquids (Bbls) | 19,520 | 2,568 | 22,088 | ||||||||
Total (Boe) | 101,736 | 4,165 | 105,901 | ||||||||
Certain unit costs (per Boe): | |||||||||||
Lease operating expenses | $ | 3.76 | $ | (0.15) | $ | 3.61 | |||||
Transportation and processing costs | $ | — | $ | 0.73 | $ | 0.73 | |||||
Production and ad valorem taxes | $ | 2.96 | $ | (0.12) | $ | 2.84 | |||||
Depreciation, depletion and amortization | $ | 15.27 | $ | (0.60) | $ | 14.67 | |||||
General and administrative expenses (including stock-based compensation) | $ | 3.91 | $ | (0.16) | $ | 3.75 | |||||
General and administrative expenses (cash based) | $ | 3.36 | $ | (0.13) | $ | 3.23 |
Changes to natural gas and NGLs sales were made in accordance with the control model defined in ASC 606. Under the new control model, the Company is required to identify and separately analyze each contract associated with revenues to determine the appropriate accounting application.
As a result of this analysis, the Company modified its accounting and presentation of natural gas and NGLs sales, and transportation and processing costs under certain marketing agreements. For additional information related to the Company's adoption of ASC 606, please refer to Note 3—Revenue from Contracts with Customers—Impact of ASC 606 Adoption in the Company's consolidated financial statements contained in its Quarterly Report on Form 10-Q, upon availability, for the three and nine months ended September 30, 2018.
Open Derivatives Positions | |||||||||||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries Open Crude Oil Derivatives Positions(1) | |||||||||||||||||||||||||||
4Q18 | 1Q19 | 2Q19 | 3Q19 | 4Q19 | 1Q20 | 2Q20 | |||||||||||||||||||||
OPTION CONTRACTS: | |||||||||||||||||||||||||||
CUSHING | |||||||||||||||||||||||||||
Put Spreads - Cushing (MBbls/d)(2) | 37.5 | 20.0 | 19.8 | 24.5 | 24.5 | ||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 49.67 | $ | 54.17 | $ | 54.17 | $ | 58.83 | $ | 58.83 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 39.67 | $ | 44.17 | $ | 44.17 | $ | 48.83 | $ | 48.83 | |||||||||||||||||
Three Way Collars - Cushing (MBbls/d)(3) | 31.0 | 8.3 | 8.2 | 9.8 | 9.8 | ||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 75.65 | $ | 80.40 | $ | 80.40 | $ | 80.33 | $ | 80.33 | |||||||||||||||||
Long Put Price ($/Bbl) | $ | 50.00 | $ | 50.00 | $ | 50.00 | $ | 50.83 | $ | 50.83 | |||||||||||||||||
Short Put Price ($/Bbl) | $ | 40.00 | $ | 40.00 | $ | 40.00 | $ | 40.83 | $ | 40.83 | |||||||||||||||||
Collars - Cushing (MBbls/d)(4) | 3.0 | ||||||||||||||||||||||||||
Short Call Price ($/Bbl) | $ | 61.31 | |||||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 45.67 | |||||||||||||||||||||||||
MIDLAND | |||||||||||||||||||||||||||
Put Spreads - Midland (MBbls/d)(2) | 11.7 | 14.8 | 4.9 | 4.9 | |||||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 50.71 | $ | 50.56 | $ | 60.00 | $ | 60.00 | |||||||||||||||||||
Short Put Price ($/Bbl) | $ | 40.71 | $ | 40.56 | $ | 50.00 | $ | 50.00 | |||||||||||||||||||
MEH | |||||||||||||||||||||||||||
Put Spreads - MEH (MBbls/d)(2) | 3.3 | 3.3 | 8.2 | 8.2 | 5.0 | 4.9 | |||||||||||||||||||||
Long Put Price ($/Bbl) | $ | 70.00 | $ | 70.00 | $ | 64.00 | $ | 64.00 | $ | 70.00 | $ | 70.00 | |||||||||||||||
Short Put Price ($/Bbl) | $ | 60.00 | $ | 60.00 | $ | 54.00 | $ | 54.00 | $ | 60.00 | $ | 60.00 | |||||||||||||||
Total Option Contracts (MBbls/d) | 71.5 | 43.3 | 46.1 | 47.4 | 47.4 | 5.0 | 4.9 | ||||||||||||||||||||
Premium Realization ($MM)(5) | $ | (19.1) | $ | (12.4) | $ | (13.3) | $ | (13.6) | $ | (13.6) | $ | (1.6) | $ | (1.6) | |||||||||||||
BASIS SWAPS: | |||||||||||||||||||||||||||
Midland-Cushing Basis Swaps (MBbls/d)(6) | 18.5 | 21.7 | 8.9 | ||||||||||||||||||||||||
Swap Price ($/Bbl) | $ | (3.76) | $ | (8.42) | $ | (8.94) | |||||||||||||||||||||
MEH-Cushing Basis Swaps (MBbls/d)(6) | 2.2 | 2.1 | 2.1 | 2.1 | |||||||||||||||||||||||
Swap Price ($/Bbl) | $ | 5.10 | $ | 5.10 | $ | 5.10 | $ | 5.10 | |||||||||||||||||||
ROLLFACTOR SWAPS: | |||||||||||||||||||||||||||
Rollfactor Swaps (MBbl/d)(7) | 15.0 | ||||||||||||||||||||||||||
Swap Price ($/Bbl) | $ | 0.60 |
Parsley Energy, Inc. and Subsidiaries Open Natural Gas Derivatives Positions(1) | |||
4Q18 | |||
Three Way Collars (MMBtu/d)(3) | 8,152 | ||
Short Call Price ($/MMBtu) | $ | 3.60 | |
Long Put Price ($/MMBtu) | $ | 3.00 | |
Short Put Price ($/MMBtu) | $ | 2.75 | |
Total MMBtu/d Hedged | 8,152 |
(1) | As of 11/1/2018. Prices represent the weighted average price of contracts scheduled for settlement during the period. | ||||||||||||
(2) | When the reference price (WTI, Midland, or MEH) is above the long put price, Parsley receives the reference price. When the reference price is between the long put price and the short put price, Parsley receives the long put price. When the reference price is below the short put price, Parsley receives the reference price plus the difference between the short put price and the long put price. | ||||||||||||
(3) | Functions similarly to put spreads except that when the index price is at or above the call price, Parsley receives the call price. | ||||||||||||
(4) | When the reference price (WTI) is above the call price, Parsley receives the call price. When the reference price is below the long put price, Parsley receives the long put price. When the reference price is between the short call and long put prices, Parsley receives the reference price. | ||||||||||||
(5) | Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | ||||||||||||
(6) | Parsley receives the swap price. | ||||||||||||
(7) | These positions hedge the timing risk associated with Parsley's physical sales. Parsley generally sells crude oil for the delivery month at a sales price based on the average reference price during that month, plus an adjustment calculated as a spread between the weighted average prices of the delivery month, the next month, and the following month during the period when the delivery month is the first month. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-third-quarter-2018-financial-and-operating-results-300742609.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Sept. 26, 2018 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley" or the "Company") today announced the appointment of David Dell'Osso as Executive Vice President—Chief Operating Officer, effective October 9, 2018. Mr. Dell'Osso will succeed Matt Gallagher, who will remain President of the Company until his previously announced appointment as President and Chief Executive Officer, which is expected to occur on January 1, 2019. Mr. Dell'Osso will assume responsibility for company-wide development, production, and engineering functions.
"We are pleased to add a leader of David's caliber to the Parsley team," said Gallagher. "David brings a wealth of experience in large-scale unconventional resource development and has a proven track record of operational and technical excellence. We are confident that he will help our teams build on the positive momentum we've established towards operational execution and excellence."
"I am excited to join Parsley and contribute to the development of the company's high-quality asset base," said Mr. Dell'Osso. "I look forward to working closely with Matt and the rest of the team to deliver value for Parsley and its shareholders."
Prior to joining Parsley, Mr. Dell'Osso was employed by Southwestern Energy Company ("Southwestern"), where for the last 13 years he served in a variety of positions of increasing responsibility, including, at the time of his departure, Senior Vice President & General Manager of the Northeast Appalachia Division. Other roles included management of exploration and production, midstream, and commercial teams. Mr. Dell'Osso earned a Bachelor of Science in Petroleum Engineering from the University of Texas at Austin and a Master of Business Administration from Rice University.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including, but not limited to, its Annual Report on Form 10-K, its subsequent Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K. The risk factors and other factors noted in the Company's SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
View original content to download multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-the-appointment-of-david-dellosso-as-executive-vice-president-chief-operating-officer-300719741.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Aug. 7, 2018 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended June 30, 2018. The Company has posted to its website a presentation that supplements the information in this release.
Second Quarter 2018 Highlights
"Parsley Energy continues to execute across the organization in 2018," said Bryan Sheffield, Parsley's Chairman and CEO. "With a steady development profile in place, our teams have found ways to boost operational efficiencies and extract more value per barrel of production. We expect these trends to continue as we implement Parsley's standard of excellence across a long-lived, high quality asset base."
Operational Update
Parsley's strong sequential production growth was driven by solid execution across multiple business units, highlighted by efficient development operations and the execution of acreage trades that increased the Company's average working interest.
Activity Overview
During the second quarter, the Company spud 43 and placed on production 45 gross operated horizontal wells. Parsley's working interest on wells placed on production was approximately 97%, with an average completed lateral length of approximately 8,750 feet. Completion activity was weighted toward the Midland Basin, where the Company placed on production 37 gross operated horizontal wells, with the Delaware Basin comprising the remaining 8 gross operated horizontal wells. Parsley expects that development activity will remain weighted to the Midland Basin for the remainder of the year, consistent with prior Company commentary.
Notable Well Results
Parsley turned 14 wells to production in Glasscock County during 2Q18, representing a significant portion of the Company's total completion activity during the quarter. These wells included two wells on the Brunson lease which targeted the Wolfcamp A and Wolfcamp B zones in a stacked configuration. Early results from these two 1.5 mile lateral wells are promising, with peak 30-day production rates averaging 1,277 Boe per day (84% oil), representing the Company's strongest stacked Wolfcamp results in Glasscock County to date. More broadly, Parsley's growing portfolio of well results across Glasscock County evidences the quality of the Company's Glasscock acreage, with Wolfcamp A and Wolfcamp B results since 2017 showing steady improvement and outperforming Parsley's Midland Basin reference curve in the aggregate.
Takeaway Positioning
During 2Q18, Parsley reported an unhedged oil price realization of $64.29/Bbl net of transportation costs, representing a differential of just $3.62/Bbl compared to the average NYMEX WTI price for the quarter. Parsley's current insulation from weaker Midland basis differentials is the product of a proactive marketing strategy that sought to diversify regional pricing exposure more than 12 months ago.
Parsley has recently taken steps to supplement its advantaged takeaway position, agreeing in principle to multiple agreements with large oil purchasers. These firm transport agreements would, if all are completed, cover up to 165,000 Bo per day of gross operated oil production by year-end 2019,(2) and also maintain favorable pricing elements by pricing a significant portion of the Company's barrels relative to Gulf Coast and international benchmarks.
"Securing flow assurance and pricing insulation were top priorities for us as we scaled up our operations 12 months ago and this foresight is now being rewarded through clear growth visibility and strong oil price realizations," said Matt Gallagher, Parsley's President and COO. "We continue to grow a crude production stream that is attractive to premier purchasers and expect to leverage these in-demand barrels to achieve favorable terms on incremental takeaway agreements. It is a distinct advantage to contemplate future development plans unencumbered by takeaway constraints or expensive long-term transportation costs."
Financial Update
Parsley's solid operational execution this quarter translated to strong performance in key financial measures.
During 2Q18, the Company recorded net income attributable to its stockholders of $119.2 million, or $0.44 per share, compared to net income attributable to its stockholders of $82.9 million, or $0.32 per share, during 1Q18. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, and adding back the non-controlling interest allocated to Class B stockholders, adjusted net income for 2Q18 was $106.4 million, or $0.39 per share, compared to $81.1 million, or $0.31 per share, in 1Q18.(4)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 2Q18 was $340.1 million, up 20% quarter-over-quarter and up more than 130% when compared to the same measure in 2Q17.(4)
Parsley maintained strong cost control during the second quarter of 2018. The Company reported LOE per Boe of $3.66,(1) up only slightly versus the peer-leading expense the Company posted in 1Q18, and is lowering its full-year 2018 LOE per Boe guidance from $3.75-$5.00 to $3.50-$4.25. Favorable LOE cost trends were driven by expansion of Parsley's cost-effective water management system, as well as reduced power costs associated with the recent commissioning of an electrical substation in the Delaware Basin.
Both G&A per Boe and cash based G&A per Boe, which excludes stock-based compensation expense, decreased quarter-over-quarter and year-over-year to $3.67(1) and $3.12,(1) respectively. Parsley is lowering full-year 2018 cash G&A per Boe guidance from $3.50-$4.25 to $3.25-$3.65. Encouraging G&A cost trends are a function of a stable development pace following a period of accelerating development activity.
Strong realized pricing and favorable trends in the above-mentioned cash operating costs drove a robust operating cash margin of $37.25 per Boe, or 78% of the Company's average realized price per Boe.(4)
Parsley reported capital expenditures of $477 million during the quarter, comprised of $387 million for drilling and completion activity and $90 million for facilities and infrastructure. Elevated facilities and infrastructure spending is a function of a proactive build-out of Parsley's growing water infrastructure network. These efforts spanned several counties and included a water recycling pilot in Martin County with favorable initial results. Reported 2Q18 capital expenditures also include $10 million associated with non-operated development activity.
The Company is revising its 2018 capital budget as a result of shorter cycle times and higher working interest. Parsley previously indicated that sustained oil price strength and associated service and equipment cost inflation would bias expectations toward the upper end of its initial guidance range of $1.35-$1.55 billion. These expectations were confirmed, primarily as a function of labor tightness, while the imposition of steel tariffs also translated to higher well costs. Relative to the top of the previous range, Parsley is revising its 2018 capital budget upward by $100-$200 million to reflect the additional net wells the Company expects to place on production this year, yielding an updated range of $1.65-$1.75 billion.
Liquidity and Hedging
As of June 30, 2018, Parsley had approximately $1.3 billion of liquidity, consisting of $301 million of cash, cash equivalents, and short-term investments, and an undrawn amount of $991 million on the Company's revolver.(5)
Almost all of Parsley's expected 2018 oil production is subject to hedge protection, and the Company recently added to its 2019 hedge position. Parsley's hedging strategy protects its balance sheet and anticipated cash flow while retaining significant exposure to higher commodity prices. For details on Parsley's hedging position, please see the tables below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the three months ended June 30, 2018.
Full-year 2018 Guidance Update | |||
2018 |
2018 | ||
Previous |
Updated | ||
Production |
|||
Annual net oil production (MBo/d) |
65-70 |
68.0-70.5 | |
Annual net production (MBoe/d) |
98-108 |
106-111 | |
Capital Program |
|||
Total development expenditures ($MM) |
$1,350-$1,550 |
$1,650-$1,750 | |
Drilling and completion (% of total) |
85-90% |
85-90% | |
Facilities, Infrastructure & Other (% of total) |
10-15% |
10-15% | |
Activity |
|||
Gross operated horizontal POPs |
~160 |
~165 | |
Midland Basin (% of total) |
~75% |
~75% | |
Delaware Basin (% of total) |
~25% |
~25% | |
Average lateral length |
~9,500' |
~9,500' | |
Average working interest |
~90% |
95-97% | |
Net operated horizontal POPs |
~144 |
157-160 | |
Unit Costs |
|||
Lease operating expenses ($/Boe) |
$3.75-$5.00 |
$3.50-$4.25 | |
Cash general and administrative expenses ($/Boe) |
$3.50-$4.25 |
$3.25-$3.65 | |
Production and ad valorem taxes (% of revenue) |
6.0%-7.0% |
6.0%-7.0% |
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the second quarter of 2018 on Wednesday, August 8 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through August 15 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13681890. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Events & Presentations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
- Tables to Follow -
__________ | ||
(1) |
Natural gas and natural gas liquids ("NGLs") sales and associated production volumes for the three months ended June 30, 2018 reflect adjustments associated with Parsley's adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC 606"), effective January 1, 2018. Accordingly, all references to 2Q18 production volumes and per Boe unit costs likewise reflect this adoption, which has the effect of increasing certain natural gas and NGLs volumes and revenues, offset by a corresponding transportation and processing cost such that there is no change to reported net income. The recognition and presentation of oil volumes and associated revenues and expenses are unaffected by the adoption of ASC 606. Previously provided full-year guidance for production volumes and unit costs incorporated the anticipated effect of the adoption of ASC 606. For more information on ASC 606 and a reconciliation of 2Q18 production and unit costs under ASC 605 and as adjusted under ASC 606, please see the table and associated commentary below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the three and six months ended June 30, 2018. | |
(2) |
The above-referenced agreements include executed contracts and one letter of intent that outlines commercial terms but has not been contractualized. | |
(3) |
Expected net well count based on revised 2018 guidance for gross wells placed on production and average working interest (midpoint of range). | |
(4) |
"Adjusted EBITDAX", "operating cash margin", and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For definitions and reconciliations of the non-GAAP financial measures of adjusted EBITDAX, operating cash margin, and adjusted net income to GAAP financial measures, please see the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. | |
(5) |
Fully undrawn revolver balance is net of letters of credit. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Selected Operating Data | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
June 30, 2018 |
March 31, 2018 |
June 30, 2017 | |||||||||
Net production volumes: |
|||||||||||
Oil (MBbls) |
6,165 |
5,341 |
3,917 |
||||||||
Natural gas (MMcf) (1) |
9,235 |
8,556 |
5,421 |
||||||||
Natural gas liquids (MBbls) (1) |
2,106 |
1,643 |
1,069 |
||||||||
Total (MBoe) |
9,811 |
8,410 |
5,890 |
||||||||
Average daily net production (Boe/d) |
107,813 |
93,444 |
64,725 |
||||||||
Average sales prices (2) : |
|||||||||||
Oil, without realized derivatives (per Bbl) |
$ |
64.29 |
$ |
61.99 |
$ |
45.46 |
|||||
Oil, with realized derivatives (per Bbl) |
$ |
60.11 |
$ |
58.32 |
$ |
45.49 |
|||||
Natural gas, without realized derivatives (per Mcf) |
$ |
1.32 |
$ |
2.04 |
$ |
2.39 |
|||||
Natural gas, with realized derivatives (per Mcf) |
$ |
1.40 |
$ |
2.06 |
$ |
2.36 |
|||||
NGLs (per Bbl) |
$ |
27.20 |
$ |
24.72 |
$ |
19.02 |
|||||
Average price per Boe, without realized derivatives |
$ |
47.48 |
$ |
46.27 |
$ |
35.89 |
|||||
Average price per Boe, with realized derivatives |
$ |
44.92 |
$ |
43.97 |
$ |
35.87 |
|||||
Average costs (per Boe) (3): |
|||||||||||
Lease operating expenses |
$ |
3.66 |
$ |
3.43 |
$ |
5.03 |
|||||
Transportation and processing costs |
$ |
0.66 |
$ |
0.75 |
$ |
— |
|||||
Production and ad valorem taxes |
$ |
2.79 |
$ |
2.88 |
$ |
1.93 |
|||||
Depreciation, depletion and amortization |
$ |
14.84 |
$ |
14.41 |
$ |
14.15 |
|||||
General and administrative expenses (including stock-based compensation) |
$ |
3.67 |
$ |
4.16 |
$ |
5.39 |
|||||
General and administrative expenses (cash based) |
$ |
3.12 |
$ |
3.56 |
$ |
4.50 |
___________ | ||
(1) |
Natural gas and NGLs volumes for the three months ended June 30 and March 31, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. | |
(2) |
Average prices shown in the table reflect prices both before and after the effects of our realized commodity hedging transactions. Our calculations of such effects include both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. Realized oil prices are net of transportation costs. Realized prices for certain gas and NGLs volumes are net of transportation, gathering, and processing costs as stipulated by ASC 606. For more information, please see associated commentary below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the three and six months ended June 30, 2018. | |
(3) |
Average costs per Boe for the three months ended June 30 and March 31, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(Unaudited, in thousands, except for per share data)(1) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2018 |
2017 |
2018 |
2017 | ||||||||||||
REVENUES |
|||||||||||||||
Oil sales |
$ |
396,325 |
$ |
178,066 |
$ |
727,428 |
$ |
347,811 |
|||||||
Natural gas sales (2) |
12,235 |
12,983 |
29,659 |
25,450 |
|||||||||||
Natural gas liquids sales (2) |
57,275 |
20,336 |
97,895 |
37,749 |
|||||||||||
Other |
1,953 |
2,292 |
5,547 |
3,525 |
|||||||||||
Total revenues |
467,788 |
213,677 |
860,529 |
414,535 |
|||||||||||
OPERATING EXPENSES |
|||||||||||||||
Lease operating expenses |
35,904 |
29,631 |
64,736 |
47,258 |
|||||||||||
Transportation and processing costs (2) |
6,471 |
— |
12,738 |
— |
|||||||||||
Production and ad valorem taxes |
27,331 |
11,397 |
51,517 |
22,559 |
|||||||||||
Depreciation, depletion and amortization |
145,552 |
83,315 |
266,751 |
152,285 |
|||||||||||
General and administrative expenses (including stock-based compensation) |
35,991 |
31,761 |
70,986 |
55,803 |
|||||||||||
Exploration and abandonment costs |
3,366 |
2,442 |
8,777 |
5,205 |
|||||||||||
Acquisition costs |
(2) |
7,176 |
2 |
8,520 |
|||||||||||
Accretion of asset retirement obligations |
359 |
193 |
713 |
329 |
|||||||||||
Other operating expenses |
2,477 |
2,503 |
4,652 |
4,786 |
|||||||||||
Total operating expenses |
257,449 |
168,418 |
480,872 |
296,745 |
|||||||||||
OPERATING INCOME |
210,339 |
45,259 |
379,657 |
117,790 |
|||||||||||
OTHER INCOME (EXPENSE) |
|||||||||||||||
Interest expense, net |
(33,758) |
(22,764) |
(65,726) |
(42,100) |
|||||||||||
Gain on sale of property |
5,166 |
— |
5,055 |
— |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
— |
(3,891) |
|||||||||||
(Loss) gain on derivatives |
(9,466) |
43,514 |
(20,259) |
68,130 |
|||||||||||
Change in TRA liability |
— |
— |
(82) |
(20,549) |
|||||||||||
Interest income |
1,686 |
2,178 |
3,809 |
4,549 |
|||||||||||
Other income (expense) |
234 |
(177) |
535 |
773 |
|||||||||||
Total other income (expense), net |
(36,138) |
22,751 |
(76,668) |
6,912 |
|||||||||||
INCOME BEFORE INCOME TAXES |
174,201 |
68,010 |
302,989 |
124,702 |
|||||||||||
INCOME TAX EXPENSE |
(33,243) |
(12,216) |
(56,568) |
(30,618) |
|||||||||||
NET INCOME |
140,958 |
55,794 |
246,421 |
94,084 |
|||||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
(21,803) |
(15,048) |
(44,376) |
(23,896) |
|||||||||||
NET INCOME ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS |
$ |
119,155 |
$ |
40,746 |
$ |
202,045 |
$ |
70,188 |
|||||||
Net income per common share: |
|||||||||||||||
Basic |
$ |
0.44 |
$ |
0.17 |
$ |
0.76 |
$ |
0.30 |
|||||||
Diluted |
$ |
0.44 |
$ |
0.17 |
$ |
0.76 |
$ |
0.30 |
|||||||
Weighted average common shares outstanding: |
|||||||||||||||
Basic |
272,239 |
245,698 |
266,479 |
233,255 |
|||||||||||
Diluted |
272,846 |
246,792 |
267,043 |
234,315 |
__________ | ||
(1) |
Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. | |
(2) |
Natural gas and NGLs sales and transportation and processing costs for the three and six months ended June 30, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Balance Sheets | |||||||
(Unaudited, in thousands) | |||||||
June 30, 2018 |
December 31, 2017 | ||||||
(In thousands) | |||||||
ASSETS |
|||||||
CURRENT ASSETS |
|||||||
Cash and cash equivalents |
$ |
201,702 |
$ |
554,189 |
|||
Short-term investments |
99,704 |
149,283 |
|||||
Accounts receivable: |
|||||||
Joint interest owners and other |
29,721 |
42,174 |
|||||
Oil, natural gas and NGLs |
178,593 |
123,147 |
|||||
Related parties |
241 |
388 |
|||||
Short-term derivative instruments, net |
42,780 |
41,957 |
|||||
Assets held for sale |
— |
1,790 |
|||||
Other current assets |
41,784 |
6,558 |
|||||
Total current assets |
594,525 |
919,486 |
|||||
PROPERTY, PLANT AND EQUIPMENT |
|||||||
Oil and natural gas properties, successful efforts method |
9,434,570 |
8,551,314 |
|||||
Accumulated depreciation, depletion and impairment |
(1,074,499) |
(822,459) |
|||||
Total oil and natural gas properties, net |
8,360,071 |
7,728,855 |
|||||
Other property, plant and equipment, net |
146,517 |
106,587 |
|||||
Total property, plant and equipment, net |
8,506,588 |
7,835,442 |
|||||
NONCURRENT ASSETS |
|||||||
Assets held for sale, net |
— |
14,985 |
|||||
Long-term derivative instruments, net |
30,837 |
15,732 |
|||||
Other noncurrent assets |
7,493 |
7,553 |
|||||
Total noncurrent assets |
38,330 |
38,270 |
|||||
TOTAL ASSETS |
$ |
9,139,443 |
$ |
8,793,198 |
|||
LIABILITIES AND EQUITY |
|||||||
CURRENT LIABILITIES |
|||||||
Accounts payable and accrued expenses |
$ |
426,677 |
$ |
407,698 |
|||
Revenue and severance taxes payable |
134,740 |
109,917 |
|||||
Current portion of long-term debt |
2,462 |
2,352 |
|||||
Short-term derivative instruments, net |
68,242 |
84,919 |
|||||
Current portion of asset retirement obligations |
7,754 |
7,203 |
|||||
Total current liabilities |
639,875 |
612,089 |
|||||
NONCURRENT LIABILITIES |
|||||||
Liabilities related to assets held for sale |
— |
405 |
|||||
Long-term debt |
2,180,559 |
2,179,525 |
|||||
Asset retirement obligations |
20,853 |
19,967 |
|||||
Deferred tax liability |
100,392 |
21,403 |
|||||
Payable pursuant to tax receivable agreement |
62,681 |
58,479 |
|||||
Long-term derivative instruments, net |
34,936 |
20,624 |
|||||
Total noncurrent liabilities |
2,399,421 |
2,300,403 |
|||||
COMMITMENTS AND CONTINGENCIES |
|||||||
STOCKHOLDERS' EQUITY |
|||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding |
— |
— |
|||||
Common stock |
|||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 280,106,940 shares issued and 279,518,737 shares outstanding at June 30, 2018 and 252,419,601 shares issued and 252,260,300 shares outstanding at December 31, 2017 |
2,801 |
2,524 |
|||||
Class B, $0.01 par value, 125,000,000 shares authorized, 37,251,738 and 62,128,157 shares issued and outstanding at June 30, 2018 and December 31, 2017 |
373 |
622 |
|||||
Additional paid in capital |
5,123,089 |
4,666,365 |
|||||
Retained earnings |
245,564 |
43,519 |
|||||
Treasury stock, at cost, 588,203 shares and 159,301 shares at June 30, 2018 and December 31, 2017 |
(11,606) |
(735) |
|||||
Total stockholders' equity |
5,360,221 |
4,712,295 |
|||||
Noncontrolling interest |
739,926 |
1,168,411 |
|||||
Total equity |
6,100,147 |
5,880,706 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
9,139,443 |
$ |
8,793,198 |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(Unaudited, in thousands) | |||||||
Six Months Ended June 30, | |||||||
2018 |
2017 | ||||||
(In thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||
Net income |
$ |
246,421 |
$ |
94,084 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation, depletion and amortization |
266,751 |
152,285 |
|||||
Accretion of asset retirement obligations |
713 |
329 |
|||||
Gain on sale of property |
(5,055) |
— |
|||||
Loss on early extinguishment of debt |
— |
3,891 |
|||||
Amortization and write off of deferred loan origination costs |
2,374 |
1,803 |
|||||
Amortization of bond premium |
(258) |
(258) |
|||||
Stock-based compensation |
10,432 |
9,460 |
|||||
Deferred income tax expense |
56,568 |
30,476 |
|||||
Change in TRA liability |
82 |
20,549 |
|||||
Loss (gain) on derivatives |
20,259 |
(68,130) |
|||||
Net cash (paid) received for derivative settlements |
(7,211) |
2,115 |
|||||
Net cash paid for option premiums |
(26,330) |
(13,281) |
|||||
Other |
8,208 |
261 |
|||||
Changes in operating assets and liabilities, net of acquisitions: |
|||||||
Accounts receivable |
(42,993) |
(22,575) |
|||||
Accounts receivable—related parties |
147 |
74 |
|||||
Other current assets |
(31,419) |
46,318 |
|||||
Other noncurrent assets |
(318) |
(842) |
|||||
Accounts payable and accrued expenses |
(32,213) |
52,672 |
|||||
Revenue and severance taxes payable |
24,823 |
17,973 |
|||||
Net cash provided by operating activities |
490,981 |
327,204 |
|||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||
Development of oil and natural gas properties |
(854,228) |
(361,742) |
|||||
Acquisitions of oil and natural gas properties |
(56,014) |
(2,088,286) |
|||||
Additions to other property and equipment |
(48,047) |
(19,520) |
|||||
Proceeds from sales of oil and natural gas properties |
42,553 |
13,557 |
|||||
Maturity of short-term investments |
49,627 |
— |
|||||
Other |
35,018 |
(630) |
|||||
Net cash used in investing activities |
(831,091) |
(2,456,621) |
|||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||
Borrowings under long-term debt |
— |
452,480 |
|||||
Payments on long-term debt |
(1,461) |
(67,411) |
|||||
Debt issuance costs |
(45) |
(9,206) |
|||||
Proceeds from issuance of common stock, net |
— |
2,123,527 |
|||||
Repurchase of common stock |
(10,871) |
(137) |
|||||
Net cash (used in) provided by financing activities |
(12,377) |
2,499,253 |
|||||
Net (decrease) increase in cash, cash equivalents and restricted cash |
(352,487) |
369,836 |
|||||
Cash, cash equivalents and restricted cash at beginning of period |
554,189 |
136,669 |
|||||
Cash, cash equivalents and restricted cash at end of period |
$ |
201,702 |
$ |
506,505 |
|||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|||||||
Cash paid for interest |
$ |
64,047 |
$ |
15,102 |
|||
Cash paid for income taxes |
$ |
— |
$ |
200 |
|||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: |
|||||||
Asset retirement obligations incurred, including changes in estimate |
$ |
940 |
$ |
8,084 |
|||
Additions to oil and natural gas properties - change in capital accruals |
$ |
46,969 |
$ |
121,663 |
|||
Additions to other property and equipment funded by capital lease borrowings |
$ |
1,175 |
$ |
2,500 |
|||
Common stock issued for oil and natural gas properties |
$ |
— |
$ |
1,183,501 |
|||
Net premiums on options that settled during the period |
$ |
(34,598) |
$ |
(9,917) |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net income (loss) before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, interest income, income tax expense (benefit), change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, (gain) loss on sale of property, asset retirement obligation accretion expense, loss on early extinguishment of debt, inventory write down, (gain) loss on derivatives, net settlements on derivative instruments and net premiums on options that settled during the period.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measure of other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net (loss) income for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted EBITDAX | |||||||||||||||
(Unaudited, in thousands)(1) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2018 |
2017 |
2018 |
2017 | ||||||||||||
Adjusted EBITDAX reconciliation to net income: |
|||||||||||||||
Net income attributable to Parsley Energy, Inc. stockholders |
$ |
119,155 |
$ |
40,746 |
$ |
202,045 |
$ |
70,188 |
|||||||
Net income attributable to noncontrolling interests |
21,803 |
15,048 |
44,376 |
23,896 |
|||||||||||
Depreciation, depletion and amortization |
145,552 |
83,315 |
266,751 |
152,285 |
|||||||||||
Exploration and abandonment costs |
3,366 |
2,442 |
8,777 |
5,205 |
|||||||||||
Interest expense, net |
33,758 |
22,764 |
65,726 |
42,100 |
|||||||||||
Interest income |
(1,686) |
(2,178) |
(3,809) |
(4,549) |
|||||||||||
Income tax expense |
33,243 |
12,216 |
56,568 |
30,618 |
|||||||||||
EBITDAX |
355,191 |
174,353 |
640,434 |
319,743 |
|||||||||||
Change in TRA liability |
— |
— |
82 |
20,549 |
|||||||||||
Stock-based compensation |
5,363 |
5,251 |
10,432 |
9,460 |
|||||||||||
Acquisition costs |
(2) |
7,176 |
2 |
8,520 |
|||||||||||
Gain on sale of property |
(5,166) |
— |
(5,055) |
— |
|||||||||||
Accretion of asset retirement obligations |
359 |
193 |
713 |
329 |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
— |
3,891 |
|||||||||||
Inventory write down |
(17) |
— |
44 |
— |
|||||||||||
Loss (gain) on derivatives |
9,466 |
(43,514) |
20,259 |
(68,130) |
|||||||||||
Net settlements on derivative instruments |
(7,019) |
4,973 |
(9,892) |
4,672 |
|||||||||||
Net premiums on options that settled during the period |
(18,072) |
(5,063) |
(34,598) |
(9,917) |
|||||||||||
Adjusted EBITDAX |
$ |
340,103 |
$ |
143,369 |
$ |
622,421 |
$ |
289,117 |
__________ | ||
(1) |
Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Operating Cash Margin
The Company defines operating cash margin as net income (loss) before income tax expense, other revenues, depreciation, depletion and amortization, exploration and abandonment costs, stock-based compensation, acquisition costs, asset retirement obligation accretion expense, other operating expenses, net interest expense, (gain) loss on sale of property, prepayment premium on extinguished debt, derivative income (loss), change in TRA liability, interest income, and other income (expense). Operating cash margin is not a measure of operating income as determined by GAAP. The amounts included in the calculations of operating cash margin were computed in accordance with GAAP. Operating cash margin is presented herein and reconciled to the GAAP measure of net income attributable to Parsley Energy, Inc. stockholders. We use operating cash margin as an indicator of the Company's profitability and ability to manage its operating income. This measure is provided in addition to, and not as an alternative for, and should be read in conjunction with, the information contained in our condensed consolidated financial statements prepared in accordance with GAAP (including the notes), included in our SEC filings and posted on our website. The following table provides a reconciliation of operating cash margin to net income attributable to Parsley Energy, Inc. stockholders.
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2018 |
2017 |
2018 |
2017 | ||||||||||||
Net income attributable to Parsley Energy, Inc. stockholders |
$ |
119,155 |
$ |
40,746 |
$ |
202,045 |
$ |
70,188 |
|||||||
Net income attributable to noncontrolling interests |
21,803 |
15,048 |
44,376 |
23,896 |
|||||||||||
Income tax expense |
33,243 |
12,216 |
56,568 |
30,618 |
|||||||||||
Other revenues |
(1,953) |
(2,292) |
(5,547) |
(3,525) |
|||||||||||
Depreciation, depletion and amortization |
145,552 |
83,315 |
266,751 |
152,285 |
|||||||||||
Exploration and abandonment costs |
3,366 |
2,442 |
8,777 |
5,205 |
|||||||||||
Stock-based compensation |
5,363 |
5,251 |
10,432 |
9,460 |
|||||||||||
Acquisition costs |
(2) |
7,176 |
2 |
8,520 |
|||||||||||
Accretion of asset retirement obligations |
359 |
193 |
713 |
329 |
|||||||||||
Other operating expenses |
2,477 |
2,503 |
4,652 |
4,786 |
|||||||||||
Interest expense, net |
33,758 |
22,764 |
65,726 |
42,100 |
|||||||||||
Gain on sale of property |
(5,166) |
— |
(5,055) |
— |
|||||||||||
Prepayment premium on extinguishment of debt |
— |
— |
— |
3,891 |
|||||||||||
Derivative income (loss) |
9,466 |
(43,514) |
20,259 |
(68,130) |
|||||||||||
Change in TRA liability |
— |
— |
82 |
20,549 |
|||||||||||
Interest income |
(1,686) |
(2,178) |
(3,809) |
(4,549) |
|||||||||||
Other income (expense) |
(234) |
177 |
(535) |
(773) |
|||||||||||
Operating cash margin |
$ |
365,501 |
$ |
143,847 |
$ |
665,437 |
$ |
294,850 |
|||||||
Operating cash margin per Boe |
$ |
37.25 |
$ |
24.42 |
$ |
36.52 |
$ |
27.25 |
|||||||
Average price per Boe, without realized derivatives |
$ |
47.48 |
$ |
35.89 |
$ |
46.92 |
$ |
37.98 |
|||||||
Operating cash margin percentage |
78 |
% |
68 |
% |
78 |
% |
72 |
% |
Adjusted Net Income
Adjusted net income is not a measure of net income determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, (gain) loss on sale of property, exploration and abandonment costs, acquisition costs, loss on early extinguishment of debt, and change in TRA liability, while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net income (loss).
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted Net Income and Net Income Per Share | |||||||||||||||
(Unaudited, in thousands, except per share data) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2018 |
2017 |
2018 |
2017 | ||||||||||||
Net income - as reported |
$ |
119,155 |
$ |
40,746 |
$ |
202,045 |
$ |
70,188 |
|||||||
Adjustments: |
|||||||||||||||
Loss (gain) on derivatives |
9,466 |
(43,514) |
20,259 |
(68,130) |
|||||||||||
Net settlements on derivative instruments |
(7,019) |
4,973 |
(9,892) |
4,672 |
|||||||||||
Net premiums on options that settled during the period |
(18,072) |
(5,063) |
(34,598) |
(9,917) |
|||||||||||
Gain on sale of property |
(5,166) |
— |
(5,055) |
— |
|||||||||||
Exploration and abandonment costs |
3,366 |
2,442 |
8,777 |
5,205 |
|||||||||||
Acquisition costs |
(2) |
7,176 |
2 |
8,520 |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
— |
3,891 |
|||||||||||
Change in TRA liability |
— |
— |
82 |
20,549 |
|||||||||||
Noncontrolling interest |
1,688 |
— |
2,334 |
— |
|||||||||||
Change in estimated income tax |
2,961 |
5,762 |
3,482 |
11,658 |
|||||||||||
Adjusted net income |
$ |
106,377 |
$ |
12,522 |
$ |
187,436 |
$ |
46,636 |
|||||||
Net income per diluted share - as reported(1) |
$ |
0.44 |
$ |
0.17 |
$ |
0.76 |
$ |
0.30 |
|||||||
Adjustments: |
|||||||||||||||
Loss (gain) on derivatives |
$ |
0.03 |
$ |
(0.18) |
$ |
0.08 |
$ |
(0.29) |
|||||||
Net settlements on derivative instruments |
(0.02) |
0.02 |
(0.04) |
0.02 |
|||||||||||
Net premiums on options that settled during the period |
(0.07) |
(0.02) |
(0.13) |
(0.04) |
|||||||||||
Gain on sale of property |
(0.02) |
— |
(0.02) |
— |
|||||||||||
Exploration and abandonment costs |
0.01 |
0.01 |
0.03 |
0.02 |
|||||||||||
Acquisition costs |
— |
0.03 |
— |
0.04 |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
— |
0.02 |
|||||||||||
Change in TRA liability |
— |
— |
— |
0.09 |
|||||||||||
Noncontrolling interest |
0.01 |
— |
0.01 |
— |
|||||||||||
Change in estimated income tax |
0.01 |
0.02 |
0.01 |
0.04 |
|||||||||||
Adjusted net income per diluted share(2) |
$ |
0.39 |
$ |
0.05 |
$ |
0.70 |
$ |
0.20 |
|||||||
Basic weighted average shares outstanding - as reported(1) |
272,239 |
245,698 |
266,479 |
233,255 |
|||||||||||
Effect of dilutive securities: |
|||||||||||||||
Restricted Stock and Restricted Stock Units |
607 |
1,094 |
564 |
1,060 |
|||||||||||
Diluted weighted average shares outstanding - as reported(1) |
272,846 |
246,792 |
267,043 |
234,315 |
|||||||||||
Effect of dilutive securities: |
|||||||||||||||
Class B Common Stock |
— |
— |
— |
— |
|||||||||||
Restricted Stock and Restricted Stock Units |
— |
— |
— |
— |
|||||||||||
Diluted weighted average shares outstanding for adjusted net income(2) |
272,846 |
246,792 |
267,043 |
234,315 |
____________ | ||
(1) |
For the three and six months ended June 30, 2018 and 2017, the number of weighted average diluted shares used to calculate actual net income per share is based on the fact that, under the "if converted" and treasury stock methods, Class B Common Stock was not recognized because it would have been antidilutive. | |
(2) |
For purposes of calculating adjusted net income per diluted share for the three and six months ended June 30, 2018 and 2017, Class B Common Stock and restricted stock and restricted stock units were not recognized because they would have been antidilutive using the treasury stock method. |
Supplemental Information
Impact of ASC 606 Adoption
Parsley adopted ASC 606 effective January 1, 2018 using the modified retrospective approach. As a result, we changed our accounting policy for revenue recognition, which resulted in the following adjustments:
Three Months Ended June 30, 2018 | |||||||||||
ASC 605 |
Adjustment |
ASC 606 | |||||||||
Production revenues (in thousands): |
|||||||||||
Oil sales |
$ |
396,325 |
$ |
— |
$ |
396,325 |
|||||
Natural gas sales |
11,094 |
1,141 |
12,235 |
||||||||
Natural gas liquids sales |
51,945 |
5,330 |
57,275 |
||||||||
Total production revenues |
459,364 |
6,471 |
465,835 |
||||||||
Operating expenses |
|||||||||||
Transportation and processing costs |
— |
6,471 |
6,471 |
||||||||
Production revenues less transportation and processing costs |
$ |
459,364 |
$ |
— |
$ |
459,364 |
|||||
Net income attributable to Parsley, Inc. stockholders (in thousands) |
$ |
119,155 |
$ |
— |
$ |
119,155 |
|||||
Production: |
|||||||||||
Oil (MBbls) |
6,165 |
— |
6,165 |
||||||||
Natural gas (MMcf) |
8,287 |
948 |
9,235 |
||||||||
Natural gas liquids (MBbls) |
1,853 |
253 |
2,106 |
||||||||
Total (MBoe) |
9,399 |
412 |
9,811 |
||||||||
Average daily production volume: |
|||||||||||
Oil (Bbls) |
67,747 |
— |
67,747 |
||||||||
Natural gas (Mcf) |
91,066 |
10,418 |
101,484 |
||||||||
Natural gas liquids (Bbls) |
20,363 |
2,780 |
23,143 |
||||||||
Total (Boe) |
103,286 |
4,527 |
107,813 |
||||||||
Certain unit costs (per Boe): |
|||||||||||
Lease operating expenses |
$ |
3.82 |
$ |
(0.16) |
$ |
3.66 |
|||||
Transportation and processing costs |
$ |
— |
$ |
0.66 |
$ |
0.66 |
|||||
Production and ad valorem taxes |
$ |
2.91 |
$ |
(0.12) |
$ |
2.79 |
|||||
Depreciation, depletion and amortization |
$ |
15.49 |
$ |
(0.65) |
$ |
14.84 |
|||||
General and administrative expenses (including stock-based compensation) |
$ |
3.83 |
$ |
(0.16) |
$ |
3.67 |
|||||
General and administrative expenses (cash based) |
$ |
3.26 |
$ |
(0.14) |
$ |
3.12 |
|||||
Six Months Ended June 30, 2018 | |||||||||||
ASC 605 |
Adjustment |
ASC 606 | |||||||||
Production revenues (in thousands): |
|||||||||||
Oil sales |
$ |
727,428 |
$ |
— |
$ |
727,428 |
|||||
Natural gas sales |
26,680 |
2,979 |
29,659 |
||||||||
Natural gas liquids sales |
88,136 |
9,759 |
97,895 |
||||||||
Total production revenues |
842,244 |
12,738 |
854,982 |
||||||||
Operating expenses |
|||||||||||
Transportation and processing costs |
— |
12,738 |
12,738 |
||||||||
Production revenues less transportation and processing costs |
$ |
842,244 |
$ |
— |
$ |
842,244 |
|||||
Net income attributable to Parsley, Inc. stockholders (in thousands) |
$ |
202,045 |
$ |
— |
$ |
202,045 |
|||||
Production: |
|||||||||||
Oil (MBbls) |
11,506 |
— |
11,506 |
||||||||
Natural gas (MMcf) |
16,269 |
1,522 |
17,791 |
||||||||
Natural gas liquids (MBbls) |
3,317 |
432 |
3,749 |
||||||||
Total (MBoe) |
17,534 |
687 |
18,221 |
||||||||
Average daily production volume: |
|||||||||||
Oil (Bbls) |
63,569 |
— |
63,569 |
||||||||
Natural gas (Mcf) |
89,884 |
8,409 |
98,293 |
||||||||
Natural gas liquids (Bbls) |
18,326 |
2,387 |
20,713 |
||||||||
Total (Boe) |
96,873 |
3,796 |
100,669 |
||||||||
Certain unit costs (per Boe): |
|||||||||||
Lease operating expenses |
$ |
3.70 |
$ |
(0.15) |
$ |
3.55 |
|||||
Transportation and processing costs |
$ |
— |
$ |
0.70 |
$ |
0.70 |
|||||
Production and ad valorem taxes |
$ |
2.94 |
$ |
(0.11) |
$ |
2.83 |
|||||
Depreciation, depletion and amortization |
$ |
15.21 |
$ |
(0.57) |
$ |
14.64 |
|||||
General and administrative expenses |
$ |
4.05 |
$ |
(0.15) |
$ |
3.90 |
|||||
General and administrative expenses (cash based) |
$ |
3.46 |
$ |
(0.14) |
$ |
3.32 |
Changes to natural gas and NGLs sales were made in accordance with the control model defined in ASC 606. Under the new control model, we are required to identify and separately analyze each contract associated with revenues to determine the appropriate accounting application.
As a result of this analysis, we modified our accounting and presentation of natural gas and NGLs sales, and transportation and processing costs under certain marketing agreements. For additional information related to our adoption of ASC 606, please refer to Note 2—Summary of Accounting Policies—Impact of ASC 606 Adoption in our consolidated financial statements contained in our Quarterly Report on Form 10-Q, upon availability, for the three and six months ended June 30, 2018.
Open Derivatives Positions | |||||||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||||||
Open Crude Oil Derivatives Positions (1) | |||||||||||||||||||||||
3Q18 |
4Q18 |
1Q19 |
2Q19 |
3Q19 |
4Q19 | ||||||||||||||||||
Put Spreads - WTI (MBbls/d) (2) |
34.2 |
37.5 |
20.0 |
19.8 |
24.5 |
24.5 |
|||||||||||||||||
Long Put Price ($/Bbl) |
$ |
49.64 |
$ |
49.67 |
$ |
54.17 |
$ |
54.17 |
$ |
58.83 |
$ |
58.83 |
|||||||||||
Short Put Price ($/Bbl) |
$ |
39.64 |
$ |
39.67 |
$ |
44.17 |
$ |
44.17 |
$ |
48.83 |
$ |
48.83 |
|||||||||||
Three Way Collars - WTI (MBbls/d) (3) |
31.0 |
31.0 |
8.3 |
8.2 |
9.8 |
9.8 |
|||||||||||||||||
Short Call Price ($/Bbl) |
$ |
75.65 |
$ |
75.65 |
$ |
80.40 |
$ |
80.40 |
$ |
80.33 |
$ |
80.33 |
|||||||||||
Long Put Price ($/Bbl) |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.83 |
$ |
50.83 |
|||||||||||
Short Put Price ($/Bbl) |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.83 |
$ |
40.83 |
|||||||||||
Collars - WTI (MBbls/d) (4) |
3.0 |
3.0 |
|||||||||||||||||||||
Short Call Price ($/Bbl) |
$ |
61.31 |
$ |
61.31 |
|||||||||||||||||||
Long Put Price ($/Bbl) |
$ |
45.67 |
$ |
45.67 |
|||||||||||||||||||
MBbls/d Hedged - WTI |
68.2 |
71.5 |
28.3 |
28.0 |
34.2 |
34.2 |
|||||||||||||||||
Put Spreads - Midland (MBbls/d) (2) |
11.7 |
14.8 |
|||||||||||||||||||||
Long Put Price ($/Bbl) |
$ |
50.71 |
$ |
50.56 |
|||||||||||||||||||
Short Put Price ($/Bbl) |
$ |
40.71 |
$ |
40.56 |
|||||||||||||||||||
Mid-Cush Basis Swaps (MBbls/d) (5) |
11.3 |
11.3 |
14.7 |
7.9 |
|||||||||||||||||||
Swap Price ($/Bbl) |
$ |
(0.86) |
$ |
(0.86) |
$ |
(8.95) |
$ |
(9.08) |
|||||||||||||||
MBbls/d Hedged - Midland |
11.3 |
11.3 |
26.4 |
22.7 |
|||||||||||||||||||
Rollfactor Swaps (MBbl/d) (6) |
15.0 |
15.0 |
|||||||||||||||||||||
Swap Price ($/Bbl) |
$ |
0.60 |
$ |
0.60 |
|||||||||||||||||||
Premium Realization ($MM) (7) |
$ |
(17.9) |
$ |
(19.1) |
$ |
(11.6) |
$ |
(12.5) |
$ |
(9.8) |
$ |
(9.8) |
Parsley Energy, Inc. and Subsidiaries | |||||||
Open Natural Gas Derivatives Positions (1) | |||||||
3Q18 |
4Q18 | ||||||
Three Way Collars (MMBtu/d) (3) |
8,152 |
8,152 |
|||||
Short Call Price ($/MMBtu) |
$ |
3.60 |
$ |
3.60 |
|||
Long Put Price ($/MMBtu) |
$ |
3.00 |
$ |
3.00 |
|||
Short Put Price ($/MMBtu) |
$ |
2.75 |
$ |
2.75 |
|||
Total MMBtu/d Hedged |
8,152 |
8,152 |
__________ | ||
(1) |
As of 8/7/2018. Prices represent the weighted average price of contracts scheduled for settlement during the period. | |
(2) |
When the NYMEX price is above the long put price, Parsley receives the NYMEX price. When the NYMEX price is between the long put price and the short put price, Parsley receives the long put price. When the NYMEX price is below the short put price, Parsley receives the NYMEX price plus the difference between the short put price and the long put price. | |
(3) |
Functions similarly to put spreads except that when the index price is at or above the call price, Parsley receives the call price. | |
(4) |
When the NYMEX price is above the call price, Parsley receives the call price. When the NYMEX price is below the long put price, Parsley receives the long put price. When the NYMEX price is between the short call and long put prices, Parsley receives the NYMEX price. | |
(5) |
Parsley receives the swap price. | |
(6) |
These positions hedge the timing risk associated with Parsley's physical sales. Parsley generally sells crude oil for the delivery month at a sales price based on the average NYMEX price during that month, plus an adjustment calculated as a spread between the weighted average prices of the delivery month, the next month, and the following month during the period when the delivery month is the first month. | |
(7) |
Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. |
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-second-quarter-2018-financial-and-operating-results-raises-production-guidance-and-lowers-unit-cost-estimates-300693449.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, July 19, 2018 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) plans to report second quarter 2018 financial results on Tuesday, August 7, 2018, after the close of trading on the New York Stock Exchange. The company will host its quarterly conference call at 9:00 AM ET (8:00 AM CT) on Wednesday, August 8, 2018.
By Phone: |
Dial 877-407-0672 (United States/Canada) or 412-902-0003 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Wednesday, August 15 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13681890. | |
By Webcast: |
|
Select "Events & Presentations" under the "Investors" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-schedules-second-quarter-2018-earnings-release-and-conference-call-300683987.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 3, 2018 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended March 31, 2018. The Company has posted to its website a presentation that supplements the information in this release.
First Quarter 2018 Highlights
"Parsley Energy made a confident first step toward executing our simplified 2018 development program," said Bryan Sheffield, Parsley's Chairman and CEO. "Accelerated development last year not only gave Parsley a head start on securing high quality services and equipment, the corresponding production uplift also means we are benefiting disproportionately from currently higher oil prices. While Parsley is well positioned to benefit from ongoing oil price strength, operational continuity at a steady development pace remains our highest priority this year."
Operational Update
Parsley's strong sequential production growth was driven by solid operational execution and favorable well productivity across its acreage footprint, highlighted by efficient Delaware Basin operations and a rapid return to full production following winter weather events in January. Volume growth was also supplemented by an increase in non-operated completion activity.
Activity Overview
During the first quarter, the Company spud 43 and placed on production 41 gross operated horizontal wells. Parsley's working interest on wells placed on production was approximately 97%, with an average completed lateral length of approximately 9,100 feet. Completion activity was nearly evenly distributed between the Midland Basin and the Delaware Basin, where the Company placed on production 20 and 21 gross operated horizontal wells, respectively. We expect that development activity will be weighted more to the Midland Basin for the remainder of the year, consistent with prior Company commentary.
Notable Well Results
With four rigs currently active in Glasscock County, recent well results in Glasscock bode well for the production contribution associated with this sizable portion of Parsley's development program. Among these results, the two-well Catfish Hunter 12-1 pad registered strong peak 30-day production rates of 2,022 Boe per day (69% oil) and 2,004 Boe per day (72% oil), respectively. Both wells targeted the Wolfcamp B interval and were completed with approximately two-mile laterals.
Parsley increased Delaware Basin oil production by more than 50% during 1Q18 as compared to 4Q17 through a combination of strong well results, cycle time improvement, and enhanced net revenue interests associated with mineral ownership on 18 of 21 wells placed on production during the quarter. Parsley's 1Q18 Delaware Basin activity included the three-well Trees State 31-34 pad in Pecos County targeting the Upper Wolfcamp A, Lower Wolfcamp A, and Wolfcamp B zones. Early results from this pad are outstanding, including two Company-record Delaware wells with respective peak 30-day production rates of 2,115 Boe per day (85% oil) and 1,940 Boe per day (86% oil) on approximately two-mile laterals. Notably, these wells are among the first to be completed in the southeast portion of Parsley's Pecos County acreage position. The 21 gross operated horizontal wells Parsley placed on production during 1Q18 represent more lateral footage than the Company completed in the Delaware Basin during all of 2017.
Non-Operated Activity
Non-operated development activity increased during the first quarter with 15 gross (6 net) horizontal wells placed on production, the timing of which was slightly ahead of Company forecasts. Non-operated activity for the remainder of 2018 is expected to be minimal.
Takeaway Positioning
During 1Q18, Parsley reported an unhedged oil price realization of $61.99/Bbl net of transportation costs, representing a differential of just $0.90/Bbl relative to the average NYMEX WTI price for the quarter.
By virtue of proactive steps taken to bolster the Company's firm transportation capacity and diversify its regional pricing exposure, Parsley now enjoys certain advantages with respect to its takeaway and marketing arrangements. Parsley currently has firm transport agreements covering 95,000 Bo per day of gross operated oil production. Additionally, the Company has diversified pricing agreements with large scale oil purchasers that price a portion of Parsley's barrels relative to Magellan East Houston, Cushing, and Midland benchmarks. During 2017, Parsley also layered on Midland-Cushing basis swaps that provide additional regional price protection during 2018.
"Our proactive marketing strategy has put us in a position of strength from both a flow assurance and realized pricing standpoint," said Matt Gallagher, Parsley's President and COO. "Given the interconnect flexibility, oil quality, scale, and growth visibility we can provide, our crude production is attractive to premier purchasers."
Financial Update
During 1Q18, the Company recorded net income attributable to its stockholders of $82.9 million, or $0.32 per share, compared to net income of $49.9 million, or $0.16 per share, during 4Q17. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, and adding back the non-controlling interest allocated to Class B stockholders, adjusted net income for 1Q18 was $81.1 million, or $0.31 per share, compared to $95.9 million, or $0.30 per share, in 4Q17.(2)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 1Q18 was $282.3 million, up 30% compared to the same measure in 4Q17.(2)
Parsley demonstrated strong cost control during the first quarter of 2018. The Company reported LOE per Boe of $3.43,(1) below the Company-provided guidance range for full-year average LOE per Boe. Both G&A per Boe and cash based G&A per Boe, which excludes stock-based compensation expense, decreased quarter-over-quarter and year-over-year to $4.16(1) and $3.56,(1) respectively. Favorable trends in cash operating costs and strong realized pricing drove a robust operating cash margin of $35.65 per Boe, or 77% of average realized price per Boe.(3)
Parsley reported capital expenditures of $424 million during the quarter, comprised of $373 million for drilling and completion activity and $51 million for facilities and infrastructure, including saltwater disposal wells. In addition to spending associated with the above-mentioned 43 operated horizontal spuds and 41 operated horizontal wells placed on production, reported 1Q18 capital expenditures include $14 million of expenses associated with non-operated activity. With planned activity weighted more to the lower-cost Midland Basin for the remainder of 2018, we expect gross development costs per operated well to decrease from 1Q18 levels. We expect net development costs per operated well to decrease for the same reason, along with an expected reduction in average working interest.
Liquidity and Hedging
Parsley amended its revolving credit agreement on April 30, 2018, thereby increasing its borrowing base from $1.8 billion to $2.3 billion while maintaining the Company's elected commitment amount of $1.0 billion. As of March 31, 2018, Parsley had approximately $1.5 billion of liquidity, consisting of $500 million of cash, cash equivalents, and short-term investments, and an undrawn amount of $991 million on the Company's revolver.(4)
Almost all of Parsley's expected 2018 oil production is subject to hedge protection, and the Company recently added to its 2019 hedge position. Parsley's hedging strategy protects its balance sheet and anticipated cash flow while retaining significant exposure to higher commodity prices. For details on Parsley's hedging position, please see the tables below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the three months ended March 31, 2018.
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the first quarter of 2018 on Friday, May 4 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through May 18 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13678639. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Events & Presentations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
- Tables to Follow -
___________ | ||
(1) |
Natural gas and natural gas liquids ("NGLs") sales and associated production volumes for the three months ended March 31, 2018 reflect adjustments associated with Parsley's adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC 606"), effective January 1, 2018. Accordingly, all references to 1Q18 production volumes and per Boe unit costs likewise reflect this adoption, which has the effect of increasing certain natural gas and NGLs volumes and revenues, offset by a corresponding transportation and processing cost such that there is no change to reported net income. The recognition and presentation of oil volumes and associated revenues and expenses are unaffected by the adoption of ASC 606. | |
Previously provided full-year guidance for production volumes and unit costs incorporated the anticipated effect of the adoption of ASC 606. | ||
For more information on ASC 606 and a reconciliation of 1Q18 production and unit costs under ASC 605 and as adjusted under ASC 606, please see the table and associated commentary below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the three months ended March 31, 2018. | ||
(2) |
"Adjusted EBITDAX" and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). For definitions and reconciliations of the non-GAAP financial measures of adjusted EBITDAX and adjusted net income to GAAP financial measures, please see the tables and associated commentary below under Reconciliation of Non-GAAP Financial Measures. | |
(3) |
"Operating cash margin" as used in this release represents the Company's average sales price (without realized derivatives) per Boe less lease operating expense per Boe, transportation and processing costs per Boe, production and ad valorem taxes per Boe, and cash based general and administrative expense per Boe (exclusive of stock-based compensation), each of which reflects the adoption of ASC 606. Sales price and cost components referenced in the calculation of operating cash margin can be found in "Selected Operating Data" in the accompanying financial tables. | |
(4) |
Fully undrawn revolver balance is net of letters of credit. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Selected Operating Data | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
March 31, 2018 |
December 31, 2017 |
March 31, 2017 | |||||||||
Net production volumes: |
|||||||||||
Oil (MBbls) |
5,341 |
4,737 |
3,394 |
||||||||
Natural gas (MMcf) (1) |
8,556 |
7,221 |
4,419 |
||||||||
Natural gas liquids (MBbls) (1) |
1,643 |
1,449 |
800 |
||||||||
Total (MBoe) |
8,410 |
7,390 |
4,931 |
||||||||
Average daily net production (Boe/d) |
93,444 |
80,327 |
54,789 |
||||||||
Average sales prices (2) : |
|||||||||||
Oil, without realized derivatives (per Bbl) |
$ |
61.99 |
$ |
53.95 |
$ |
50.01 |
|||||
Oil, with realized derivatives (per Bbl) |
$ |
58.32 |
$ |
50.88 |
$ |
48.52 |
|||||
Natural gas, without realized derivatives (per Mcf) |
$ |
2.04 |
$ |
2.15 |
$ |
2.82 |
|||||
Natural gas, with realized derivatives (per Mcf) |
$ |
2.06 |
$ |
2.13 |
$ |
2.80 |
|||||
NGLs (per Bbl) |
$ |
24.72 |
$ |
26.84 |
$ |
21.77 |
|||||
Total, without realized derivatives (per Boe) |
$ |
46.27 |
$ |
41.94 |
$ |
40.48 |
|||||
Total, with realized derivatives (per Boe) |
$ |
43.97 |
$ |
39.96 |
$ |
39.44 |
|||||
Average costs (per Boe) (3): |
|||||||||||
Lease operating expenses |
$ |
3.43 |
$ |
3.44 |
$ |
3.57 |
|||||
Transportation and processing costs |
$ |
0.75 |
$ |
— |
$ |
— |
|||||
Production and ad valorem taxes |
$ |
2.88 |
$ |
3.01 |
$ |
2.26 |
|||||
Depreciation, depletion and amortization |
$ |
14.41 |
$ |
14.23 |
$ |
13.99 |
|||||
General and administrative expenses (including stock-based compensation) |
$ |
4.16 |
$ |
4.72 |
$ |
4.88 |
|||||
General and administrative expenses (cash based) |
$ |
3.56 |
$ |
4.04 |
$ |
4.02 |
___________ | ||
(1) |
Natural gas and NGLs volumes for the three months ended March 31, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. | |
(2) |
Average prices shown in the table reflect prices both before and after the effects of our realized commodity hedging transactions. Our calculations of such effects include both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. Realized oil prices are net of transportation costs. Realized prices for certain gas and NGLs volumes are net of transportation, gathering, and processing costs as stipulated by ASC 606. For more information, please see associated commentary below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the three months ended March 31, 2018. | |
(3) |
Average costs per Boe for the three months ended March 31, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Statements of Operations | |||||||
(Unaudited, in thousands, except for per share data)(1) | |||||||
Three Months Ended March 31, | |||||||
2018 |
2017 | ||||||
REVENUES |
|||||||
Oil sales |
$ |
331,103 |
$ |
169,745 |
|||
Natural gas sales (2) |
17,424 |
12,467 |
|||||
Natural gas liquids sales (2) |
40,620 |
17,413 |
|||||
Other |
3,594 |
1,233 |
|||||
Total revenues |
392,741 |
200,858 |
|||||
OPERATING EXPENSES |
|||||||
Lease operating expenses |
28,832 |
17,627 |
|||||
Transportation and processing costs (2) |
6,267 |
— |
|||||
Production and ad valorem taxes |
24,186 |
11,162 |
|||||
Depreciation, depletion and amortization |
121,199 |
68,970 |
|||||
General and administrative expenses (including stock-based compensation) |
34,995 |
24,042 |
|||||
Exploration and abandonment costs |
5,411 |
2,763 |
|||||
Acquisition costs |
4 |
1,344 |
|||||
Accretion of asset retirement obligations |
354 |
136 |
|||||
Other operating expenses |
2,175 |
2,283 |
|||||
Total operating expenses |
223,423 |
128,327 |
|||||
OPERATING INCOME (LOSS) |
169,318 |
72,531 |
|||||
OTHER INCOME (EXPENSE) |
|||||||
Interest expense, net |
(31,968) |
(19,336) |
|||||
Loss on sale of property |
(111) |
— |
|||||
Loss on early extinguishment of debt |
— |
(3,891) |
|||||
(Loss) gain on derivatives |
(10,793) |
24,616 |
|||||
Change in TRA liability |
(82) |
(20,549) |
|||||
Interest income |
2,123 |
2,371 |
|||||
Other income |
301 |
950 |
|||||
Total other expense, net |
(40,530) |
(15,839) |
|||||
INCOME BEFORE INCOME TAXES |
128,788 |
56,692 |
|||||
INCOME TAX EXPENSE |
(23,325) |
(18,402) |
|||||
NET INCOME |
105,463 |
38,290 |
|||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
(22,573) |
(8,848) |
|||||
NET INCOME ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS |
$ |
82,890 |
$ |
29,442 |
|||
Net income per common share: |
|||||||
Basic |
$ |
0.32 |
$ |
0.13 |
|||
Diluted |
$ |
0.32 |
$ |
0.13 |
|||
Weighted average common shares outstanding: |
|||||||
Basic |
260,654 |
220,674 |
|||||
Diluted |
261,639 |
221,697 |
___________ | ||
(1) |
Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. | |
(2) |
Natural gas and NGLs sales and transportation and processing costs for the three months ended March 31, 2018 reflect adjustments associated with Parsley's adoption of ASC 606, effective January 1, 2018. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Balance Sheets | |||||||
(Unaudited, in thousands) | |||||||
March 31, 2018 |
December 31, 2017 | ||||||
(In thousands) | |||||||
ASSETS |
|||||||
CURRENT ASSETS |
|||||||
Cash and cash equivalents |
$ |
350,762 |
$ |
554,189 |
|||
Short-term investments |
149,345 |
149,283 |
|||||
Accounts receivable: |
|||||||
Joint interest owners and other |
49,221 |
42,174 |
|||||
Oil, natural gas and NGLs |
159,314 |
123,147 |
|||||
Related parties |
311 |
388 |
|||||
Short-term derivative instruments, net |
34,563 |
41,957 |
|||||
Assets held for sale |
— |
1,790 |
|||||
Other current assets |
6,530 |
6,558 |
|||||
Total current assets |
750,046 |
919,486 |
|||||
PROPERTY, PLANT AND EQUIPMENT |
|||||||
Oil and natural gas properties, successful efforts method |
8,964,262 |
8,551,314 |
|||||
Accumulated depreciation, depletion and impairment |
(938,629) |
(822,459) |
|||||
Total oil and natural gas properties, net |
8,025,633 |
7,728,855 |
|||||
Other property, plant and equipment, net |
131,691 |
106,587 |
|||||
Total property, plant and equipment, net |
8,157,324 |
7,835,442 |
|||||
NONCURRENT ASSETS |
|||||||
Assets held for sale, net |
— |
14,985 |
|||||
Long-term derivative instruments, net |
25,150 |
15,732 |
|||||
Other noncurrent assets |
8,128 |
7,553 |
|||||
Total noncurrent assets |
33,278 |
38,270 |
|||||
TOTAL ASSETS |
$ |
8,940,648 |
$ |
8,793,198 |
|||
LIABILITIES AND EQUITY |
|||||||
CURRENT LIABILITIES |
|||||||
Accounts payable and accrued expenses |
$ |
415,283 |
$ |
407,698 |
|||
Revenue and severance taxes payable |
124,974 |
109,917 |
|||||
Current portion of long-term debt |
2,388 |
2,352 |
|||||
Short-term derivative instruments, net |
74,675 |
84,919 |
|||||
Current portion of asset retirement obligations |
7,308 |
7,203 |
|||||
Total current liabilities |
624,628 |
612,089 |
|||||
NONCURRENT LIABILITIES |
|||||||
Liabilities related to assets held for sale |
— |
405 |
|||||
Long-term debt |
2,179,996 |
2,179,525 |
|||||
Asset retirement obligations |
20,476 |
19,967 |
|||||
Deferred tax liability |
55,730 |
21,403 |
|||||
Payable pursuant to tax receivable agreement |
62,681 |
58,479 |
|||||
Long-term derivative instruments, net |
27,487 |
20,624 |
|||||
Total noncurrent liabilities |
2,346,370 |
2,300,403 |
|||||
COMMITMENTS AND CONTINGENCIES |
|||||||
STOCKHOLDERS' EQUITY |
|||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding |
— |
— |
|||||
Common stock |
|||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 268,550,575 shares issued and 268,112,160 shares outstanding at March 31, 2018 and 252,419,601 shares issued and 252,260,300 shares outstanding at December 31, 2017 |
2,686 |
2,524 |
|||||
Class B, $0.01 par value, 125,000,000 shares authorized, 48,731,731 and 62,128,157 shares issued and outstanding at March 31, 2018 and December 31, 2017 |
487 |
622 |
|||||
Additional paid in capital |
4,911,682 |
4,666,365 |
|||||
Retained earnings |
126,409 |
43,519 |
|||||
Treasury stock, at cost, 438,415 shares and 159,301 shares at March 31, 2018 and December 31, 2017 |
(7,200) |
(735) |
|||||
Total stockholders' equity |
5,034,064 |
4,712,295 |
|||||
Noncontrolling interest |
935,586 |
1,168,411 |
|||||
Total equity |
5,969,650 |
5,880,706 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
8,940,648 |
$ |
8,793,198 |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(Unaudited, in thousands) | |||||||
Three Months Ended March 31, | |||||||
2018 |
2017 | ||||||
(In thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||
Net income |
$ |
105,463 |
$ |
38,290 |
|||
Adjustments to reconcile net income to net cash provided by operating activities: |
|||||||
Depreciation, depletion and amortization |
121,199 |
68,970 |
|||||
Accretion of asset retirement obligations |
354 |
136 |
|||||
Loss on sale of property |
111 |
— |
|||||
Loss on early extinguishment of debt |
— |
3,891 |
|||||
Amortization and write off of deferred loan origination costs |
1,189 |
783 |
|||||
Amortization of bond premium |
(129) |
(129) |
|||||
Stock-based compensation |
5,069 |
4,209 |
|||||
Deferred income tax expense |
23,325 |
18,402 |
|||||
Change in TRA liability |
82 |
20,549 |
|||||
Loss (gain) on derivatives |
10,793 |
(24,616) |
|||||
Net cash paid for derivative settlements |
(1,903) |
(1,188) |
|||||
Net cash paid for option premiums |
(13,506) |
(16,291) |
|||||
Net premiums paid on options that settled during the period |
(16,526) |
(4,854) |
|||||
Other |
5,215 |
118 |
|||||
Changes in operating assets and liabilities, net of acquisitions: |
|||||||
Accounts receivable |
(43,214) |
(7,025) |
|||||
Accounts receivable—related parties |
77 |
103 |
|||||
Other current assets |
20,361 |
(85,460) |
|||||
Other noncurrent assets |
(635) |
(902) |
|||||
Accounts payable and accrued expenses |
(5,427) |
17,676 |
|||||
Revenue and severance taxes payable |
15,057 |
9,363 |
|||||
Net cash provided by operating activities |
226,955 |
42,025 |
|||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||
Development of oil and natural gas properties |
(411,073) |
(161,003) |
|||||
Acquisitions of oil and natural gas properties |
(27,447) |
(589,286) |
|||||
Additions to other property and equipment |
(28,248) |
(10,628) |
|||||
Proceeds from sales and exchanges of oil and natural gas properties |
43,228 |
— |
|||||
Other |
349 |
— |
|||||
Net cash used in investing activities |
(423,191) |
(760,917) |
|||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||
Borrowings under long-term debt |
— |
451,500 |
|||||
Payments on long-term debt |
(694) |
(66,328) |
|||||
Debt issuance costs |
(32) |
(6,280) |
|||||
Proceeds from issuance of common stock, net |
— |
2,123,486 |
|||||
Repurchase of common stock |
(6,465) |
(112) |
|||||
Net cash (used in) provided by financing activities |
(7,191) |
2,502,266 |
|||||
Net (decrease) increase in cash, cash equivalents and restricted cash |
(203,427) |
1,783,374 |
|||||
Cash, cash equivalents and restricted cash at beginning of period |
554,189 |
136,669 |
|||||
Cash, cash equivalents and restricted cash at end of period |
$ |
350,762 |
$ |
1,920,043 |
|||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|||||||
Cash paid for interest |
$ |
29,455 |
$ |
2,463 |
|||
Cash paid for income taxes |
$ |
— |
$ |
200 |
|||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: |
|||||||
Asset retirement obligations incurred, including changes in estimate |
$ |
359 |
$ |
3,501 |
|||
Additions to oil and natural gas properties - change in capital accruals |
$ |
13,013 |
$ |
27,463 |
|||
Additions to other property and equipment funded by capital lease borrowings |
$ |
491 |
$ |
881 |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net income (loss) before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, income tax expense (benefit), change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, (gain) loss on sale of property, asset retirement obligation accretion expense, loss on early extinguishment of debt, inventory write down, (gain) loss on derivatives, net settlements on derivative instruments, net premium realizations on options that settled during the period.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measure of other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net (loss) income for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||
Adjusted EBITDAX | |||||||
(Unaudited, in thousands)(1) | |||||||
Three Months Ended March 31, | |||||||
2018 |
2017 | ||||||
Adjusted EBITDAX reconciliation to net income: |
|||||||
Net income attributable to Parsley Energy, Inc. stockholders |
$ |
82,890 |
$ |
29,442 |
|||
Net income attributable to noncontrolling interests |
22,573 |
8,848 |
|||||
Depreciation, depletion and amortization |
121,199 |
68,970 |
|||||
Exploration and abandonment costs |
5,411 |
2,763 |
|||||
Interest expense, net |
29,845 |
16,965 |
|||||
Income tax expense |
23,325 |
18,402 |
|||||
EBITDAX |
285,243 |
145,390 |
|||||
Change in TRA liability |
82 |
20,549 |
|||||
Stock-based compensation |
5,069 |
4,209 |
|||||
Acquisition costs |
4 |
1,344 |
|||||
Loss on sale of property |
111 |
— |
|||||
Accretion of asset retirement obligations |
354 |
136 |
|||||
Loss on early extinguishment of debt |
— |
3,891 |
|||||
Inventory write down |
61 |
— |
|||||
Loss (gain) on derivatives |
10,793 |
(24,616) |
|||||
Net settlements on derivative instruments |
(2,873) |
(301) |
|||||
Net premium realization on options that settled during the period |
(16,526) |
(4,854) |
|||||
Adjusted EBITDAX |
$ |
282,318 |
$ |
145,748 |
___________ | ||
(1) |
Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income
Adjusted net income is not a measure of net income determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, (gain) loss on sale of property, exploration and abandonment costs, acquisition costs, loss on early extinguishment of debt, and change in TRA liability, while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net income (loss).
Parsley Energy, Inc. and Subsidiaries | |||||||
Adjusted Net Income and Net Income Per Share | |||||||
(Unaudited, in thousands, except per share data) | |||||||
Three Months Ended March 31, | |||||||
2018 |
2017 | ||||||
Net income - as reported |
$ |
82,890 |
$ |
29,442 |
|||
Adjustments: |
|||||||
Loss (gain) on derivatives |
10,793 |
(24,616) |
|||||
Net settlements on derivative instruments |
(2,873) |
(301) |
|||||
Net premium realization on options that settled during the period |
(16,526) |
(4,854) |
|||||
Loss on sale of property |
111 |
— |
|||||
Exploration and abandonment costs |
5,411 |
2,763 |
|||||
Acquisition costs |
4 |
1,344 |
|||||
Loss on early extinguishment of debt |
— |
3,891 |
|||||
Change in TRA liability |
82 |
20,549 |
|||||
Noncontrolling interest |
647 |
— |
|||||
Change in estimated income tax |
522 |
5,950 |
|||||
Adjusted net income |
$ |
81,061 |
$ |
34,168 |
|||
Net income per diluted share - as reported(1) |
$ |
0.32 |
$ |
0.13 |
|||
Adjustments: |
|||||||
Loss (gain) on derivatives |
$ |
0.04 |
$ |
(0.11) |
|||
Net settlements on derivative instruments |
(0.01) |
— |
|||||
Net premium realization on options that settled during the period |
(0.06) |
(0.02) |
|||||
Loss on sale of property |
— |
— |
|||||
Exploration and abandonment costs |
0.02 |
0.01 |
|||||
Acquisition costs |
— |
0.01 |
|||||
Loss on early extinguishment of debt |
— |
0.01 |
|||||
Change in TRA liability |
— |
0.09 |
|||||
Noncontrolling interest |
— |
— |
|||||
Change in estimated income tax |
— |
0.03 |
|||||
Adjusted net income per diluted share(2) |
$ |
0.31 |
$ |
0.15 |
|||
Basic weighted average shares outstanding - as reported(1) |
260,654 |
220,674 |
|||||
Effect of dilutive securities: |
|||||||
Restricted Stock and Restricted Stock Units |
985 |
1,023 |
|||||
Diluted weighted average shares outstanding - as reported(1) |
261,639 |
221,697 |
|||||
Effect of dilutive securities: |
|||||||
Class B Common Stock |
— |
— |
|||||
Restricted Stock and Restricted Stock Units |
— |
— |
|||||
Diluted weighted average shares outstanding for adjusted net income(2) |
261,639 |
221,697 |
___________ | ||
(1) |
For the three months ended March 31, 2018 and 2017, the number of weighted average diluted shares used to calculate actual net income per share is based on the fact that, under the "if converted" and treasury stock methods, Class B Common Stock was not recognized because it would have been antidilutive. | |
(2) |
For purposes of calculating adjusted net income per diluted share for the three months ended March 31, 2018 and 2017, Class B Common Stock and restricted stock and restricted stock units were not recognized because they would have been antidilutive using the treasury stock method. |
Supplemental Information
Impact of ASC 606 Adoption
Parsley adopted ASC 606 effective January 1, 2018 using the modified retrospective approach. As a result, we changed our accounting policy for revenue recognition, which resulted in the following adjustments:
Three Months Ended March 31, 2018 | |||||||||||
ASC 605 |
Adjustment |
ASC 606 | |||||||||
Production revenues (in thousands): |
|||||||||||
Oil sales |
$ |
331,103 |
$ |
— |
$ |
331,103 |
|||||
Natural gas sales |
15,586 |
1,838 |
17,424 |
||||||||
Natural gas liquids sales |
36,191 |
4,429 |
40,620 |
||||||||
Total production revenues |
382,880 |
6,267 |
389,147 |
||||||||
Operating expenses |
|||||||||||
Transportation and processing costs |
— |
6,267 |
6,267 |
||||||||
Production revenues less transportation and processing costs |
$ |
382,880 |
$ |
— |
$ |
382,880 |
|||||
Net income attributable to Parsley, Inc. stockholders (in thousands) |
$ |
82,890 |
$ |
— |
$ |
82,890 |
|||||
Production: |
|||||||||||
Oil (MBbls) |
5,341 |
— |
5,341 |
||||||||
Natural gas (MMcf) |
7,982 |
574 |
8,556 |
||||||||
Natural gas liquids (MBbls) |
1,464 |
179 |
1,643 |
||||||||
Total (MBoe) |
8,083 |
327 |
8,410 |
||||||||
Average daily production volume: |
|||||||||||
Oil (Bbls) |
59,344 |
— |
59,344 |
||||||||
Natural gas (Mcf) |
88,689 |
6,378 |
95,067 |
||||||||
Natural gas liquids (Bbls) |
16,267 |
1,989 |
18,256 |
||||||||
Total (Boe) |
89,811 |
3,633 |
93,444 |
||||||||
Certain unit costs (per Boe): |
|||||||||||
Lease operating expenses |
$ |
3.57 |
$ |
(0.14) |
$ |
3.43 |
|||||
Transportation and processing costs |
$ |
— |
$ |
0.75 |
$ |
0.75 |
|||||
Production and ad valorem taxes |
$ |
2.99 |
$ |
(0.11) |
$ |
2.88 |
|||||
Depreciation, depletion and amortization |
$ |
14.99 |
$ |
(0.58) |
$ |
14.41 |
|||||
General and administrative expenses (including stock-based compensation) |
$ |
4.33 |
$ |
(0.17) |
$ |
4.16 |
|||||
General and administrative expenses (cash based) |
$ |
3.70 |
$ |
(0.14) |
$ |
3.56 |
Changes to natural gas and NGLs sales were made in accordance with the control model defined in ASC 606. Under the new control model, we are required to identify and separately analyze each contract associated with revenues to determine the appropriate accounting application.
As a result of this analysis, we modified our accounting and presentation of natural gas and NGLs sales, and transportation and processing costs under certain marketing agreements. For additional information related to our adoption of ASC 606, please refer to Note 2—Summary of Accounting Policies—Impact of ASC 606 Adoption in our consolidated financial statements contained in our Quarterly Report on Form 10-Q, upon availability, for the three months ended March 31, 2018.
Open Derivatives Positions | ||||||||||||||||||||
Parsley Energy, Inc. and Subsidiaries | ||||||||||||||||||||
Open Crude Oil Derivatives Positions (1) | ||||||||||||||||||||
2Q18 |
3Q18 |
4Q18 |
1Q19 |
2Q19 |
3Q19 |
4Q19 | ||||||||||||||
Put Spreads (MBbls/d) (2) |
11.5 |
34.2 |
37.5 |
20.6 |
20.3 |
11.4 |
11.4 | |||||||||||||
Long Put Price ($/Bbl) |
$ |
52.50 |
$ |
49.64 |
$ |
49.67 |
$ |
54.32 |
$ |
54.32 |
$ |
55.71 |
$ |
55.71 | ||||||
Short Put Price ($/Bbl) |
$ |
42.50 |
$ |
39.64 |
$ |
39.67 |
$ |
44.32 |
$ |
44.32 |
$ |
45.71 |
$ |
45.71 | ||||||
Three Way Collars (MBbls/d) (3) |
49.5 |
31.0 |
31.0 |
8.3 |
8.2 |
9.8 |
9.8 | |||||||||||||
Short Call Price ($/Bbl) |
$ |
68.11 |
$ |
75.65 |
$ |
75.65 |
$ |
80.40 |
$ |
80.40 |
$ |
80.33 |
$ |
80.33 | ||||||
Long Put Price ($/Bbl) |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.83 |
$ |
50.83 | ||||||
Short Put Price ($/Bbl) |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.83 |
$ |
40.83 | ||||||
Premium Realization ($ MM) (4) |
$ |
(16.5) |
$ |
(17.9) |
$ |
(19.1) |
$ |
(8.4) |
$ |
(8.4) |
$ |
(5.5) |
$ |
(5.5) | ||||||
Collars (MBbls/d) (5) |
3.0 |
3.0 |
3.0 |
|||||||||||||||||
Short Call Price ($/Bbl) |
$ |
61.31 |
$ |
61.31 |
$ |
61.31 |
||||||||||||||
Long Put Price ($/Bbl) |
$ |
45.67 |
$ |
45.67 |
$ |
45.67 |
||||||||||||||
Total MBbls/d Hedged |
64.0 |
68.2 |
71.5 |
28.9 |
28.6 |
21.2 |
21.2 | |||||||||||||
Mid-Cush Basis Swaps (MBbls/d) (6) |
11.4 |
11.3 |
11.3 |
|||||||||||||||||
Swap Price ($/Bbl) |
$ |
(0.86) |
$ |
(0.86) |
$ |
(0.86) |
||||||||||||||
Rollfactor Swaps (MBbl/d) (7) |
15.0 |
15.0 |
15.0 |
|||||||||||||||||
Swap Price ($/Bbl) |
$ |
0.60 |
$ |
0.60 |
$ |
0.60 |
Parsley Energy, Inc. and Subsidiaries | ||||||||
Open Natural Gas Derivatives Positions (1) | ||||||||
2Q18 |
3Q18 |
4Q18 | ||||||
Three Way Collars (MMBtu/d) (3) |
8,152 |
8,152 |
8,152 | |||||
Short Call Price ($/MMBtu) |
$ |
3.60 |
$ |
3.60 |
$ |
3.60 | ||
Long Put Price ($/MMBtu) |
$ |
3.00 |
$ |
3.00 |
$ |
3.00 | ||
Short Put Price ($/MMBtu) |
$ |
2.75 |
$ |
2.75 |
$ |
2.75 | ||
Total MMBtu/d Hedged |
8,152 |
8,152 |
8,152 |
_________ | ||
(1) |
As of 5/2/2018. Prices represent the weighted average price of contracts scheduled for settlement during the period. | |
(2) |
When the NYMEX price is above the long put price, Parsley receives the NYMEX price. When the NYMEX price is between the long put price and the short put price, Parsley receives the long put price. When the NYMEX price is below the short put price, Parsley receives the NYMEX price plus the difference between the short put price and the long put price. | |
(3) |
Functions similarly to put spreads except that when the index price is at or above the call price, Parsley receives the call price. | |
(4) |
Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | |
(5) |
When the NYMEX price is above the call price, Parsley receives the call price. When the NYMEX price is below the long put price, Parsley receives the long put price. When the NYMEX price is between the short call and long put prices, Parsley receives the NYMEX price. | |
(6) |
Parsley receives the swap price. | |
(7) |
These positions hedge the timing risk associated with Parsley's physical sales. Parsley generally sells crude oil for the delivery month at a sales price based on the average NYMEX price during that month, plus an adjustment calculated as a spread between the weighted average prices of the delivery month, the next month, and the following month during the period when the delivery month is the first month. |
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-first-quarter-2018-financial-and-operating-results-300642458.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Feb. 23, 2018 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) (the "Company") today announced that the Company will participate in three upcoming conferences. The Company will participate in Simmons & Company's Annual International Energy Conference in Las Vegas, Nevada on February 28 and March 1, Raymond James' Annual Institutional Investor Conference in Orlando, Florida on March 5 and March 6, and Scotia Howard Weil's Annual Energy Conference in New Orleans, Louisiana on March 26 and March 27.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-to-participate-in-upcoming-conferences-300603500.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Feb. 21, 2018 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended December 31, 2017. The Company has posted to its website a presentation that supplements the information in this release.
Fourth Quarter 2017 Highlights
"Following a transformative 2017 for Parsley Energy, we are eager to efficiently harvest the ample resource base our team has assembled, tested, and optimized," said Bryan Sheffield, Parsley's Chairman and CEO. "Even at a steady activity pace, we look forward to delivering compelling high-margin growth on a simplified 2018 development program."
Operational Highlights
During 4Q17, Parsley spud 42 and completed 41 horizontal wells with an average working interest of 95% and an average lateral length of approximately 9,500 feet.
Parsley's 4Q17 activity included a three-well stacked pad in Martin County targeting the Lower Spraberry, Wolfcamp A, and Wolfcamp B zones. The Strain Ranch 12-1 pad is part of the Company's growing activity on its expanded asset base in the northern Midland Basin. Early results from these three 1.5 mile lateral wells are promising, with peak 30-day production rates averaging 175 Boe (139 Bo) per day per thousand lateral feet.
"Acquisitions completed in 2017 transformed the long-term resource potential of our Company," said Matt Gallagher, Parsley's President and COO. "Results like the Strain Ranch pad highlight the high-return opportunity set we possess, and having integrated and gained experience on acquired assets, we are prepared to capitalize on this sizable resource opportunity."
Financial Highlights
During 4Q17, the Company recorded net income attributable to its stockholders of $49.9 million, or $0.20 per weighted average share, compared to a net loss of $13.3 million, or $0.05 per weighted average share, during 3Q17. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, and adding back the non-controlling interest allocated to Class B stockholders, adjusted net income for 4Q17 was $95.9 million, or $0.30 per diluted share, compared to $29.3 million, or $0.12 per weighted average share, during 3Q17.(2)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 4Q17 was $217 million, up 32% compared to 3Q17.(3)
Parsley registered favorable quarter-over-quarter trends in unit costs. LOE per Boe decreased from $4.49 in 3Q17 to $3.44 in 4Q17. General and administrative expense ("G&A") per Boe decreased from $5.10 in 3Q17 to $4.72 in 4Q17, while cash G&A per Boe, which excludes stock-based compensation expense, decreased from $4.32 in 3Q17 to $4.04 in 4Q17. Depreciation, depletion, and amortization expense per Boe decreased from $14.41 in 3Q17 to $14.23 in 4Q17.
Reported capital expenditures increased from $307 million in 3Q17 to $417 million in 4Q17, reflecting a 41% quarter-over-quarter increase in net completed footage, as well as increases in facilities and infrastructure spending and non-operated development.
Solid Balance Sheet and Advantaged Hedge Position
Parsley entered 2018 with a strong balance sheet. As of December 31, 2017, the Company had approximately $1.7 billion of liquidity, consisting of $703 million of cash, cash equivalents, and short-term investments and an undrawn amount of $997 million on the Company's revolver.(4) Pro forma for the January 2018 divestiture of certain non-operated properties, the Company likewise had approximately $1.7 billion of liquidity, consisting of $739 million of cash, cash equivalents, and short-term investments and an undrawn amount of $997 million on the Company's revolver.(4) Parsley's proactive hedging strategy protects its balance sheet and anticipated cash flow while retaining commodity price upside.
For details on Parsley's hedging position, please see the tables below under Supplemental Information, the presentation posted to the Company's website, and/or the Company's Annual Report on Form 10-K, upon availability, for the year ended December 31, 2017.
Full-year 2018 Guidance
2018E | ||
Production |
||
Annual net oil production (MBo/d) |
65-70 | |
Annual net total production (MBoe/d) |
98-108 | |
Capital Program |
||
Total development expenditures ($MM) |
$1,350-$1,550 | |
Drilling and completion (% of total) |
85-90% | |
Facilities, Infrastructure & Other (% of total) |
10-15% | |
Activity |
||
Gross operated horizontal POPs(1) |
~160 | |
Midland Basin (% of total) |
~75% | |
Delaware Basin (% of total) |
~25% | |
Average lateral length |
~9,500' | |
Average working interest |
~90% | |
Unit Costs |
||
Lease operating expenses ($/Boe) |
$3.75-$5.00 | |
Cash general and administrative expenses ($/Boe) |
$3.50-$4.25 | |
Production and ad valorem taxes (% of revenue) |
6.0%-7.0% |
(1) |
"POPs" defined as wells placed on production. |
Year-end 2017 Reserves
Parsley posted strong reserves growth in 2017. The Company's proved reserves as of December 31, 2017 totaled 416.4 MMBoe, consisting of 248.5 MMbo, 451.7 Bcf, and 92.6 MMboe of natural gas liquids ("NGLs").
Proved Reserve Highlights
Changes in reserves for the year ended December 31, 2017 are summarized in the table below:
(MMBoe) |
|||
Balance, December 31, 2016 |
222.3 |
||
Purchases of reserves in place |
55.8 |
||
Divestures of reserves in place |
(6.5) |
||
Extensions and discoveries |
160.3 |
||
Revisions of previous estimates |
9.2 |
||
Production |
(24.8) |
||
Balance, December 31, 2017 |
416.4 |
Parsley's internally prepared estimated proved reserves as of December 31, 2017 were audited by Netherland, Sewell & Associates, the Company's independent reserve engineer. These estimates have been prepared in accordance with the definitions and regulations of the U.S. Securities and Exchange Commission and conform to the FASB Accounting Standards Codification Topic 932, Extractive Activities – Oil and Gas. Prices used are based on the 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period January through December 2017. Adjusting for quality, transportation fees, and market differentials, the pricing is as follows: $49.17 per barrel of oil, $22.20 per barrel of NGL, and $2.53 per Mcf of gas. The estimates of the Company's net reserves as of December 31, 2017 are summarized in the table below:
Net Reserves | ||||||||
Oil (MMbo) |
Gas (Bcf) |
NGL (MMboe) |
Total (MMboe) | |||||
PDP |
118.5 |
237.2 |
49.1 |
207.2 | ||||
PNP |
1.1 |
3.1 |
0.6 |
2.2 | ||||
PUD |
128.9 |
211.4 |
42.9 |
207.0 | ||||
Total Proved |
248.5 |
451.7 |
92.6 |
416.4 |
Officer Promotions
As part of Parsley's ongoing commitment to operational excellence, the Company has promoted Larry Parnell to Senior Vice President-Development Operations, Carrie Endorf to Vice President-Reservoir Engineering and Planning, and Jody Jordan to Vice President-Marketing, effective February 1, 2018.
Bryan Sheffield, the Company's Chairman and Chief Executive Officer, said, "It is my pleasure to announce the promotions of Larry Parnell, Carrie Endorf, and Jody Jordan. These individuals earned their promotions through superior leadership of their respective groups and the substantial individual contributions that each has made to Parsley. I am happy to have Larry, as Senior Vice President-Development Operations, join with Paul Treadwell, Senior Vice President-Production Operations, to manage our operational activity as we focus on executing our simplified 2018 program. Likewise, Carrie and Jody bring unique skills and depth of expertise to their roles, and I look forward to their future contributions."
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the fourth quarter of 2017 on Thursday, February 22 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through March 8, 2018 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13674991. A live broadcast will also be available at www.parsleyenergy.com under the "Investor Relations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
(1) |
"Pre-hedge cash margin" as used in this release represents the Company's average sales price in a period (without realized derivatives) expressed in barrels of oil equivalent (Boe) less lease operating expense per Boe, production and ad valorem taxes per Boe, and general and administrative expense per Boe (exclusive of stock-based compensation). Sales price and cost components referenced in pre-hedge cash margin calculation can be found in "Selected Operating Data" in accompanying financial tables. | ||||||
(2) |
"Adjusted net income" is not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). Please see the supplemental financial information at the end of this news release for definitions and reconciliation of the non-GAAP financial measure of adjusted net income to GAAP financial measures. | ||||||
(3) |
"Adjusted EBITDAX" is not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). Please see the supplemental financial information at the end of this news release for definitions and reconciliation of the non-GAAP financial measure of adjusted EBITDAX to GAAP financial measures. | ||||||
(4) |
Revolver balance is net of $3 million letters of credit which do not change the status of the Company's fully undrawn borrowing base. | ||||||
(5) |
"Organic reserves replacement" calculated as total 2017 reserve additions and revisions (technical and pricing) divided by total 2017 production; excludes acquisitions and divestitures. | ||||||
(6) |
"Pre-tax PV-10" is not presented in accordance with GAAP in the United States. Please see the supplemental financial information at the end of this news release for a definition and reconciliation of the non-GAAP financial measure of pre-tax PV10 to a GAAP financial measure. |
- Tables to Follow -
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Selected Operating Data | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Net production volumes: |
|||||||||||||||
Oil (MBbls) |
4,737 |
2,811 |
16,390 |
9,368 |
|||||||||||
Natural gas (MMcf) |
7,221 |
3,812 |
23,326 |
13,463 |
|||||||||||
Natural gas liquids (MBbls) |
1,449 |
704 |
4,512 |
2,390 |
|||||||||||
Total (MBoe) |
7,390 |
4,150 |
24,792 |
14,002 |
|||||||||||
Average net daily production (Boe/d) |
80,327 |
45,109 |
67,923 |
38,257 |
|||||||||||
Average sales prices: (1) |
|||||||||||||||
Oil, without realized derivatives (per Bbl) |
$ |
53.95 |
$ |
46.76 |
$ |
48.95 |
$ |
41.34 |
|||||||
Oil, with realized derivatives (per Bbl) |
$ |
50.88 |
$ |
49.41 |
$ |
47.68 |
$ |
47.56 |
|||||||
Natural gas, without realized derivatives (per Mcf) |
$ |
2.15 |
$ |
2.91 |
$ |
2.43 |
$ |
2.30 |
|||||||
Natural gas, with realized derivatives (per Mcf) |
$ |
2.13 |
$ |
2.91 |
$ |
2.40 |
$ |
2.30 |
|||||||
NGLs (per Bbl) |
$ |
26.84 |
$ |
19.12 |
$ |
22.87 |
$ |
16.01 |
|||||||
Total, without realized derivatives (per Boe) |
$ |
41.94 |
$ |
37.59 |
$ |
38.80 |
$ |
32.60 |
|||||||
Total, with realized derivatives (per Boe) |
$ |
39.96 |
$ |
39.39 |
$ |
37.94 |
$ |
36.76 |
|||||||
Average costs (per Boe): |
|||||||||||||||
Lease operating expenses |
$ |
3.44 |
$ |
3.56 |
$ |
4.12 |
$ |
4.23 |
|||||||
Production and ad valorem taxes |
$ |
3.01 |
$ |
2.15 |
$ |
2.41 |
$ |
1.99 |
|||||||
Depreciation, depletion and amortization |
$ |
14.23 |
$ |
15.10 |
$ |
14.21 |
$ |
16.70 |
|||||||
General and administrative expenses (including stock-based compensation) |
$ |
4.72 |
$ |
5.61 |
$ |
5.01 |
$ |
6.04 |
|||||||
General and administrative expenses (cash based) |
$ |
4.04 |
$ |
4.79 |
$ |
4.22 |
$ |
5.12 |
(1) |
Average prices shown in the table include transportation and gathering costs and reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculation of such effects includes both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. |
Parsley Energy, Inc. and Subsidiaries | ||||||||||||||||
Consolidated Statements of Operations (1) | ||||||||||||||||
(Unaudited, in thousands, except for per share data) | ||||||||||||||||
Three Months Ended |
Year Ended | |||||||||||||||
2017 |
2016 |
2017 |
2016 | |||||||||||||
REVENUES |
||||||||||||||||
Oil sales |
$ |
255,554 |
$ |
131,438 |
$ |
802,230 |
$ |
387,303 |
||||||||
Natural gas sales |
15,520 |
11,094 |
56,571 |
30,928 |
||||||||||||
Natural gas liquids sales |
38,897 |
13,462 |
103,193 |
38,273 |
||||||||||||
Other |
1,517 |
(118) |
5,050 |
1,269 |
||||||||||||
Total revenues |
311,488 |
155,876 |
967,044 |
457,773 |
||||||||||||
OPERATING EXPENSES |
||||||||||||||||
Lease operating expenses |
25,386 |
14,784 |
102,169 |
59,293 |
||||||||||||
Production and ad valorem taxes |
22,274 |
8,923 |
59,641 |
27,916 |
||||||||||||
Depreciation, depletion and amortization |
105,143 |
62,653 |
352,247 |
233,766 |
||||||||||||
General and administrative expenses |
34,879 |
23,290 |
124,255 |
84,591 |
||||||||||||
Exploration and abandonment costs |
35,122 |
1,152 |
40,415 |
13,931 |
||||||||||||
Acquisition costs |
8 |
155 |
10,977 |
1,081 |
||||||||||||
Accretion of asset retirement obligations |
374 |
157 |
971 |
732 |
||||||||||||
Other operating expenses |
2,363 |
1,549 |
9,568 |
5,316 |
||||||||||||
Total operating expenses |
225,549 |
112,663 |
700,243 |
426,626 |
||||||||||||
OPERATING INCOME |
85,939 |
43,213 |
266,801 |
31,147 |
||||||||||||
OTHER INCOME (EXPENSE) |
||||||||||||||||
Interest expense, net |
(32,402) |
(16,468) |
(97,381) |
(56,225) |
||||||||||||
Loss on sale of property |
(14,332) |
— |
(14,332) |
(119) |
||||||||||||
Loss on early extinguishment of debt |
— |
(36,335) |
(3,891) |
(36,335) |
||||||||||||
Loss on derivatives |
(72,310) |
(26,993) |
(66,135) |
(50,835) |
||||||||||||
Change in TRA liability |
56,396 |
7,351 |
35,847 |
7,351 |
||||||||||||
Interest income |
2,374 |
189 |
7,936 |
992 |
||||||||||||
Other (expense) income |
(498) |
(713) |
783 |
(2,317) |
||||||||||||
Total other expense, net |
(60,772) |
(72,969) |
(137,173) |
(137,488) |
||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
25,167 |
(29,756) |
129,628 |
(106,341) |
||||||||||||
INCOME TAX BENEFIT (EXPENSE) |
19,830 |
(4,341) |
(5,708) |
17,424 |
||||||||||||
NET INCOME (LOSS) |
44,997 |
(34,097) |
123,920 |
(88,917) |
||||||||||||
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
4,922 |
3,352 |
(17,146) |
14,735 |
||||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO PARSLEY ENERGY INC. STOCKHOLDERS |
$ |
49,919 |
$ |
(30,745) |
$ |
106,774 |
$ |
(74,182) |
||||||||
Net income (loss) per common share: (2) |
||||||||||||||||
Basic |
$ |
0.20 |
$ |
(0.17) |
$ |
0.44 |
$ |
(0.46) |
||||||||
Diluted |
$ |
0.16 |
$ |
(0.17) |
$ |
0.42 |
$ |
(0.46) |
||||||||
Weighted average common shares outstanding: |
||||||||||||||||
Basic |
249,659 |
178,990 |
240,733 |
161,793 |
||||||||||||
Diluted |
314,864 |
178,990 |
296,512 |
161,793 |
(1) |
Certain reclassifications to prior period amounts have been made to conform with current presentation. |
(2) |
For the three months and year ended December 31, 2016 the number of weighted average diluted shares used to calculate net income(loss) per share is based on the fact that, under the "if converted" and treasury stock methods, Class B Common Stock and restricted stock and restricted stock units were not recognized because they would have been antidilutive. |
Parsley Energy, Inc. and Subsidiaries | ||||||||
Consolidated Balance Sheets | ||||||||
December 31, 2017 |
December 31, 2016 | |||||||
(In thousands) | ||||||||
ASSETS |
||||||||
CURRENT ASSETS |
||||||||
Cash and cash equivalents |
$ |
554,189 |
$ |
133,379 |
||||
Short-term investments |
149,283 |
— |
||||||
Restricted cash |
— |
3,290 |
||||||
Accounts receivable: |
||||||||
Joint interest owners and other |
42,174 |
12,698 |
||||||
Oil, natural gas and NGLs |
123,147 |
59,174 |
||||||
Related parties |
388 |
290 |
||||||
Short-term derivative instruments |
41,957 |
39,708 |
||||||
Assets held for sale |
1,790 |
— |
||||||
Other current assets |
6,558 |
50,949 |
||||||
Total current assets |
919,486 |
299,488 |
||||||
PROPERTY, PLANT AND EQUIPMENT |
||||||||
Oil and natural gas properties, successful efforts method |
8,551,314 |
4,063,417 |
||||||
Accumulated depreciation, depletion, amortization and impairment |
(822,459) |
(506,175) |
||||||
Total oil and natural gas properties, net |
7,728,855 |
3,557,242 |
||||||
Other property, plant and equipment net |
106,587 |
59,318 |
||||||
Total property, plant and equipment, net |
7,835,442 |
3,616,560 |
||||||
NONCURRENT ASSETS |
||||||||
Assets held for sale, net |
14,985 |
— |
||||||
Long-term derivative instruments |
15,732 |
16,416 |
||||||
Other noncurrent assets |
7,553 |
6,318 |
||||||
Total noncurrent assets |
38,270 |
22,734 |
||||||
TOTAL ASSETS |
$ |
8,793,198 |
$ |
3,938,782 |
||||
Parsley Energy, Inc. and Subsidiaries | |||||||
Consolidated Balance Sheets (continued) | |||||||
December 31, 2017 |
December 31, 2016 | ||||||
(In thousands) | |||||||
LIABILITIES AND EQUITY |
|||||||
CURRENT LIABILITIES |
|||||||
Accounts payable and accrued expenses |
$ |
407,698 |
$ |
162,317 |
|||
Revenue and severance taxes payable |
109,917 |
69,452 |
|||||
Current portion of long-term debt |
2,352 |
67,214 |
|||||
Short-term derivative instruments |
84,919 |
44,153 |
|||||
Current portion of asset retirement obligations |
7,203 |
1,818 |
|||||
Total current liabilities |
612,089 |
344,954 |
|||||
NONCURRENT LIABILITIES |
|||||||
Liabilities related to assets held for sale |
405 |
— |
|||||
Long-term debt |
2,179,525 |
1,041,324 |
|||||
Asset retirement obligations |
19,967 |
9,574 |
|||||
Deferred tax liability, net |
21,403 |
5,483 |
|||||
Payable pursuant to tax receivable agreement |
58,479 |
94,326 |
|||||
Long-term derivative instruments |
20,624 |
12,815 |
|||||
Total noncurrent liabilities |
2,300,403 |
1,163,522 |
|||||
COMMITMENTS AND CONTINGENCIES |
|||||||
STOCKHOLDERS' EQUITY |
|||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding |
— |
— |
|||||
Common stock |
|||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 252,419,601 shares issued and 252,260,300 shares outstanding at December 31, 2017 and 179,730,033 shares issued and 179,590,617 shares outstanding at December 31, 2016 |
2,524 |
1,797 |
|||||
Class B, $0.01 par value, 125,000,000 shares authorized, 62,128,257 and 28,008,573 issued and outstanding at December 31, 2017 and December 31, 2016 |
622 |
280 |
|||||
Additional paid in capital |
4,666,365 |
2,151,197 |
|||||
Retained earnings (accumulated deficit) |
43,519 |
(63,255) |
|||||
Treasury stock, at cost, 159,301 shares and 139,416 at December 31, 2017 and December 31, 2016 |
(735) |
(381) |
|||||
Total stockholders' equity |
4,712,295 |
2,089,638 |
|||||
Noncontrolling interest |
1,168,411 |
340,668 |
|||||
Total equity |
5,880,706 |
2,430,306 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
8,793,198 |
$ |
3,938,782 |
Parsley Energy, Inc. and Subsidiaries | |||||||
Consolidated Statements of Cash Flows | |||||||
Year Ended December 31, | |||||||
2017 |
2016 | ||||||
(In thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||
Net income (loss) |
$ |
123,920 |
$ |
(88,917) |
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|||||||
Depreciation, depletion and amortization |
352,247 |
233,766 |
|||||
Inventory write down |
1,060 |
— |
|||||
Accretion of asset retirement obligations |
971 |
732 |
|||||
Loss on sale of property |
14,332 |
119 |
|||||
Loss on early extinguishment of debt |
3,891 |
36,335 |
|||||
Amortization and write off of deferred loan origination costs |
4,720 |
3,190 |
|||||
Amortization of bond premium |
(516) |
(874) |
|||||
Deferred income tax expense (benefit) |
5,752 |
(17,582) |
|||||
Change in TRA liability |
(35,847) |
(7,351) |
|||||
Stock-based compensation expense |
19,619 |
12,871 |
|||||
Loss on derivatives |
66,135 |
50,835 |
|||||
Net cash received for derivative settlements |
16,172 |
32,364 |
|||||
Net cash paid for option premiums |
(28,426) |
(10,334) |
|||||
Net premiums (paid) received on options that settled during the period |
(37,103) |
31,757 |
|||||
Other |
33,719 |
6,169 |
|||||
Changes in operating assets and liabilities, net of acquisitions: |
|||||||
Restricted cash |
3,290 |
(2,151) |
|||||
Accounts receivable |
(95,239) |
(35,774) |
|||||
Accounts receivable—related parties |
(98) |
100 |
|||||
Other current assets |
82,520 |
(71,052) |
|||||
Other noncurrent assets |
(536) |
748 |
|||||
Accounts payable and accrued expenses |
122,992 |
20,897 |
|||||
Revenue and severance taxes payable |
40,465 |
32,343 |
|||||
Net cash provided by operating activities |
694,040 |
228,191 |
|||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||
Development of oil and natural gas properties |
(1,089,256) |
(505,802) |
|||||
Acquisitions of oil and natural gas properties |
(2,192,093) |
(1,346,190) |
|||||
Additions to other property and equipment |
(54,896) |
(33,374) |
|||||
Proceeds from sale of property |
30,537 |
— |
|||||
Purchases of short-term investments |
(149,283) |
— |
|||||
Other |
(1,869) |
— |
|||||
Net cash used in investing activities |
(3,456,860) |
(1,885,366) |
|||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||
Borrowings under long-term debt |
1,152,780 |
1,057,500 |
|||||
Payments on long-term debt |
(74,769) |
(521,944) |
|||||
Debt issue costs |
(17,371) |
(18,097) |
|||||
Proceeds from issuance of common stock, net |
2,123,344 |
930,315 |
|||||
Purchases of common stock |
(354) |
(213) |
|||||
Vesting of restricted stock units |
— |
(91) |
|||||
Net cash provided by financing activities |
3,183,630 |
1,447,470 |
|||||
Net increase (decrease) in cash and cash equivalents |
420,810 |
(209,705) |
|||||
Cash and cash equivalents at beginning of year |
133,379 |
343,084 |
|||||
Cash and cash equivalents at end of year |
$ |
554,189 |
$ |
133,379 |
|||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|||||||
Cash paid for interest |
$ |
63,170 |
$ |
65,513 |
|||
Cash paid for income taxes |
$ |
350 |
$ |
315 |
|||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: |
|||||||
Asset retirement obligations incurred, including changes in estimate |
$ |
15,428 |
$ |
(6,646) |
|||
Additions (reductions) to oil and natural gas properties - change in capital accruals |
$ |
118,145 |
$ |
(9,831) |
|||
Additions to other property and equipment funded by capital lease borrowings |
$ |
3,904 |
$ |
2,758 |
|||
Common stock issued for oil and natural gas properties |
$ |
1,183,501 |
$ |
— |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net income (loss) before depreciation, depletion and amortization, exploration and abandonment costs, net interest expense, income tax expense (benefit), change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, asset retirement obligation accretion expense, loss (gain) on sale of property, loss on early extinguishment of debt, inventory write down, loss (gain) on derivatives, net settlements on derivative instruments, net premium realization on options that settled during the period, and certain additional items.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measures of other companies. The Company believes that Adjusted EBITDAX is useful to investors as a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income (loss) for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted EBITDAX (1) | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Adjusted EBITDAX reconciliation to net income (loss): |
|||||||||||||||
Net income (loss) attributable to Parsley Energy, Inc. stockholders |
$ |
49,919 |
$ |
(30,745) |
$ |
106,774 |
$ |
(74,182) |
|||||||
Net (loss) income attributable to noncontrolling interests |
(4,922) |
(3,352) |
17,146 |
(14,735) |
|||||||||||
Depreciation, depletion and amortization |
105,143 |
62,653 |
352,247 |
233,766 |
|||||||||||
Exploration and abandonment costs |
35,122 |
1,152 |
40,415 |
13,931 |
|||||||||||
Interest expense, net |
30,028 |
16,279 |
89,445 |
55,233 |
|||||||||||
Income tax (benefit) expense |
(19,830) |
4,341 |
5,708 |
(17,424) |
|||||||||||
EBITDAX |
195,460 |
50,328 |
611,735 |
196,589 |
|||||||||||
Change in TRA liability |
(56,396) |
(7,351) |
(35,847) |
(7,351) |
|||||||||||
Stock-based compensation |
4,989 |
3,405 |
19,619 |
12,871 |
|||||||||||
Acquisition costs |
8 |
155 |
10,977 |
1,081 |
|||||||||||
Accretion of asset retirement obligations |
374 |
157 |
971 |
732 |
|||||||||||
Loss on sale of property |
14,332 |
— |
14,332 |
119 |
|||||||||||
Loss on early extinguishment of debt |
— |
36,335 |
3,891 |
36,335 |
|||||||||||
Inventory write down |
1,060 |
— |
1,060 |
— |
|||||||||||
Loss on derivatives |
72,310 |
26,993 |
66,135 |
50,835 |
|||||||||||
Net settlements on derivative instruments |
16 |
1,881 |
15,670 |
26,441 |
|||||||||||
Net premium realization on options that settled during the period |
(14,699) |
5,576 |
(37,103) |
31,757 |
|||||||||||
Adjusted EBITDAX |
$ |
217,454 |
$ |
117,479 |
$ |
671,440 |
$ |
349,409 |
(1) |
Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income
Adjusted net income is not a measure of net income determined in accordance with GAAP. Adjusted net income is a supplemental non-GAAP performance measure used by management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, change in TRA liability, loss (gain) on sale of property, exploration and abandonment costs, acquisition costs, inventory write down, and loss on early extinguishment of debt while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to, or more meaningful than, consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net loss.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted Net Income and Net Income Per Share | |||||||||||||||
(Unaudited, in thousands, except per share data) | |||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Net income (loss) - as reported |
$ |
49,919 |
$ |
(30,745) |
$ |
106,774 |
$ |
(74,182) |
|||||||
Adjustments: |
|||||||||||||||
Loss on derivatives |
72,310 |
26,993 |
66,135 |
50,835 |
|||||||||||
Net settlements on derivative instruments |
16 |
1,881 |
15,670 |
26,441 |
|||||||||||
Net premium realization on options that settled during the period |
(14,699) |
5,576 |
(37,103) |
31,757 |
|||||||||||
Change in TRA liability |
(56,396) |
(7,351) |
(35,847) |
(7,351) |
|||||||||||
Loss on sale of property |
14,332 |
— |
14,332 |
119 |
|||||||||||
Exploration and abandonment costs |
35,122 |
1,152 |
40,415 |
13,931 |
|||||||||||
Acquisition costs |
8 |
155 |
10,977 |
1,081 |
|||||||||||
Inventory write down |
1,060 |
— |
1,060 |
— |
|||||||||||
Loss on early extinguishment of debt |
— |
36,335 |
3,891 |
36,335 |
|||||||||||
Noncontrolling interest |
(3,891) |
(3,310) |
19,225 |
(14,953) |
|||||||||||
Change in estimated income tax(1) |
(1,919) |
(18,884) |
(865) |
(47,152) |
|||||||||||
Adjusted net income |
$ |
95,862 |
$ |
11,802 |
$ |
204,664 |
$ |
16,861 |
|||||||
Net income (loss) per diluted share - as reported |
$ |
0.16 |
$ |
(0.17) |
$ |
0.42 |
$ |
(0.46) |
|||||||
Adjustments: |
|||||||||||||||
Loss on derivatives |
$ |
0.23 |
$ |
0.13 |
$ |
0.22 |
$ |
0.26 |
|||||||
Net settlements on derivative instruments |
— |
0.01 |
0.05 |
0.14 |
|||||||||||
Net premium realization on options that settled during the period |
(0.05) |
0.03 |
(0.13) |
0.17 |
|||||||||||
Change in TRA liability |
(0.18) |
(0.04) |
(0.12) |
(0.04) |
|||||||||||
Loss on sale of property |
0.05 |
— |
0.05 |
— |
|||||||||||
Exploration and abandonment costs |
0.11 |
0.01 |
0.14 |
0.07 |
|||||||||||
Acquisition costs |
— |
— |
0.04 |
0.01 |
|||||||||||
Inventory write down |
— |
— |
— |
— |
|||||||||||
Loss on early extinguishment of debt |
— |
0.18 |
0.01 |
0.19 |
|||||||||||
Noncontrolling interest |
(0.01) |
(0.02) |
— |
(0.08) |
|||||||||||
Change in estimated income tax(1) |
(0.01) |
(0.09) |
0.01 |
(0.24) |
|||||||||||
Adjustment for change in weighted average diluted share count |
— |
0.02 |
— |
0.07 |
|||||||||||
Adjusted net income per diluted share |
$ |
0.30 |
$ |
0.06 |
$ |
0.69 |
$ |
0.09 |
|||||||
Basic weighted average shares outstanding - as reported |
249,659 |
178,990 |
240,733 |
161,793 |
|||||||||||
Effect of dilutive securities: |
|||||||||||||||
Class B Common Stock |
63,946 |
— |
54,665 |
— |
|||||||||||
Restricted Stock and Restricted Stock Units |
1,259 |
— |
1,114 |
— |
|||||||||||
Diluted weighted average shares outstanding - as reported(2) |
314,864 |
178,990 |
296,512 |
161,793 |
|||||||||||
Effect of dilutive securities: |
|||||||||||||||
Class B Common Stock |
— |
28,009 |
— |
30,371 |
|||||||||||
Restricted Stock and Restricted Stock Units |
— |
1,118 |
— |
872 |
|||||||||||
Diluted weighted average shares outstanding for adjusted net income |
314,864 |
208,117 |
296,512 |
193,036 |
(1) |
The Company is subject to a full valuation allowance for federal income taxes as of December 31, 2017, resulting in minimal federal tax expense; as a result, tax expense is calculated based on a 0.75% Texas margin tax rate applied against certain taxable items. |
(2) |
For the three months and year ended December 31, 2016 the number of weighted average diluted shares used to calculate reported net income per share is based on the fact that, under the "if converted" and treasury stock methods, Class B Common Stock and restricted stock and restricted stock units were not recognized because they would have been antidilutive. |
PV-10
PV-10 is a non-GAAP financial measure and generally differs from the Standardized Measure, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes on future net reserves. Neither PV-10 nor Standardized Measure represents an estimate of the fair market value of our oil and natural gas properties. We and others in the industry use PV-10 as a measure to compare the relative size and value of proved reserves held by companies without regard to the specific tax characteristics of such companies.
The following table provides a reconciliation of PV-10 to the GAAP financial measure of Standardized Measure as of December 31, 2017:
As of December 31, 2017 | |||
(in millions) | |||
PV-10 of proved reserves |
$ |
3,918.0 |
|
Present value of future income tax discounted at 10% |
(902.5) |
||
Standardized Measure |
$ |
3,015.5 |
Supplemental Information
Derivatives
Parsley Energy, Inc. and Subsidiaries | ||||||||||||||||||||||||||||||||
Open Crude Oil Derivatives Positions (1) | ||||||||||||||||||||||||||||||||
1Q18 |
2Q18 |
3Q18 |
4Q18 |
1Q19 |
2Q19 |
3Q19 |
4Q19 | |||||||||||||||||||||||||
Put Spreads (MBbls/d) (2) |
7.8 |
11.5 |
34.2 |
37.5 |
11.7 |
11.5 |
8.2 |
8.2 |
||||||||||||||||||||||||
Put Price ($/Bbl) |
$ |
52.14 |
$ |
52.50 |
$ |
49.64 |
$ |
49.67 |
$ |
50.00 |
$ |
50.00 |
$ |
55.00 |
$ |
55.00 |
||||||||||||||||
Short Put Price ($/Bbl) |
$ |
41.43 |
$ |
42.50 |
$ |
39.64 |
$ |
39.67 |
$ |
40.00 |
$ |
40.00 |
$ |
45.00 |
$ |
45.00 |
||||||||||||||||
Three Way Collars (MBbls/d) (3) |
43.3 |
49.5 |
31.0 |
31.0 |
8.3 |
8.2 |
8.2 |
8.2 |
||||||||||||||||||||||||
Short Call Price ($/Bbl) |
$ |
65.67 |
$ |
68.11 |
$ |
75.65 |
$ |
75.65 |
$ |
80.40 |
$ |
80.40 |
$ |
80.40 |
$ |
80.40 |
||||||||||||||||
Put Price ($/Bbl) |
$ |
50.77 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
||||||||||||||||
Short Put Price ($/Bbl) |
$ |
40.19 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
||||||||||||||||
Premium Realizations ($ MM) (4) |
$ |
(18.5) |
$ |
(16.5) |
$ |
(17.9) |
$ |
(19.1) |
$ |
(5.9) |
$ |
(5.9) |
$ |
(3.9) |
$ |
(3.9) |
||||||||||||||||
Collars (MBbls/d) (5) |
3.0 |
3.0 |
3.0 |
|||||||||||||||||||||||||||||
Short Call Price ($/Bbl) |
$61.31 |
$61.31 |
$61.31 |
|||||||||||||||||||||||||||||
Put Price ($/Bbl) |
$45.67 |
$45.67 |
$45.67 |
|||||||||||||||||||||||||||||
Total MBbls/d Hedged |
51.1 |
64.0 |
68.2 |
71.5 |
20.0 |
19.7 |
16.4 |
16.4 |
||||||||||||||||||||||||
Mid-Cuch Basis Swaps (MBbls/d) |
11.5 |
11.4 |
11.3 |
11.3 |
||||||||||||||||||||||||||||
Swap Price ($/Bbl) |
$ |
(0.86) |
$ |
(0.86) |
$ |
(0.86) |
$ |
(0.86) |
Parsley Energy, Inc. and Subsidiaries | ||||||||||||||||
Open Natural Gas Derivatives Positions (1) | ||||||||||||||||
1Q18 |
2Q18 |
3Q18 |
4Q18 | |||||||||||||
Three Way Collars (MMBtu/d) (3) |
35.0 |
8.2 |
8.2 |
8.2 |
||||||||||||
Call Price ($/MMBtu) |
$ |
4.44 |
$ |
3.60 |
$ |
3.60 |
$ |
3.60 |
||||||||
Put Price ($/MMBtu) |
$ |
3.19 |
$ |
3.00 |
$ |
3.00 |
$ |
3.00 |
||||||||
Short Put Price ($/MMBtu) |
$ |
2.64 |
$ |
2.75 |
$ |
2.75 |
$ |
2.75 |
||||||||
Swaps (MMBtu/d) |
5.0 |
|||||||||||||||
Strike Price ($/MMBtu) |
$3.50 |
|||||||||||||||
Total MMBtu/d Hedged |
40.0 |
8.2 |
8.2 |
8.2 |
Organic Reserves Replacement Ratio
Parsley uses the organic reserves replacement ratio as an indicator of the company's ability to replace the reserves that it has developed and to increase its reserves over time. The ratio is not a representation of value creation and has a number of limitations that should be considered. For example, the ratio does not incorporate the costs or timing of developing future reserves. The organic reserves replacement ratio of 683% was calculated as total 2017 reserve additions and revisions (technical and pricing), divided by total 2017 production. The ratio calculation excludes acquisitions and divestitures.
(1) |
As of 2/21/2018 | ||||
(2) |
When NYMEX price is above put price, Parsley receives the NYMEX price. When NYMEX price is between the put price and the short put price, Parsley receives the put price. When NYMEX price is below the short put price, Parsley receives the NYMEX price plus the difference between the short put price and the put price. | ||||
(3) |
Functions similarly to put spreads except that when index price is at or above the call price, Parsley receives the call price. | ||||
(4) |
Premium realizations represent net premiums paid (including deferred premiums), which are recognized as a loss in the period of settlement. | ||||
(5) |
When NYMEX price is above the call price, Parsley receives the call price. When NYMEX is below the put price, Parsley receives the put price. When NYMEX is between call and put prices, Parsley receives the NYMEX price. |
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-fourth-quarter-2017-financial-and-operating-results-announces-officer-promotions-300602290.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Jan. 29, 2018 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today provided an operational update that discloses certain full-year 2017 results and highlights strong indications from the Company's Wolfcamp C delineation program.
Fourth Quarter and Full-Year 2017 Results
Parsley expects to report full-year 2017 net production of approximately 68 MBoe per day, up 78% relative to full-year 2016 net production, concluding a year of robust and efficient production growth. The Company expects to report analogous growth in 2017 net oil production, up 75% versus 2016 net oil production to approximately 45 MBo per day. Full-year expected production is based on anticipated 4Q17 net production of 80-81 MBoe per day and 51-52 MBo per day.
In line with stated plans, Parsley completed 41 wells in the fourth quarter of 2017. The Company expects to report fourth quarter capital expenditures of approximately $410-420 million, translating to full-year 2017 capital expenditures of approximately $1.2 billion. Fourth quarter development spending increased relative to third quarter spending, driven by more completions, longer laterals, and material quarter-over-quarter increases in facilities and infrastructure spending and non-operated development.
2018 Capital Program Update
Parsley continues to expect best-in-class volume growth in 2018, albeit from a lower than anticipated starting point, impeded by the impact of freezing weather at the beginning of the year, and accounting for the recent divestiture of non-operated properties with approximately 600 Boe per day of associated production. Accordingly, Parsley now expects average net oil production of 65-70 MBo per day in 2018, representing year-over-year growth of 50% at the midpoint. The Company expects corresponding total production volumes of 98-108 MBoe per day in 2018.
Notwithstanding the recent increase in oil prices, Parsley continues to expect to place approximately 40 gross horizontal wells on production per quarter during 2018. While sustained oil price strength would bias expectations toward the higher end of the previously issued guidance for 2018 capital expenditures of $1.35-1.55 billion given the likelihood of service and equipment cost inflation, the Company expects that it would be accompanied by a disproportionate increase in cash flow generation on a steady development pace.
Positive Wolfcamp C Results
Parsley placed several Wolfcamp C wells on production during 2017, marking an important delineation success for the Company. These five wells have registered strong peak 30-day production rates, averaging 198 Boe (122 Bo) per day per thousand lateral feet. In addition, the Char Hughes 28-2-4803H, turned to production two weeks ago with a lateral length of approximately 11,000 feet in central Reagan County, achieved a peak 24-hour production rate of more than 1,000 Bo per day, extending the areal delineation of the Wolfcamp C target to the southeast corner of Parsley's Midland Basin acreage.
Divestiture of Non-Operated Properties
As part of an ongoing initiative to high-grade the Company's acreage portfolio, Parsley recently closed the divestiture of a portion of its non-operated properties. In aggregate, the Company divested approximately 10,000 net (63,000 gross) acres in Martin, Howard, Reagan, Irion, Dawson, and Pecos Counties for approximately $57 million.
"By any measurement 2017 was a transformational year for Parsley Energy, with a substantial resource discovery, sizable acquisitions, a peer-leading activity ramp, and compelling volume growth through which we are benefitting disproportionately from higher oil prices," said Bryan Sheffield, Parsley's Chairman and CEO. "Our focus now turns to a simplified 2018 development program that applies 2017 delineation and testing results and will increasingly be characterized by more familiar areas, proven configurations, and calibrated designs as we move through the year. With our ambitious activity ramp and delineation agenda behind us, Parsley Energy remains positioned to deliver superior corporate returns and debt-adjusted production growth as we develop our premier acreage portfolio from a position of financial strength, including ample liquidity and a substantial hedge position."
Fourth Quarter 2017 Earnings Conference Call
As previously announced, on February 22nd the Company will host a conference call to discuss 4Q17 and full-year 2017 results and 2018 capital plans.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, the fourth quarter and full-year 2017 results presented in this news release are preliminary estimates derived from Parsley Energy's internal records and are based on the most current information available to management. Parsley Energy's normal reporting processes with respect to such preliminary results have not been fully completed and, during the course of its review process on these preliminary estimates, Parsley Energy could identify items that would require it to make material adjustments and which could affect its final results. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-provides-operational-update-highlights-successful-wolfcamp-c-results-300589689.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Jan. 9, 2018 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley" or the "Company") today announced that next year, in January 2019, Chairman of the Board and Chief Executive Officer Bryan Sheffield will be succeeded as CEO by Matt Gallagher, the Company's current President and Chief Operating Officer. Mr. Gallagher is appointed to Parsley's Board of Directors effective immediately. Mr. Sheffield will serve as CEO through the end of 2018, in the newly-created position of Executive Chairman throughout 2019, and as Chairman of the Board thereafter. As part of the succession plan, the Board has determined to separate the roles of Chairman and CEO at the time of Mr. Sheffield's transition to Executive Chairman.
"This announcement is the culmination of a thoughtful and thorough succession planning process in which the Board and Bryan unanimously agree that Matt Gallagher is the ideal person to serve as Parsley's next CEO and lead Parsley into its next stage of growth and development," said Ray Alameddine, the Company's lead director. "Bryan and Matt have worked closely together on every strategic decision for the last several years, Matt is deeply respected across the organization, and Bryan will continue to provide guidance as his role evolves. For these reasons, we expect a seamless transition, accompanied by continued growth and operational excellence. Matt has the right combination of industry expertise, financial acumen, leadership, and work ethic to lead Parsley with distinction. Importantly, he is acutely attuned to the Company's core values, having helped establish and foster Parsley's identity through his years of service as a founding officer."
"On behalf of the Board and the entire team at Parsley, we thank Bryan for his visionary leadership and outstanding decade of service as CEO in building this great Company and making Parsley the premier operator that it is today," said Mr. Alameddine. "Among his many contributions, Bryan has instilled a culture of excellence and ethical leadership, and he has recruited and groomed an exceptionally strong and capable senior leadership team, including an outstanding leader who is well prepared to succeed him."
"I am proud of both the tremendous growth of our company and the abiding teamwork that made our growth possible," said Mr. Sheffield. "From our humble start, contract operating 100 wells in the Permian, we have built a publicly traded company that today operates over 1,200 wells and is closing in on production of 100,000 net Boe per day. After ten exhilarating and intense years in this role and with the Company well positioned for the future, I am looking forward to spending more time with my family, knowing that Parsley is in good hands with Matt leading the next phase of our expansion. I am confident that Matt is the right person to lead as CEO, and I am excited to work with him in our current roles for the remainder of this year, as Executive Chairman throughout 2019, and as Chairman thereafter."
"It is an incredible honor to succeed Bryan as CEO," said Mr. Gallagher. "I believe that the foundation Bryan established—including a strong balance sheet, superior acreage position, and team culture that emphasizes innovation and integrity—paves the way for superior long-term value creation for our stockholders."
Matt Gallagher has served as the Company's President and Chief Operating Officer since January 2017. Since joining the Company in 2010, he has served in positions of increasing responsibility across the company, including overseeing engineering and geoscience activities. Prior to joining Parsley, Mr. Gallagher served in various engineering and investor relations functions with Pioneer Natural Resources between 2005 and 2010. Mr. Gallagher has a Bachelor of Science in Petroleum Engineering from the Colorado School of Mines, serves on the board of directors of the Permian Basin Petroleum Association, and is a member of the Permian Basin Society of Petroleum Engineers and the West Texas Geological Society.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including, but not limited to, its Annual Report on Form 10-K, its subsequent Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K. The risk factors and other factors noted in the Company's SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-ceo-succession-plan-300580272.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Jan. 4, 2018 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) plans to report fourth quarter 2017 financial results on Wednesday, February 21, 2018, after the close of trading on the New York Stock Exchange. The company will host its quarterly conference call at 9:00 AM EST (8:00 AM CST) on Thursday, February 22, 2018.
By Phone: |
Dial 877-407-0672 (United States/Canada) or 412-902-0003 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Thursday, March 8 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13674991. | |
By Webcast: |
|
Select "Events & Presentations" under the "Investors" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-schedules-fourth-quarter-2017-earnings-release-and-conference-call-300577709.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Nov. 7, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended September 30, 2017. The Company has posted to its website a presentation that supplements the information in this release.
Third Quarter 2017 Highlights
Preliminary 2018 Outlook
"Parsley Energy's core objective is to create long-term shareholder value by investing large amounts of capital at high rates of return," said Bryan Sheffield, Parsley's Chairman and CEO. "Having added almost 100,000 net acres and essentially doubled our activity level since the beginning of the year, we intend to stabilize at a measured development pace that prioritizes operational continuity and advances our progress toward free cash flow generation. Based on the momentum we have generated and our track record of capital efficient investment, if we were to maintain our current development pace for the next two years, at current strip prices we would expect to generate free cash flow from operations by the end of 2019. In the interim, we would expect to fund the associated development program entirely with operating cash flow and current cash on hand. In addition, with services and equipment largely secured and a robust hedge position in place, we have taken steps to insure a compelling 2018 development program."
Operational Highlights
During the third quarter, the Company spud 38 and completed 36 gross horizontal wells. Parsley's working interest on completed wells was approximately 97%, with an average completed lateral length of approximately 7,700 feet. Drilling and completion activity was concentrated in the Midland Basin, where the Company spud 24 and completed 27 gross operated horizontal wells; the balance were spud and completed in the Southern Delaware Basin.
In light of enhanced lease geometry as facilitated by recent acreage trades, the Company anticipates a significant step up in the average lateral lengths of the wells it will bring online in future periods. Through the end of 2018, for example, the Company expects that the wells it turns to production will be characterized by average lateral lengths of more than 9,000 feet.
Production Trends
Parsley is replacing its one million Boe type curve (based on a 7,000 foot lateral) with a 1.6 million Boe Midland Basin reference curve (based on a 10,000 foot lateral). This revised Midland Basin curve better reflects the Company's expanded acreage footprint, recognizes the shift to higher average lateral lengths, and captures incremental gas and NGL production based on actual results. The Company is also introducing a 1.5 million Boe reference curve for the Southern Delaware Basin (likewise based on a 10,000 foot lateral). Details on these new curves can be found in the 3Q17 investor presentation posted to the Company's website.
Parsley continued to deliver solid well performance during 3Q17, helping to offset previously disclosed impacts from Hurricane Harvey-related curtailments. The 20 Midland Basin wells that achieved 30-day peak production periods since the Company's last quarterly update registered an average peak 30-day rate of 1,177 Boe per day with an average lateral length of 7,229' and an average three-stream oil cut of 72%. The four Southern Delaware wells that reached peak production since the Company's last update achieved an average 30-day initial production rate of 1,333 Boe per day with an average lateral length of 7,867' and an average three-stream oil cut of 67%.
Parsley's first well targeting the Wolfcamp C formation, the Taylor 45-33-4601H, continues to generate robust volumes, with cumulative production of over 525 MBoe (56% oil) after 240 days. The Taylor well achieved payout within six months and was still producing over 700 Bbls of oil per day after eight months on production. The Company's second Wolfcamp C well, the Paige 13A-12A-4810H, reported a peak 60-day production rate of nearly 1,600 Boe per day (~56% oil) and has generated cumulative volumes that are consistent with the Company's Midland Basin reference curve.
Parsley built upon an encouraging 2Q17 result from a well utilizing a compressed stage completion design with six additional compressed stage tests during 3Q17. These seven wells were drilled with one-mile laterals and completed with 50 stages on average, equating to 100-foot stage spacing versus Parsley's heretofore standard design of 170-foot stage spacing. Compared to the nearest offset wells using a standard stage spacing design, these seven compressed stage wells have registered a 10-25% uplift in cumulative oil production, with an incremental well cost of 5-7%. This cost/benefit relationship continues to imply a compelling economic profile, motivating additional tests during 2018.
Financial Highlights
During 3Q17, the Company recorded net loss attributable to its stockholders of $13.3 million, or $0.05 per weighted average share, compared to net income of $40.7 million, or $0.17 per weighted average share, during 2Q17. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, and adding back the non-controlling interest allocated to Class B stockholders, adjusted net income for 3Q17 was $29.3 million, or $0.12 per diluted share, compared to $12.5 million, or $0.05 per diluted share, in 2Q17.(1)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 3Q17 was $164.9 million, up 15% compared to 2Q17.(1)
During the third quarter, Parsley successfully reduced production costs on recently acquired wells, leading to an 11% decrease in lease operating expense ("LOE") per Boe to $4.49 in 3Q17 from $5.03 in 2Q17. Parsley reported general and administrative expense ("G&A") per Boe of $5.10, down 5% versus 2Q17. The Company reported cash G&A per Boe, which excludes stock-based compensation expense, of $4.32, down 4% over the same period. Depreciation, depletion, and amortization expense per Boe increased to $14.41 in 3Q17 from $14.15 in 2Q17.
Parsley reported capital expenditures of $307 million during the quarter, comprised of $281 million for drilling and completion and $26 million for facilities and infrastructure. In addition to spending associated with the 38 horizontal spuds and 36 horizontal completions noted above, 3Q17 capital expenditures include expenses associated with drilling and completing three saltwater disposal wells.
Strong Balance Sheet and Robust Hedge Position
As of September 30, 2017, pro forma for the October issuance of $700 million of senior unsecured notes due 2027, the Company had approximately $1.9 billion of liquidity, consisting of $934 million of cash on hand and an undrawn amount of $997.3 million on the Company's revolver.(2) Based on the midpoint of Parsley's preliminary 2018 oil production outlook, the Company is fully hedged through 2018 with an average floor price of approximately $50/Bbl.(3)
For details on Parsley's hedging position, please see the tables below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the three months ended September 30, 2017.
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the third quarter of 2017 on Wednesday, November 8 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through November 15 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13671668. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Events & Presentations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
_____________ | ||
(1) |
"Adjusted EBITDAX" and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). Please see the supplemental financial information at the end of this news release for definitions and reconciliations of the non-GAAP financial measures of adjusted EBITDAX and adjusted net income to GAAP financial measures. | |
(2) |
Fully undrawn revolver balance is net of letters of credit. | |
(3) |
Average floor price refers to the Company's weighted average long put price for 2018. |
- Tables to Follow -
Parsley Energy, Inc. and Subsidiaries Selected Operating Data (Unaudited) | |||||||||||
Three Months Ended | |||||||||||
September 30, 2017 |
June 30, 2017 |
September 30, 2016 | |||||||||
Net production volumes: |
|||||||||||
Oil (MBbls) |
4,342 |
3,917 |
2,669 |
||||||||
Natural gas (MMcf) |
6,265 |
5,421 |
3,553 |
||||||||
Natural gas liquids (MBbls) |
1,194 |
1,069 |
695 |
||||||||
Total (MBoe) |
6,581 |
5,890 |
3,956 |
||||||||
Average net daily production (Boe/d) |
71,534 |
64,725 |
43,000 |
||||||||
Average sales prices (1) : |
|||||||||||
Oil, without realized derivatives (per Bbl) |
$ |
45.80 |
$ |
45.46 |
$ |
42.23 |
|||||
Oil, with realized derivatives (per Bbl) |
$ |
45.51 |
$ |
45.49 |
$ |
46.19 |
|||||
Natural gas, without realized derivatives (per Mcf) |
$ |
2.49 |
$ |
2.39 |
$ |
2.38 |
|||||
Natural gas, with realized derivatives (per Mcf) |
$ |
2.45 |
$ |
2.36 |
$ |
2.38 |
|||||
NGLs (per Bbl) |
$ |
22.23 |
$ |
19.02 |
$ |
15.50 |
|||||
Total, without realized derivatives (per Boe) |
$ |
36.62 |
$ |
35.89 |
$ |
33.35 |
|||||
Total, with realized derivatives (per Boe) |
$ |
36.39 |
$ |
35.87 |
$ |
36.03 |
|||||
Average costs (per Boe): |
|||||||||||
Lease operating expenses |
$ |
4.49 |
$ |
5.03 |
$ |
4.15 |
|||||
Production and ad valorem taxes |
$ |
2.25 |
$ |
1.93 |
$ |
2.12 |
|||||
Depreciation, depletion and amortization |
$ |
14.41 |
$ |
14.15 |
$ |
16.62 |
|||||
General and administrative expenses (including stock-based compensation) |
$ |
5.10 |
$ |
5.39 |
$ |
6.24 |
|||||
General and administrative expenses (cash based) |
$ |
4.32 |
$ |
4.50 |
$ |
5.40 |
(1) |
Average prices shown in the table include transportation and gathering costs and reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculation of such effects includes both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. |
Parsley Energy, Inc. and Subsidiaries Condensed Consolidated Statements of Operations (Unaudited, in thousands, except for per share data) | |||||||||||||||
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
REVENUES |
|||||||||||||||
Oil sales |
$ |
198,865 |
$ |
112,705 |
$ |
546,676 |
$ |
255,865 |
|||||||
Natural gas sales |
15,601 |
8,457 |
41,051 |
19,834 |
|||||||||||
Natural gas liquids sales |
26,547 |
10,770 |
64,296 |
24,811 |
|||||||||||
Other |
8 |
605 |
3,533 |
1,388 |
|||||||||||
Total revenues |
241,021 |
132,537 |
655,556 |
301,898 |
|||||||||||
OPERATING EXPENSES |
|||||||||||||||
Lease operating expenses |
29,525 |
16,407 |
76,783 |
44,509 |
|||||||||||
Production and ad valorem taxes |
14,808 |
8,391 |
37,367 |
18,993 |
|||||||||||
Depreciation, depletion and amortization |
94,819 |
65,741 |
247,104 |
171,113 |
|||||||||||
General and administrative expenses (including stock-based compensation) |
33,573 |
24,695 |
89,376 |
61,301 |
|||||||||||
Exploration costs |
88 |
3,113 |
5,293 |
12,779 |
|||||||||||
Acquisition costs |
2,449 |
440 |
10,969 |
926 |
|||||||||||
Accretion of asset retirement obligations |
268 |
190 |
597 |
575 |
|||||||||||
Other operating expenses |
2,419 |
1,220 |
7,205 |
3,767 |
|||||||||||
Total operating expenses |
177,949 |
120,197 |
474,694 |
313,963 |
|||||||||||
OPERATING INCOME (LOSS) |
63,072 |
12,340 |
180,862 |
(12,065) |
|||||||||||
OTHER INCOME (EXPENSE) |
|||||||||||||||
Interest expense, net |
(21,866) |
(15,561) |
(59,417) |
(38,954) |
|||||||||||
Loss on sale of property |
— |
— |
— |
(119) |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
(3,891) |
— |
|||||||||||
(Loss) gain on derivatives |
(61,955) |
1,374 |
6,175 |
(23,842) |
|||||||||||
Change in TRA liability |
— |
— |
(20,549) |
— |
|||||||||||
Other income (expense) |
508 |
(1,073) |
1,281 |
(1,605) |
|||||||||||
Total other expense, net |
(83,313) |
(15,260) |
(76,401) |
(64,520) |
|||||||||||
(LOSS) INCOME BEFORE INCOME TAXES |
(20,241) |
(2,920) |
104,461 |
(76,585) |
|||||||||||
INCOME TAX BENEFIT (EXPENSE) |
5,080 |
1,279 |
(25,538) |
21,765 |
|||||||||||
NET (LOSS) INCOME |
(15,161) |
(1,641) |
78,923 |
(54,820) |
|||||||||||
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
1,828 |
(1,065) |
(22,068) |
11,383 |
|||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS |
$ |
(13,333) |
$ |
(2,706) |
$ |
56,855 |
$ |
(43,437) |
|||||||
Net (loss) income per common share: |
|||||||||||||||
Basic |
$ |
(0.05) |
$ |
(0.02) |
$ |
0.24 |
$ |
(0.28) |
|||||||
Diluted |
$ |
(0.05) |
$ |
(0.02) |
$ |
0.24 |
$ |
(0.28) |
|||||||
Weighted average common shares outstanding: |
|||||||||||||||
Basic |
246,518 |
173,241 |
237,725 |
156,018 |
|||||||||||
Diluted |
246,518 |
173,241 |
238,785 |
156,018 |
* |
Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited, in thousands) | |||||||
September 30, 2017 |
December 31, 2016 | ||||||
(In thousands) | |||||||
ASSETS |
|||||||
CURRENT ASSETS |
|||||||
Cash and cash equivalents |
$ |
242,547 |
$ |
133,379 |
|||
Restricted cash |
4,448 |
3,290 |
|||||
Accounts receivable: |
|||||||
Joint interest owners and other |
31,875 |
12,698 |
|||||
Oil, natural gas and NGLs |
94,790 |
59,174 |
|||||
Related parties |
207 |
290 |
|||||
Short-term derivative instruments, net |
94,709 |
39,708 |
|||||
Other current assets |
5,791 |
50,949 |
|||||
Total current assets |
474,367 |
299,488 |
|||||
PROPERTY, PLANT AND EQUIPMENT |
|||||||
Oil and natural gas properties, successful efforts method |
8,150,403 |
4,063,417 |
|||||
Accumulated depreciation, depletion and impairment |
(732,690) |
(506,175) |
|||||
Total oil and natural gas properties, net |
7,417,713 |
3,557,242 |
|||||
Other property, plant and equipment, net |
87,562 |
59,318 |
|||||
Total property, plant and equipment, net |
7,505,275 |
3,616,560 |
|||||
NONCURRENT ASSETS |
|||||||
Long-term derivative instruments, net |
60,953 |
16,416 |
|||||
Other noncurrent assets |
8,838 |
6,318 |
|||||
Total noncurrent assets |
69,791 |
22,734 |
|||||
TOTAL ASSETS |
$ |
8,049,433 |
$ |
3,938,782 |
|||
LIABILITIES AND EQUITY |
|||||||
CURRENT LIABILITIES |
|||||||
Accounts payable and accrued expenses |
$ |
313,905 |
$ |
162,317 |
|||
Revenue and severance taxes payable |
95,939 |
69,452 |
|||||
Current portion of long-term debt |
8,037 |
67,214 |
|||||
Short-term derivative instruments, net |
90,244 |
44,153 |
|||||
Current portion of asset retirement obligations |
5,624 |
1,818 |
|||||
Total current liabilities |
513,749 |
344,954 |
|||||
NONCURRENT LIABILITIES |
|||||||
Long-term debt |
1,487,271 |
1,041,324 |
|||||
Asset retirement obligations |
14,323 |
9,574 |
|||||
Deferred tax liability |
9,234 |
5,483 |
|||||
Payable pursuant to TRA liability |
114,876 |
94,326 |
|||||
Long-term derivative instruments, net |
50,037 |
12,815 |
|||||
Total noncurrent liabilities |
1,675,741 |
1,163,522 |
|||||
COMMITMENTS AND CONTINGENCIES |
|||||||
STOCKHOLDERS' EQUITY |
|||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding |
— |
— |
|||||
Common stock |
|||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 247,890,053 shares issued and 247,739,464 shares outstanding at September 30, 2017 and 179,730,033 shares issued and 179,590,617 shares outstanding at December 31, 2016 |
2,479 |
1,797 |
|||||
Class B, $0.01 par value, 125,000,000 shares authorized, 66,655,716 and 28,008,573 shares issued and outstanding at September 30, 2017 and December 31, 2016 |
667 |
280 |
|||||
Additional paid in capital |
4,608,515 |
2,151,197 |
|||||
Accumulated deficit |
(6,400) |
(63,255) |
|||||
Treasury stock, at cost, 150,589 shares and 139,416 shares at September 30, 2017 and December 31, 2016 |
(681) |
(381) |
|||||
Total stockholders' equity |
4,604,580 |
2,089,638 |
|||||
Noncontrolling interest |
1,255,363 |
340,668 |
|||||
Total equity |
5,859,943 |
2,430,306 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
8,049,433 |
$ |
3,938,782 |
Parsley Energy, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) | |||||||
Nine Months Ended September 30, | |||||||
2017 |
2016 | ||||||
(In thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||
Net income (loss) |
$ |
78,923 |
$ |
(54,820) |
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|||||||
Depreciation, depletion and amortization |
247,104 |
171,113 |
|||||
Accretion of asset retirement obligations |
597 |
575 |
|||||
Loss on sale of property |
— |
119 |
|||||
Loss on early extinguishment of debt |
3,891 |
— |
|||||
Amortization and write off of deferred loan origination costs |
2,826 |
2,293 |
|||||
Amortization of bond premium |
(387) |
(617) |
|||||
Stock-based compensation |
14,630 |
9,466 |
|||||
Deferred income tax expense (benefit) |
25,538 |
(21,765) |
|||||
Change in TRA liability |
20,549 |
— |
|||||
(Gain) loss on derivatives |
(6,175) |
23,842 |
|||||
Net cash received for derivative settlements |
13,845 |
28,678 |
|||||
Net cash paid for option premiums |
(19,905) |
(2,270) |
|||||
Net premiums (paid) received on options that settled during the period |
(22,404) |
26,181 |
|||||
Other |
366 |
6,026 |
|||||
Changes in operating assets and liabilities, net of acquisitions: |
|||||||
Restricted cash |
(1,158) |
(1,616) |
|||||
Accounts receivable |
(54,793) |
(23,295) |
|||||
Accounts receivable—related parties |
83 |
59 |
|||||
Other current assets |
67,543 |
(38,436) |
|||||
Other noncurrent assets |
(739) |
682 |
|||||
Accounts payable and accrued expenses |
94,442 |
28,168 |
|||||
Revenue and severance taxes payable |
26,487 |
20,817 |
|||||
Other noncurrent liabilities |
— |
2 |
|||||
Net cash provided by operating activities |
491,263 |
175,202 |
|||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||
Development of oil and natural gas properties |
(733,179) |
(385,076) |
|||||
Acquisitions of oil and natural gas properties |
(2,131,361) |
(864,870) |
|||||
Additions to other property and equipment |
(31,947) |
(20,818) |
|||||
Proceeds from sales and exchanges of oil and natural gas properties |
13,366 |
— |
|||||
Other |
2,893 |
— |
|||||
Net cash used in investing activities |
(2,880,228) |
(1,270,764) |
|||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||
Borrowings under long-term debt |
452,780 |
404,000 |
|||||
Payments on long-term debt |
(68,410) |
(813) |
|||||
Debt issuance costs |
(9,281) |
(8,958) |
|||||
Proceeds from issuance of common stock, net |
2,123,344 |
930,315 |
|||||
Repurchase of common stock |
(300) |
(213) |
|||||
Vesting of restricted stock units |
— |
(91) |
|||||
Net cash provided by financing activities |
2,498,133 |
1,324,240 |
|||||
Net increase in cash and cash equivalents |
109,168 |
228,678 |
|||||
Cash and cash equivalents at beginning of period |
133,379 |
343,084 |
|||||
Cash and cash equivalents at end of period |
$ |
242,547 |
$ |
571,762 |
|||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|||||||
Cash paid for interest |
$ |
49,565 |
$ |
42,909 |
|||
Cash paid for income taxes |
$ |
350 |
$ |
315 |
|||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: |
|||||||
Asset retirement obligations incurred, including changes in estimate |
$ |
8,144 |
$ |
(1,124) |
|||
Additions (reductions) to oil and natural gas properties - change in capital accruals |
$ |
57,014 |
$ |
(46,669) |
|||
Additions to other property and equipment funded by capital lease borrowings |
$ |
3,571 |
$ |
1,517 |
|||
Common stock issued for oil and natural gas properties |
$ |
1,183,501 |
$ |
— |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net income (loss) before depreciation, depletion and amortization, exploration costs, net interest expense, income tax expense (benefit), change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, (gain) loss on sale of property, asset retirement obligation accretion expense, loss on early extinguishment of debt, (gain) loss on derivatives, net settlements on derivative instruments, net premium realizations on options that settled during the period, and certain additional items.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measure of other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net (loss) income for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries Adjusted EBITDAX (Unaudited, in thousands) | |||||||||||||||
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Adjusted EBITDAX reconciliation to net (loss) income: |
|||||||||||||||
Net (loss) income attributable to Parsley Energy, Inc. stockholders |
$ |
(13,333) |
$ |
(2,706) |
$ |
56,855 |
$ |
(43,437) |
|||||||
Net (loss) income attributable to noncontrolling interests |
(1,828) |
1,065 |
22,068 |
(11,383) |
|||||||||||
Depreciation, depletion and amortization |
94,819 |
65,741 |
247,104 |
171,113 |
|||||||||||
Exploration costs |
88 |
3,113 |
5,293 |
12,779 |
|||||||||||
Interest expense, net |
21,866 |
15,561 |
59,417 |
38,954 |
|||||||||||
Income tax (benefit) expense |
(5,080) |
(1,279) |
25,538 |
(21,765) |
|||||||||||
EBITDAX |
96,532 |
81,495 |
416,275 |
146,261 |
|||||||||||
Change in TRA liability |
— |
— |
20,549 |
— |
|||||||||||
Stock-based compensation |
5,170 |
3,316 |
14,630 |
9,466 |
|||||||||||
Acquisition costs |
2,449 |
440 |
10,969 |
926 |
|||||||||||
Loss on sale of property |
— |
— |
— |
119 |
|||||||||||
Accretion of asset retirement obligations |
268 |
190 |
597 |
575 |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
3,891 |
— |
|||||||||||
Loss (gain) on derivatives |
61,955 |
(1,374) |
(6,175) |
23,842 |
|||||||||||
Net settlements on derivative instruments |
10,982 |
5,373 |
15,654 |
24,560 |
|||||||||||
Net premium realization on options that settled during the period |
(12,487) |
5,215 |
(22,404) |
26,181 |
|||||||||||
Adjusted EBITDAX |
$ |
164,869 |
$ |
94,655 |
$ |
453,986 |
$ |
231,930 |
* |
Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income
Adjusted net income is a performance measure used by management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, (gain) loss on sale of property, exploration costs, acquisition costs, loss on early extinguishment of debt, and change in TRA liability, while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net income (loss).
Parsley Energy, Inc. and Subsidiaries Adjusted Net Income and Net Income Per Share (Unaudited, in thousands, except per share data) | |||||||||||||||
Three Months Ended |
Nine Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Net (loss) income - as reported |
$ |
(13,333) |
$ |
(2,706) |
$ |
56,855 |
$ |
(43,437) |
|||||||
Adjustments: |
|||||||||||||||
Loss (gain) on derivatives |
61,955 |
(1,374) |
(6,175) |
23,842 |
|||||||||||
Net settlements on derivative instruments |
10,982 |
5,373 |
15,654 |
24,560 |
|||||||||||
Net premium realization on options that settled during the period |
(12,487) |
5,215 |
(22,404) |
26,181 |
|||||||||||
Loss on sale of property |
— |
— |
— |
119 |
|||||||||||
Exploration costs |
88 |
3,113 |
5,293 |
12,779 |
|||||||||||
Acquisition costs |
2,449 |
440 |
10,969 |
926 |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
3,891 |
— |
|||||||||||
Change in TRA liability |
— |
— |
20,549 |
— |
|||||||||||
Noncontrolling interest |
(13,472) |
799 |
(6,872) |
(11,643) |
|||||||||||
Change in estimated income tax |
(6,839) |
(4,203) |
4,819 |
(25,280) |
|||||||||||
Adjusted net income |
$ |
29,343 |
$ |
6,657 |
$ |
82,579 |
$ |
8,047 |
|||||||
Net (loss) income per diluted share - as reported(1) |
$ |
(0.05) |
$ |
(0.02) |
$ |
0.24 |
$ |
(0.28) |
|||||||
Adjustments: |
|||||||||||||||
Loss (gain) on derivatives |
$ |
0.25 |
$ |
(0.01) |
$ |
(0.03) |
$ |
0.13 |
|||||||
Net settlements on derivative instruments |
0.04 |
0.03 |
0.07 |
0.13 |
|||||||||||
Net premium realization on options that settled during the period |
(0.05) |
0.03 |
(0.09) |
0.14 |
|||||||||||
Exploration costs |
— |
0.02 |
0.02 |
0.07 |
|||||||||||
Acquisition costs |
0.01 |
— |
0.05 |
— |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
0.02 |
— |
|||||||||||
Change in TRA liability |
— |
— |
0.08 |
— |
|||||||||||
Noncontrolling interest |
(0.05) |
— |
(0.03) |
(0.06) |
|||||||||||
Change in estimated income tax |
(0.03) |
(0.02) |
0.02 |
(0.13) |
|||||||||||
Adjustment for change in weighted average diluted share count(1)(2) |
— |
— |
— |
0.04 |
|||||||||||
Adjusted net income per diluted share(2) |
$ |
0.12 |
$ |
0.03 |
$ |
0.35 |
$ |
0.04 |
|||||||
Basic weighted average shares outstanding - as reported(1) |
246,518 |
173,241 |
237,725 |
156,018 |
|||||||||||
Effect of dilutive securities: |
|||||||||||||||
Class B Common Stock |
— |
— |
— |
— |
|||||||||||
Restricted Stock and Restricted Stock Units |
— |
— |
1,060 |
— |
|||||||||||
Diluted weighted average shares outstanding - as reported(1) |
246,518 |
173,241 |
238,785 |
156,018 |
|||||||||||
Effect of dilutive securities: |
|||||||||||||||
Class B Common Stock |
— |
29,223 |
— |
31,164 |
|||||||||||
Restricted Stock and Restricted Stock Units |
— |
1,129 |
— |
965 |
|||||||||||
Diluted weighted average shares outstanding for adjusted net income(2) |
246,518 |
203,593 |
238,785 |
188,147 |
___________ | ||
(1) |
For the three and nine months ended September 30, 2016 and and the three months ended September 30, 2017, the number of weighted average diluted shares used to calculate actual net income per share is based on the fact that, under the "if converted" and treasury stock methods, Class B Common Stock and restricted stock and restricted stock units were note recognized because they would have been antidilutive. | |
(2) |
For purposes of calculating adjusted net income per diluted share for the three and nine months ended September 30, 2017, Class B Common Stock was not recognized because it would have been antidilutive using the "if converted" method and, for the three months ended September 30, 2017, restricted stock and restricted stock units were not recognized because they would have been antidilutive using the treasury stock method. |
Supplemental Information Parsley Energy, Inc. and Subsidiaries Open Crude Oil Derivatives Positions (1) | |||||||||||||||||||||||||||||||||||
4Q17 |
1Q18 |
2Q18 |
3Q18 |
4Q18 |
1Q19 |
2Q19 |
3Q19 |
4Q19 | |||||||||||||||||||||||||||
Put Spreads (MBbls/d) (2) |
45.5 |
38.3 |
37.9 |
39.1 |
42.4 |
11.7 |
11.5 |
||||||||||||||||||||||||||||
Put Price ($/Bbl) |
$ |
50.96 |
$ |
51.74 |
$ |
51.09 |
$ |
46.69 |
$ |
49.71 |
$ |
50.00 |
$ |
50.00 |
|||||||||||||||||||||
Short Put Price ($/Bbl) |
$ |
41.43 |
$ |
40.65 |
$ |
41.09 |
$ |
39.69 |
$ |
39.71 |
$ |
40.00 |
$ |
40.00 |
|||||||||||||||||||||
Three Way Collars (MBbls/d) (3) |
21.7 |
28.0 |
31.0 |
31.0 |
8.3 |
8.2 |
8.2 |
8.2 |
|||||||||||||||||||||||||||
Short Call Price ($/Bbl) |
$ |
68.85 |
$ |
70.79 |
$ |
75.65 |
$ |
75.65 |
$ |
80.40 |
$ |
80.40 |
$ |
80.40 |
$ |
80.40 |
|||||||||||||||||||
Put Price ($/Bbl) |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
|||||||||||||||||||
Short Put Price ($/Bbl) |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
|||||||||||||||||||
Premium Realization ($ MM) (4) |
$ |
(9.6) |
$ |
(19.6) |
$ |
(18.0) |
$ |
(18.3) |
$ |
(19.6) |
$ |
(5.9) |
$ |
(5.9) |
$ |
(1.5) |
$ |
(1.5) |
|||||||||||||||||
Collars (MBbls/d) (5) |
4.0 |
3.0 |
3.0 |
3.0 |
|||||||||||||||||||||||||||||||
Short Call Price ($/Bbl) |
$ |
59.98 |
$ |
61.31 |
$ |
61.31 |
$ |
61.31 |
|||||||||||||||||||||||||||
Put Price ($/Bbl) |
$ |
46.75 |
$ |
45.67 |
$ |
45.67 |
$ |
45.67 |
|||||||||||||||||||||||||||
Swaps (MBbls/d) |
0.5 |
||||||||||||||||||||||||||||||||||
Strike Price ($/Bbl) |
$ |
55.00 |
|||||||||||||||||||||||||||||||||
Total MBbls/d Hedged |
50.0 |
60.0 |
68.9 |
73.1 |
76.4 |
20.0 |
19.8 |
8.2 |
8.2 |
||||||||||||||||||||||||||
Mid-Cush Basis Swaps (MBbls/d) |
16.7 |
11.5 |
11.4 |
11.3 |
11.3 |
||||||||||||||||||||||||||||||
Swap Price ($/Bbl) |
$ |
(1.00) |
$ |
(0.86) |
$ |
(0.86) |
$ |
(0.86) |
$ |
(0.86) |
Parsley Energy, Inc. and Subsidiaries Open Natural Gas Derivatives Positions (1) | |||||||
4Q17 |
1Q18 | ||||||
Three Way Collars (MMBtu/d) (3) |
15.5 |
26.7 |
|||||
Call Price ($/MMBtu) |
$ |
4.02 |
$ |
4.70 |
|||
Put Price ($/MMBtu) |
$ |
2.75 |
$ |
3.25 |
|||
Short Put Price ($/MMBtu) |
$ |
2.36 |
$ |
2.60 |
|||
Swaps (MMBtu/d) |
5.0 |
5.0 |
|||||
Strike Price ($/MMBtu) |
$ |
3.46 |
$ |
3.50 |
|||
Total MMBtu/d Hedged |
20.5 |
31.7 |
__________ | ||
(1) |
As of 11/7/2017. | |
(2) |
When the NYMEX price is above the put price, Parsley receives the NYMEX price. When the NYMEX price is between the put price and the short put price, Parsley receives the put price. When the NYMEX price is below the short put price, Parsley receives the NYMEX price plus the difference between the short put price and the put price. | |
(3) |
Functions similarly to put spreads except that when the index price is at or above the call price, Parsley receives the call price. | |
(4) |
Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | |
(5) |
When the NYMEX price is above the call price, Parsley receives the call price. When the NYMEX price is below the put price, Parsley receives the put price. When the NYMEX price is between the call and put prices, Parsley receives the NYMEX price. |
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-announces-third-quarter-2017-financial-and-operating-results-provides-preliminary-2018-outlook-300551323.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Oct. 5, 2017 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp., announced today the pricing of their previously announced private offering (the "Notes Offering") of senior unsecured notes due 2027 (the "2027 Notes"), which was upsized to $700 million in aggregate principal amount from the originally proposed $600 million offering. The 2027 Notes, which priced at par, will mature on October 15, 2027 and will pay interest at an annual rate of 5.625%. Parsley Inc. will not guarantee the 2027 Notes.
The Notes Offering is expected to close October 11, 2017, subject to customary closing conditions. Parsley intends to use the net proceeds of the Notes Offering to fund a portion of its capital program and for general corporate purposes.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Parsley plans to offer and sell the securities only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This news release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the SEC, including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-llc-announces-pricing-of-upsized-700-million-private-offering-of-senior-unsecured-notes-due-2027-300532095.html
SOURCE Parsley Energy, LLC
AUSTIN, Texas, Oct. 5, 2017 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp., announced today that they have commenced, subject to market conditions and other factors, a private offering of $600 million in aggregate principal amount of senior unsecured notes due 2027 to eligible purchasers (the "Notes Offering").
Parsley intends to use the net proceeds of the Notes Offering to fund a portion of its capital program and for general corporate purposes.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Parsley plans to offer and sell the securities only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This news release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the SEC, including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-llc-announces-600-million-private-offering-of-senior-unsecured-notes-due-2027-300531703.html
SOURCE Parsley Energy, LLC
AUSTIN, Texas, Sept. 28, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced that the Company remains on track to deliver production volumes consistent with previously issued guidance despite impacts from Hurricane Harvey and the deferral of anticipated non-operated development activity.
The majority of Parsley's September production was targeted for destinations that experienced disruptions related to Hurricane Harvey, resulting in temporary production curtailments enforced by the Company's midstream partners. Diligent cross-functional efforts limited the impact of these curtailments and other hurricane-related disruptions to approximately 2.0 MBoe per day on average in 3Q17, approximately 80% of which was oil. All production and sales processes have returned to normal.
Parsley's most recent production guidance for the fourth quarter and full-year 2017 contemplated the completion of nine gross (4.5 net) non-operated drilled uncompleted wells over the second half of 2017. The indefinite postponement of these non-operated completions reduces estimated 3Q17 and 4Q17 production by approximately 1.5 MBoe per day and 2.0 MBoe per day, respectively.
Accounting for the above-mentioned factors, as well as extended cycle times on several development projects, Parsley expects 3Q17 net production of 70-71 MBoe per day. The Company is narrowing its estimated full-year 2017 net production guidance from a range of 67-73 MBoe per day to a range of 67-68 MBoe per day and narrowing its estimated 4Q17 net production guidance from a range of 80-90 MBoe per day to a range of 80-83 MBoe per day. Revised 4Q17 and full-year 2017 production guidance also incorporates a modest impact from the planned divestiture of non-operated properties that, if completed, would likely close before the end of the year.
Parsley expects oil to constitute 65-66% of 3Q17 net production and 66-68% of 4Q17 net production, placing oil as a percentage of full-year 2017 net production at the low-end of the previously provided range of 67-70%. As noted above, relative to their impact on gas and NGL volumes, hurricane-related production curtailments disproportionately reduced oil volumes, as the Company was in many instances able to sell gas even as oil sales slowed or ceased. In addition, the flush production foregone upon the deferral of non-operated activity was forecast to have been characterized by a high proportion of oil. Finally, all nine of the wells Parsley turned to production in the Delaware Basin in 3Q17 were completed in Reeves County, where Parsley's wells have been characterized by relatively high quantities of associated gas even as they have been among the most prolific in the Company's portfolio in terms of oil volumes.
"While various transitory factors will affect near-term reported results, Parsley Energy continues to enjoy structural advantages with respect to acreage quality, inventory depth, and liquids content," stated Bryan Sheffield, Parsley's Chairman and CEO. "In addition, having already navigated a significant activity ramp this year, secured most or all of the services and equipment necessary to deliver compelling oil growth next year, and hedged the majority of that expected growth, Parsley is actively managing operational and financial risk and has established a clear path toward leading capital efficiency in 2018. In the meantime, with our delineation and design-testing agendas for 2017 substantially complete, we expect cycle times to revert to more typical levels, and we confirm our previous targets for operated completions through the end of the year."
Third Quarter Earnings Release and Conference Call Information
Parsley Energy plans to release its third quarter 2017 financial and operating results after the market closes on Tuesday, November 7, 2017. In conjunction with the release, the Company has scheduled a conference call for Wednesday, November 8, at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through November 15 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13671668. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Events & Presentations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-provides-operational-update-schedules-third-quarter-2017-earnings-conference-call-for-november-8-300527860.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Sept. 1, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley" or the "Company") today announced that the Company will participate in the Barclays CEO Energy-Power Conference in New York City on September 5-6, during which Bryan Sheffield, Chairman and Chief Executive Officer, is scheduled to make a presentation on Tuesday, September 5. Investor slides will be posted prior to this presentation and can be accessed on the Investors section of Parsley's website at www.parsleyenergy.com.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-to-participate-in-the-barclays-ceo-energy-power-conference-300513189.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Aug. 3, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley" or the "Company") today announced that Karen Hughes has been appointed to the Company's Board of Directors (the "Board"), effective August 1, 2017.
Ms. Hughes has more than 35 years of public policy, communications, and political experience, and is the Worldwide Vice Chair of Burson-Marsteller, a leading global public relations and communications firm, which she joined in 2008. During her time with Burson-Marsteller, Ms. Hughes has provided strategic communications counsel to a wide range of clients across a variety of industries. Previously, she served as Counselor to the President for President George W. Bush from 2001 to 2002. In this role she acted as strategic advisor to the President on policy and communications and led the White House Offices of Communications, Media Affairs, Speechwriting, and Press Secretary. She also served as Under-Secretary of State for Public Diplomacy and Public Affairs, in which capacity she led the U.S. government's efforts to communicate America's values abroad.
"We are excited for Karen Hughes to join Parsley's Board and look forward to her contributions," said Bryan Sheffield, Parsley's Chairman and Chief Executive Officer. "The Company and our stockholders will benefit greatly from her unique perspective, experience, and counsel."
Ms. Hughes received a Bachelor of Arts in English and a Bachelor of Fine Arts in Journalism from Southern Methodist University. She serves on the Board of Directors for the National Football Foundation and Manos de Cristo, a non-profit organization that provides dental, educational, and emergency basic needs services to low income residents in Austin. She is a member of the Council on Foreign Relations and the U.S. Afghan Women's Council, an organization created to foster ties between the women of America and Afghanistan. Ms. Hughes also serves on the Women's Initiative Policy Advisory Council at the Bush Institute in Dallas. She is the author of Ten Minutes from Normal, a book about working for President Bush and her decision to leave the White House to return with her family to Texas in 2002.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
View original content with multimedia:http://www.prnewswire.com/news-releases/parsley-energy-appoints-karen-hughes-to-its-board-of-directors-300499081.html
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Aug. 2, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended June 30, 2017. The Company has posted to its website a presentation that supplements the information in this release.
Second Quarter 2017 Highlights
"Parsley Energy continues to generate value from multiple sources, registering several noteworthy accomplishments in the second quarter of 2017," said Bryan Sheffield, Parsley's Chairman and CEO. "Strong production growth in 2Q17 was accompanied by significant delineation success, promising new well designs, and accretive acreage trades, all of which increase the value of our premier acreage position. With a strong balance sheet and abundant operational flexibility, Parsley is poised to deliver differentiated results across a range of commodity price scenarios."
Operational Highlights
In light of anticipated tightness in the market for high-specification drilling rigs, Parsley proactively secured and has taken delivery of all of the rigs necessary to execute the Company's 2017 drilling program. Consequently, Parsley spud 49 gross horizontal wells in the second quarter while completing 27 gross horizontal wells. Parsley's working interest on completed wells was approximately 95%, with an average completed lateral length of approximately 7,600 feet. Drilling and completion activity was concentrated in the Midland Basin, where the Company spud 35 and completed 21 gross operated horizontal wells; the balance were spud and completed in the Southern Delaware Basin.
Delineation Success
Roughly half of the wells Parsley brought online in 2Q17 targeted new zones or were drilled and completed with new spacing configurations, resulting in several important delineation milestones.
Midland Basin
Successful execution of an Upper/Lower Wolfcamp A stack test confirmed the presence of two target intervals within the Wolfcamp A formation. After 30 days of production, the Elwood 16-21-4107H and the Elwood 16-21-4207H, completed in Upton County with 1.5-mile laterals, are currently producing an average of approximately 1,200 Boe per day and have generated cumulative volumes that are consistent with the Company's one million Boe type curve. Encouraged by early results, Parsley expects to test two more stacked Wolfcamp A wells in 2H17, this time on top of two wells stacked in the Wolfcamp B formation. Confirmatory success could add to Parsley's drilling inventory, as the Company's stated inventory currently ascribes no credit for the Upper Wolfcamp A formation in the Midland Basin.
Parsley validated a stacked Upper/Lower Wolfcamp B downspacing concept with early production history from an 8-well project in Reagan County. This density test consists of four wells in the Upper Wolfcamp B atop four wells in the Lower Wolfcamp B, with 330-foot lateral spacing between wells (or 15 wells per target per section equivalent). To date, seven of the eight wells have achieved peak 30-day production rates, which on average are tracking at 84% of the average rate for offset Wolfcamp B wells at 660-foot spacing. Relatively modest productivity degradation combined with pad- and facilities-related cost savings yield a projected net present value uplift of more than 30% for an 8-well project at 330-foot spacing when compared to a 4-well project at 660-foot spacing. Application of less intensive completion designs could increase the cost savings and net present value impact of downspaced development. Parsley bases its current Midland Basin Wolfcamp B inventory on 660-foot spacing between laterals (or 8 wells per section equivalent).
Parsley's first well targeting the Wolfcamp C formation, the Taylor 45-33-4601H, continues to generate robust volumes, with cumulative production of 370 MBoe (58% oil) after 150 days. The well is still flowing naturally at nearly 2,000 Boe per day and is on track to achieve payout within its first six months of production. The Company's second Wolfcamp C well, the Paige 13A-12A-4810H, has yet to reach a peak-24 hour rate after several days online but is already producing more than 1,300 Bbls of oil per day while registering favorable pressure trends during its initial flowback period. Parsley possesses more than 900 Wolfcamp C drilling locations in what the Company has identified as the fairway of the Wolfcamp C play, encompassing portions of Reagan, Glasscock, Midland, and Upton Counties.
Southern Delaware Basin
During 2Q17, Parsley successfully tested two new flow units in Pecos County. Building on a series of strong standalone wells in the Lower Wolfcamp A interval, the Company executed a stacked two-well Lower Wolfcamp A/Wolfcamp B test and a staggered two-well Upper/Lower Wolfcamp A test. To date, both combinations have performed well relative to the average production generated by the Company's standalone wells in Pecos County when normalized for lateral length. After 40 days, the Lower Wolfcamp A/Wolfcamp B wells, drilled with one-mile laterals, have produced 26 MBoe on average, in line with the standalone average. After 50 days, the Upper/Lower Wolfcamp A wells, drilled with two-mile laterals, have produced 65 MBoe on average, or roughly 20% less than the standalone average for that timeframe. Three confirmed Wolfcamp targets support the Company's current Southern Delaware Wolfcamp inventory assumption of 16 wells per section equivalent.
Production Trends
Parsley continued its strong production momentum in 2Q17, driven by robust well performance from its core development activity. The 15 Midland Basin development wells that achieved 30-day peak production periods since the Company's last quarterly update registered an average peak 30-day rate of 1,379 Boe per day with an average stimulated lateral length of 7,720' and an average three-stream oil cut of 75%. Including the Upper/Lower Wolfcamp B density pilot, newly-peaked Midland Basin wells registered an average 30-day initial production rate of 1,245 Boe per day with an average stimulated lateral length of 7,730' and an average three-stream oil cut of 74%. The five Southern Delaware wells that reached peak production since the Company's last update achieved an average 30-day initial production rate of 1,056 Boe per day with an average stimulated lateral length of 7,090' and an average three-stream oil cut of 78%.
Favorable results from Parsley's initial compressed stage spacing test bode well for ongoing productivity gains. The Louis 4413H, drilled in Upton County with a one-mile lateral, was completed with 50 stages, equating to 100-foot stage spacing versus Parsley's heretofore standard design of 170-foot stage spacing. After 120 days, the compressed stage well is the Company's most prolific one-mile Wolfcamp B well to date with cumulative production of 110 MBoe and a peak 30-day rate of 1,397 Boe per day (or 272 Boe per day per thousand stimulated feet). Moreover, compared to a well drilled 660 feet away in the same target formation and completed simultaneously with standard stage spacing, the Louis 4413H has registered 20% higher cumulative production, even with reduced proppant loading that limited incremental well cost to less than 5%. This cost/benefit relationship implies a compelling economic profile, motivating several additional tests during 2H17.
The Company experienced a slight shift in production mix in 2Q17, with oil as a percentage of total production down from 69% to 67%. The shift in production composition was a function of contributions from recently acquired vertical production and a seasonal increase in plant efficiencies that boosted the recovery of NGLs. Delays on the eight-well Wolfcamp B downspacing project also limited the contribution of high oil-cut flush production in the second quarter, adversely impacting both absolute oil volumes and overall production mix. More generally, oil recoveries from Parsley's portfolio of horizontal wells continue to track in line with expectations, even as gas and NGL volumes broadly exceed expectations. Notably, liquids as a percentage of overall production tied a Company-record in the second quarter at 85%. In light of these considerations as well as increasing contribution from Wolfcamp C wells, Parsley is reducing its estimated full-year 2017 oil percentage to 67-70%, a range that the Company believes is likely to be appropriate through 2018, as well.
Financial Highlights
During 2Q17, the Company recorded net income attributable to its stockholders of $40.7 million, or $0.17 per weighted average share, compared to net income of $29.4 million, or $0.13 per weighted average share, during 1Q17. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, and adding back the non-controlling interest allocated to Class B stockholders, adjusted net income for 2Q17 was $12.5 million, or $0.05 per diluted share, compared to $34.2 million, or $0.15 per diluted share, in 1Q17.(1)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for 2Q17 was $143.4 million, down 2% compared to 1Q17.(1)
Parsley recorded lease operating expense ("LOE") per Boe of $5.03 in 2Q17, up from $3.57 in 1Q17. Second quarter LOE was impacted by higher workover costs, an infusion of relatively high-cost vertical production, and lifting costs on non-operated wells, all of which relate to recent acquisitions. Parsley reported general and administrative expense ("G&A") per Boe of $5.39, up 10% versus 1Q17. The Company reported cash G&A per Boe, which excludes stock-based compensation expense, of $4.50, up by 12% over the same period. The sequential increase in G&A per Boe reflects increased staffing associated with early rig additions and recent acquisitions. Depreciation, depletion, and amortization expense per Boe was relatively stable in 2Q17 at $14.15 compared to $13.99 in 1Q17.
Parsley reported capital expenditures of $295 million during the quarter, comprised of $252 million for drilling and completion and $43 million for facilities and infrastructure. In addition to spending associated with the 49 horizontal spuds and 27 horizontal completions noted above, 2Q17 capital expenditures include expenses associated with drilling and completing two vertical wells and two saltwater disposal wells.
Strong Balance Sheet and Robust Hedge Position
As of June 30, 2017, the Company had approximately $1.5 billion of liquidity, consisting of $503 million of cash on hand and an undrawn amount of $997 million on the Company's revolver.(2) Parsley added to its oil hedge portfolio during the quarter and now has an average of 58 MBbls per day of oil hedged during 2018 with an average floor price of approximately $50/Bbl.(3) "Parsley Energy continues to operate from strong financial footing," said Ryan Dalton, Parsley's CFO. "A differentiated cash position and an advantaged hedge book provide a buffer if oil prices decline and facilitate strategic growth in more constructive commodity scenarios."
For details on Parsley's hedging position, please see the tables below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the three months ended June 30, 2017.
Full-year 2017 Guidance Update
Parsley is increasing guidance for full-year 2017 and 4Q17 daily net production, reflecting broadly stronger well performance and higher NGL volumes. The Company is reducing its estimated full-year 2017 oil percentage to account for its 2Q17 production mix, as discussed above, and for increasing contributions from Wolfcamp C wells. Parsley is also reducing its expected completion count in the Southern Delaware Basin to reflect extended project cycle times earlier this year. Estimated full-year 2017 capital expenditures are unchanged, as fewer expected completions are offset by incremental drilling activity associated with early rig delivery. All other guidance remains unchanged, as well.
2017 |
2017 | ||
Previous |
Updated | ||
Production |
|||
Annual net production (MBoe/d) |
65.0-71.0 |
67.0-73.0 | |
% Oil |
68%-73% |
67%-70% | |
4Q17 net production (MBoe/d) |
78.0-88.0 |
80.0-90.0 | |
Capital Program |
|||
Drilling and completion ($MM) |
$840-$960 |
$840-$960 | |
Infrastructure and other ($MM) |
$160-$190 |
$160-$190 | |
Total development expenditures ($MM) |
$1,000-$1,150 |
$1,000-$1,150 | |
% Non-operated |
3%-5% |
3%-5% | |
Activity |
|||
Gross operated horizontal completions |
130-150 |
120-140 | |
Midland Basin |
95-105 |
95-105 | |
Delaware Basin |
35-45 |
25-35 | |
Average lateral length |
~8,000' |
~8,000' | |
Gross operated vertical completions |
5-10 |
5-10 | |
Average working interest |
85%-95% |
85%-95% | |
Unit Costs |
|||
Lease operating expenses ($/Boe) |
$3.50-$4.50 |
$3.50-$4.50 | |
Cash general and administrative expenses ($/Boe) |
$4.00-$5.00 |
$4.00-$5.00 | |
Production and ad valorem taxes (% of revenue) |
6.0%-7.0% |
6.0%-7.0% |
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the second quarter of 2017 on Thursday, August 3 at 11:00 a.m. Eastern Time (10:00 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through August 10 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13666261. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Events & Presentations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
(1) |
"Adjusted EBITDAX" and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). Please see the supplemental financial information at the end of this news release for a reconciliation of the non-GAAP financial measures of adjusted EBITDAX and adjusted net income to GAAP financial measures. | |||||
(2) |
Fully undrawn revolver balance is net of letters of credit. | |||||
(3) |
Average floor price refers to the Company's weighted average long put price for 2018. |
- Tables to Follow -
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Selected Operating Data | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | |||||||||||
June 30, 2017 |
March 31, 2017 |
June 30, 2016 | |||||||||
Net production volumes: |
|||||||||||
Oil (MBbls) |
3,917 |
3,394 |
2,157 |
||||||||
Natural gas (MMcf) |
5,421 |
4,419 |
3,154 |
||||||||
Natural gas liquids (MBbls) |
1,069 |
800 |
566 |
||||||||
Total (MBoe) |
5,890 |
4,931 |
3,249 |
||||||||
Average net daily production (Boe/d) |
64,725 |
54,789 |
35,703 |
||||||||
Average sales prices (1) : |
|||||||||||
Oil, without realized derivatives (per Bbl) |
$ |
45.46 |
$ |
50.01 |
$ |
42.25 |
|||||
Oil, with realized derivatives (per Bbl) |
$ |
45.49 |
$ |
48.52 |
$ |
47.49 |
|||||
Natural gas, without realized derivatives (per Mcf) |
$ |
2.39 |
$ |
2.82 |
$ |
1.85 |
|||||
Natural gas, with realized derivatives (per Mcf) |
$ |
2.36 |
$ |
2.80 |
$ |
1.85 |
|||||
NGLs (per Bbl) |
$ |
19.02 |
$ |
21.77 |
$ |
16.51 |
|||||
Total, without realized derivatives (per Boe) |
$ |
35.89 |
$ |
40.48 |
$ |
32.72 |
|||||
Total, with realized derivatives (per Boe) |
$ |
35.87 |
$ |
39.44 |
$ |
36.20 |
|||||
Average costs (per Boe): |
|||||||||||
Lease operating expenses |
$ |
5.03 |
$ |
3.57 |
$ |
4.37 |
|||||
Production and ad valorem taxes |
$ |
1.93 |
$ |
2.26 |
$ |
1.97 |
|||||
Depreciation, depletion and amortization |
$ |
14.15 |
$ |
13.99 |
$ |
17.23 |
|||||
General and administrative expenses (including stock-based compensation) |
$ |
5.39 |
$ |
4.88 |
$ |
5.33 |
|||||
General and administrative expenses (cash based) |
$ |
4.50 |
$ |
4.02 |
$ |
4.28 |
(1) |
Average prices shown in the table include transportation and gathering costs and reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculation of such effects includes both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. |
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(Unaudited, in thousands, except for per share data) | |||||||||||||||
Three Months Ended |
Six Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
REVENUES |
|||||||||||||||
Oil sales |
$ |
178,066 |
$ |
91,129 |
$ |
347,811 |
$ |
143,160 |
|||||||
Natural gas sales |
12,983 |
5,834 |
25,450 |
11,377 |
|||||||||||
Natural gas liquids sales |
20,336 |
9,347 |
37,749 |
14,041 |
|||||||||||
Other |
2,292 |
562 |
3,525 |
782 |
|||||||||||
Total revenues |
213,677 |
106,872 |
414,535 |
169,360 |
|||||||||||
OPERATING EXPENSES |
|||||||||||||||
Lease operating expenses |
29,631 |
14,204 |
47,258 |
28,102 |
|||||||||||
Production and ad valorem taxes |
11,397 |
6,407 |
22,559 |
10,602 |
|||||||||||
Depreciation, depletion and amortization |
83,315 |
55,988 |
152,285 |
105,372 |
|||||||||||
General and administrative expenses (including stock-based compensation) |
31,761 |
17,307 |
55,803 |
36,606 |
|||||||||||
Exploration costs |
2,442 |
8,978 |
5,205 |
9,666 |
|||||||||||
Acquisition costs |
7,176 |
486 |
8,520 |
486 |
|||||||||||
Accretion of asset retirement obligations |
193 |
215 |
329 |
385 |
|||||||||||
Other operating expenses |
2,503 |
1,651 |
4,786 |
2,547 |
|||||||||||
Total operating expenses |
168,418 |
105,236 |
296,745 |
193,766 |
|||||||||||
OPERATING INCOME (LOSS) |
45,259 |
1,636 |
117,790 |
(24,406) |
|||||||||||
OTHER INCOME (EXPENSE) |
|||||||||||||||
Interest expense, net |
(20,586) |
(12,199) |
(37,551) |
(23,393) |
|||||||||||
Loss on sale of property |
— |
(469) |
— |
(119) |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
(3,891) |
— |
|||||||||||
Gain (loss) on derivatives |
43,514 |
(27,304) |
68,130 |
(25,216) |
|||||||||||
Change in TRA liability |
— |
— |
(20,549) |
— |
|||||||||||
Other (expense) income |
(177) |
(70) |
773 |
(531) |
|||||||||||
Total other income (expense), net |
22,751 |
(40,042) |
6,912 |
(49,259) |
|||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
68,010 |
(38,406) |
124,702 |
(73,665) |
|||||||||||
INCOME TAX (EXPENSE) BENEFIT |
(12,216) |
10,918 |
(30,618) |
20,486 |
|||||||||||
NET INCOME (LOSS) |
55,794 |
(27,488) |
94,084 |
(53,179) |
|||||||||||
LESS: NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
(15,048) |
6,111 |
(23,896) |
12,448 |
|||||||||||
NET INCOME (LOSS) ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS |
$ |
40,746 |
$ |
(21,377) |
$ |
70,188 |
$ |
(40,731) |
|||||||
Net income (loss) per common share: |
|||||||||||||||
Basic |
$ |
0.17 |
$ |
(0.13) |
$ |
0.30 |
$ |
(0.28) |
|||||||
Diluted |
$ |
0.17 |
$ |
(0.13) |
$ |
0.30 |
$ |
(0.28) |
|||||||
Weighted average common shares outstanding: |
|||||||||||||||
Basic |
245,698 |
158,662 |
233,255 |
147,313 |
|||||||||||
Diluted |
246,792 |
158,662 |
234,315 |
147,313 |
* |
Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Balance Sheets | |||||||
(Unaudited, in thousands) | |||||||
June 30, 2017 |
December 31, 2016 | ||||||
(In thousands) | |||||||
ASSETS |
|||||||
CURRENT ASSETS |
|||||||
Cash and cash equivalents |
$ |
502,616 |
$ |
133,379 |
|||
Restricted cash |
3,889 |
3,290 |
|||||
Accounts receivable: |
|||||||
Joint interest owners and other |
17,826 |
12,698 |
|||||
Oil, natural gas and NGLs |
76,621 |
59,174 |
|||||
Related parties |
216 |
290 |
|||||
Short-term derivative instruments, net |
117,825 |
39,708 |
|||||
Other current assets |
8,053 |
50,949 |
|||||
Total current assets |
727,046 |
299,488 |
|||||
PROPERTY, PLANT AND EQUIPMENT |
|||||||
Oil and natural gas properties, successful efforts method |
7,803,119 |
4,063,417 |
|||||
Accumulated depreciation, depletion and impairment |
(640,926) |
(506,175) |
|||||
Total oil and natural gas properties, net |
7,162,193 |
3,557,242 |
|||||
Other property, plant and equipment, net |
77,197 |
59,318 |
|||||
Total property, plant and equipment, net |
7,239,390 |
3,616,560 |
|||||
NONCURRENT ASSETS |
|||||||
Long-term derivative instruments, net |
109,940 |
16,416 |
|||||
Other noncurrent assets |
9,226 |
6,318 |
|||||
Total noncurrent assets |
119,166 |
22,734 |
|||||
TOTAL ASSETS |
$ |
8,085,602 |
$ |
3,938,782 |
|||
LIABILITIES AND EQUITY |
|||||||
CURRENT LIABILITIES |
|||||||
Accounts payable and accrued expenses |
$ |
336,926 |
$ |
162,317 |
|||
Revenue and severance taxes payable |
87,425 |
69,452 |
|||||
Current portion of long-term debt |
3,806 |
67,214 |
|||||
Short-term derivative instruments, net |
73,660 |
44,153 |
|||||
Current portion of asset retirement obligations |
5,500 |
1,818 |
|||||
Total current liabilities |
507,317 |
344,954 |
|||||
NONCURRENT LIABILITIES |
|||||||
Long-term debt |
1,490,597 |
1,041,324 |
|||||
Asset retirement obligations |
14,157 |
9,574 |
|||||
Deferred tax liability |
10,375 |
5,483 |
|||||
Payable pursuant to TRA liability |
114,876 |
94,326 |
|||||
Long-term derivative instruments, net |
75,104 |
12,815 |
|||||
Total noncurrent liabilities |
1,705,109 |
1,163,522 |
|||||
COMMITMENTS AND CONTINGENCIES |
|||||||
STOCKHOLDERS' EQUITY |
|||||||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding |
— |
— |
|||||
Common stock |
|||||||
Class A, $0.01 par value, 600,000,000 shares authorized, 246,667,121 shares issued and 246,523,242 shares outstanding at June 30, 2017 and 179,730,033 shares issued and 179,590,617 shares outstanding at December 31, 2016 |
2,467 |
1,797 |
|||||
Class B, $0.01 par value, 125,000,000 shares authorized, 67,857,091 and 28,008,573 shares issued and outstanding at June 30, 2017 and December 31, 2016 |
679 |
280 |
|||||
Additional paid in capital |
4,582,932 |
2,151,197 |
|||||
Retained earnings (accumulated deficit) |
6,933 |
(63,255) |
|||||
Treasury stock, at cost, 143,879 shares and 139,416 shares at June 30, 2017 and December 31, 2016 |
(518) |
(381) |
|||||
Total stockholders' equity |
4,592,493 |
2,089,638 |
|||||
Noncontrolling interest |
1,280,683 |
340,668 |
|||||
Total equity |
5,873,176 |
2,430,306 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
8,085,602 |
$ |
3,938,782 |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Statements of Cash Flows | |||||||
(Unaudited, in thousands) | |||||||
Six Months Ended June 30, | |||||||
2017 |
2016 | ||||||
(In thousands) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||
Net income (loss) |
$ |
94,084 |
$ |
(53,179) |
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|||||||
Depreciation, depletion and amortization |
152,285 |
105,372 |
|||||
Accretion of asset retirement obligations |
329 |
385 |
|||||
Loss on sale of property |
— |
119 |
|||||
Loss on early extinguishment of debt |
3,891 |
— |
|||||
Amortization and write off of deferred loan origination costs |
1,803 |
1,385 |
|||||
Amortization of bond premium |
(258) |
(383) |
|||||
Stock-based compensation |
9,460 |
6,150 |
|||||
Deferred income tax expense (benefit) |
30,476 |
(20,486) |
|||||
Change in TRA liability |
20,549 |
— |
|||||
(Gain) loss on derivatives |
(68,130) |
25,216 |
|||||
Net cash received for derivative settlements |
2,115 |
25,133 |
|||||
Net cash (paid) received for option premiums |
(13,281) |
7,014 |
|||||
Net premiums (paid) received on options that settled during the period |
(9,917) |
20,965 |
|||||
Other |
261 |
5,677 |
|||||
Changes in operating assets and liabilities, net of acquisitions: |
|||||||
Restricted cash |
(599) |
(1,019) |
|||||
Accounts receivable |
(22,575) |
(52,521) |
|||||
Accounts receivable—related parties |
74 |
(345) |
|||||
Other current assets |
56,235 |
(39,037) |
|||||
Other noncurrent assets |
(842) |
482 |
|||||
Accounts payable and accrued expenses |
52,672 |
12,388 |
|||||
Revenue and severance taxes payable |
17,973 |
8,487 |
|||||
Other noncurrent liabilities |
— |
2 |
|||||
Net cash provided by operating activities |
326,605 |
51,805 |
|||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|||||||
Development of oil and natural gas properties |
(361,742) |
(252,764) |
|||||
Acquisitions of oil and natural gas properties |
(2,088,286) |
(548,724) |
|||||
Additions to other property and equipment |
(19,520) |
(6,487) |
|||||
Proceeds from sales and exchanges of oil and natural gas properties |
13,557 |
— |
|||||
Other |
(630) |
— |
|||||
Net cash used in investing activities |
(2,456,621) |
(807,975) |
|||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||
Borrowings under long-term debt |
452,480 |
200,000 |
|||||
Payments on long-term debt |
(67,411) |
(503) |
|||||
Debt issuance costs |
(9,206) |
(4,561) |
|||||
Proceeds from issuance of common stock, net |
2,123,527 |
659,387 |
|||||
Repurchase of common stock |
(137) |
(213) |
|||||
Net cash provided by financing activities |
2,499,253 |
854,110 |
|||||
Net increase in cash and cash equivalents |
369,237 |
97,940 |
|||||
Cash and cash equivalents at beginning of period |
133,379 |
343,084 |
|||||
Cash and cash equivalents at end of period |
$ |
502,616 |
$ |
441,024 |
|||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|||||||
Cash paid for interest |
$ |
15,102 |
$ |
21,241 |
|||
Cash paid for income taxes |
$ |
200 |
$ |
315 |
|||
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: |
|||||||
Asset retirement obligations incurred, including changes in estimate |
$ |
8,084 |
$ |
(1,257) |
|||
Additions (reductions) to oil and natural gas properties - change in capital accruals |
$ |
121,663 |
$ |
(6,281) |
|||
Additions to other property and equipment funded by capital lease borrowings |
$ |
2,500 |
$ |
505 |
|||
Common stock issued for oil and natural gas properties |
$ |
1,183,501 |
$ |
— |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net income (loss) before depreciation, depletion and amortization, exploration costs, net interest expense, income tax expense (benefit), change in Tax Receivable Agreement ("TRA") liability, stock-based compensation, acquisition costs, (gain) loss on sale of property, asset retirement obligation accretion expense, loss on early extinguishment of debt, (gain) loss on derivatives, net settlements on derivative instruments, and net premium realizations on options that settled during the period.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures, and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measure of other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income (loss) for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted EBITDAX | |||||||||||||||
(Unaudited, in thousands) | |||||||||||||||
Three Months Ended |
Six Months Ended | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Adjusted EBITDAX reconciliation to net income (loss): |
|||||||||||||||
Net income (loss) attributable to Parsley Energy, Inc. stockholders |
$ |
40,746 |
$ |
(21,377) |
$ |
70,188 |
$ |
(40,731) |
|||||||
Net income (loss) attributable to noncontrolling interests |
15,048 |
(6,111) |
23,896 |
(12,448) |
|||||||||||
Depreciation, depletion and amortization |
83,315 |
55,988 |
152,285 |
105,372 |
|||||||||||
Exploration costs |
2,442 |
8,978 |
5,205 |
9,666 |
|||||||||||
Interest expense, net |
20,586 |
12,199 |
37,551 |
23,393 |
|||||||||||
Income tax expense (benefit) |
12,216 |
(10,918) |
30,618 |
(20,486) |
|||||||||||
EBITDAX |
174,353 |
38,759 |
319,743 |
64,766 |
|||||||||||
Change in TRA liability |
— |
— |
20,549 |
— |
|||||||||||
Stock-based compensation |
5,251 |
3,391 |
9,460 |
6,150 |
|||||||||||
Acquisition costs |
7,176 |
486 |
8,520 |
486 |
|||||||||||
Loss on sale of property |
— |
469 |
— |
119 |
|||||||||||
Accretion of asset retirement obligations |
193 |
215 |
329 |
385 |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
3,891 |
— |
|||||||||||
(Gain) loss on derivatives |
(43,514) |
27,304 |
(68,130) |
25,216 |
|||||||||||
Net settlements on derivative instruments |
4,973 |
747 |
4,672 |
19,187 |
|||||||||||
Net premium realization on options that settled during the period |
(5,063) |
10,551 |
(9,917) |
20,965 |
|||||||||||
Adjusted EBITDAX |
$ |
143,369 |
$ |
81,922 |
$ |
289,117 |
$ |
137,274 |
* |
Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income
Adjusted net income is a performance measure used by management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, (gain) loss on sale of property, exploration costs, acquisition costs, loss on early extinguishment of debt, and change in TRA liability, while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net income (loss).
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||
Adjusted Net Income and Net Income Per Share | |||||||||||||||
(Unaudited, in thousands, except per share data) | |||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||||||||||
2017 |
2016 |
2017 |
2016 | ||||||||||||
Net income (loss) - as reported |
$ |
40,746 |
$ |
(21,377) |
$ |
70,188 |
$ |
(40,731) |
|||||||
Adjustments for certain non-cash and unusual items: |
|||||||||||||||
(Gain) loss on derivatives |
(43,514) |
27,304 |
(68,130) |
25,216 |
|||||||||||
Net settlements on derivative instruments |
4,973 |
747 |
4,672 |
19,187 |
|||||||||||
Net premium realization on options that settled during the period |
(5,063) |
10,551 |
(9,917) |
20,965 |
|||||||||||
Loss on sale of property |
— |
469 |
— |
119 |
|||||||||||
Exploration costs |
2,442 |
8,978 |
5,205 |
9,666 |
|||||||||||
Acquisition costs |
7,176 |
486 |
8,520 |
486 |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
3,891 |
— |
|||||||||||
Change in TRA liability |
— |
— |
20,549 |
— |
|||||||||||
Noncontrolling interest |
— |
(6,085) |
— |
(12,441) |
|||||||||||
Change in estimated income tax |
5,762 |
(14,224) |
11,658 |
(21,077) |
|||||||||||
Adjusted net income |
$ |
12,522 |
$ |
6,849 |
$ |
46,636 |
$ |
1,390 |
|||||||
Net income (loss) per diluted share - as reported(1) |
$ |
0.17 |
$ |
(0.13) |
$ |
0.30 |
$ |
(0.28) |
|||||||
Adjustments for certain non-cash and unusual items: |
|||||||||||||||
(Gain) loss on derivatives |
$ |
(0.18) |
$ |
0.14 |
$ |
(0.29) |
$ |
0.15 |
|||||||
Net settlements on derivative instruments |
0.02 |
— |
0.02 |
0.11 |
|||||||||||
Net premium realization on options that settled during the period |
(0.02) |
0.06 |
(0.04) |
0.12 |
|||||||||||
Loss on sale of property |
— |
— |
— |
— |
|||||||||||
Exploration costs |
0.01 |
0.05 |
0.02 |
0.05 |
|||||||||||
Acquisition costs |
0.03 |
— |
0.04 |
— |
|||||||||||
Loss on early extinguishment of debt |
— |
— |
0.02 |
— |
|||||||||||
Change in TRA liability |
— |
— |
0.09 |
— |
|||||||||||
Noncontrolling interest |
— |
(0.03) |
— |
(0.07) |
|||||||||||
Change in estimated income tax |
0.02 |
(0.07) |
0.04 |
(0.12) |
|||||||||||
Adjustment for change in weighted average diluted share count(1)(2) |
— |
0.02 |
— |
0.05 |
|||||||||||
Adjusted net income per diluted share(2) |
$ |
0.05 |
$ |
0.04 |
$ |
0.20 |
$ |
0.01 |
|||||||
Basic weighted average shares outstanding - as reported(1) |
245,698 |
158,662 |
233,255 |
147,313 |
|||||||||||
Effect of dilutive securities: |
|||||||||||||||
Class B Common Stock |
— |
— |
— |
— |
|||||||||||
Restricted Stock and Restricted Stock Units |
1,094 |
— |
1,060 |
— |
|||||||||||
Diluted weighted average shares outstanding - as reported(1) |
246,792 |
158,662 |
234,315 |
147,313 |
|||||||||||
Effect of dilutive securities: |
|||||||||||||||
Class B Common Stock |
— |
32,145 |
— |
32,145 |
|||||||||||
Restricted Stock and Restricted Stock Units |
— |
898 |
— |
796 |
|||||||||||
Diluted weighted average shares outstanding for adjusted net income(2) |
246,792 |
191,705 |
234,315 |
180,254 |
(1) |
For the three and six months ended June 30, 2016, the number of weighted average diluted shares used to calculate actual net income per share is based on the fact that, under the "if converted" and treasury stock methods, Class B Common Stock and restricted stock and restricted stock units were not recognized because they would have been antidilutive. | |||||
(2) |
For purposes of calculating adjusted net income per diluted share for the three and six months ended June 30, 2016, Class B Common Stock was dilutive using the "if converted" method and restricted stock and restricted stock units were dilutive using the treasury stock method. |
Supplemental Information
Parsley Energy, Inc. and Subsidiaries | |||||||||||||||||||||||||||||||||||||||
Open Crude Oil Derivatives Positions (1) | |||||||||||||||||||||||||||||||||||||||
3Q17 |
4Q17 |
1Q18 |
2Q18 |
3Q18 |
4Q18 |
1Q19 |
2Q19 |
3Q19 |
4Q19 | ||||||||||||||||||||||||||||||
Put Spreads (MBbls/d) (2) |
35.7 |
45.5 |
26.7 |
26.4 |
26.1 |
26.1 |
6.7 |
6.6 |
|||||||||||||||||||||||||||||||
Put Price ($/Bbl) |
$ |
51.23 |
$ |
50.96 |
$ |
52.81 |
$ |
51.88 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
|||||||||||||||||||||||
Short Put Price ($/Bbl) |
$ |
41.14 |
$ |
41.43 |
$ |
41.88 |
$ |
41.88 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
|||||||||||||||||||||||
Three Way Collars (MBbls/d) (3) |
21.7 |
28.0 |
31.0 |
31.0 |
8.3 |
8.2 |
8.2 |
8.2 |
|||||||||||||||||||||||||||||||
Short Call Price ($/Bbl) |
$ |
68.85 |
$ |
70.79 |
$ |
75.65 |
$ |
75.65 |
$ |
80.40 |
$ |
80.40 |
$ |
80.40 |
$ |
80.40 |
|||||||||||||||||||||||
Put Price ($/Bbl) |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
|||||||||||||||||||||||
Short Put Price ($/Bbl) |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
|||||||||||||||||||||||
Premium Realization ($ MM) (4) |
$ |
(12.5) |
$ |
(14.6) |
$ |
(16.1) |
$ |
(14.5) |
$ |
(13.7) |
$ |
(13.7) |
$ |
(4.2) |
$ |
(4.2) |
$ |
(1.5) |
$ |
(1.5) |
|||||||||||||||||||
Collars (MBbls/d) (5) |
4.0 |
4.0 |
3.0 |
3.0 |
3.0 |
3.0 |
|||||||||||||||||||||||||||||||||
Short Call Price ($/Bbl) |
$ |
59.73 |
$ |
59.98 |
$ |
61.31 |
$ |
61.31 |
$ |
61.31 |
$ |
61.31 |
|||||||||||||||||||||||||||
Put Price ($/Bbl) |
$ |
46.75 |
$ |
46.75 |
$ |
45.67 |
$ |
45.67 |
$ |
45.67 |
$ |
45.67 |
|||||||||||||||||||||||||||
Swaps (MBbls/d) |
0.5 |
0.5 |
0.5 |
0.5 |
0.5 |
0.5 |
|||||||||||||||||||||||||||||||||
Strike Price ($/Bbl) |
$ |
55.00 |
$ |
55.00 |
$ |
55.00 |
$ |
55.00 |
$ |
55.00 |
$ |
55.00 |
|||||||||||||||||||||||||||
Total MBbls/d Hedged |
40.2 |
50.0 |
51.8 |
57.9 |
60.6 |
60.6 |
15.0 |
14.8 |
8.2 |
8.2 |
|||||||||||||||||||||||||||||
Mid-Cush Basis Swaps (MBbls/d) |
16.7 |
16.7 |
4.5 |
4.5 |
4.5 |
4.5 |
|||||||||||||||||||||||||||||||||
Swap Price ($/Bbl) |
$ |
(1.00) |
$ |
(1.00) |
$ |
(0.91) |
$ |
(0.91) |
$ |
(0.91) |
$ |
(0.91) |
Parsley Energy, Inc. and Subsidiaries | |||||||||||
Open Natural Gas Derivatives Positions (1) | |||||||||||
3Q17 |
4Q17 |
1Q18 | |||||||||
Three Way Collars (MMBtu/d) (3) |
15.5 |
15.5 |
26.7 |
||||||||
Call Price ($/MMBtu) |
$ |
4.02 |
$ |
4.02 |
$ |
4.70 |
|||||
Put Price ($/MMBtu) |
$ |
2.75 |
$ |
2.75 |
$ |
3.25 |
|||||
Short Put Price ($/MMBtu) |
$ |
2.36 |
$ |
2.36 |
$ |
2.60 |
|||||
Swaps (MMBtu/d) |
5.0 |
5.0 |
5.0 |
||||||||
Strike Price ($/MMBtu) |
$ |
3.39 |
$ |
3.46 |
$ |
3.50 |
|||||
Total MMBtu/d Hedged |
20.5 |
20.5 |
31.7 |
(1) |
As of 8/1/2017 | ||||||
(2) |
When the NYMEX price is above the put price, Parsley receives the NYMEX price. When the NYMEX price is between the put price and the short put price, Parsley receives the put price. When the NYMEX price is below the short put price, Parsley receives the NYMEX price plus the difference between the short put price and the put price. | ||||||
(3) |
Functions similarly to put spreads except that when the index price is at or above the call price, Parsley receives the call price. | ||||||
(4) |
Premium realizations represent net premiums paid (including deferred premiums), which are recognized as income or loss in the period of settlement. | ||||||
(5) |
When the NYMEX price is above the call price, Parsley receives the call price. When the NYMEX price is below the put price, Parsley receives the put price. When the NYMEX price is between the call and put prices, Parsley receives the NYMEX price. |
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, July 7, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("the Company") plans to release its second quarter 2017 financial and operating results after the market closes on Wednesday, August 2, 2017. In conjunction with the release, the Company has scheduled a conference call for Thursday, August 3, at 11:00 a.m. Eastern Time (10:00 a.m. Central Time).
By Phone: |
Dial 877-407-0672 (United States/Canada) or 412-902-0003 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Thursday, August 10 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13666261. | |
By Webcast: |
|
Select "Events & Presentations" under the "Investors" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, July 5, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) (the "Company" or "Parsley Energy") today announced that Stephanie Reed has been appointed as the Company's Senior Vice President—Land, effective July 1. Ms. Reed previously served as the Company's Vice President—Land. In this new position, Ms. Reed will continue to manage the Company's land-related activities and report to the Company's President and Chief Operating Officer, Matt Gallagher.
Bryan Sheffield, the Company's Chairman and Chief Executive Officer, commented, "Stephanie's expertise and favorable reputation throughout the industry have facilitated numerous transactions and helped ensure that Parsley derives maximum value from the Company's leasehold. An essential member of the Parsley team for years, Stephanie earned this promotion through her outstanding leadership of the Land department to date. I look forward to her ongoing contributions as we continue to consolidate and develop our premier acreage position."
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including our Annual Report on Form 10-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 15, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) (the "Company") today announced that the Company will participate in three conferences during the month of May. The Company will participate in the Stephens Energy Executive Summit in Little Rock, AR on May 16-17, the UBS Global Oil and Gas Conference in Austin, TX on May 23-24, and the BMO Capital Markets Global Energy Leadership Forum in Pinehurst, NC on May 31-June 1.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 1, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley" or the "Company") today announced that the Company amended its revolving credit agreement, thereby increasing the borrowing base by 60% to $1.4 billion, with a Company-elected commitment amount of $1.0 billion. The amendment also adds five new lenders under the credit agreement: Canadian Imperial Bank of Commerce, New York Branch; Capital One, National Association; Citibank, N.A.; PNC Bank, National Association; and UBS AG, Stamford Branch. Parsley currently has no outstanding borrowings under its credit facility.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, April 20, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced the closing of the previously announced acquisition of certain entities holding undeveloped acreage and producing oil and gas properties in the core of the Midland Basin from Double Eagle Energy Permian LLC and certain of its affiliates ("Double Eagle") for an aggregate purchase price of approximately $2.8 billion, consisting of approximately $1.4 billion in cash and approximately 39.8 million units of Parsley Energy, LLC (together with a corresponding number of shares of the Company's Class B Common Stock).
"We are thrilled to complete the acquisition of Double Eagle's premier Midland Basin assets and appreciate the diligent effort of all parties involved," stated Bryan Sheffield, Chairman and CEO of Parsley Energy. "With promising initial well results on acquired properties and progress toward trades that will enhance the value of the consolidated acreage position, our enthusiasm for this combination has only increased."
Bracewell LLP acted as legal counsel to Parsley on the transaction, and Double Eagle and certain of their affiliates were represented by Vinson & Elkins LLP.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including our Annual Report on Form 10-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, April 12, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("the Company") plans to release its first quarter 2017 financial and operating results after the market closes on Thursday, May 4, 2017. In conjunction with the release, the Company has scheduled a conference call for Friday, May 5, at 9:00 a.m. Eastern Time (8:00 a.m. Central Time).
By Phone: |
Dial 877-407-0672 (United States/Canada) or 412-902-0003 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Friday, May 12 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13660106. | |
By Webcast: |
|
Select "Events & Presentations" under the "Investor Relations" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, March 22, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) (the "Company") today announced that the Company will participate in the Scotia Howard Weil Energy Conference in New Orleans on March 27-28, during which Bryan Sheffield, Chairman and Chief Executive Officer, is scheduled to make a presentation on Tuesday, March 28.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Feb. 28, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) (the "Company") today announced that the Company will participate in Simmons & Company's Annual Energy Conference in Las Vegas on March 1-3. The Company will also participate in Raymond James' Annual Institutional Investors Conference in Orlando on March 7-8, during which Matt Gallagher, President and Chief Operating Officer, is scheduled to make a presentation on Tuesday, March 7.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Feb. 23, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended December 31, 2016. The Company has posted to its website a presentation that supplements the information in this release.
Fourth Quarter 2016 Highlights
"The fourth quarter was a strong conclusion to an extraordinary year for Parsley Energy," said Bryan Sheffield, Parsley's Chairman and CEO. "During 2016 we grew production by approximately 80% and set the pace on cost compression, as well. Our operational momentum and anticipated rig additions through 2017 position us for robust production growth both this year and next, and our recently announced acquisitions of premium acreage position us for many more years of efficient growth. Having amassed what we believe to be the premiere acreage portfolio of its size, our focus is on execution and capital efficiency as we extract maximum value from the assets we have consolidated."
Operational Highlights
During 4Q16 Parsley spud 23 and completed 21 horizontal wells with an average working interest of 99% and an average lateral length of approximately 9,500 feet.
Parsley's first well targeting the Wolfcamp C formation, the Taylor 45-33-4601H, recently completed with a 2-mile lateral in Reagan County, registered a strong peak 24-hour rate of 2,414 Boe per day, representing the fourth highest peak 24-hour rate among all Parsley wells completed to date.
Among the wells that achieved 30-day peak production periods since the Company's last quarterly update, two wells in Upton County established company-record 30-day initial production rates. The Atkins 14-11-4415H, completed with a 10,500 foot lateral in the Lower Wolfcamp B interval, registered a 30-day IP rate of 1,932 Boe per day, while the Grace 45-1-4306H, completed with a 7,800 foot lateral in the Upper Wolfcamp B interval, posted an even higher 30-day IP rate of 2,194 Boe per day. Benefiting from differentiated Wolfcamp thickness, Parsley continues to see strong results from both the Upper Wolfcamp B and Lower Wolfcamp B target intervals.
Together, the Mary 18-18B-7-4202H and the Mary 18-18B-7-4401H, completed in Upton County with lateral lengths of 10,400 feet in the Wolfcamp A and Lower Wolfcamp B intervals, respectively, established a company-record 30-day IP rate for a two-well pad of 3,386 Boe per day.
The Company's first drilled (second completed) well in Reeves County, the Lincoln 4-1-4307H, posted a robust 30-day IP rate of 1,929 Boe per day on a 6,900 foot lateral, representing the Company's strongest Southern Delaware well to date and the third highest 30-day IP rate company-wide. Parsley's second drilled well in Reeves county, the Kauffman State C4-6-4307H, has not yet achieved a 30-day rate but posted a company-record peak 24-hour rate of 2,666 Boe per day on a 6,400 foot lateral.
Financial Highlights
During the fourth quarter of 2016, the Company recorded a net loss attributable to its stockholders of $30.7 million, or $0.17 per weighted average share, compared to $2.7 million, or $0.02 per weighted average share, during the third quarter of 2016. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, and adding back the non-controlling interest allocated to Class B stockholders, adjusted net income for the fourth quarter of 2016 was $11.8 million, or $0.06 per diluted share, compared to $6.7 million, or $0.03 per weighted average share, during the third quarter of 2016.(1)
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for the fourth quarter of 2016 was $117.5 million, up 24% compared to the third quarter of 2016.(1)
Parsley registered favorable quarter-over-quarter trends in unit costs. LOE per Boe decreased from $4.15 in 3Q16 to $3.56 in 4Q16. General and administrative expense ("G&A") per Boe decreased from $6.24 in 3Q16 to $5.61 in 4Q16, while cash G&A per Boe, which excludes stock-based compensation expense, decreased from $5.40 in 3Q16 to $4.79 in 4Q16. Depreciation, depletion, and amortization expense per Boe decreased from $16.62 in 3Q16 to $15.10 in 4Q16.
Reported capital expenditures increased from $92 million in 3Q16 to $158 million, reflecting a 72% quarter-over-quarter increase in net completed footage. Fourth quarter capital expenditures include costs associated with the horizontal drilling activity noted above, as well as one vertical well and two saltwater disposal wells.
Liquidity Update
Parsley entered 2017 with a strong balance sheet. As of December 31, 2016, the Company had approximately $733 million of liquidity, consisting of $133 million of cash on hand and an undrawn amount of $600 million on the Company's revolver. Pro forma for acquisitions and equity offerings announced in January and February and the issuance of new senior notes due 2025 announced in February, the Company had approximately $1.36 billion of liquidity, consisting of $765 million of cash on hand and an undrawn amount of $598 million on the Company's revolver.(2)
Hedging Update
In view of the anticipated production growth associated with additional drilling and completion activity on an expanded asset base, Parsley has added meaningfully to and extended the duration of its oil hedge portfolio, thereby reducing the variability of its anticipated cash flows and enhancing the Company's ability to execute its development and value creation objectives. For details on Parsley's hedging position, please see the tables below under Supplemental Information and/or the Company's Annual Report on Form 10-K, upon availability, for the period ended December 31, 2016.
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the fourth quarter of 2016 on Friday, February 24 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through March 3, 2017 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13655145. A live broadcast will also be available at www.parsleyenergy.com under the "Investor Relations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
(1) |
"Adjusted EBITDAX" and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). Please see the supplemental financial information at the end of this news release for a reconciliation of the non-GAAP financial measures of adjusted EBITDAX and adjusted net income to GAAP financial measures. |
(2) |
Revolver balance is net of a $2 million letter of credit which does not change the status of the Company's fully undrawn borrowing base. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
- Tables to Follow -
Parsley Energy, Inc. and Subsidiaries Selected Operating Data (Unaudited) | |||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Net production volumes: |
|||||||||||||||
Oil (MBbls) |
2,811 |
1,462 |
9,368 |
4,807 |
|||||||||||
Natural gas (MMcf) |
3,812 |
2,711 |
13,463 |
10,339 |
|||||||||||
Natural gas liquids (MBbls) |
704 |
405 |
2,390 |
1,500 |
|||||||||||
Total (MBoe) |
4,150 |
2,319 |
14,002 |
8,031 |
|||||||||||
Average net daily production (Boe/d) |
45,109 |
25,207 |
38,257 |
22,003 |
|||||||||||
Average sales prices: (1) |
|||||||||||||||
Oil, without realized derivatives (per Bbl) |
$ |
46.76 |
$ |
39.00 |
$ |
41.34 |
$ |
44.89 |
|||||||
Oil, with realized derivatives (per Bbl) |
$ |
49.41 |
$ |
51.30 |
$ |
47.56 |
$ |
56.60 |
|||||||
Natural gas, without realized derivatives (per Mcf) |
$ |
2.91 |
$ |
2.17 |
$ |
2.30 |
$ |
2.57 |
|||||||
Natural gas, with realized derivatives (per Mcf) |
$ |
2.91 |
$ |
2.25 |
$ |
2.30 |
$ |
2.72 |
|||||||
NGLs (per Bbl) |
$ |
19.12 |
$ |
14.48 |
$ |
16.01 |
$ |
15.79 |
|||||||
Total, without realized derivatives (per Boe) |
$ |
37.59 |
$ |
29.65 |
$ |
32.60 |
$ |
33.13 |
|||||||
Total, with realized derivatives (per Boe) |
$ |
39.39 |
$ |
37.50 |
$ |
36.76 |
$ |
40.33 |
|||||||
Average costs (per Boe): |
|||||||||||||||
Lease operating expenses |
$ |
3.56 |
$ |
5.57 |
$ |
4.23 |
$ |
7.83 |
|||||||
Production and ad valorem taxes |
$ |
2.15 |
$ |
1.90 |
$ |
1.99 |
$ |
2.22 |
|||||||
Depreciation, depletion and amortization |
$ |
15.10 |
$ |
21.74 |
$ |
16.70 |
$ |
22.20 |
|||||||
General and administrative expenses (including stock-based compensation) |
$ |
5.61 |
$ |
5.39 |
$ |
6.04 |
$ |
6.89 |
|||||||
General and administrative expenses (cash based) |
$ |
4.79 |
$ |
4.41 |
$ |
5.12 |
$ |
5.87 |
(1) |
Average prices shown in the table include transportation and gathering costs and reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculation of such effects includes both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. |
Parsley Energy, Inc. and Subsidiaries Consolidated Statements of Operations (Unaudited, in thousands, except for per share data) | |||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
REVENUES |
|||||||||||||||
Oil sales |
$ |
131,438 |
$ |
57,019 |
$ |
387,303 |
$ |
215,795 |
|||||||
Natural gas sales |
11,094 |
5,870 |
30,928 |
26,582 |
|||||||||||
Natural gas liquids sales |
13,462 |
5,863 |
38,273 |
23,680 |
|||||||||||
Other |
(118) |
194 |
1,269 |
417 |
|||||||||||
Total revenues |
155,876 |
68,946 |
457,773 |
266,474 |
|||||||||||
OPERATING EXPENSES |
|||||||||||||||
Lease operating expenses |
14,784 |
12,920 |
59,293 |
62,913 |
|||||||||||
Production and ad valorem taxes |
8,923 |
4,403 |
27,916 |
17,800 |
|||||||||||
Depreciation, depletion and amortization |
62,653 |
50,408 |
233,766 |
178,281 |
|||||||||||
General and administrative expenses (including stock-based compensation) |
23,290 |
12,508 |
84,591 |
55,294 |
|||||||||||
Exploration costs |
1,152 |
5,307 |
13,931 |
13,865 |
|||||||||||
Acquisition costs |
155 |
— |
1,081 |
— |
|||||||||||
Impairment |
— |
950 |
— |
950 |
|||||||||||
Accretion of asset retirement obligations |
157 |
169 |
732 |
826 |
|||||||||||
Rig termination costs |
— |
— |
— |
8,970 |
|||||||||||
Other operating expenses |
1,549 |
1,440 |
5,316 |
1,696 |
|||||||||||
Total operating expenses |
112,663 |
88,105 |
426,626 |
340,595 |
|||||||||||
OPERATING INCOME (LOSS) |
43,213 |
(19,159) |
31,147 |
(74,121) |
|||||||||||
OTHER (EXPENSE) INCOME |
|||||||||||||||
Interest expense, net |
(16,279) |
(11,220) |
(55,233) |
(45,553) |
|||||||||||
Loss on sale of property |
— |
(36,705) |
(119) |
(34,374) |
|||||||||||
Prepayment premium on extinguishment of debt |
(36,335) |
— |
(36,335) |
— |
|||||||||||
(Loss) gain on derivatives |
(26,993) |
37,119 |
(50,835) |
60,818 |
|||||||||||
Other income (expense) |
6,638 |
(4,593) |
5,034 |
(3,556) |
|||||||||||
Total other (expense) income, net |
(72,969) |
(15,399) |
(137,488) |
(22,665) |
|||||||||||
(LOSS) BEFORE INCOME TAXES |
(29,756) |
(34,558) |
(106,341) |
(96,786) |
|||||||||||
INCOME TAX (EXPENSE) BENEFIT |
(4,341) |
8,622 |
17,424 |
23,755 |
|||||||||||
NET LOSS |
(34,097) |
(25,936) |
(88,917) |
(73,031) |
|||||||||||
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS |
3,352 |
10,696 |
14,735 |
22,547 |
|||||||||||
NET LOSS ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS |
$ |
(30,745) |
$ |
(15,240) |
$ |
(74,182) |
$ |
(50,484) |
|||||||
Net loss per common share: |
|||||||||||||||
Basic |
$ |
(0.17) |
$ |
(0.12) |
$ |
(0.46) |
$ |
(0.45) |
|||||||
Diluted |
$ |
(0.17) |
$ |
(0.14) |
$ |
(0.46) |
$ |
(0.45) |
|||||||
Weighted average common shares outstanding: |
|||||||||||||||
Basic |
178,990 |
125,437 |
161,793 |
111,271 |
|||||||||||
Diluted |
178,990 |
157,582 |
161,793 |
111,271 |
* |
Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited, in thousands) | |||||||
December |
December 31, | ||||||
Cash and cash equivalents |
$ |
133,379 |
$ |
343,084 |
|||
Other current assets |
166,109 |
145,242 |
|||||
Total current assets |
299,488 |
488,326 |
|||||
Total property, plant and equipment, net |
3,616,560 |
1,985,753 |
|||||
Total noncurrent assets |
22,734 |
31,021 |
|||||
TOTAL ASSETS |
$ |
3,938,782 |
$ |
2,505,100 |
|||
Total current liabilities |
$ |
344,954 |
$ |
228,497 |
|||
Long-term debt |
1,041,324 |
546,832 |
|||||
Other noncurrent liabilities |
122,198 |
143,130 |
|||||
Total noncurrent liabilities |
1,163,522 |
689,962 |
|||||
Total liabilities |
1,508,476 |
918,459 |
|||||
Total equity |
2,430,306 |
1,586,641 |
|||||
TOTAL LIABILITIES AND EQUITY |
$ |
3,938,782 |
$ |
2,505,100 |
Parsley Energy, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) | |||||||
Year Ended December 31, | |||||||
2016 |
2015 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|||||||
Net loss |
$ |
(88,917) |
$ |
(73,031) |
|||
Adjustments to reconcile net loss to net cash provided by operating activities: |
|||||||
Non-cash and other items |
372,155 |
247,215 |
|||||
Changes in operating assets and liabilities |
(55,047) |
(1,894) |
|||||
Net cash provided by operating activities |
228,191 |
172,290 |
|||||
Net cash used in investing activities |
(1,885,366) |
(427,165) |
|||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|||||||
Net proceeds (repayments) from long-term debt |
517,459 |
(121,932) |
|||||
Issuance of common stock |
930,315 |
669,418 |
|||||
Other |
(304) |
(77) |
|||||
Net cash provided by financing activities |
1,447,470 |
547,409 |
|||||
Net (decrease) increase in cash and cash equivalents |
(209,705) |
292,534 |
|||||
Cash and cash equivalents, beginning of year |
343,084 |
50,550 |
|||||
Cash and cash equivalents, end of year |
$ |
133,379 |
$ |
343,084 |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net (loss) income before depreciation, depletion and amortization, exploration costs, acquisition costs, (gain) loss on sale of property, prepayment premium on extinguishment of debt, asset retirement obligation accretion expense, stock-based compensation, net interest expense, income tax (benefit) expense, deferred tax asset valuation, rig termination costs, (gain) loss on derivatives, net settlements on derivative instruments, net premium realizations on options that settled during the period, and inventory write down.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measure of other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries Adjusted EBITDAX (Unaudited, in thousands) | |||||||||||||||
Three Months Ended |
Year Ended | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Adjusted EBITDAX reconciliation to net loss: |
|||||||||||||||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ |
(30,745) |
$ |
(15,240) |
$ |
(74,182) |
$ |
(50,484) |
|||||||
Net loss attributable to noncontrolling interests |
(3,352) |
(10,696) |
(14,735) |
(22,547) |
|||||||||||
Depreciation, depletion and amortization |
62,653 |
50,408 |
233,766 |
178,281 |
|||||||||||
Exploration costs |
1,152 |
5,307 |
13,931 |
13,865 |
|||||||||||
Interest expense, net |
16,279 |
11,220 |
55,233 |
45,553 |
|||||||||||
Income tax expense (benefit) |
4,341 |
(8,622) |
(17,424) |
(23,755) |
|||||||||||
EBITDAX |
50,328 |
32,377 |
196,589 |
140,913 |
|||||||||||
Stock-based compensation |
3,405 |
2,278 |
12,871 |
8,133 |
|||||||||||
Impairment |
— |
950 |
— |
950 |
|||||||||||
Acquisition costs |
155 |
— |
1,081 |
— |
|||||||||||
Accretion of asset retirement obligations |
157 |
169 |
732 |
826 |
|||||||||||
Rig termination costs |
— |
— |
— |
8,970 |
|||||||||||
Loss on sale of property |
— |
36,705 |
119 |
34,374 |
|||||||||||
Prepayment premium on extinguishment of debt |
36,335 |
— |
36,335 |
— |
|||||||||||
Loss (gain) on derivatives |
26,993 |
(37,119) |
50,835 |
(60,818) |
|||||||||||
Net settlements on derivative instruments |
1,881 |
14,402 |
26,441 |
46,456 |
|||||||||||
Net premium realization on options that settled during the period |
5,576 |
4,276 |
31,757 |
11,406 |
|||||||||||
Inventory write down |
— |
4,147 |
— |
4,147 |
|||||||||||
Deferred tax asset valuation |
(7,351) |
— |
(7,351) |
— |
|||||||||||
Adjusted EBITDAX |
$ |
117,479 |
$ |
58,185 |
$ |
349,409 |
$ |
195,357 |
* |
Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income
Adjusted net income is a performance measure used by management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, deferred tax asset valuation, (gain) loss on sale of property, prepayment premium on extinguishment of debt, exploration costs and acquisition costs while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net loss.
Parsley Energy, Inc. and Subsidiaries Adjusted Net Income and Net Income Per Share (Unaudited, in thousands, except per share data) | |||||||
Three Months Ended |
Year Ended | ||||||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ |
(30,745) |
$ |
(74,182) |
|||
Exploration costs |
1,152 |
13,931 |
|||||
Acquisition costs |
155 |
1,081 |
|||||
Loss on derivatives |
26,993 |
50,835 |
|||||
Net settlements on derivative instruments |
1,881 |
26,441 |
|||||
Net premium realization on options that settled during the period |
5,576 |
31,757 |
|||||
Loss on sale of property |
— |
119 |
|||||
Prepayment premium on extinguishment of debt |
36,335 |
36,335 |
|||||
Deferred tax asset valuation |
(7,351) |
(7,351) |
|||||
Noncontrolling interest |
(3,310) |
(14,953) |
|||||
Change in estimated income tax |
(18,884) |
(47,152) |
|||||
Adjusted net income |
$ |
11,802 |
$ |
16,861 |
|||
Weighted average diluted shares outstanding |
208,117 |
193,036 |
|||||
Adjusted net income per diluted share |
$ |
0.06 |
$ |
0.09 |
Supplemental Information | ||||||||||||||||||||||||||||||||||||||||||||||||
Parsley Energy, Inc., Subsidiaries, and Entities to be Acquired Open Crude Oil Derivatives Positions(1) | ||||||||||||||||||||||||||||||||||||||||||||||||
1Q17 |
2Q17 |
3Q17 |
4Q17 |
1Q18 |
2Q18 |
3Q18 |
4Q18 |
1Q19 |
2Q19 |
3Q19 |
4Q19 |
|||||||||||||||||||||||||||||||||||||
Parsley Energy: |
||||||||||||||||||||||||||||||||||||||||||||||||
Put Spreads (MBbls/d)(2) |
13.8 |
13.6 |
35.7 |
45.5 |
23.3 |
23.1 |
19.6 |
19.6 |
||||||||||||||||||||||||||||||||||||||||
Put Price ($/Bbl) |
||||||||||||||||||||||||||||||||||||||||||||||||
$ |
49.93 |
$ |
49.93 |
$ |
52.66 |
$ |
52.80 |
$ |
53.21 |
$ |
52.14 |
$ |
50.00 |
$ |
50.00 |
|||||||||||||||||||||||||||||||||
Short Put Price ($/Bbl) |
$ |
36.14 |
$ |
36.14 |
$ |
41.80 |
$ |
41.95 |
$ |
41.43 |
$ |
42.14 |
$ |
40.00 |
$ |
40.00 |
||||||||||||||||||||||||||||||||
Three Way Collars (MBbls/d)(3) |
13.3 |
19.8 |
31.0 |
31.0 |
8.3 |
8.2 |
8.2 |
8.2 |
||||||||||||||||||||||||||||||||||||||||
Call Price ($/Bbl) |
$ |
74.38 |
$ |
75.28 |
$ |
75.65 |
$ |
75.65 |
$ |
80.40 |
$ |
80.40 |
$ |
80.40 |
$ |
80.40 |
||||||||||||||||||||||||||||||||
Put Price ($/Bbl) |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
$ |
50.00 |
||||||||||||||||||||||||||||||||
Short Put Price ($/Bbl) |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
$ |
40.00 |
||||||||||||||||||||||||||||||||
Premium Realization ($ MM)(4) |
$ |
(4.9) |
$ |
(4.9) |
$ |
(14.2) |
$ |
(17.8) |
$ |
(11.9) |
$ |
(10.4) |
$ |
(10.6) |
$ |
(10.6) |
$ |
(1.5) |
$ |
(1.5) |
$ |
(1.5) |
$ |
(1.5) |
||||||||||||||||||||||||
Mid-Cush Basis Swaps (MBbls/d) |
11.3 |
11.3 |
12.2 |
12.2 |
1.0 |
1.0 |
1.0 |
1.0 |
||||||||||||||||||||||||||||||||||||||||
Swap Price ($/Bbl) |
$ |
(1.00) |
$ |
(1.00) |
$ |
(1.05) |
$ |
(1.05) |
$ |
(0.95) |
$ |
(0.95) |
$ |
(0.95) |
$ |
(0.95) |
||||||||||||||||||||||||||||||||
Double Eagle: (5) |
||||||||||||||||||||||||||||||||||||||||||||||||
Collars (MBbls/d)(6) |
1.5 |
4.0 |
4.0 |
3.0 |
3.0 |
3.0 |
3.0 |
|||||||||||||||||||||||||||||||||||||||||
Call Price ($/Bbl) |
$ |
56.15 |
$ |
59.73 |
$ |
59.98 |
$ |
61.31 |
$ |
61.31 |
$ |
61.31 |
$ |
61.31 |
||||||||||||||||||||||||||||||||||
Put Price ($/Bbl) |
$ |
47.00 |
$ |
46.75 |
$ |
46.75 |
$ |
45.67 |
$ |
45.67 |
$ |
45.67 |
$ |
45.67 |
||||||||||||||||||||||||||||||||||
WTI Swaps (MBbls/d) |
1.0 |
0.5 |
0.5 |
0.5 |
0.5 |
0.5 |
0.5 |
|||||||||||||||||||||||||||||||||||||||||
Strike Price ($/Bbl) |
$ |
53.42 |
$ |
55.00 |
$ |
55.00 |
$ |
55.00 |
$ |
55.00 |
$ |
55.00 |
$ |
55.00 |
||||||||||||||||||||||||||||||||||
Mid-Cush Basis Swaps (MBbls/d) |
4.5 |
4.5 |
3.5 |
3.5 |
3.5 |
3.5 |
||||||||||||||||||||||||||||||||||||||||||
Swap Price ($/Bbl) |
$ |
(0.86) |
$ |
(0.86) |
$ |
(0.90) |
$ |
(0.90) |
$ |
(0.90) |
$ |
(0.90) |
Parsley Energy, Inc., Subsidiaries, and Entities to be Acquired | |||||||||||||||||||
1Q17 |
2Q17 |
3Q17 |
4Q17 |
1Q18 | |||||||||||||||
Parsley Energy: |
|||||||||||||||||||
Three Way Collars (MMBtu/d)(3) |
15.8 |
15.7 |
15.5 |
15.5 |
|||||||||||||||
Call Price ($/MMBtu) |
$ |
4.02 |
$ |
4.02 |
$ |
4.02 |
$ |
4.02 |
|||||||||||
Put Price ($/MMBtu) |
$ |
2.75 |
$ |
2.75 |
$ |
2.75 |
$ |
2.75 |
|||||||||||
Short Put Price ($/MMBtu) |
$ |
2.36 |
$ |
2.36 |
$ |
2.36 |
$ |
2.36 |
|||||||||||
Double Eagle: (5) |
|||||||||||||||||||
Swaps (MMBtu/d) |
5.0 |
5.0 |
5.0 |
5.0 |
|||||||||||||||
Strike Price ($/MMBtu) |
$ |
3.39 |
$ |
3.39 |
$ |
3.46 |
$ |
3.50 |
(1) |
As of 2/23/2017 |
(2) |
When NYMEX price is above put price, Parsley receives the NYMEX price. When NYMEX price is between the put price and the short put price, Parsley receives the put price. When NYMEX price is below the short put price, Parsley receives the NYMEX price plus the difference between the short put price and the put price. |
(3) |
Functions similarly to put spreads except that when index price is at or above the call price, Parsley receives the call price. |
(4) |
Premium realizations represent net premiums collected (from restructured positions) or paid (including deferred premiums), which are recognized as income or loss in the period of settlement. |
(5) |
Upon the closing of Parsley's pending acquisition of equity interests in Double Eagle Lone Star LLC, DE Operating LLC, and Veritas Energy Partners, LLC (collectively, "Double Eagle"), as reported in Parsley's Form 8-K filed with the SEC on 2/13/2017, Parsley will assume Double Eagle's existing hedge positions. |
(6) |
When NYMEX price is above the call price, Double Eagle receives call price. When NYMEX is below the put price, Double Eagle receives the put price. When NYMEX is between call and put prices, Double Eagle receives the NYMEX price. |
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Feb. 9, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("the Company") plans to release its fourth quarter 2016 financial and operating results after the market closes on Thursday, February 23, 2017. In conjunction with the release, the Company has scheduled a conference call for Friday, February 24, at 9:00 a.m. Eastern Time (8:00 a.m. Central Time).
By Phone: |
Dial 877-407-0672 (United States/Canada) or 412-902-0003 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Friday, March 3 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13655145. | |
By Webcast: |
|
Select "Events & Presentations" under the "Investor Relations" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Feb. 8, 2017 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp., announced today the pricing of their previously announced private placement of senior unsecured notes due 2025 (the "2025 Notes"), which was upsized to $450.0 million in aggregate principal amount from the originally proposed $350.0 million offering (the "Notes Offering"). The 2025 Notes, which priced at par, will mature on August 15, 2025 and will pay interest at the rate of 5.250% per year. Parsley Inc. will not guarantee the 2025 Notes.
The Notes Offering is expected to close February 13, 2017, subject to customary closing conditions. Together with a portion of the net proceeds from Parsley Inc.'s previously announced equity offering (the "Concurrent Equity Offering"), which is scheduled to close on February 13, 2017, Parsley intends to use the net proceeds of the Notes Offering to fund the cash portion of the purchase price for the acquisition of certain undeveloped acreage and producing oil and gas properties in the Midland Basin from Double Eagle Energy Permian LLC (the "Double Eagle Acquisition"). The Notes Offering is not conditioned on the consummation of the Double Eagle Acquisition or the consummation of the Concurrent Equity Offering. If the Double Eagle Acquisition is not consummated, or if there are any remaining net proceeds from the Notes Offering following its consummation, Parsley intends to use such net proceeds to fund a portion of its capital program and for general corporate purposes, including potential future acquisitions.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Parsley plans to offer and sell the securities only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This news release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the SEC, including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
SOURCE Parsley Energy, LLC
AUSTIN, Texas, Feb. 7, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley Energy" or the "Company") today announced that it has priced an underwritten public offering of 36,000,000 shares of Class A common stock for total gross proceeds (before underwriters' fees and estimated expenses) of approximately $1.116 billion (the "Equity Offering"). The underwriters have an option for 30 days to purchase up to an additional 5,400,000 shares of Class A common stock from the Company. The Equity Offering is expected to close on February 13, 2017, subject to customary closing conditions.
Concurrently with the Equity Offering, Parsley Energy, LLC and Parsley Finance Corp., the Company's consolidated subsidiaries, intend to offer to qualified institutional buyers and non-U.S. persons outside of the U.S., in an offering exempt from registration under the Securities Act of 1933, as amended, $350.0 million aggregate principal amount of senior notes due 2025 (the "Concurrent Notes Offering"). The Company will not guarantee the senior notes. The Equity Offering is not conditioned on the consummation of the Concurrent Notes Offering, and the Concurrent Notes Offering is not conditioned on the consummation of the Equity Offering.
Together with a portion of the net proceeds from the Concurrent Notes Offering, the Company intends to use the net proceeds of the Equity Offering to fund the cash portion of the purchase price for the acquisition of certain undeveloped acreage and producing oil and gas properties in the Midland Basin from Double Eagle Energy Permian LLC (the "Double Eagle Acquisition"). The Equity Offering is not conditioned on the consummation of the Double Eagle Acquisition. If the Double Eagle Acquisition is not consummated, or if there are any remaining net proceeds from the Equity Offering following its consummation, the Company intends to use such net proceeds to fund a portion of its capital program and for general corporate purposes, including potential future acquisitions.
Credit Suisse Securities (USA) LLC and Morgan Stanley are acting as joint lead bookrunners for the Equity Offering.
The Equity Offering is being made pursuant to an effective shelf registration statement, which has been filed with the Securities and Exchange Commission (the "SEC") and became effective June 5, 2015. The Equity Offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the SEC's website at www.sec.gov. Alternatively, the joint lead bookrunners will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting:
Credit Suisse Securities (USA) LLC
Attn: Prospectus Department
One Madison Avenue
New York, NY 10010
Telephone: 1-800-221-1037
newyork.prospectus@credit-suisse.com
Morgan Stanley & Co. LLC
Attn: Prospectus Department
180 Varick Street, 2nd Floor
New York, NY 10014
This news release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2015 and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Feb. 7, 2017 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp., announced today that they have commenced, subject to market conditions and other factors, a private placement of $350.0 million in aggregate principal amount of senior unsecured notes due 2025 to eligible purchasers (the "Notes Offering").
Concurrently with the Notes Offering, Parsley Inc. is offering 36,000,000 shares of its Class A common stock (or 41,400,000 shares if the option to purchase additional shares is exercised in full) in an underwritten public offering (the "Concurrent Equity Offering"). The shares of Class A common stock are being offered in the Concurrent Equity Offering by means of a separate prospectus supplement. The Notes Offering is not conditioned on the consummation of the Concurrent Equity Offering, and the Concurrent Equity Offering is not conditioned on the consummation of the Notes Offering.
Together with a portion of the net proceeds from the Concurrent Equity Offering, Parsley intends to use the net proceeds of the Notes Offering to fund the cash portion of the purchase price for the acquisition of certain undeveloped acreage and producing oil and gas properties in the Midland Basin from Double Eagle Energy Permian LLC (the "Double Eagle Acquisition"). The Notes Offering is not conditioned on the consummation of the Double Eagle Acquisition. If the Double Eagle Acquisition is not consummated, or if there are any remaining net proceeds from the Notes Offering following its consummation, Parsley intends to use such net proceeds to fund a portion of its capital program and for general corporate purposes, including potential future acquisitions.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Parsley plans to offer and sell the securities only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This news release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the SEC, including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
SOURCE Parsley Energy, LLC
AUSTIN, Texas, Feb. 7, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley Energy" or the "Company") today announced that it has commenced an underwritten public offering of 36,000,000 shares of Class A common stock (the "Equity Offering"). The Company expects to grant the underwriters an option to purchase up to an additional 5,400,000 shares of Class A common stock from the Company.
Concurrently with the Equity Offering, Parsley Energy, LLC and Parsley Finance Corp., the Company's consolidated subsidiaries, intend to offer to qualified institutional buyers and non-U.S. persons outside of the U.S., in an offering exempt from registration under the Securities Act of 1933, as amended, $350.0 million aggregate principal amount of senior notes due 2025 (the "Concurrent Notes Offering"). The Company will not guarantee the senior notes. The Equity Offering is not conditioned on the consummation of the Concurrent Notes Offering, and the Concurrent Notes Offering is not conditioned on the consummation of the Equity Offering.
Together with a portion of the net proceeds from the Concurrent Notes Offering, the Company intends to use the net proceeds of the Equity Offering to fund the cash portion of the purchase price for the acquisition of certain undeveloped acreage and producing oil and gas properties in the Midland Basin from Double Eagle Energy Permian LLC (the "Double Eagle Acquisition"). The Equity Offering is not conditioned on the consummation of the Double Eagle Acquisition. If the Double Eagle Acquisition is not consummated, or if there are any remaining net proceeds from the Equity Offering following its consummation, the Company intends to use such net proceeds to fund a portion of its capital program and for general corporate purposes, including potential future acquisitions.
Credit Suisse Securities (USA) LLC and Morgan Stanley are acting as joint lead bookrunners for the Equity Offering.
The Equity Offering is being made pursuant to an effective shelf registration statement, which has been filed with the Securities and Exchange Commission (the "SEC") and became effective June 5, 2015. The Equity Offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the SEC's website at www.sec.gov. Alternatively, the joint lead bookrunners will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting:
Credit Suisse Securities (USA) LLC
Attn: Prospectus Department
One Madison Avenue
New York, NY 10010
Telephone: 1-800-221-1037
newyork.prospectus@credit-suisse.com
Morgan Stanley & Co. LLC
Attn: Prospectus Department
180 Varick Street, 2nd Floor
New York, NY 10014
This news release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2015 and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Feb. 7, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced that it has entered into an agreement to acquire certain undeveloped acreage and producing oil and gas properties in the core of the Midland Basin from Double Eagle Energy Permian, LLC ("Double Eagle") for an aggregate purchase price of approximately $2.8 billion, subject to purchase price adjustments and customary closing conditions. Upon completion, the pending acquisition will add approximately 71,000 net acres to the Company's Midland Basin acreage portfolio, bringing total Permian Basin net acreage to approximately 227,000 acres. Parsley intends to increase drilling and completion activity on the Company's expanded asset base and, as a result, is updating 2017 capital plans and operating guidance to reflect increased capital investment and associated production growth. Herein Parsley also provides updates on preliminary 4Q16 and full-year 2016 operational results, year-end 2016 reserves, and recent hedging activity.
Acquisition Highlights
Pro Forma Company Highlights
"We are pleased to solidify Parsley's position as a leading Permian operator through our largest acquisition to date," stated Bryan Sheffield, Chairman and Chief Executive Officer of Parsley Energy. "This transaction maintains our focus on core of the core acreage with the most favorable reservoir characteristics and positions us for years of production growth at the low end of the cost curve. The infusion of high quality drilling locations substantially increases our peak production potential and extends our inventory of drilling locations while enhancing the quality of that inventory. We believe this transaction sets us apart from peer companies on the basis of the size and quality of our acreage position in what we consider the most desirable basin in the country."
John Sellers and Cody Campbell, Co-CEOs of Double Eagle, commented, "With many possible paths for the next phase in the evolution and development of Double Eagle's assets, we were excited to negotiate a transaction with Parsley given the Company's history of efficient growth and of enhancing the value of its asset base through the same types of creative transactions it took to build Double Eagle's portfolio." Greg Beard, Head of Natural Resources and Senior Partner at Apollo Global Management, added, "On behalf of Apollo and Double Eagle's other financial sponsors, Post Oak Energy Capital and Magnetar Capital, we look forward to working with Parsley Energy as the Company develops the prized assets the Double Eagle team has expertly assembled in the true core of the Midland Basin. We believe Parsley's record of strong operational performance and the Company's complementary asset base make Parsley the ideal company to deliver the tremendous value associated with these assets."
Fourth Quarter and Full Year 2016 Operations Update1
The Company expects to report 4Q16 net production of 44.8-45.2 MBoe per day, up approximately 5% at the midpoint versus 3Q16 net production, placing full-year 2016 average production within the annual guidance range.
The Company expects to report 4Q16 capital expenditures of $155-$160 MM, translating to full-year 2016 capital expenditures that fall within the annual guidance range. Parsley expects to report unit costs near the low end of annual guidance ranges.
The Company plans to release detailed fourth quarter and full-year 2016 results on February 23, 2017 and to discuss these results on a conference call scheduled for February 24, 2017, details of which can be found below. The following table shows revised expectations for full-year 2016 results based on preliminary 4Q16 results:
2016E |
2016E | ||
(Prior) |
(Updated) | ||
Production |
|||
Annual production (MBoe/d) |
37-39 |
38.1-38.3 | |
Capital Program |
|||
Total development expenditures ($MM) |
$460-$510 |
$493-$499 | |
Activity |
|||
Gross operated horizontal completions |
80-90 |
79 | |
Average lateral length |
~7,000' |
~7,400' | |
Average working interest |
85%-95% |
96% | |
Unit Costs |
|||
Lease operating expenses ($/Boe) |
$4.25-$4.75 |
$4.10-$4.30 | |
Cash general and administrative expenses ($/Boe) |
$5.00-$5.50 |
$5.00-$5.25 |
Updated 2017 Capital Program and Operational Guidance2
Prompted by the pending acreage acquisition and relative to the activity contemplated by its previously disclosed capital program, Parsley intends to add four rigs by the end of 2017, translating to approximately 40 incremental horizontal well spuds in 2017, approximately 10 of which are expected to be put on production this year. All of the incremental wells would be located in the Midland Basin. While the majority of the production impact associated with incremental drilling and completion activity would occur in 2018, Parsley is raising 2017 net daily production guidance by 5 MBoe per day to a range of 62-68 MBoe per day, and is likewise increasing expected 4Q17 production from 70-80 MBoe per day to 75-85 MBoe per day.
1 The preliminary 4Q16 estimates set forth herein are derived from internal records and are based on the most current information available to the Company's management. The Company's normal reporting processes with respect to such preliminary operational data have not been fully completed and, during the course of its review process on these preliminary estimates, the Company could identify items that would require it to make adjustments and which could affect its final results. Any such adjustments could be material. |
2 All figures represent Company expectations and all except reference to 4Q17 net production refer to full-year 2017 totals or averages. |
Historical and Projected Horizontal Rig Activity3
1Q16 |
2Q16 |
3Q16 |
4Q16 |
1Q17 |
2Q17 |
3Q17 |
4Q17 | ||||||||
Rig Count – Prior |
6 |
6 |
6 |
7 |
10 |
10 |
10 |
10 | |||||||
Rig Count – Updated |
6 |
6 |
6 |
7 |
10 |
11 |
12 |
14 | |||||||
Changes to annual guidance ranges are shown in the following table:
2017E |
2017E* | ||
(Prior) |
(Updated) | ||
Production |
|||
Annual production (MBoe/d) |
57-63 |
62-68 | |
% Oil |
68%-73% |
68%-73% | |
Capital Program |
|||
Drilling and completion ($MM) |
$630-$750 |
$840-$960 | |
Infrastructure and other ($MM) |
$120-$150 |
$160-$190 | |
Total development expenditures ($MM) |
$750-$900 |
$1,000-$1,150 | |
Activity |
|||
Gross operated horizontal completions |
120-140 |
130-150 | |
Midland Basin |
85-95 |
95-105 | |
Delaware Basin |
35-45 |
35-45 | |
Average lateral length |
~8,000' |
~8,000' | |
Gross operated vertical completions |
0 |
5-10 | |
Average working interest |
85%-95% |
85%-95% | |
Unit Costs |
|||
Lease operating expenses ($/Boe) |
$4.00-$4.75 |
$4.00-$4.75 | |
Cash general and administrative expenses ($/Boe) |
$4.50-$5.25 |
$4.50-$5.25 | |
Production and ad valorem taxes (as a % of revenue) |
6.5%-7.5% |
6.5%-7.5% |
*These estimates are based on our current planned capital expenditures, drilling activity, and well results, as well as our current expected unit costs for 2017. Achieving these production estimates and maintaining the required drilling activity to achieve these estimates will depend on the availability of capital, regulatory approval, commodity prices, drilling and completion costs, actual drilling results, and other factors. To the extent any of these factors changes adversely, we may not be able to achieve these production and drilling results. |
The increase in expected capital expenditures versus previous guidance is associated with the additional horizontal wells noted above, deployment of a vertical rig to hold Double Eagle acreage to be acquired, non-operated activity and associated capital expenditures on acreage to be acquired, service and equipment cost inflation on incremental activity relative to costs on previously anticipated activity, and expenses associated with the integration of new assets.
3 While certain of Parsley's previous disclosures have referenced only those rigs tasked to drill both the vertical and lateral portions of a horizontal well, the table above and associated discussion contemplate all rigs utilized for horizontal drilling activity, some of which may be dedicated to and purposed for certain segments of the wellbore. "Spudder" rigs are excluded from the counts above. |
Hedging Update
In view of the anticipated production growth associated with additional drilling and completion activity on an expanded asset base, Parsley has added meaningfully to and extended the duration of its oil hedge portfolio, thereby reducing the variability of its anticipated cash flows and enhancing the Company's ability to execute its development and value creation objectives.
Open Oil Derivatives Positions
1Q17 |
2Q17 |
3Q17 |
4Q17 |
1Q18 |
2Q18 |
3Q18 |
4Q18 |
1Q19 |
2Q19 |
3Q19 |
4Q19 | ||||||||||||
Put Spreads (MBbls/d) |
13.8 |
13.6 |
35.7 |
45.5 |
23.3 |
23.1 |
13.0 |
13.0 |
|||||||||||||||
Put Price ($/Bbl) |
$49.93 |
$49.93 |
$52.66 |
$52.80 |
$53.21 |
$52.14 |
$50.00 |
$50.00 |
|||||||||||||||
Short Put Price ($/Bbl) |
$36.14 |
$36.14 |
$41.80 |
$41.95 |
$41.43 |
$42.14 |
$40.00 |
$40.00 |
|||||||||||||||
Three Way Collars (MBbls/d) |
6.6 |
17.9 |
17.9 |
8.3 |
8.2 |
8.2 |
8.2 | ||||||||||||||||
Call Price ($/Bbl) |
$77.10 |
$76.57 |
$76.57 |
$80.40 |
$80.40 |
$80.40 |
$80.40 | ||||||||||||||||
Put Price ($/Bbl) |
$50.00 |
$50.00 |
$50.00 |
$50.00 |
$50.00 |
$50.00 |
$50.00 | ||||||||||||||||
Short Put Price ($/Bbl) |
$40.00 |
$40.00 |
$40.00 |
$40.00 |
$40.00 |
$40.00 |
$40.00 | ||||||||||||||||
Premium Realization ($ MM) |
($4.9) |
($4.9) |
($14.2) |
($17.8) |
($9.5) |
($8.0) |
($6.3) |
($6.3) |
($1.5) |
($1.5) |
($1.5) |
($1.5) | |||||||||||
Mid-Cush Basis Swaps (MBbls/d) |
11.3 |
11.3 |
12.2 |
12.2 |
1.0 |
1.0 |
1.0 |
1.0 |
|||||||||||||||
Swap Price ($/Bbl) |
($1.00) |
($1.00) |
($1.05) |
($1.05) |
($0.95) |
($0.95) |
($0.95) |
($0.95) |
In addition to the hedge portfolio shown in the table above, Parsley expects to assume the following hedge positions upon completion of the pending acquisition of Midland Basin assets:
1Q17 |
2Q17 |
3Q17 |
4Q17 |
1Q18 |
2Q18 |
3Q18 |
4Q18 | ||||||||
Collars (MBbls/d) |
1.5 |
4.0 |
4.0 |
3.0 |
3.0 |
3.0 |
3.0 | ||||||||
Long Put Price ($/Bbl) |
$47.00 |
$46.75 |
$46.75 |
$45.67 |
$45.67 |
$45.67 |
$45.67 | ||||||||
Short Call Price ($/Bbl) |
$56.15 |
$59.73 |
$59.98 |
$61.31 |
$61.31 |
$61.31 |
$61.31 | ||||||||
WTI Swaps (MBbls/d) |
1.0 |
0.5 |
0.5 |
0.5 |
0.5 |
0.5 |
0.5 | ||||||||
Strike Price ($/Bbl) |
$53.42 |
$55.00 |
$55.00 |
$55.00 |
$55.00 |
$55.00 |
$55.00 | ||||||||
Mid-Cush Basis Swaps (MBbls/d) |
4.5 |
4.5 |
3.5 |
3.5 |
3.5 |
3.5 | |||||||||
Swap Price ($/Bbl) |
($0.86) |
($0.86) |
($0.90) |
($0.90) |
($0.90) |
($0.90) |
Year-end 2016 Reserves
Parsley posted strong reserve growth in 2016. The Company's proved reserves as of December 31, 2016 were 222.3 MMBoe and consist of 136.5 million barrels of oil, 223.6 billion cubic feet of natural gas, and 48.5 million barrels of natural gas liquids.
Proved Reserve Highlights
Changes in reserves for the year ended December 31, 2016 are summarized in the table below:
(MMBoe) | ||
Balance, December 31, 2015 |
123.8 | |
Additions |
98.7 | |
Acquisitions |
24.2 | |
Divestitures |
(6.6) | |
Revisions |
(3.8) | |
Production |
(14.0) | |
Balance, December 31, 2016 |
222.3 |
Parsley's internally-prepared estimated proved reserves were audited by Netherland, Sewell & Associates, the Company's independent reserve engineer, as of December 31, 2016. These estimates have been prepared in accordance with the definitions and regulations of the U.S. Securities and Exchange Commission and conform to the FASB Accounting Standards Codification Topic 932, Extractive Activities – Oil and Gas. Prices used are based on 12-month unweighted arithmetic average of the first-day-of-the-month price for each month in the period January through December 2016. Adjusting for quality, transportation fees, and market differentials, the pricing is as follows: $39.36 per barrel of oil, $15.03 per barrel of NGL, and $2.23 per Mcf of gas. The estimate of the Company's net reserves as of December 31, 2016 are summarized in the table below:
Net Reserves | ||||||||
Oil (MMBbls) |
Gas (Bcf) |
NGL (MMBbls) |
Total (MMBoe) | |||||
PDP |
59.3 |
121.8 |
23.7 |
103.3 | ||||
PNP |
1.9 |
2.2 |
0.6 |
2.8 | ||||
PUD |
75.4 |
99.7 |
24.2 |
116.2 | ||||
Total Proved |
136.6 |
223.7 |
48.5 |
222.3 |
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the fourth quarter of 2016 on Friday, February 24, 2017 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through March 3, 2017 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13655145. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Investor Relations" section of the website.
Registration Statement
The Company has filed a registration statement (including a prospectus) with the SEC for the equity offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the equity offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the equity offering will arrange to send you the prospectus if you request it by contacting Credit Suisse Securities (USA) LLC, Attn: Prospectus Department, One Madison Avenue, New York, NY 10010 or Morgan Stanley & Co. LLC, Attn: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including our Annual Report on Form 10-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Jan. 10, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley Energy" or the "Company") today announced that it has priced an underwritten, upsized public offering of 22,000,000 shares of Class A common stock for total gross proceeds (before underwriters' fees and estimated expenses) of approximately $770.0 million (the "Equity Offering"). The 22,000,000 share offering represents a 2,000,000 share upsize to the originally proposed 20,000,000 share offering. The underwriters have an option for 30 days to purchase up to an additional 3,300,000 shares of Class A common stock from the Company. The Equity Offering is expected to close on January 16, 2017, subject to customary closing conditions.
The Company intends to use a portion of the net proceeds of the Equity Offering to fund the aggregate purchase price for certain acquisitions of oil and natural gas interests in the Midland and Southern Delaware Basins (the "Acquisitions"), and the remaining net proceeds will be used to fund a portion of the Company's capital program and for general corporate purposes, including potential future acquisitions. The Equity Offering is not conditioned on the consummation of the Acquisitions.
Morgan Stanley and BMO Capital Markets Corp. are acting as joint lead bookrunners for the Equity Offering.
The Equity Offering is being made pursuant to an effective shelf registration statement, which has been filed with the Securities and Exchange Commission (the "SEC") and became effective June 5, 2015. The Equity Offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the SEC's website at www.sec.gov. Alternatively, the joint lead bookrunners will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting:
Morgan Stanley & Co. LLC
Attn: Prospectus Department
180 Varick Street, 2nd Floor
New York, NY 10014
BMO Capital Markets Corp.
Attn: Equity Syndicate Department
3 Times Square
New York, NY 10036
bmoprospectus@bmo.com
Telephone: 1-800-414-3627
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2015 and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Jan. 10, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley Energy" or the "Company") today announced that it has commenced an underwritten public offering of 20,000,000 shares of Class A common stock (the "Equity Offering"). The Company expects to grant the underwriters an option to purchase up to an additional 3,000,000 shares of Class A common stock from the Company.
The Company intends to use a portion of the net proceeds of the Equity Offering to fund the aggregate purchase price for certain acquisitions of oil and natural gas interests in the Midland and Southern Delaware Basins (the "Acquisitions"), and any remaining net proceeds will be used to fund a portion of the Company's capital program and for general corporate purposes, including potential future acquisitions. The Equity Offering is not conditioned on the consummation of the Acquisitions.
Morgan Stanley and BMO Capital Markets Corp. are acting as joint lead bookrunners for the Equity Offering.
The Equity Offering is being made pursuant to an effective shelf registration statement, which has been filed with the Securities and Exchange Commission (the "SEC") and became effective June 5, 2015. The Equity Offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the SEC's website at www.sec.gov. Alternatively, the joint lead bookrunners will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting:
Morgan Stanley & Co. LLC
Attn: Prospectus Department
180 Varick Street, 2nd Floor
New York, NY 10014
BMO Capital Markets Corp.
Attn: Equity Syndicate Department
3 Times Square
New York, NY 10036
bmoprospectus@bmo.com
Telephone: 1-800-414-3627
This news release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2015 and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Jan. 10, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced that it has entered into agreements to acquire, in unrelated transactions, certain undeveloped acreage and producing oil and gas properties located adjacent to the Company's existing operating areas in the Midland and Southern Delaware Basins for an aggregate purchase price of $607 million in cash, with certain transactions still subject to customary closing conditions. The Company has also acquired certain mineral interests in the Southern Delaware Basin for an aggregate purchase price of $43 million. Parsley intends to finance these acquisitions through an equity offering announced concurrently with the acquisitions. The Company also introduced 2017 capital plans and operating guidance that contemplate a 75% increase in net lateral footage and production growth of almost 60% versus 2016, effectively pulling forward value from a growing asset base.
Acquisition Highlights
Midland Basin
Southern Delaware Basin
"We are excited to announce a set of acquisitions that add to our premier asset bases in both the Midland and Southern Delaware Basins," stated Bryan Sheffield, Chairman and Chief Executive Officer of Parsley Energy. "We continue to focus on digestible bolt-on acreage that can be rapidly assimilated into our development program. All of the acquisition properties meet our high standards for acreage quality, return profile, and upside potential. Together, these properties will increase our net acreage by more than 15%, and we believe that our track record of operational excellence, productivity enhancement, and cost leadership makes us the best owner of these assets."
2017 Capital Program Overview1
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."
1 All figures represent Company expectations and all except reference to 4Q17 net production refer to full-year 2017 totals or averages.
2017 Capital Program and Operational Guidance Detail
2016E |
2017E1 | ||
Production |
|||
Annual Production (MBoe/d) |
37-39 |
57-63 | |
% Oil |
65%-70% |
68%-73% | |
Capital Program |
|||
Drilling and completion ($MM) |
$395-$435 |
$630-$750 | |
Infrastructure and other ($MM) |
$65-$75 |
$120-$150 | |
Total development expenditures ($MM) |
$460-$510 |
$750-$900 | |
Activity |
|||
Gross operated horizontal completions |
80-90 |
120-140 | |
Midland Basin |
75-83 |
85-95 | |
Delaware Basin |
5-7 |
35-45 | |
Average Lateral Length |
~7,000' |
~8,000' | |
Average Working Interest |
85%-95% |
85%-95% | |
Unit Costs |
|||
Lease operating expenses ($/Boe) |
$4.25-$4.75 |
$4.00-$4.75 | |
Cash general and administrative expenses ($/Boe) |
$5.00-$5.50 |
$4.50-$5.25 | |
Production and ad valorem taxes (as a % of revenue) |
6.5%-7.5% |
6.5%-7.5% | |
1These estimates are based on our current planned capital expenditures, drilling activity, and well results, as well as our current expected unit costs for 2017. Achieving these production estimates and maintaining the required drilling activity to achieve these estimates will depend on the availability of capital, regulatory approval, commodity prices, drilling and completion costs, actual drilling results, and other factors. To the extent any of these factors changes adversely, we may not be able to achieve these production and drilling results. |
Parsley plans to complete 120-140 gross operated horizontal wells in 2017. At an average lateral length of approximately 8,000 feet, 2017 completions would represent approximately 75% more net lateral footage than the Company completed in 2016. While project timing will influence quarterly completion schedules, the Company does not at this time expect significant variation in the level of drilling activity over the course of the year.
Anticipated capital spending of $750-$900 million incorporates the aforementioned horizontal wells and also associated facilities, infrastructure, and other expenditures, which will represent a larger portion of total development spending in the Southern Delaware Basin than in the Midland Basin as Parsley transitions to development mode in the Southern Delaware Basin.
Given an anticipated increase in oil as a percent of total production, the Company expects growth in oil volumes to outpace overall production growth in 2017. While Parsley expects to generate robust year-over-year production growth of approximately 58%, the Company expects even sharper oil volume growth of approximately 65% versus 2016. Drilling and completion activity should account for more than 95% of anticipated 2017 production growth, with an estimated contribution of approximately 1,000 Boe per day from already producing wells associated with newly announced acquisitions. The Company expects steady production growth over the first half of 2017, followed by steeper growth through the end of the year as projects initiated early in the year come online.
Capital Allocation
Parsley intends to deploy approximately 60% of planned 2017 development capital in the Midland Basin, with the balance allocated to the Southern Delaware Basin—a ratio that should hold relatively steady throughout the year.
The Company continues to evaluate the resource potential associated with several target formations and well-spacing configurations that have not yet been incorporated in the Company's inventory of horizontal drilling locations. While Parsley regularly implements new designs and technologies across its development program, approximately 20% of planned capital expenditures are specifically designated for projects that could be classified as delineation activity inasmuch as it involves less proven target zones and/or spacing configurations. Accordingly, Parsley expects to take significant steps toward an optimized development program even as the Company generates superior production growth.
Parsley expects to bring 85-95 horizontal wells online in the Midland Basin. Drilling and completion activity in the Midland Basin will focus on the Wolfcamp A and Wolfcamp B intervals, with additional activity planned for the Lower Spraberry, Middle Spraberry, and Wolfcamp C formations.
Parsley expects to bring 35-45 horizontal wells online in the Southern Delaware Basin. Drilling and completion activity in the Southern Delaware Basin will focus on the upper Wolfcamp interval, with additional activity planned for the Middle Wolfcamp, 2nd and 3rd Bone Spring, and additional flow units in the upper Wolfcamp interval. In addition, contemplated drilling locations in the Southern Delaware Basin are weighted toward leasehold on which the Company holds mineral interests, enhancing the economic profile of such drilling projects.
Cost Outlook
Unit cost guidance for 2017 represents incremental reductions relative to anticipated 2016 averages, which in turn represent significant declines from prior period costs. Parsley also expects lower development costs per lateral foot in 2017 than in 2016 despite a significantly greater capital allocation to more intensive Southern Delaware drilling projects, higher average completion intensity across the development program, and modest service and equipment cost inflation.
Hedging Update
In view of the anticipated production growth outlined above, Parsley has added meaningfully to its oil hedge portfolio, thereby reducing the variability of its anticipated cash flows and enhancing the Company's ability to execute its expressed development plan. Given increased visibility to near-term commodity prices, the Company has elected to hedge a larger percentage of its anticipated oil volumes in the second half of 2017 than in the first half of 2017, and has also established a meaningful position in 2018. Parsley hedges oil volumes with put spreads, which provide downside protection while retaining exposure to higher oil prices. Based on the possibility of basin-specific tightness associated with potential Permian Basin production growth, the Company has also entered into basis swaps covering the next several quarters.
Open Oil Derivatives Positions
1Q17 |
2Q17 |
3Q17 |
4Q17 |
1Q18 |
2Q18 | ||||||
Put Spreads (MBbls/d)1 |
13.8 |
13.6 |
35.7 |
45.5 |
23.3 |
13.2 | |||||
Put Price ($/Bbl) |
$49.93 |
$49.93 |
$52.66 |
$52.80 |
$53.21 |
$53.75 | |||||
Short Put Price ($/Bbl) |
$36.14 |
$36.14 |
$41.80 |
$41.95 |
$41.43 |
$43.75 | |||||
Premium Realization ($ MM)2 |
($4.9) |
($4.9) |
($16.4) |
($20.0) |
($9.5) |
($4.4) | |||||
Mid-Cush Basis Swaps (MBbls/d) |
11.3 |
11.3 |
12.2 |
12.2 |
1.0 |
1.0 | |||||
Swap Price ($/Bbl) |
($1.00) |
($1.00) |
($1.05) |
($1.05) |
($0.95) |
($0.95) | |||||
1When NYMEX price is above put price, Parsley receives the NYMEX price. When NYMEX price is between the put price and the short put price, Parsley receives the put price. When NYMEX price is below the short put price, Parsley receives the NYMEX price plus the difference between the short put price and the put price. |
2Premium realizations represent net premiums collected (from restructured positions) or paid (including deferred premiums), which are recognized as income or loss in the period of settlement. |
Registration Statement
The Company has filed a registration statement (including a prospectus) with the SEC for the equity offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the equity offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the equity offering will arrange to send you the prospectus if you request it by contacting Morgan Stanley & Co. LLC, Attn: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including our Annual Report on Form 10-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Jan. 5, 2017 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley" or the "Company") today announced that it has reorganized its management structure by creating executive officer, senior vice president, and vice president tiers, and has also appointed three new officers, effective January 5, 2017.
Bryan Sheffield, the Company's Chairman and Chief Executive Officer, said, "Parsley Energy has grown substantially since our initial public offering in 2014, and updating our management structure will facilitate ongoing growth and enable us to recognize, retain, and attract high-caliber employees who will continue to deliver compelling value for our stockholders."
"I am delighted to announce the promotions of Mark Brown to Vice President—Security and Risk Management, Kristin McClure to Vice President—Human Resources, and Mark Timmons to Vice President—Field Operations. Each of these individuals has demonstrated tremendous leadership in managing their respective departments, and each will play an integral role in the Company's future achievements," Sheffield said. "Finally, I would like to acknowledge Matt Gallagher's promotion to President and Chief Operating Officer. Matt has earned this recognition through his superior leadership as COO, and Parsley will surely benefit from his increased responsibilities as President."
Parsley's updated management team, effective January 5, 2017, is as follows:
Executive Officers
Senior Vice Presidents
Vice Presidents
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Dec. 21, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley" or "the Company") today announced that Jerry Windlinger has been appointed to the Company's Board of Directors (the "Board"), effective December 21, 2016.
Mr. Windlinger is the former Vice President of Corporate Development of Anadarko Petroleum Corporation, a position he held from March 2014 until his retirement in December 2016, during which time he was responsible for overseeing the company's global acquisitions, divestitures, and business development activities. Mr. Windlinger joined Anadarko in 1978 and served in a variety of technical and managerial positions in reservoir engineering, exploration, development, and acquisitions. Over the course of his 41 years in the energy industry, Mr. Windlinger's experience spanned U.S. onshore, U.S. offshore, Alaskan, Canadian, and international assets.
"We are pleased to welcome Jerry Windlinger to the Parsley Board," said Bryan Sheffield, the Company's Chairman, President and Chief Executive Officer. "Jerry has deep technical and managerial experience and has worked on complex strategic transactions throughout his career. Parsley will benefit greatly from his perspective and business acumen, and we look forward to his contributions."
Mr. Windlinger earned both a Bachelor of Science and a Master of Science in Petroleum Engineering from the University of Texas. He is a member of the Society of Petroleum Engineers and a registered Professional Engineer in the state of Texas.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Dec. 12, 2016 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), announced today that its previously announced cash tender offer to purchase any and all of its 7.500% senior unsecured notes due 2022 (the "2022 Notes") expired at 5:00 p.m., New York City time, on December 12, 2016 (the "Expiration Time"). As of the Expiration Time, $487,715,000 aggregate principal amount of the 2022 Notes (88.7%) were validly tendered, which excludes $1,222,000 aggregate principal amount of the 2022 Notes that remain subject to guaranteed delivery procedures. Parsley expects to accept for payment all such 2022 Notes validly tendered and not validly withdrawn in the tender offer and expects to make payment for the 2022 Notes on December 13, 2016, subject to Parsley's successful completion of its previously announced debt financing transaction (the "Financing Condition"). Concurrently with the launch of the tender offer, Parsley exercised its right to optionally redeem any 2022 Notes not validly tendered and purchased in the tender offer, pursuant to the terms of the Indenture relating to the 2022 Notes, conditioned upon and subject to satisfaction of the Financing Condition.
This news release does not constitute an offer to purchase or the solicitation of an offer to sell the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Specifically, Parsley cannot assure you that the proposed transactions (including the proposed debt financing transaction) described above will be consummated on the terms Parsley currently contemplates, if at all. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015, and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
Contact Information
Brad Smith, Ph.D., CFA
Parsley Energy, LLC
Vice President, Corporate Strategy and Investor Relations
ir@parsleyenergy.com
(512) 505-5199
SOURCE Parsley Energy, LLC
AUSTIN, Texas, Dec. 6, 2016 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp. ("Finance Corp.," and, together with Parsley, the "Issuers"), announced today the pricing of their previously announced private placement (the "Notes Offering") of senior unsecured notes due 2025 (the "2025 Notes"). The $650 million Notes Offering represents a $50 million upsize to the originally proposed $600 million offering. The 2025 Notes, which priced at par, will mature on January 15, 2025 and will pay interest at the rate of 5.375% per year.
The Notes Offering is expected to close on December 13, 2016, subject to customary closing conditions. Parsley intends to use a portion of the net proceeds from the Notes Offering to repurchase for cash any and all of the Issuers' outstanding 7.500% senior unsecured notes due 2022 (the "2022 Notes") pursuant to a tender offer (the "Tender Offer"), pay fees and expenses thereof and, at its option, redeem any of the 2022 Notes that remain outstanding thereafter, and the remaining net proceeds for general corporate purposes, including potential future acquisitions. The Notes Offering is not conditioned on the consummation of the Tender Offer. The Tender Offer is conditioned on, among other things, the Notes Offering.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Parsley plans to offer and sell the securities only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the SEC, including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, LLC
AUSTIN, Texas, Dec. 6, 2016 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), announced today that it has commenced a cash tender offer to purchase any and all of its 7.500% senior unsecured notes due 2022 (the "2022 Notes"). As of December 5, 2016, there was $550 million aggregate principal amount of the 2022 Notes outstanding. The tender offer is being made pursuant to an offer to purchase, dated today, and a related letter of transmittal and notice of guaranteed delivery. The tender offer will expire at 5:00 p.m., New York City time, on December 12, 2016, unless extended (the "Expiration Time"). Tendered 2022 Notes may be withdrawn at any time before the Expiration Time.
Holders of 2022 Notes that are validly tendered and accepted at or prior to the Expiration Time, or who deliver to the depositary and information agent a properly completed and duly executed notice of guaranteed delivery and subsequently deliver such 2022 Notes, each in accordance with the instructions described in the offer to purchase, will receive total cash consideration of $1,066.72 per $1,000 principal amount of 2022 Notes, plus any accrued and unpaid interest to, but not including, the settlement date, which is expected to be December 13, 2016, subject to satisfaction of the Financing Condition described herein.
The tender offer is contingent upon, among other things, Parsley's successful completion of a proposed debt financing transaction, the gross proceeds of which will be at least $600 million (the "Financing Condition"). The tender offer is not conditioned on any minimum amount of 2022 Notes being tendered. Parsley may amend, extend or terminate the tender offer, in its sole discretion. Concurrently with the launch of the tender offer, Parsley is exercising its right to optionally redeem any 2022 Notes not validly tendered and purchased in the tender offer, pursuant to the terms of the Indenture relating to the 2022 Notes, conditioned upon and subject to satisfaction of the Financing Condition.
The tender offer is being made pursuant to the terms and conditions contained in the offer to purchase and related letter of transmittal and notice of guaranteed delivery, copies of which may be requested from the information agent for the tender offer, D.F. King & Co., Inc., by telephone at (800) 864-1460 (toll-free) or (212) 269-5550 (for banks and brokers only), or via the following web address: www.dfking.com/pe.
Persons with questions regarding the tender offer should contact the dealer manager for the tender offer, Credit Suisse Securities (USA) LLC, by telephone at (800) 820-1653 (U.S. toll free) or (212) 538-2147 (call collect).
This news release does not constitute an offer to purchase or the solicitation of an offer to sell the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Specifically, Parsley cannot assure you that the proposed transactions (including the proposed debt financing transaction) described above will be consummated on the terms Parsley currently contemplates, if at all. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015, and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, LLC
AUSTIN, Texas, Dec. 6, 2016 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp. ("Finance Corp.," and, together with Parsley, the "Issuers"), announced today that they have commenced, subject to market conditions and other factors, a private placement of $600 million in aggregate principal amount of senior unsecured notes due 2025 to eligible purchasers (the "Notes Offering").
Parsley intends to use the net proceeds from the Notes Offering, along with cash on hand, to repurchase for cash any and all of the Issuers' outstanding 7.500% senior unsecured notes due 2022 (the "2022 Notes") pursuant to a tender offer (the "Tender Offer"), pay fees and expenses thereof and, at its option, redeem any of the 2022 Notes that remain outstanding thereafter. The Notes Offering is not conditioned on the consummation of the Tender Offer. The Tender Offer is conditioned on, among other things, the Notes Offering.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Parsley plans to offer and sell the securities only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This news release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the SEC, including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, LLC
AUSTIN, Texas, Dec. 1, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) today announced that the Company will participate in the Capital One Securities Energy Conference in New Orleans on December 7-8, during which Ryan Dalton, Chief Financial Officer, is scheduled to make a presentation on Thursday, December 8.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Nov. 2, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended September 30, 2016. The Company has posted to its website a presentation that supplements the information in this release.
Third Quarter 2016 Highlights
"Parsley Energy continues to set the pace for efficient production growth, having more than doubled our oil volumes over the past twelve months while substantially reducing development and operating costs over the same period," said Bryan Sheffield, Parsley's President and CEO. "We are proud of the way we have managed through the downcycle by opportunistically expanding our asset base and reducing our cost structure to the point that well-level returns today match returns at $85 oil two years ago. We remain well-positioned for future growth, with a strong balance sheet and a high-quality drilling inventory distributed across scalable operating areas in premier portions of the Midland and Southern Delaware Basins. In fact, in light of our favorable combination of highly productive wells and low costs, we have deployed a fifth horizontal rig and continue to contemplate additional rig activity as we look toward 2017. In the meantime, we are raising full-year 2016 production guidance even as we transition to larger pad projects and undertake additional density that could translate to a flattish production profile in the fourth quarter on the way to rapid and efficient growth in 2017. Future growth potential is also enhanced by the prospect of significant resource expansion, of which adding a second target zone in the Wolfcamp B interval is just one component."
Operational Highlights
During the third quarter, Parsley spud 19 and completed 18 gross operated horizontal wells with an average working interest of 97%.
Well results continue to improve across operating areas and target intervals, driven by the ongoing evolution of drilling and completion designs and processes. The Kathryn 43-42-4401H, for example, completed in Reagan County with a 10,164' stimulated lateral in the Wolfcamp B interval and with approximately 40% higher proppant loading than analogous wells[2], registered a peak 30-day IP of 1,562 Boe per day and has outpaced analogues by approximately 8% over the first three months of production.
The 24 Midland Basin Wolfcamp A and Wolfcamp B wells that achieved 30-day peak production periods since the Company's last quarterly update generated a strong average 30-day IP rate of 1,159 Boe per day with an average stimulated lateral length of 6,644' and an average oil cut of 73%.
Parsley's second well completed in the Lower Spraberry formation, the Dusek 45-4-2807H, registered an increasing production rate for nearly two months before settling into a shallow decline profile, generating a peak 30-day IP of 1,148 Boe per day. Drilled in Upton County with a 10,114' stimulated lateral, the well continues to produce more than 800 barrels of oil per day after three months on production.
Parsley posted strong results from the Company's first stacked lateral completions in the Wolfcamp A, Upper Wolfcamp B, and Lower Wolfcamp B intervals located in northeast Upton County in the middle of Parsley's primary development area. Completed simultaneously, the three wells are on average tracking ahead of the Company's 1 MMBoe EUR type curve for Wolfcamp A and Wolfcamp B wells in the Midland Basin after almost one month of production. Notably, the Grace 45-1-4306H, completed in the Upper Wolfcamp B interval, recently registered the second-highest 24-hour initial production rate in the Company's history at 2,420 Boe per day, representing 306 Boe per day per thousand stimulated feet.
In light of favorable results from wells completed in the upper and lower portions of the Wolfcamp B interval—on a standalone basis and when completed together—Parsley continues to progress toward higher expected recovery factors in the Company's prolific Midland Basin Wolfcamp complex. The 550 gross drilling locations added to the Company's horizontal drilling inventory by virtue of including a second target zone in the Wolfcamp B interval assumes eight wells per section in both the upper and lower portions of the Wolfcamp B. Ongoing density testing will evaluate the prospect of up to 15 wells per section in each of the Wolfcamp B target zones. In addition, with several hundred feet of Wolfcamp A thickness across the Company's acreage in Upton and Reagan Counties, Parsley plans to test a second target zone in the Wolfcamp A interval, as well.
Horizontal wells on Parsley's Southern Delaware acreage continue to register prolific production trends. The Company's two most recent wells on its Trees Ranch development area in Pecos County, the Trees State 65-36-4307H and the Trees State 65-64-4307H, posted peak 30-day IP rates of 1,569 and 1,465 Boe per day, respectively, or 197 and 192 Boe per day per thousand stimulated feet, respectively. The Company's first drilled (second completed) well on its Reeves County acreage, the Lincoln 4-1-4307H, has not yet achieved a peak 30-day rate but recently posted a robust peak 24-hour rate of 2,292 Boe per day or 333 Boe per day per thousand stimulated feet.
Financial Highlights
During the third quarter of 2016, the Company recorded a net loss attributable to its stockholders of $2.7 million, or $0.02 per weighted average share, compared to $21.4 million, or $0.13 per weighted average share during the second quarter of 2016. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its ongoing financial performance, and adding back the non-controlling interest allocated to Class B stockholders, adjusted net income for the third quarter of 2016 was $6.7 million, or $0.03 per diluted share.3
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for the third quarter of 2016 was $94.7 million, up 16% compared to the second quarter of 2016.[3]
LOE per Boe decreased from $4.37 in 2Q16 to $4.15 in 3Q16. The Company is lowering full-year 2016 LOE per Boe guidance from $4.50-$5.25 to $4.25-$4.75. G&A per Boe increased from $5.33 in 2Q16 to $6.24 in 3Q16, while cash G&A per Boe, which excludes stock-based compensation expense, increased from $4.28 in 2Q16 to $5.40 in 3Q16, reflecting incremental staffing in preparation for higher anticipated development activity in coming quarters. The Company is raising full-year 2016 cash G&A per Boe guidance from $4.50-$5.00 to $5.00-$5.50. Depreciation, depletion, and amortization expense per Boe decreased from $17.23 in 2Q16 to $16.62 in the third quarter of 2016.
Reported capital expenditures decreased by $44 million quarter-over-quarter to $92 million, driven by lower drilling and completion activity relative to 2Q16 and by declining well costs that have resulted in favorable actual costs relative to cost estimates made over recent periods. Reported capital expenditures include costs associated with the horizontal drilling activity noted above, as well as one vertical well and two saltwater disposal wells. Drilling and completion costs for a 7,000-stimulated-foot Wolfcamp well in the Midland Basin averaged $4.7 million during the third quarter, while analogous wells in the Southern Delaware basin cost $6.1 million on average during 3Q16. The Company maintains estimated full-year 2016 capital expenditures at a range of $460-$510 million despite the addition of a fifth horizontal rig in September.
Liquidity Update
As of September 30, 2016, pro forma for the elected commitment amount under the Company's revolving credit facility, the Company had $1.17 billion of liquidity—consisting of $572 million of cash on hand and an undrawn amount of $600 million on the Company's revolving credit facility. Pro forma, as well, for the closing of its Glasscock County acreage acquisition on October 4, 2016, the Company had approximately $201 million of cash on hand and $801 million of liquidity.
Hedging Update
Parsley maintains an active hedging program to reduce the variability of its anticipated cash flows arising from fluctuations in commodity prices. The Company has hedged the majority of anticipated oil volumes through the end of 2016 and maintains a significant hedge position into the first quarter of 2018, having added to its hedge position covering the second half of 2017 and the first quarter of 2018 since the last quarterly update. For details on Parsley's hedging position, please see the table below under Supplemental Information and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the period ended September 30, 2016.
Full-year 2016 Guidance Update
2016 |
2016 | ||
Previous |
Updated | ||
Production |
|||
Production (Mboe/d) |
36.0-38.0 |
37.0-39.0 | |
% Oil |
65%-70% |
65%-70% | |
Capital Program |
|||
Drilling and completion ($MM) |
$395-$435 |
$395-$435 | |
Infrastructure and other ($MM) |
$65-$75 |
$65-$75 | |
Total development expenditures ($MM) |
$460-$510 |
$460-$510 | |
Activity |
|||
Gross horizontal completions |
80-90 |
80-90 | |
Midland Basin |
75-83 |
75-83 | |
Delaware Basin |
5-7 |
5-7 | |
Average lateral length |
~7,000' |
~7,000' | |
Gross vertical completions |
3-6 |
3-6 | |
Average working interest |
85%-95% |
85%-95% | |
Unit Costs |
|||
Lease operating expenses ($/Boe) |
$4.50-$5.25 |
$4.25-$4.75 | |
Cash general and administrative expenses ($/Boe) |
$4.50-$5.00 |
$5.00-$5.50 | |
Production and ad valorem taxes (% of revenue) |
6.5%-7.5% |
6.5%-7.5% |
Corporate Governance Update
As part of Parsley's ongoing commitment to responsible corporate governance and at the recommendation of the Company's Board of Directors, the Company intends to respond to recent trends in favor of majority voting for directors by enabling shareholders to determine Parsley's policy on this issue at the Company's next annual meeting.
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the third quarter of 2016 on Thursday, November 3 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through November 11 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13647023. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Investor Relations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
[1] Estimated present value is pre-tax and unhedged; NPV range based on productivity range of 800 MBoe to 1 MMBoe EUR for 7,000' stimulated lateral scaled proportionately to average stimulated lateral length of 6,400'; Further assumes—D&C cost: $4.4 million; Oil price: $50 per barrel; Natural gas price: $3 per Mmcf; NGL price: $20 per barrel; working interest: 82%; net revenue interest: 62%; LOE: $7,500 per month fixed, $2.00/barrel of oil variable; discount rate: 10%.
[2] Analogues consist of wells completed by the Company in the last two years within a 3-mile radius in the same target interval with an equivalent lateral length.
[3] "Adjusted EBITDAX" and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). Please see the supplemental financial information at the end of this news release for a reconciliation of the non-GAAP financial measures of adjusted EBITDAX and adjusted net income to GAAP financial measures.
- Tables to Follow -
Parsley Energy, Inc. and Subsidiaries | |||||
Selected Operating Data | |||||
(Unaudited) | |||||
Three Months Ended | |||||
September 30, |
June 30, |
September 30, | |||
2016 |
2016 |
2015 | |||
Net production volumes: |
|||||
Oil (MBbls) |
2,669 |
2,157 |
1,153 | ||
Natural gas (MMcf) |
3,553 |
3,154 |
2,628 | ||
Natural gas liquids (MBoe) |
695 |
566 |
393 | ||
Total (MBoe) |
3,956 |
3,249 |
1,984 | ||
Average net daily production (Boe/d) |
43,000 |
35,703 |
21,565 | ||
Average sales prices(1): |
|||||
Oil, without realized derivatives (per Bbl) |
$ 42.23 |
$ 42.25 |
$ 44.81 | ||
Oil, with realized derivatives (per Bbl) |
$ 46.19 |
$ 47.49 |
$ 59.81 | ||
Natural gas, without realized derivatives (per Mcf) |
$ 2.38 |
$ 1.85 |
$ 2.69 | ||
Natural gas, with realized derivatives (per Mcf) |
$ 2.38 |
$ 1.85 |
$ 2.86 | ||
NGLs (per Bbl) |
$ 15.50 |
$ 16.51 |
$ 14.01 | ||
Total, without realized derivatives (per Boe) |
$ 33.35 |
$ 32.72 |
$ 32.38 | ||
Total, with realized derivatives (per Boe) |
$ 36.03 |
$ 36.20 |
$ 41.32 | ||
Average costs (per Boe): |
|||||
Lease operating expenses |
$ 4.15 |
$ 4.37 |
$ 7.63 | ||
Production and ad valorem taxes |
$ 2.12 |
$ 1.97 |
$ 1.75 | ||
Depreciation, depletion and amortization |
$ 16.62 |
$ 17.23 |
$ 23.23 | ||
General and administrative expenses (including stock-based compensation) |
$ 6.24 |
$ 5.33 |
$ 7.92 | ||
General and administrative expenses (cash based) |
$ 5.40 |
$ 4.28 |
$ 6.86 |
(1) |
Average prices shown in the table include transportation and gathering costs and reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculation of such effects includes both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. |
Parsley Energy, Inc. and Subsidiaries | |||||||
Condensed Consolidated Statements of Operations | |||||||
(Unaudited, in thousands, except per share data) | |||||||
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||
2016 |
2015 |
2016 |
2015 | ||||
Revenues |
|||||||
Oil sales |
$ 112,705 |
$ 51,670 |
$ 255,865 |
$ 158,776 | |||
Natural gas sales |
8,457 |
7,060 |
19,834 |
20,712 | |||
Natural gas liquids sales |
10,770 |
5,504 |
24,811 |
17,817 | |||
Other |
733 |
— |
733 |
— | |||
Total revenues |
132,665 |
64,234 |
301,243 |
197,305 | |||
Operating expenses |
|||||||
Lease operating expenses |
16,407 |
15,131 |
44,509 |
49,993 | |||
Production and ad valorem taxes |
8,391 |
3,471 |
18,993 |
13,397 | |||
Depreciation, depletion and amortization |
65,741 |
46,085 |
171,113 |
127,873 | |||
General and administrative expenses (including stock based compensation) |
24,695 |
15,721 |
61,301 |
42,785 | |||
Exploration costs |
3,113 |
3,824 |
12,779 |
8,558 | |||
Acquisition costs |
440 |
— |
926 |
— | |||
Accretion of asset retirement obligations |
190 |
187 |
575 |
657 | |||
Rig termination costs |
— |
— |
— |
8,970 | |||
Other operating expenses |
1,220 |
233 |
3,767 |
256 | |||
Total operating expenses |
120,197 |
84,652 |
313,963 |
252,489 | |||
Operating income (loss) |
12,468 |
(20,418) |
(12,720) |
(55,184) | |||
Other (expense) income |
|||||||
Interest expense, net |
(15,561) |
(11,393) |
(38,954) |
(34,334) | |||
Gain (loss) on sale of property |
— |
1,300 |
(119) |
2,331 | |||
Gain (loss) on derivatives |
1,374 |
34,290 |
(23,842) |
23,699 | |||
Other (expense) income |
(1,201) |
(579) |
(950) |
1,260 | |||
Total other (expense) income |
(15,388) |
23,618 |
(63,865) |
(7,044) | |||
(Loss) income before income taxes |
(2,920) |
3,200 |
(76,585) |
(62,228) | |||
Income tax (expense) benefit |
1,279 |
(557) |
21,765 |
15,133 | |||
Net (loss) income |
(1,641) |
2,643 |
(54,820) |
(47,095) | |||
Less: Net (income) loss attributable to noncontrolling interest |
(1,065) |
(1,734) |
11,383 |
11,851 | |||
Net (loss) income attributable to Parsley Energy, Inc. stockholders |
$ (2,706) |
$ 909 |
$ (43,437) |
$ (35,244) | |||
Net (loss) income per common share: |
|||||||
Basic |
($0.02) |
$0.01 |
($0.28) |
($0.33) | |||
Diluted |
($0.02) |
$0.01 |
($0.28) |
($0.33) | |||
Weighted average common shares outstanding: |
|||||||
Basic |
173,241 |
109,218 |
156,018 |
106,212 | |||
Diluted |
173,241 |
109,592 |
156,018 |
106,212 | |||
* Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. and Subsidiaries | |||||
Condensed Consolidated Balance Sheets | |||||
(Unaudited, in thousands) | |||||
September 30, 2016 |
December 31, 2015 | ||||
Cash and cash equivalents |
$ |
571,762 |
$ |
343,084 | |
Other current assets |
120,729 |
145,242 | |||
Total current assets |
692,491 |
488,326 | |||
Total property, plant and equipment, net |
3,032,568 |
1,985,753 | |||
Total noncurrent assets |
31,413 |
31,021 | |||
Total Assets |
$ |
3,756,472 |
$ |
2,505,100 | |
Total current liabilities |
$ |
216,554 |
$ |
228,497 | |
Long-term debt |
942,726 |
546,832 | |||
Other noncurrent liabilities |
134,598 |
143,130 | |||
Total noncurrent liabilities |
1,077,324 |
689,962 | |||
Total liabilities |
1,293,878 |
918,459 | |||
Total equity |
2,462,594 |
1,586,641 | |||
Total Liabilities and Equity |
$ |
3,756,472 |
$ |
2,505,100 |
Parsley Energy, Inc. and Subsidiaries | |||||
Condensed Consolidated Statements of Cash Flows | |||||
(Unaudited, in thousands) | |||||
Nine Months Ended September 30, | |||||
2016 |
2015 | ||||
Cash flows from operating activities |
|||||
Net loss |
$ |
(54,820) |
$ |
(47,095) | |
Adjustments to reconcile net loss to net cash |
|||||
provided by operating activities: |
|||||
Non-cash and other items |
243,641 |
162,531 | |||
Changes in operating assets and liabilities |
(13,619) |
(4,956) | |||
Net cash provided by operating activities |
175,202 |
110,480 | |||
Net cash used in investing activities |
(1,270,764) |
(357,543) | |||
Cash flows from financing activities: |
|||||
Net proceeds (repayments) from long-term debt |
394,229 |
(121,292) | |||
Issuance of common stock |
930,315 |
441,000 | |||
Other |
(304) |
(77) | |||
Net cash provided by financing activities |
1,324,240 |
319,631 | |||
Net increase in cash and cash equivalents |
228,678 |
72,568 | |||
Cash and cash equivalents, beginning of year |
343,084 |
50,550 | |||
Cash and cash equivalents, end of year |
$ |
571,762 |
$ |
123,118 |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net (loss) income before depreciation, depletion and amortization, exploration costs, acquisition costs, (gain) loss on sale of property, asset retirement obligation accretion expense, stock-based compensation, net interest expense, income tax (benefit) expense, rig termination costs, (gain) loss on derivatives, net settlements on derivative instruments, and net premium realizations on options that settled during the period.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measure of other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income for each of the periods indicated.
Parsley Energy, Inc. and Subsidiaries | |||||||
Adjusted EBITDAX | |||||||
(Unaudited, in thousands) | |||||||
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||
2016 |
2015 |
2016 |
2015 | ||||
Adjusted EBITDAX reconciliation to net income: |
|||||||
Net (loss) income attributable to Parsley Energy, Inc. stockholders |
$ (2,706) |
$ 909 |
$ (43,437) |
$ (35,244) | |||
Net income (loss) attributable to noncontrolling interests |
1,065 |
1,734 |
(11,383) |
(11,851) | |||
Depreciation, depletion and amortization |
65,741 |
46,085 |
171,113 |
127,873 | |||
Exploration costs |
3,113 |
3,824 |
12,779 |
8,558 | |||
Acquisition costs |
440 |
— |
926 |
— | |||
(Gain) loss on sale of property |
— |
(1,300) |
119 |
(2,331) | |||
Accretion of asset retirement obligations |
190 |
187 |
575 |
657 | |||
Stock-based compensation |
3,316 |
2,102 |
9,466 |
5,855 | |||
Interest expense, net |
15,561 |
11,393 |
38,954 |
34,334 | |||
Income tax (benefit) expense |
(1,279) |
557 |
(21,765) |
(15,133) | |||
Rig termination costs |
— |
— |
— |
8,970 | |||
(Gain) loss on derivatives |
(1,374) |
(34,290) |
23,842 |
(23,699) | |||
Net settlements on derivative instruments |
5,373 |
10,787 |
24,560 |
32,054 | |||
Net premium realization on options that settled during the period |
5,215 |
5,085 |
26,181 |
7,130 | |||
Adjusted EBITDAX |
$ 94,655 |
$ 47,073 |
$ 231,930 |
$ 137,173 | |||
* Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income
Adjusted net income is a performance measure used by management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, (gain) loss on sale of property, exploration costs, and acquisition costs while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income should not be considered an alternative to consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income to the GAAP financial measure of net income (loss).
Parsley Energy, Inc. and Subsidiaries | ||||
Adjusted Net Income and Net Income Per Share | ||||
(Unaudited, in thousands, except per share data) | ||||
Three Months Ended |
Nine Months Ended | |||
September 30, 2016 |
September 30, 2016 | |||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ (2,706) |
$ (43,437) | ||
(Gain) loss on derivatives |
(1,374) |
23,842 | ||
Net settlements on derivative instruments |
5,373 |
24,560 | ||
Net premium realization on options that settled during the period |
5,215 |
26,181 | ||
Gain (loss) on sale of property |
— |
119 | ||
Exploration costs |
3,113 |
12,779 | ||
Acquisition costs |
440 |
926 | ||
Noncontrolling interest |
799 |
(11,643) | ||
Change in estimated income tax |
(4,203) |
(25,280) | ||
Adjusted net income |
$ 6,657 |
$ 8,047 | ||
Weighted average diluted shares outstanding |
206,593 |
188,147 | ||
Adjusted net income per diluted share |
$ 0.03 |
$ 0.04 |
Supplemental Information
Parsley Energy, Inc. and Subsidiaries | ||||||||||||
Open Commodity Derivatives Positions | ||||||||||||
4Q16 |
1Q17 |
2Q17 |
3Q17 |
4Q17 |
1Q18 |
|||||||
OIL: |
||||||||||||
Put Spreads (MBbls/d)(1) |
23.5 |
20.5 |
20.2 |
19.4 |
22.6 |
16.7 |
||||||
Put Price ($/Bbl) |
$45.03 |
$45.88 |
$45.88 |
$52.79 |
$53.11 |
$53.50 |
||||||
Short Put Price ($/Bbl) |
$32.78 |
$34.14 |
$34.14 |
$41.21 |
$41.40 |
$41.00 |
||||||
Premium Realization ($ MM)(2) |
$5.6 |
($4.9) |
($4.9) |
($8.7) |
($10.1) |
($7.3) |
||||||
Mid-Cush Basis Swaps (MBbls/d) |
8.2 |
11.3 |
11.3 |
12.2 |
12.2 |
- |
||||||
Swap Price ($/Bbl) |
($0.87) |
($1.00) |
($1.00) |
($1.05) |
($1.05) |
- |
||||||
NATURAL GAS: |
||||||||||||
Three Way Collars (MMBtu/d)(3) |
- |
15.8 |
15.7 |
15.5 |
15.5 |
- |
||||||
Call Price ($/MMBtu) |
- |
$4.02 |
$4.02 |
$4.02 |
$4.02 |
- |
||||||
Put Price ($/MMBtu) |
- |
$2.75 |
$2.75 |
$2.75 |
$2.75 |
- |
||||||
Short Put Price ($/MMBtu) |
- |
$2.36 |
$2.36 |
$2.36 |
$2.36 |
- |
(1) |
When NYMEX price is above put price, Parsley receives the NYMEX price. When NYMEX price is between the put price and the short put price, Parsley receives the put price. When NYMEX price is below the short put price, Parsley receives the NYMEX price plus the difference between the short put price and the put price. |
(2) |
Premium realizations represent net premiums collected (from restructured positions) or paid (including deferred premiums), which are recognized as income or loss in the period of settlement. |
(3) |
Functions similarly to put spreads except that when index price is at or above the call price, Parsley receives the call price. |
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Oct. 4, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("the Company") plans to release its third quarter 2016 financial and operating results after the market closes on Wednesday, November 2, 2016. In conjunction with the release, the Company has scheduled a conference call for Thursday, November 3, at 9:00 a.m. Eastern Time (8:00 a.m. Central Time).
By Phone: |
Dial 877-407-0672 (United States/Canada) or 412-902-0003 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Friday, November 11 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13647023. | |
By Webcast: |
|
Select "Events & Presentations" under the "Investor Relations" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Aug. 31, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) today announced that the Company will participate in the Barclays CEO Energy-Power Conference in New York City on September 6-7, during which Bryan Sheffield, Chairman and Chief Executive Officer, is scheduled to make a presentation on Tuesday, September 6. Investor slides will be posted in association with this presentation and can be accessed on the Investor Relations section of Parsley's website at www.parsleyenergy.com.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Logo- http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, LLC
AUSTIN, Texas, Aug. 16, 2016 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp., announced today the pricing of its previously announced private placement (the "Notes Offering") of an additional $200.0 million in aggregate principal amount of their 6.250% senior unsecured notes due 2024 (the "New 2024 Notes") at 102.000% of par. The Notes Offering is expected to close on August 19, 2016, subject to customary closing conditions.
On May 27, 2016, Parsley and Parsley Finance Corp. completed an offering of $200.0 million of their 6.250% senior notes due 2024 (the "Initial 2024 Notes" and, together with the New 2024 Notes, the "2024 Notes"). The New 2024 Notes will have identical terms, other than the issue date, as the Initial 2024 Notes, and the New 2024 Notes and the Initial 2024 Notes will be treated as a single class of securities under the indenture governing the 2024 Notes. The 2024 Notes mature on June 1, 2024 and pay interest at the rate of 6.250% per year.
Together with the net proceeds from Parsley Inc.'s previously announced equity offering (the "Concurrent Equity Offering"), which is scheduled to close on August 19, 2016, Parsley intends to use the net proceeds of the Notes Offering to fund the aggregate purchase price for the acquisition of oil and gas interests in Glasscock County, Texas (the "Acquisition"), and the remaining net proceeds will be used to fund a portion of Parsley's capital program and for general corporate purposes, including potential future acquisitions. The Notes Offering is not conditioned on the consummation of the Acquisition or the Concurrent Equity Offering.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Parsley plans to offer and sell the securities only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the SEC, including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, LLC
AUSTIN, Texas, Aug. 15, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley Energy" or the "Company") today announced that it has priced an underwritten, upsized public offering of 7,250,000 shares of Class A common stock for total gross proceeds (before underwriters' fees and estimated expenses) of approximately $243.2 million (the "Equity Offering"). The 7,250,000 million share offering represents a 250,000 share upsize to the originally proposed 7,000,000 share offering. The underwriters have an option for 30 days to purchase up to an additional 1,087,500 shares of Class A common stock from the Company. The Equity Offering is expected to close on August 19, 2016, subject to customary closing conditions.
Concurrently with the Equity Offering, Parsley Energy, LLC and Parsley Finance Corp., the Company's consolidated subsidiaries, intend to offer to qualified institutional buyers and non-U.S. persons outside of the U.S., in an offering exempt from registration under the Securities Act of 1933, as amended, an additional $200.0 million aggregate principal amount of their 6.250% senior notes due 2024 (the "Concurrent Notes Offering"). The Company does not guarantee the senior notes. The Equity Offering is not conditioned on the consummation of the Concurrent Notes Offering, and the Concurrent Notes Offering is not conditioned on the consummation of the Equity Offering.
Together with the net proceeds from the Concurrent Notes Offering, the Company intends to use the net proceeds of the Equity Offering to fund the aggregate purchase price for the acquisition of oil and gas interests in Glasscock County, Texas (the "Acquisition"), and any remaining net proceeds will be used to fund a portion of the Company's capital program and for general corporate purposes, including potential future acquisitions. The Equity Offering is not conditioned on the consummation of the Acquisition.
J.P. Morgan Securities LLC is acting as sole lead bookrunner for the Equity Offering.
The Equity Offering is being made pursuant to an effective shelf registration statement, which has been filed with the Securities and Exchange Commission (the "SEC") and became effective June 5, 2015. The Equity Offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the SEC's website at www.sec.gov. Alternatively, the sole lead bookrunner will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting:
J.P. Morgan
via Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, New York, 11717
Telephone: (866) 803-9204
E-mail: prospectus-eq_fi@jpmchase.com
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2015 and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
Logo- http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Aug. 15, 2016 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp., announced today that, subject to market conditions, they intend to offer an additional $200.0 million in aggregate principal amount of their 6.250% senior unsecured notes due 2024 (the "New 2024 Notes") to eligible purchasers (the "Notes Offering").
On May 27, 2016, Parsley and Parsley Finance Corp. completed an offering of $200.0 million of their 6.250% senior notes due 2024 (the "Initial 2024 Notes" and, together with the New 2024 Notes, the "2024 Notes"). The New 2024 Notes will have identical terms, other than the issue date, as the Initial 2024 Notes, and the New 2024 Notes and the Initial 2024 Notes will be treated as a single class of securities under the indenture governing the 2024 Notes.
Concurrently with the Notes Offering, Parsley Inc. is offering 7,000,000 shares of its Class A common stock (or 8,050,000 shares if the option to purchase additional shares is exercised in full) in an underwritten public offering (the "Concurrent Equity Offering"). The shares of Class A common stock are being offered in the Concurrent Equity Offering by means of a separate prospectus supplement. The Notes Offering is not conditioned on the consummation of the Concurrent Equity Offering, and the Concurrent Equity Offering is not conditioned on the Notes Offering.
Together with the net proceeds from the Concurrent Equity Offering, Parsley intends to use the net proceeds from the Notes Offering to fund the aggregate purchase price for the acquisition of oil and gas interests in Glasscock County, Texas (the "Acquisition"), and any remaining net proceeds will be used to fund a portion of Parsley's capital program and for general corporate purposes, including potential future acquisitions. The Notes Offering is not conditioned on the consummation of the Acquisition.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Parsley plans to offer and sell the securities only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the SEC, including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, LLC
AUSTIN, Texas, Aug. 15, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley Energy" or the "Company") today announced that it has commenced an underwritten public offering of 7,000,000 shares of Class A common stock (the "Equity Offering"). The Company expects to grant the underwriters an option to purchase up to an additional 1,050,000 shares of Class A common stock from the Company.
Concurrently with the Equity Offering, Parsley Energy, LLC and Parsley Finance Corp., the Company's consolidated subsidiaries, intend to offer to qualified institutional buyers and non-U.S. persons outside of the U.S., in an offering exempt from registration under the Securities Act of 1933, as amended, an additional $200.0 million aggregate principal amount of their 6.250% senior notes due 2024 (the "Concurrent Notes Offering"). The Company does not guarantee the senior notes. The Equity Offering is not conditioned on the consummation of the Concurrent Notes Offering, and the Concurrent Notes Offering is not conditioned on the consummation of the Equity Offering.
Together with the net proceeds from the Concurrent Notes Offering, the Company intends to use the net proceeds of the Equity Offering to fund the aggregate purchase price for the acquisition of oil and gas interests in Glasscock County, Texas (the "Acquisition"), and any remaining net proceeds will be used to fund a portion of the Company's capital program and for general corporate purposes, including potential future acquisitions. The Equity Offering is not conditioned on the consummation of the Acquisition.
J.P. Morgan Securities LLC is acting as sole lead bookrunner for the Equity Offering.
The Equity Offering is being made pursuant to an effective shelf registration statement, which has been filed with the Securities and Exchange Commission (the "SEC") and became effective June 5, 2015. The Equity Offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the SEC's website at www.sec.gov. Alternatively, the sole lead bookrunner will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting:
J.P. Morgan
via Broadridge Financial Solutions
1155 Long Island Avenue
Edgewood, New York, 11717
Telephone: (866) 803-9204
E-mail: prospectus-eq_fi@jpmchase.com
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2015 and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Aug. 15, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley Energy," "Parsley," or the "Company") today announced that it has entered into an agreement to acquire certain undeveloped acreage and producing oil and gas properties in Glasscock County, Texas, as well as associated mineral and overriding royalty interests, for an aggregate purchase price of $400 million in cash, subject to customary closing conditions. Parsley intends to finance this acquisition through debt and equity issuances announced concurrently with the acquisition.
Acquisition Highlights
Initial Glasscock County Horizontal Well Results
Parsley's first producing horizontal well on the Glasscock County acreage the Company acquired in May has shown encouraging results to date. The Dwight Gooden 6-7-01AH, located approximately 2.5 miles west of the acreage to be acquired and completed in the Wolfcamp A interval with a 5,890' stimulated lateral, registered a strong peak 30-day initial production ("IP") rate of 1,161 Boe per day or 197 Boe per day per thousand stimulated feet. Normalized to 7,000 lateral feet, the well is outperforming the Company's 1 million Boe EUR type curve for Midland Basin Wolfcamp A/B wells by 10% after almost 90 days of production, generating 82% oil during that timeframe.
"The pending acquisition of leasehold and associated assets establishes Glasscock County as another key development area for Parsley Energy," stated Bryan Sheffield, CEO of Parsley Energy. "Offset well performance and initial results on our first horizontal well in the area suggest that the properties to be acquired may compete with the best of our existing horizontal drilling inventory, and the acquisition of associated royalty interests boosts the return profile of these properties. We continue to build a high-quality acreage footprint consisting of favorably distributed development areas that can accommodate significant rig count additions, and we believe this acquisition represents an important step toward a large-scale, basin-wide development program that can generate sustainably strong production and cash flow growth."
Registration Statement
The Company has filed a registration statement (including a prospectus) with the SEC for the equity offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the equity offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the equity offering will arrange to send you the prospectus if you request it by contacting J.P. Morgan, via Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York, 11717, or by telephone at (866) 803-9204, or by e-mail at prospectus-eq_fi@jpmchase.com.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2015 and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
Photo - http://photos.prnewswire.com/prnh/20160815/398124
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Aug. 12, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("the Company") today announced that Randolph Newcomer, Jr., a member of the Company's Board of Directors (the "Board"), has resigned from the Board.
Bryan Sheffield, Parsley's Chairman, President and Chief Executive Officer, commented, "Randy joined Parsley's Board prior to our initial public offering and has contributed significantly to the Company's progress during his tenure. We will miss having him on the Board and wish him the very best in his future endeavors."
Mr. Newcomer commented, "My time as a Board member and my association with fellow directors, Parsley's management team, and Parsley employees has been very special. It has been a pleasure serving on Parsley's Board and I want to congratulate Bryan and the Parsley team on everything they have accomplished to date. I look forward to following the Company's successes going forward and am highly confident in abundant accomplishments to come from Parsley Energy."
The Company also announced that Larry Parnell has joined the Company as Vice President—Engineering, effective July 26, 2016. Mr. Parnell has over 30 years of exploration and production experience and has served in a variety of engineering, operations, business development, planning, and leadership roles both domestically and internationally.
Mr. Sheffield commented, "We are excited for Larry Parnell to join Parsley. He is a seasoned oil and gas executive with extensive managerial and technical experience, and we look forward to benefiting from his leadership of the Company's engineering activities."
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, Aug. 3, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended June 30, 2016. The Company has posted to its website a presentation that supplements the information in this release.
Second Quarter 2016 Highlights
"The substantial production growth and cost compression Parsley generated during the second quarter are exactly what we envisioned earlier this year when we made a non-consensus decision to maintain operational momentum in the face of unsteady commodity prices," said Bryan Sheffield, Parsley's President and CEO. "We are also gratified to have closed on meaningful leasehold acquisitions in both the Midland Basin and Southern Delaware Basin at increasingly attractive prices, and to have boosted the economic potential of our promising Southern Delaware acreage by acquiring associated mineral rights. Taking a broader view, over Parsley's nine quarters as a public company, we have increased production at a 16% compound quarterly growth rate—almost entirely through the drill-bit—and built an asset base and the organizational capacity to support top-tier growth for years to come."
Operational Highlights
During the second quarter, Parsley spud 21 and completed 25 gross operated horizontal wells with an average working interest of 93%. Second quarter completion activity includes four recently acquired wells that had been drilled but not completed by the previous operators.
Parsley completed its first horizontal well on its recently acquired Reeves County acreage in the Southern Delaware Basin. The Ranger C4-7-4309H, completed in the upper Wolfcamp interval with a 5,078' stimulated lateral, registered a strong peak 30-day initial production ("IP") rate of 1,127 Boe per day or 222 Boe per day per thousand stimulated feet. Normalized to 7,000 lateral feet, the well is outperforming the Company's 1 million Boe EUR type curve for Midland Basin Wolfcamp A/B wells by 24% after 60 days of production and is also on pace with the strong results posted by the initial wells on Parsley's Trees Ranch prospect in the Southern Delaware Basin.
The Midland Basin wells that achieved 30-day peak production periods since the Company's last quarterly update generated an average 30-day IP rate of 1,013 Boe per day, with an average stimulated lateral length of 6,238' and an average oil cut of 75%. Each of these wells was completed in the Wolfcamp A or Wolfcamp B target interval and among them, the Hirsch E 4201H, completed in the Wolfcamp A formation in Upton County, established a Company record 30-day IP rate of 284 Boe/d per thousand stimulated feet.
Financial Highlights
During the second quarter of 2016, the Company recorded a net loss attributable to its stockholders of $21.4 million, or $0.13 per weighted average share. Excluding, on a tax-adjusted basis, certain items that the Company does not view as indicative of its financial performance, and adding back the non-controlling interest allocated to Class B stockholders, adjusted net income for the second quarter of 2016 was $6.8 million, or $0.04 per diluted share.
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense ("Adjusted EBITDAX") for the second quarter of 2016 was $81.9 million, up 48% compared to the first quarter of 2016.1
Parsley generated significant reductions in unit costs during the second quarter of 2016. LOE per Boe decreased from $5.25 in 1Q16 to $4.37 in 2Q16. G&A per Boe decreased from $7.29 in 1Q16 to $5.33 in 2Q16, while cash G&A per Boe, which excludes stock-based compensation expense, decreased from $6.25 in 1Q16 to $4.28 in 2Q16. Depreciation, depletion, and amortization expense per Boe decreased from $18.66 in 1Q16 to $17.23 in the second quarter of 2016.
Despite completing ten more horizontal wells in 2Q16 than in 1Q16, reported capital expenditures increased by just $26 million quarter-over-quarter to $136 million. Reported capital expenditures include costs associated with the horizontal drilling activity noted above, as well as one vertical well and one saltwater disposal well. Drilling and completion costs for a 7,000-stimulated-foot Wolfcamp well in the Midland Basin averaged less than $5 million for the first time, registering $4.8 million during the second quarter.
Liquidity Update
As of June 30, 2016, the Company had $966 million of liquidity—consisting of $441 million of cash on hand and an undrawn amount of $525 million on the Company's revolving credit facility. Pro forma for the closing of its Southern Delaware minerals acquisition on July 14, 2016, the Company had approximately $189 million of cash on hand, $714 million of liquidity, and a net debt to annualized adjusted EBITDAX ratio of 1.7.
Hedging Update
Parsley maintains an active hedging program to reduce the variability of its anticipated cash flows arising from fluctuations in commodity prices. The Company remains well-hedged, with a majority of anticipated oil volumes hedged this year and a significant hedge position in 2017. Parsley also recently entered into natural gas hedge positions with settlements starting in 2017. For details on Parsley's hedging position, please see the investor presentation on the Company's website and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the period ended June 30, 2016.
Full-year 2016 Guidance Update | |||
2016 |
2016 | ||
Previous |
Updated | ||
Production |
|||
Production (Mboe/d) |
31.5-34.5 |
36.0-38.0 | |
% Oil |
65%-70% |
65%-70% | |
Capital Program |
|||
Drilling and completion ($MM) |
$355-$395 |
$395-$435 | |
Infrastructure and other ($MM) |
$55-$65 |
$65-$75 | |
Total development expenditures ($MM) |
$410-$460 |
$460-$510 | |
Activity |
|||
Gross horizontal completions |
65-75 |
80-90 | |
Midland Basin |
60-68 |
75-83 | |
Delaware Basin |
5-7 |
5-7 | |
Average lateral length |
~7,000' |
~7,000' | |
Gross vertical completions |
3-6 |
3-6 | |
Average working interest |
85%-95% |
85%-95% | |
Unit Costs |
|||
Lease operating expenses ($/Boe) |
$5.50-$6.50 |
$4.50-$5.25 | |
Cash general and administrative expenses ($/Boe) |
$4.75-$5.75 |
$4.50-$5.00 | |
Production and ad valorem taxes (% of revenue) |
6.5%-7.5% |
6.5%-7.5% |
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the second quarter of 2016 on Thursday, August 4 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through August 11 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13641422. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Investor Relations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit the Company's website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in the Company's filings with the SEC, including its Annual Report on Form 10-K. The risk factors and other factors noted in the Company's SEC filings could cause its actual results to differ materially from those contained in any forward-looking statement.
1 "Adjusted EBITDAX" and "adjusted net income" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). Please see the supplemental financial information at the end of this news release for a reconciliation of the non-GAAP financial measures of adjusted net loss and adjusted EBITDAX to GAAP financial measures.
- Tables to Follow -
Parsley Energy, Inc. | ||||||
Selected Operating Data | ||||||
(Unaudited) | ||||||
Three Months Ended |
||||||
June 30, |
March 31, |
June 30, |
||||
2016 |
2016 |
2015 |
||||
Net production volumes: |
||||||
Oil (MBbls) |
2,157 |
1,731 |
1,183 |
|||
Natural gas (MMcf) |
3,154 |
2,944 |
2,698 |
|||
NGLs (MBbls) |
566 |
425 |
392 |
|||
Total (MBoe)(1) |
3,249 |
2,647 |
2,025 |
|||
Average net daily production (Boe/d) |
35,703 |
29,088 |
22,249 |
|||
Average sales prices(2): |
||||||
Oil, without realized derivatives (per Bbl) |
$42.25 |
$30.06 |
$53.61 |
|||
Oil, with realized derivatives (per Bbl) |
47.49 |
46.73 |
60.78 |
|||
Natural gas, without realized derivatives (per Mcf) |
1.85 |
1.88 |
2.48 |
|||
Natural gas, with realized derivatives (per Mcf) |
1.85 |
1.88 |
2.65 |
|||
NGLs (per Bbl) |
16.51 |
11.04 |
19.76 |
|||
Total, without realized derivatives (per Boe) |
$32.72 |
$23.52 |
$38.45 |
|||
Total, with realized derivatives (per Boe) |
$36.20 |
$34.42 |
$42.86 |
|||
Average costs (per Boe): |
||||||
Lease operating expenses |
$4.37 |
$5.25 |
$9.12 |
|||
Production and ad valorem taxes |
$1.97 |
$1.58 |
$2.68 |
|||
Depreciation, depletion and amortization |
$17.23 |
$18.66 |
$21.93 |
|||
General and administrative expenses (including stock-based compensation) |
$5.33 |
$7.29 |
$6.95 |
|||
General and administrative expenses (cash based) |
$4.28 |
$6.25 |
$5.91 |
|||
(1) |
One Boe is equal to six Mcf of natural gas or one Bbl of oil or NGLs based on an approximate energy equivalency. This is an energy content correlation and does not reflect a value or price relationship between the commodities. | ||||||||||||||
(2) |
Average prices shown in the table include transportation and gathering costs and reflect prices both before and after the effects of the Company's realized commodity hedging transactions. The Company's calculation of such effects includes both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. |
Parsley Energy, Inc. | |||||||
Condensed Consolidated Statements of Operations | |||||||
(Unaudited, in thousands, except per share data) | |||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||
2016 |
2015 |
2016 |
2015 | ||||
Revenues |
|||||||
Oil sales |
$ 91,129 |
$ 63,418 |
$ 143,160 |
$ 107,106 | |||
Natural gas sales |
5,834 |
6,696 |
11,377 |
13,652 | |||
Natural gas liquids sales |
9,347 |
7,746 |
14,041 |
12,313 | |||
Total revenues |
106,310 |
77,860 |
168,578 |
133,071 | |||
Operating expenses |
|||||||
Lease operating expenses |
14,204 |
18,464 |
28,102 |
34,862 | |||
Production and ad valorem taxes |
6,407 |
5,431 |
10,602 |
9,926 | |||
Depreciation, depletion and amortization |
55,988 |
44,407 |
105,372 |
81,788 | |||
General and administrative expenses (including stock based compensation) |
17,307 |
14,083 |
36,606 |
27,064 | |||
Exploration costs |
8,978 |
1,515 |
9,666 |
4,734 | |||
Acquisition costs |
486 |
— |
486 |
— | |||
Accretion of asset retirement obligations |
215 |
221 |
385 |
470 | |||
Rig termination costs |
— |
3,870 |
— |
8,970 | |||
Other operating expenses |
1,651 |
23 |
2,547 |
23 | |||
Total operating expenses |
105,236 |
88,014 |
193,766 |
167,837 | |||
Operating income (loss) |
1,074 |
(10,154) |
(25,188) |
(34,766) | |||
Other income (expense) |
|||||||
Interest expense, net |
(12,199) |
(11,099) |
(23,393) |
(22,940) | |||
(Loss) gain on sale of property |
(469) |
1,031 |
(119) |
1,031 | |||
Derivative loss |
(27,304) |
(17,733) |
(25,216) |
(10,591) | |||
Other income, net |
492 |
1,559 |
251 |
1,838 | |||
Total other expense, net |
(39,480) |
(26,242) |
(48,477) |
(30,662) | |||
Loss before income taxes |
(38,406) |
(36,396) |
(73,665) |
(65,428) | |||
Income tax benefit |
10,918 |
10,216 |
20,486 |
15,690 | |||
Net loss |
(27,488) |
(26,180) |
(53,179) |
(49,738) | |||
Less: Net loss attributable to noncontrolling interests |
6,111 |
7,051 |
12,448 |
13,585 | |||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ (21,377) |
$ (19,129) |
$ (40,731) |
$ (36,153) | |||
Net loss per common share: |
|||||||
Basic |
($0.13) |
($0.18) |
($0.28) |
($0.35) | |||
Diluted |
($0.13) |
($0.18) |
($0.28) |
($0.35) | |||
Weighted average common shares outstanding: |
|||||||
Basic |
158,662 |
108,058 |
147,313 |
104,684 | |||
Diluted |
158,662 |
108,058 |
147,313 |
104,684 |
* Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. | |||||
Condensed Consolidated Balance Sheets | |||||
(Unaudited, in thousands) | |||||
June 30, 2016 |
December 31, 2015 | ||||
Cash and cash equivalents |
$ |
441,024 |
$ |
343,084 | |
Other current assets |
149,775 |
145,242 | |||
Total current assets |
$ |
590,799 |
$ |
488,326 | |
Total property, plant and equipment, net |
2,675,114 |
1,985,753 | |||
Total noncurrent assets |
24,281 |
31,021 | |||
Total Assets |
$ |
3,290,194 |
$ |
2,505,100 | |
Total current liabilities |
$ |
225,806 |
$ |
228,497 | |
Long-term debt |
742,471 |
546,832 | |||
Other noncurrent liabilities |
131,712 |
143,130 | |||
Total noncurrent liabilities |
$ |
874,183 |
$ |
689,962 | |
Total liabilities |
1,099,989 |
918,459 | |||
Total equity |
2,190,205 |
1,586,641 | |||
Total Liabilities and Shareholders' Equity |
$ |
3,290,194 |
$ |
2,505,100 |
Parsley Energy, Inc. | |||||
Condensed Consolidated Statements of Cash Flows | |||||
(Unaudited, in thousands) | |||||
Six Months Ended June 30, | |||||
2016 |
2015 | ||||
Cash flows from operating activities |
|||||
Net loss |
$ |
(53,179) |
$ |
(49,738) | |
Adjustments to reconcile net loss to net cash |
|||||
provided by operating activities: |
|||||
Non-cash and other items |
176,373 |
123,530 | |||
Changes in operating assets and liabilities |
(71,389) |
4,835 | |||
Net cash provided by operating activities |
$ |
51,805 |
$ |
78,627 | |
Net cash used in investing activities |
(807,975) |
(255,938) | |||
Cash flows from financing activities: |
|||||
Net proceeds (repayments) from long-term debt |
194,936 |
(76,072) | |||
Issuance of common stock |
659,174 |
223,931 | |||
Net cash provided by financing activities |
$ |
854,110 |
$ |
147,859 | |
Net increase in cash and cash equivalents |
97,940 |
(29,452) | |||
Cash and cash equivalents, beginning of year |
343,084 |
50,550 | |||
Cash and cash equivalents, end of period |
$ |
441,024 |
$ |
21,098 |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDAX as net (loss) income before depreciation, depletion and amortization, exploration costs, acquisition costs, (gain) loss on sales of oil and natural gas properties, asset retirement obligation accretion expense, stock-based compensation, net interest expense, income tax (benefit) expense, rig termination costs, derivative (income) loss, net settlements on derivative instruments, and net premium realizations on options that settled during the period.
Management believes Adjusted EBITDAX is useful because it allows the Company to more effectively evaluate its operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company's operating performance or liquidity. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. The Company's computations of Adjusted EBITDAX may not be comparable to other similarly titled measure of other companies. The Company believes that Adjusted EBITDAX is a widely followed measure of operating performance.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income for each of the periods indicated.
Parsley Energy, Inc. | |||||||
Adjusted EBITDAX | |||||||
(Unaudited, in thousands) | |||||||
Three Months Ended June 30, |
Six Months Ended June 30, | ||||||
2016 |
2015 |
2016 |
2015 | ||||
Adjusted EBITDAX reconciliation to net loss: |
|||||||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ (21,377) |
$ (19,129) |
$ (40,731) |
$ (36,153) | |||
Net loss attributable to noncontrolling interests |
(6,111) |
(7,051) |
(12,448) |
(13,585) | |||
Depreciation, depletion and amortization |
55,988 |
44,407 |
105,372 |
81,788 | |||
Exploration costs |
8,978 |
1,515 |
9,666 |
4,734 | |||
Acquisition costs |
486 |
— |
486 |
— | |||
Loss (gain) on sale of property |
469 |
(1,031) |
119 |
(1,031) | |||
Accretion of asset retirement obligations |
215 |
221 |
385 |
470 | |||
Stock based compensation |
3,391 |
2,112 |
6,150 |
3,753 | |||
Interest expense, net |
12,199 |
11,099 |
23,393 |
22,940 | |||
Income tax benefit |
(10,918) |
(10,216) |
(20,486) |
(15,690) | |||
Rig termination costs |
— |
3,870 |
— |
8,970 | |||
Derivative loss |
27,304 |
17,733 |
25,216 |
10,591 | |||
Net settlements on derivative instruments |
747 |
8,071 |
19,187 |
21,267 | |||
Net premium realization on options that settled during the period |
10,551 |
2,181 |
20,965 |
2,045 | |||
Adjusted EBITDAX |
$ 81,922 |
$ 53,782 |
$ 137,274 |
$ 90,099 |
* Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income (Loss)
Adjusted net income (loss) is a performance measure used by management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, (gain) loss on sale of property, exploration costs, acquisition costs, and rig termination costs while adjusting for noncontrolling interest and the associated changes in estimated income tax. Management believes adjusted net income (loss) is useful because it may enhance investors' ability to assess Parsley's historical and future financial performance. Adjusted net income (loss) should not be considered an alternative to consolidated net income, operating income, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income (loss) to the GAAP financial measure of net income (loss).
Parsley Energy, Inc. | ||||||||
Adjusted Net Income (Loss) and Net Income (Loss) Per Share | ||||||||
(Unaudited, in thousands, except per share data) | ||||||||
Three Months Ended June 30, |
Six Months Ended June 30, | |||||||
2016 |
2015 |
2016 |
2015 | |||||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ (21,377) |
$ (19,129) |
$ (40,731) |
$ (36,153) | ||||
Derivative loss |
27,304 |
17,733 |
25,216 |
10,591 | ||||
Net settlements on derivative instruments |
747 |
8,071 |
19,187 |
21,267 | ||||
Net premium realization on options that settled during the period |
10,551 |
2,181 |
20,965 |
2,045 | ||||
Loss (gain) on sale of property |
469 |
(1,031) |
119 |
(1,031) | ||||
Exploration costs |
8,978 |
1,515 |
9,666 |
4,734 | ||||
Acquisition costs |
486 |
— |
486 |
— | ||||
Rig termination costs |
— |
3,870 |
— |
8,970 | ||||
Noncontrolling interest |
(6,085) |
(7,051) |
(12,442) |
(13,585) | ||||
Change in estimated income tax |
(14,224) |
(7,975) |
(21,077) |
(11,706) | ||||
Adjusted net income (loss) |
$ 6,849 |
$ (1,816) |
$ 1,389 |
$ (14,868) | ||||
Weighted average diluted shares outstanding |
191,705 |
140,444 |
180,254 |
137,042 | ||||
Adjusted net income (loss) per diluted share |
$ 0.04 |
$ (0.01) |
$ 0.01 |
$ (0.11) | ||||
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, July 11, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("the Company") plans to release its second quarter 2016 financial and operating results after the market closes on Wednesday, August 3, 2016. In conjunction with the release, the Company has scheduled a conference call for Thursday, August 4, at 9:00 a.m. Eastern Time (8:00 a.m. Central Time).
By Phone: |
Dial 877-407-0672 (United States/Canada) or 412-902-0003 (International) approximately 10 minutes before the scheduled start time and request the Parsley Energy earnings conference call. |
A telephone replay will be available through Thursday, August 11 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13641422. | |
By Webcast: |
|
Select "Events & Presentations" under the "Investor Relations" section of the Company's website. Please log on at least 10 minutes in advance to register and download any necessary software. A replay will be available shortly after the call. |
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, June 24, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("the Company") today announced that it has formed a dedicated corporate development department and appointed Mike Hinson as the Company's Vice President—Corporate Development, effective July 1. Mr. Hinson previously served as the Company's Vice President—Land. In this new position, Mr. Hinson will lead the Company's acquisition and divestiture activities.
Bryan Sheffield, the Company's Chairman, President, and Chief Executive Officer, commented, "Parsley's corporate development activities have added significant value for our shareholders, and forming a dedicated group to oversee these activities demonstrates our commitment to sourcing and executing strategic transactions that we believe will benefit the Company in the long run. We are excited for Mike to focus on corporate development and expand our capabilities in this area."
In addition, the Company has appointed Stephanie Reed as the Company's Vice President—Land, also effective July 1.
Mr. Sheffield commented, "Stephanie Reed joined Parsley in its early days and has developed deep expertise in the land side of the business over the past several years. This experience, along with her recent experience serving as Investor Relations Manager, provides Stephanie with a broad skill set and knowledge base that I believe will translate into superior leadership of our Land department."
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, June 2, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) today announced that the Company will participate in three conferences during the month of June. The Company will participate in the RBC Capital Markets Energy and Power Executive Conference in New York City on June 6-7, the TPH Hotter 'N Hell Conference in Houston on June 15, and the Wells Fargo Energy Conference in San Francisco on June 21-22.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 24, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) today announced that the Company will participate in the UBS Global Oil and Gas Conference in Austin, Texas on May 25-26, during which Matt Gallagher, Parsley Energy's Chief Operating Officer, is scheduled to make a presentation on Thursday, May 26. Investor slides will be posted in association with this presentation and can be accessed on the Investor Relations section of Parsley's website at www.parsleyenergy.com.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Logo- http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 24, 2016 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE:PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp., announced today the pricing of its previously announced private placement (the "Notes Offering") of senior notes due 2024 (the "2024 Notes"). The 2024 Notes mature on June 1, 2024, will pay interest at the rate of 6.250% per year and were priced at par. Parsley Inc. will not guarantee the 2024 Notes.
The Notes Offering is expected to close May 27, 2016, subject to customary closing conditions. Together with a portion of the net proceeds from Parsley Inc.'s previously announced equity offering (the "Concurrent Equity Offering"), which is scheduled to close on May 27, 2016, Parsley intends to use a portion of the net proceeds of the Notes Offering to fund the aggregate purchase price for the acquisitions of mineral interests (and associated surface rights) and certain working interests in Pecos and Reeves Counties, Texas (the "Acquisitions"), and the remaining net proceeds will be used to fund a portion of Parsley's capital program and for general corporate purposes, including potential future acquisitions. The Notes Offering is not conditioned on the consummation of the Acquisitions or the Concurrent Equity Offering.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Parsley plans to offer and sell the securities only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the SEC, including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
Contact Information
Brad Smith, Ph.D., CFA
Parsley Energy, LLC
Vice President, Corporate Strategy and Investor Relations
or
Stephanie Reed
Investor Relations Manager
ir@parsleyenergy.com
(512) 505-5199
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, LLC
AUSTIN, Texas, May 23, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley Energy" or the "Company") today announced that it has priced an underwritten, upsized public offering of 8,250,000 shares of Class A common stock for total gross proceeds (before underwriters' fees and estimated expenses) of approximately $203.0 million (the "Equity Offering"). The 8,250,000 share offering represents a 250,000 share upsize to the originally proposed 8,000,000 share offering. The underwriters have an option for 30 days to purchase up to an additional 1,237,500 shares of Class A common stock from the Company. The Equity Offering is expected to close on May 27, 2016, subject to customary closing conditions.
Concurrently with the Equity Offering, Parsley Energy, LLC and Parsley Finance Corp., the Company's consolidated subsidiaries, intend to offer to qualified institutional buyers and non-U.S. persons outside of the U.S., in an offering exempt from registration under the Securities Act of 1933, as amended, $200.0 million aggregate principal amount of senior notes due 2024 (the "Concurrent Notes Offering"). The Company will not guarantee the senior notes. The Equity Offering is not conditioned on the consummation of the Concurrent Notes Offering, and the Concurrent Notes Offering is not conditioned on the consummation of the Equity Offering.
Together with a portion of the net proceeds from the Concurrent Notes Offering, the Company intends to use a portion of the net proceeds of the Equity Offering to fund the aggregate purchase price for the acquisitions of mineral interests (and associated surface rights) and certain working interests in Pecos and Reeves Counties, Texas (the "Acquisitions"), and any remaining net proceeds will be used to fund a portion of the Company's capital program and for general corporate purposes, including potential future acquisitions. The Equity Offering is not conditioned on the consummation of the Acquisitions.
Credit Suisse Securities (USA) LLC is acting as sole lead bookrunner for the Equity Offering.
The Equity Offering is being made pursuant to an effective shelf registration statement, which has been filed with the Securities and Exchange Commission (the "SEC") and became effective June 5, 2015. The Equity Offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the SEC's website at www.sec.gov. Alternatively, the sole lead bookrunner will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting:
Credit Suisse Securities (USA) LLC
Attn: Prospectus Department
One Madison Avenue
New York, NY 10010
Telephone: 1-800-221-1037
newyork.prospectus@credit-suisse.com
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2015 and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 23, 2016 /PRNewswire/ -- Parsley Energy, LLC ("Parsley"), a subsidiary of Parsley Energy, Inc. (NYSE: PE) ("Parsley Inc."), and Parsley's wholly owned subsidiary, Parsley Finance Corp., announced today that, subject to market conditions, they intend to offer $200 million in aggregate principal amount of senior unsecured notes due 2024 (the "2024 Notes") to eligible purchasers (the "Notes Offering").
Concurrently with the Notes Offering, Parsley Inc. is offering 8,000,000 shares of its Class A common stock (or 9,200,000 shares if the option to purchase additional shares is exercised in full) in an underwritten public offering (the "Concurrent Equity Offering"). The shares of Class A common stock are being offered in the Concurrent Equity Offering by means of a separate prospectus supplement. The Notes Offering is not conditioned on the consummation of the Concurrent Equity Offering, and the Concurrent Equity Offering is not conditioned on the Notes Offering.
Together with a portion of the net proceeds from the Concurrent Equity Offering, Parsley intends to use a portion of the net proceeds of Notes Offering to fund the aggregate purchase price for the acquisitions of mineral interests (and associated surface rights) and certain working interests in Pecos and Reeves Counties, Texas (the "Acquisitions"), and any remaining net proceeds will be used to fund a portion of Parsley's capital program and for general corporate purposes, including potential future acquisitions. The Notes Offering is not conditioned on the consummation of the Acquisitions.
The securities to be offered in the Notes Offering have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Parsley plans to offer and sell the securities only to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to non-U.S. persons in transactions outside the United States pursuant to Regulation S under the Securities Act.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in Parsley Inc.'s filings with the SEC, including, but not limited to, Parsley Inc.'s Annual Report on Form 10-K for the year ended December 31, 2015 and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in Parsley Inc.'s SEC filings could cause actual results to differ materially from those contained in any forward-looking statement.
Logo: http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 23, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley Energy" or the "Company") today announced that it has commenced an underwritten public offering of 8,000,000 shares of Class A common stock (the "Equity Offering"). The Company expects to grant the underwriters an option to purchase up to an additional 1,200,000 shares of Class A common stock from the Company.
Concurrently with the Equity Offering, Parsley Energy, LLC and Parsley Finance Corp., the Company's consolidated subsidiaries, intend to offer to qualified institutional buyers and non-U.S. persons outside of the U.S., in an offering exempt from registration under the Securities Act of 1933, as amended, $200.0 million aggregate principal amount of senior notes due 2024 (the "Concurrent Notes Offering"). The Company will not guarantee the senior notes. The Equity Offering is not conditioned on the consummation of the Concurrent Notes Offering, and the Concurrent Notes Offering is not conditioned on the consummation of the Equity Offering.
Together with a portion of the net proceeds from the Concurrent Notes Offering, the Company intends to use a portion of the net proceeds of the Equity Offering to fund the aggregate purchase price for the acquisitions of mineral interests (and associated surface rights) and certain working interests in Pecos and Reeves Counties, Texas (the "Acquisitions"), and any remaining net proceeds will be used to fund a portion of the Company's capital program and for general corporate purposes, including potential future acquisitions. The Equity Offering is not conditioned on the consummation of the Acquisitions.
Credit Suisse Securities (USA) LLC is acting as sole lead bookrunner for the Equity Offering.
The Equity Offering is being made pursuant to an effective shelf registration statement, which has been filed with the Securities and Exchange Commission (the "SEC") and became effective June 5, 2015. The Equity Offering will be made only by means of a preliminary prospectus supplement and the accompanying base prospectus, copies of which may be obtained on the SEC's website at www.sec.gov. Alternatively, the sole lead bookrunner will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting:
Credit Suisse Securities (USA) LLC
Attn: Prospectus Department
One Madison Avenue
New York, NY 10010
Telephone: 1-800-221-1037
newyork.prospectus@credit-suisse.com
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2015 and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 23, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley Energy," "Parsley," or the "Company") today announced that it has entered into an agreement to acquire mineral rights under approximately 30,000 acres consisting of Parsley leasehold and other adjacent properties in Pecos and Reeves Counties, Texas in the Southern Delaware Basin for $280.5 million in cash. The proposed transaction is scheduled to close by July 14, 2016, subject to customary closing conditions. Parsley intends to finance this acquisition through debt and equity issuances announced concurrently with the announcement of the acquisition. Parsley also announced the purchase of additional working interests in the Company's leasehold in Pecos and Reeves Counties totaling 885 net acres for $9.0 million in cash. This transaction closed on May 10, 2016.
Acquisition Highlights
Mineral Rights Acquisition
Working Interest Acquisition
"The pending minerals acquisition encompasses what we view as very promising portions of Parsley's Southern Delaware acreage and represents an important step toward unlocking the full value of Parsley's Southern Delaware assets," stated Bryan Sheffield, CEO of Parsley Energy. "Increasing netbacks per barrel of oil equivalent with no incremental capital expenditures or operating expenses elevates the return profile on the associated acreage, making it among the most compelling in our corporate portfolio. In light of encouraging production trends on our first operated and non-operated wells in the Southern Delaware Basin and with current AFEs down to $5.7 million for a horizontal Wolfcamp well with a 7,000' lateral in the Southern Delaware, we anticipate that the acreage associated with the mineral interests we are acquiring will represent a central focus of our development program from this point forward. The acquisition of surface rights on the majority of the mineral acreage further supplements its development potential."
Projected Economic Impact of Mineral Rights(1)(2)
Parsley believes the addition of mineral interests will enhance already compelling economics on the relevant portion of the Company's Southern Delaware horizontal drilling inventory. The following table shows the projected uplift in rate of return ("ROR") and net present value ("NPV") associated with the receipt of a 17.5% royalty interest on a horizontal Wolfcamp well with a 7,000' stimulated lateral. The analysis is based on a type curve assigned to Parsley's proved reserves in the Southern Delaware Basin by the Company's reserve auditors, Netherland, Sewell & Associates, Inc. ("NSAI").
$40 WTI |
$50 WTI |
$60 WTI |
NYMEX Strip Pricing | ||||||||||||||
NRI |
ROR |
NPV ($MM) |
ROR |
NPV ($MM) |
ROR |
NPV ($MM) |
ROR |
NPV ($MM) | |||||||||
Without Minerals |
75.0% |
41% |
$4.8 |
63% |
$7.8 |
86% |
$10.8 |
63% |
$8.1 | ||||||||
With Minerals(3) |
92.5% |
65% |
$8.1 |
94% |
$11.7 |
122% |
$15.3 |
93% |
$12.1 | ||||||||
+17.5% |
+24% |
+$3.3 |
+31% |
+$3.9 |
+36% |
+$4.5 |
+30% |
+$4.0 |
The following table illustrates the potential cash flow associated with acquired mineral rights, which convey incremental revenue without associated costs.
MBoe per Well |
Lateral Length Adjustment(4) |
Adjusted MBoe per Well |
Avg. Royalty Interest |
Production Attributed to Minerals (MBoe) |
Revenue per Boe(5) |
Gross Cash Flow from Minerals ($MM) |
Associated Costs |
Net Cash Flow from Minerals ($MM) |
877 |
0.90 |
790 |
17.5% |
138 |
$44 |
$6.1 |
-- |
$6.1 |
(1) Assumptions relating to well results and costs are not intended to be representative of the results we will achieve and may differ materially therefrom; NSAI type curve does not constitute a projection for all wells across this acreage and individual well results may differ materially therefrom |
(2) Analysis based on NYMEX WTI and Henry Hub strip prices as of 5/17/2016; 877 MBoe EUR type curve assigned by NSAI for 7,000' stimulated lateral; 100% working interest; D&C: $5.7 MM; LOE for 75% NRI: $7,500/month fixed, $2.00/BO variable; LOE for 92.5% NRI: $7,500/month fixed, $1.00/BO variable based on savings associated with surface ownership; NGL Price: 40% of WTI |
(3) Reflects average royalty interest of 17.5% on mineral acreage |
(4) Reflects 6,307' average lateral length of horizontal drilling locations with minerals |
(5) Based on NYMEX WTI and Henry Hub strip prices as of 5/17/2016 and the following production mix: 80% oil, 10% NGL, 10% residue gas |
Registration Statement
The Company has filed a registration statement (including a prospectus) with the SEC for the equity offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the equity offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the issuer, any underwriter or any dealer participating in the equity offering will arrange to send you the prospectus if you request it by contacting Credit Suisse Securities (USA) LLC, Attn: Prospectus Department, One Madison Avenue, New York, NY 10010.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Forward-Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2015 and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
Photo - http://photos.prnewswire.com/prnh/20160523/370971
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 4, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") earlier today announced in a press release (the "Original Release") financial and operating results for the quarter ended March 31, 2016. Subsequent to the issuance of the Original Release, the Company determined that an entry relating to certain derivative income that will be realized in subsequent periods was incorrectly realized in the quarter ended March 31, 2016. The entry affected net income and adjusted EBITDAX, among other financial results. As a result, the Company has revised its financial results for the quarter ended March 31, 2016 as set forth in this revised release. The Company has posted to its website a presentation that supplements the information in this revised release.
First Quarter 2016 Highlights and Recent Developments
"The momentum we built last year carried over to the first quarter of 2016," said Bryan Sheffield, Parsley's President and CEO. "With oil prices rebounding and costs still declining, our decision to maintain a steady activity pace is paying off as we deliver robust production growth in a healthy-return environment. In addition, we are thrilled to have added meaningfully to our core acreage positions in both the Midland and Southern Delaware Basins in recent weeks. All in all, Parsley Energy is off to a great start in 2016, with a number of exciting projects on the horizon as we ramp up in the Southern Delaware and delineate new target intervals in the Midland Basin."
Operational Highlights
During the first quarter, Parsley spud 20 and completed 15 gross operated horizontal wells with an average working interest of 92%.
The Company's first operated horizontal well in the Southern Delaware Basin, the Trees State 16-1H, continues to show a strong production trajectory, as does the non-operated Cilantro 2524-C3-1H, drilled onto the northwest corner of Parsley's Southern Delaware acreage position. At the 120-day mark and when normalized to a 7,000' lateral, both wells are tracking at least 25% above the Company's 1 million Boe EUR type curve for Midland Basin Wolfcamp A/B wells.
Among the wells that achieved 30-day peak production periods since the Company's last quarterly update, the Atkins 14-11-4202H, completed on a three-well pad in Upton County, established a Company-record 30-day IP rate for a Wolfcamp A well at 1,883 Boe/d or 242 Boe/d per thousand completed feet. The three wells that comprise this pad project, two of which were completed in the Wolfcamp B formation, produced more than 97,000 barrels of oil during their respective peak 30-day periods. Parsley's Wolfcamp A and Wolfcamp B wells with longer production histories continue to show encouraging decline rates, supporting cumulative production profiles that in aggregate track above those implied by the Company's 1 MMBoe EUR Wolfcamp A/B type curve, which corresponds to a 7,000' completed lateral. Wolfcamp wells with 180 and 360 days of production are outperforming the type curve by 3% and 10%, respectively.
Financial Highlights
During the first quarter of 2016, the Company recorded a net loss attributable to its stockholders of $19.4 million, or $0.14 per weighted average share. Excluding non-recurring items on a tax-adjusted basis and adding back the non-controlling interest allocated to Class B stockholders, the adjusted net loss for the first quarter of 2016 was $5.3 million, or $0.03 per diluted share.
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense for the first quarter of 2016 was $55.4 million, down just 5% compared to the fourth quarter of 2015 despite significantly lower oil prices on average during 1Q16. ("Adjusted EBITDAX" and "adjusted net loss" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). Please see the supplemental financial information at the end of this news release for a reconciliation of the non-GAAP financial measures of adjusted net loss and adjusted EBITDAX to GAAP financial measures.)
LOE per Boe decreased from $5.57 in 4Q15 to $5.25 in 1Q16, driven by ongoing buildout of the Company's in-house gathering and disposal system and electrification projects that reduce fuel and power costs and boost well run-times. Cash G&A per Boe increased from $4.41 in 4Q15 to $6.25 in 1Q16, burdened by a full-year vacation accrual as well as relocation expenses associated with moving departments from Midland to Austin. Depreciation, depletion, and amortization expense per Boe decreased from $21.74 in 4Q15 to $18.66 in the first quarter of 2016 as reserve growth outpaced strong production growth.
Parsley reported development expenditures of $110 million in 1Q16. Reported capital expenditures include costs associated with the horizontal drilling activity noted above, as well as one vertical well and three saltwater disposal wells.
Liquidity Update
As of March 31, 2016 pro forma for the acquisitions announced and equity offering completed in April, the Company had approximately $738 million of liquidity—consisting of $164 million of cash on hand and an undrawn amount of $575 million on the Company's revolver—and a net debt to annualized EBITDAX ratio of 1.7x.
Hedging Update
Parsley maintains an active hedging program to reduce the variability of its anticipated cash flows arising from fluctuations in commodity prices. The Company remains well-hedged, with close to 100% of anticipated oil volumes hedged this year and a significant hedge position in 2017, as well. For details on Parsley's hedging position, please see the investor presentation on the Company's website and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the period ended March 31, 2016.
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the first quarter of 2016 on Thursday, May 5 at 10:30 a.m. Eastern Time (9:30 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through May 11 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13635001. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Investor Relations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including our Annual Report on Form 10-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
- Tables to Follow -
Parsley Energy, Inc. | ||||
Selected Operating Data | ||||
(Unaudited) | ||||
Three months ended |
||||
March 31, |
March 31, |
|||
2016 |
2015 |
|||
Net production volumes: |
||||
Oil (MBbls) |
1,731 |
1,009 |
||
Natural gas (MMcf) |
2,944 |
2,302 |
||
NGLs (MBbls) |
425 |
310 |
||
Total (MBoe)(1) |
2,647 |
1,703 |
||
Average net daily production (Boe/d) |
29,088 |
18,919 |
||
Average sales prices(2): |
||||
Oil, without realized derivatives (per Bbl) |
$30.06 |
$43.30 |
||
Oil, with realized derivatives (per Bbl) |
46.73 |
55.71 |
||
Natural gas, without realized derivatives (per Mcf) |
1.88 |
3.02 |
||
Natural gas, with realized derivatives (per Mcf) |
1.88 |
3.22 |
||
NGLs (per Bbl) |
11.04 |
14.73 |
||
Total, without realized derivatives (per Boe) |
$23.52 |
$32.42 |
||
Total, with realized derivatives (per Boe) |
$34.42 |
$40.04 |
||
Average costs (per Boe): |
||||
Lease operating expenses |
$5.25 |
$9.63 |
||
Production and ad valorem taxes |
$1.58 |
$2.64 |
||
Depreciation, depletion and amortization |
$18.66 |
$21.95 |
||
General and administrative expenses (including stock-based compensation) |
$7.29 |
$7.62 |
||
General and administrative expenses (cash based) |
$6.25 |
$6.66 |
(1) |
One Boe is equal to six Mcf of natural gas or one Bbl of oil or NGLs based on an approximate energy equivalency. This is an energy content correlation and does not reflect a value or price relationship between the commodities. |
(2) |
Average prices shown in the table include transportation and gathering costs and reflect prices both before and after the effects of our realized commodity hedging transactions. Our calculation of such effects includes both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. |
Parsley Energy, Inc. | ||||
Condensed Consolidated Statement of Operations | ||||
(Unaudited, in thousands, except per share data) | ||||
Three months ended | ||||
March 31, | ||||
2016 |
2015 | |||
Revenues |
||||
Oil sales |
$ 52,031 |
$ 43,688 | ||
Natural gas sales |
5,543 |
6,956 | ||
Natural gas liquids sales |
4,694 |
4,567 | ||
Total revenues |
62,268 |
55,211 | ||
Operating expenses |
||||
Lease operating expenses |
13,898 |
16,398 | ||
Production and ad valorem taxes |
4,195 |
4,495 | ||
Depreciation, depletion and amortization |
49,384 |
37,381 | ||
General and administrative expenses (including stock-based compensation) |
19,299 |
12,981 | ||
Exploration costs |
688 |
3,219 | ||
Accretion of asset retirement obligations |
170 |
249 | ||
Rig termination costs |
— |
5,100 | ||
Other operating expenses |
896 |
— | ||
Total operating expenses |
88,530 |
79,823 | ||
Operating loss |
(26,262) |
(24,612) | ||
Other income (expense) |
||||
Interest expense, net |
(11,289) |
(11,841) | ||
Gain on sale of property |
350 |
— | ||
Derivative income |
2,088 |
7,142 | ||
Other income (expense) |
(146) |
279 | ||
Total other income (expense), net |
(8,997) |
(4,420) | ||
Loss before income taxes |
(35,259) |
(29,032) | ||
Income tax benefit |
9,568 |
5,474 | ||
Net loss |
(25,691) |
(23,558) | ||
Less: Net loss attributable to noncontrolling interest |
6,337 |
6,534 | ||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ (19,354) |
$ (17,024) | ||
Net loss per common share: |
||||
Basic |
($0.14) |
($0.17) | ||
Diluted |
($0.14) |
($0.17) | ||
Weighted average common shares outstanding: |
||||
Basic |
135,963 |
101,273 | ||
Diluted |
135,963 |
101,273 | ||
* Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. | |||||
Condensed Consolidated Balance Sheets | |||||
(Unaudited, in thousands) | |||||
March 31, |
December 31, | ||||
2016 |
2015 | ||||
Cash and cash equivalents |
$ |
28,310 |
$ |
343,084 | |
Other current assets |
144,231 |
145,242 | |||
Total current assets |
172,541 |
488,326 | |||
Total property, plant and equipment, net |
2,259,252 |
1,985,753 | |||
Total noncurrent assets |
24,741 |
31,021 | |||
Total Assets |
$ |
2,456,534 |
$ |
2,505,100 | |
Total current liabilities |
$ |
215,033 |
$ |
228,497 | |
Long-term debt |
546,817 |
546,832 | |||
Other noncurrent liabilities |
130,899 |
143,130 | |||
Total noncurrent liabilities |
677,716 |
689,962 | |||
Total liabilities |
892,749 |
918,459 | |||
Total equity |
1,563,785 |
1,586,641 | |||
Total Liabilities and Shareholders' Equity |
$ |
2,456,534 |
$ |
2,505,100 |
Parsley Energy, Inc. | |||||
Condensed Consolidated Statements of Cash Flows | |||||
(Unaudited, in thousands) | |||||
Three months ended | |||||
March 31, | |||||
2016 |
2015 | ||||
Cash flows from operating activities |
|||||
Net loss |
$ |
(25,691) |
$ |
(23,558) | |
Adjustments to reconcile net loss to net cash |
|||||
provided by operating activities: |
|||||
Non-cash and other items |
73,050 |
59,746 | |||
Changes in operating assets and liabilities |
(27,454) |
(18,201) | |||
Net cash provided by operating activities |
19,905 |
17,987 | |||
Net cash used in investing activities |
(334,459) |
(145,144) | |||
Cash flows from financing activities |
|||||
Net repayments from long-term debt |
(237) |
(120,164) | |||
Issuance of common stock |
36 |
224,007 | |||
Other |
(19) |
— | |||
Net cash (used in) provided by financing activities |
(220) |
103,843 | |||
Net decrease in cash and cash equivalents |
(314,774) |
(23,314) | |||
Cash and cash equivalents, beginning of period |
343,084 |
50,550 | |||
Cash and cash equivalents, end of period |
$ |
28,310 |
$ |
27,236 |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDAX as net (loss) income before depreciation, depletion and amortization, exploration costs, (gain) loss on sales of oil and natural gas properties, asset retirement obligation accretion expense, stock-based compensation, net interest expense, income tax (benefit) expense, rig termination costs, derivative (income) loss, net settlements on derivative instruments, and net premium realizations on options that settled during the period.
Management believes Adjusted EBITDAX is useful because it allows us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our computations of Adjusted EBITDAX may not be comparable to other similarly titled measure of other companies. We believe that Adjusted EBITDAX is a widely followed measure of operating performance and may also be used by investors to measure our ability to meet debt service requirements.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income for each of the periods indicated.
Parsley Energy, Inc. | ||||
Adjusted EBITDAX | ||||
(Unaudited, in thousands) | ||||
Three months ended |
||||
March 31, |
||||
2016 |
2015 |
|||
Adjusted EBITDAX reconciliation to net income: |
||||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ (19,354) |
$ (17,024) |
||
Net loss attributable to noncontrolling interests |
(6,337) |
(6,534) |
||
Depreciation, depletion and amortization |
49,384 |
37,381 |
||
Exploration costs |
688 |
3,219 |
||
Gain on sale of property |
(350) |
— |
||
Accretion of asset retirement obligations |
170 |
249 |
||
Stock-based compensation |
2,759 |
1,641 |
||
Interest expense, net(1) |
11,289 |
11,841 |
||
Income tax benefit |
(9,568) |
(5,474) |
||
Rig termination costs |
— |
5,100 |
||
Derivative income |
(2,088) |
(7,142) |
||
Net settlements on derivative instruments |
18,440 |
13,196 |
||
Net premium realization on options that settled during the period |
10,414 |
(136) |
||
Adjusted EBITDAX |
$ 55,447 |
$ 36,317 |
||
(1) Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income (Loss)
Adjusted net income (loss) is a performance measure used by management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, (gain) loss on sale of property, exploration costs, and rig termination costs while adjusting for noncontrolling interest and the associated changes in estimated income tax. It should not be considered an alternative to consolidated net income, operating income, net cash provided by operating activities, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income (loss) to the GAAP financial measure of net income (loss).
Parsley Energy, Inc. | ||||
Adjusted Net Loss and Net Loss Per Share | ||||
(Unaudited, in thousands, except per share data) | ||||
Three months ended | ||||
March 31, 2016 |
March 31, 2015 | |||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ (19,354) |
$ (17,024) | ||
Derivative income |
(2,088) |
(7,142) | ||
Net settlements on derivative instruments |
18,440 |
13,196 | ||
Net premium realization on options that settled during the period |
10,414 |
(136) | ||
Gain on sale of property |
(350) |
— | ||
Exploration costs |
688 |
3,219 | ||
Rig termination costs |
— |
5,100 | ||
Noncontrolling interest |
(6,196) |
(6,534) | ||
Change in estimated income tax |
(6,852) |
(494) | ||
Adjusted net loss |
$ (5,298) |
$ (9,815) | ||
Weighted average diluted shares outstanding |
169,006 |
133,574 | ||
Adjusted net loss per diluted share |
$ (0.03) |
$ (0.07) |
Logo - http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
AUSTIN, Texas, May 4, 2016 /PRNewswire/ -- Parsley Energy, Inc. (NYSE: PE) ("Parsley," "Parsley Energy," or the "Company") today announced financial and operating results for the quarter ended March 31, 2016. The Company has posted to its website a presentation that supplements the information in this release.
First Quarter 2016 Highlights and Recent Developments
"The momentum we built last year carried over to the first quarter of 2016," said Bryan Sheffield, Parsley's President and CEO. "With oil prices rebounding and costs still declining, our decision to maintain a steady activity pace is paying off as we deliver robust production growth in a healthy-return environment. In addition, we are thrilled to have added meaningfully to our core acreage positions in both the Midland and Southern Delaware Basins in recent weeks. All in all, Parsley Energy is off to a great start in 2016, with a number of exciting projects on the horizon as we ramp up in the Southern Delaware and delineate new target intervals in the Midland Basin."
Operational Highlights
During the first quarter, Parsley spud 20 and completed 15 gross operated horizontal wells with an average working interest of 92%.
The Company's first operated horizontal well in the Southern Delaware Basin, the Trees State 16-1H, continues to show a strong production trajectory, as does the non-operated Cilantro 2524-C3-1H, drilled onto the northwest corner of Parsley's Southern Delaware acreage position. At the 120-day mark and when normalized to a 7,000' lateral, both wells are tracking at least 25% above the Company's 1 million Boe EUR type curve for Midland Basin Wolfcamp A/B wells.
Among the wells that achieved 30-day peak production periods since the Company's last quarterly update, the Atkins 14-11-4202H, completed on a three-well pad in Upton County, established a Company-record 30-day IP rate for a Wolfcamp A well at 1,883 Boe/d or 242 Boe/d per thousand completed feet. The three wells that comprise this pad project, two of which were completed in the Wolfcamp B formation, produced more than 97,000 barrels of oil during their respective peak 30-day periods.
Parsley's Wolfcamp A and Wolfcamp B wells with longer production histories continue to show encouraging decline rates, supporting cumulative production profiles that in aggregate track above those implied by the Company's 1 MMBoe EUR Wolfcamp A/B type curve, which corresponds to a 7,000' completed lateral. Wolfcamp wells with 180 and 360 days of production are outperforming the type curve by 3% and 10%, respectively.
Financial Highlights
During the first quarter of 2016, the Company recorded a net loss attributable to its stockholders of $17.6 million, or $0.13 per weighted average share. Excluding non-recurring items on a tax-adjusted basis and adding back the non-controlling interest allocated to Class B stockholders, the adjusted net loss for the first quarter of 2016 was $3.1 million, or $0.02 per diluted share.
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense for the first quarter of 2016 was $58.8 million, up 1% compared to the fourth quarter 2015 despite significantly lower oil prices on average during 1Q16. ("Adjusted EBITDAX" and "adjusted net loss" are not presented in accordance with generally accepted accounting principles in the United States ("GAAP"). Please see the supplemental financial information at the end of this news release for a reconciliation of the non-GAAP financial measures of adjusted net loss and adjusted EBITDAX to GAAP financial measures.)
LOE per Boe decreased from $5.57 in 4Q15 to $5.25 in 1Q16, driven by ongoing buildout of the Company's in-house gathering and disposal system and electrification projects that reduce fuel and power costs and boost well run-times. Cash G&A per Boe increased from $4.41 in 4Q15 to $6.25 in 1Q16, burdened by a full-year vacation accrual as well as relocation expenses associated with moving departments from Midland to Austin. Depreciation, depletion, and amortization expense per Boe decreased from $21.74 in 4Q15 to $18.66 in the first quarter of 2016 as reserve growth outpaced strong production growth.
Parsley reported development expenditures of $110 million in 1Q16. Reported capital expenditures include costs associated with the horizontal drilling activity noted above, as well as one vertical well and three saltwater disposal wells.
Liquidity Update
As of March 31, 2016 pro forma for the acquisitions announced and equity offering completed in April, the Company had approximately $738 million of liquidity—consisting of $164 million of cash on hand and an undrawn amount of $575 million on the Company's revolver—and a net debt to annualized EBITDAX ratio of 1.6x.
Hedging Update
Parsley maintains an active hedging program to reduce the variability of its anticipated cash flows arising from fluctuations in commodity prices. The Company remains well-hedged, with close to 100% of anticipated oil volumes hedged this year and a significant hedge position in 2017, as well. For details on Parsley's hedging position, please see the investor presentation on the Company's website and/or the Company's Quarterly Report on Form 10-Q, upon availability, for the period ended March 31, 2016.
Conference Call Information
Parsley Energy will host a conference call and webcast to discuss its results for the first quarter of 2016 on Thursday, May 5 at 10:30 a.m. Eastern Time (9:30 a.m. Central Time). Participants should call 877-407-0672 (United States/Canada) or 412-902-0003 (International) 10 minutes before the scheduled time and request the Parsley Energy conference call. A telephone replay will be available shortly after the call through May 11 by dialing 877-660-6853 (United States/Canada) or 201-612-7415 (International). Conference ID: 13635001. A live broadcast will also be available on the internet at www.parsleyenergy.com under the "Investor Relations" section of the website. The Company has also posted to its website a presentation that supplements the information in this release.
About Parsley Energy, Inc.
Parsley Energy, Inc. is an independent oil and natural gas company focused on the acquisition and development of unconventional oil and natural gas reserves in the Permian Basin in West Texas. For more information, visit our website at www.parsleyenergy.com.
Forward Looking Statements
Certain statements contained in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent Parsley Energy's expectations or beliefs concerning future events, and it is possible that the results described in this news release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Parsley Energy's control, which could cause actual results to differ materially from the results discussed in the forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, Parsley Energy does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for Parsley Energy to predict all such factors. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our filings with the SEC, including our Annual Report on Form 10-K. The risk factors and other factors noted in our SEC filings could cause our actual results to differ materially from those contained in any forward-looking statement.
- Tables to Follow -
Parsley Energy, Inc. | ||||
Selected Operating Data | ||||
(Unaudited) | ||||
Three months ended |
||||
March 31, |
March 31, |
|||
2016 |
2015 |
|||
Net production volumes: |
||||
Oil (MBbls) |
1,731 |
1,009 |
||
Natural gas (MMcf) |
2,944 |
2,302 |
||
NGLs (MBbls) |
425 |
310 |
||
Total (MBoe)(1) |
2,647 |
1,703 |
||
Average net daily production (Boe/d) |
29,088 |
18,919 |
||
Average sales prices(2): |
||||
Oil, without realized derivatives (per Bbl) |
$30.06 |
$43.30 |
||
Oil, with realized derivatives (per Bbl) |
48.66 |
55.71 |
||
Natural gas, without realized derivatives (per Mcf) |
1.88 |
3.02 |
||
Natural gas, with realized derivatives (per Mcf) |
1.88 |
3.22 |
||
NGLs (per Bbl) |
11.04 |
14.73 |
||
Total, without realized derivatives (per Boe) |
$23.52 |
$32.42 |
||
Total, with realized derivatives (per Boe) |
$35.69 |
$40.04 |
||
Average costs (per Boe): |
||||
Lease operating expenses |
$5.25 |
$9.63 |
||
Production and ad valorem taxes |
$1.58 |
$2.64 |
||
Depreciation, depletion and amortization |
$18.66 |
$21.95 |
||
General and administrative expenses (including stock-based compensation) |
$7.29 |
$7.62 |
||
General and administrative expenses (cash based) |
$6.25 |
$6.66 |
(1) |
One Boe is equal to six Mcf of natural gas or one Bbl of oil or NGLs based on an approximate energy equivalency. This is an energy content correlation and does not reflect a value or price relationship between the commodities. |
(2) |
Average prices shown in the table include transportation and gathering costs and reflect prices both before and after the effects of our realized commodity hedging transactions. Our calculation of such effects includes both realized gains and losses on cash settlements for commodity derivative transactions and premiums paid or received on options that settled during the period. |
Parsley Energy, Inc. | ||||
Condensed Consolidated Statement of Operations | ||||
(Unaudited, in thousands, except per share data) | ||||
Three months ended | ||||
March 31, | ||||
2016 |
2015 | |||
Revenues |
||||
Oil sales |
$ 52,031 |
$ 43,688 | ||
Natural gas sales |
5,543 |
6,956 | ||
Natural gas liquids sales |
4,694 |
4,567 | ||
Total revenues |
62,268 |
55,211 | ||
Operating expenses |
||||
Lease operating expenses |
13,898 |
16,398 | ||
Production and ad valorem taxes |
4,195 |
4,495 | ||
Depreciation, depletion and amortization |
49,384 |
37,381 | ||
General and administrative expenses (including stock-based compensation) |
19,299 |
12,981 | ||
Exploration costs |
688 |
3,219 | ||
Accretion of asset retirement obligations |
170 |
249 | ||
Rig termination costs |
— |
5,100 | ||
Other operating expenses |
896 |
— | ||
Total operating expenses |
88,530 |
79,823 | ||
Operating loss |
(26,262) |
(24,612) | ||
Other income (expense) |
||||
Interest expense, net |
(11,289) |
(11,841) | ||
Gain on sale of property |
350 |
— | ||
Derivative income |
5,427 |
7,142 | ||
Other income (expense) |
(146) |
279 | ||
Total other income (expense), net |
(5,658) |
(4,420) | ||
Loss before income taxes |
(31,920) |
(29,032) | ||
Income tax benefit |
8,678 |
5,474 | ||
Net loss |
(23,242) |
(23,558) | ||
Less: Net loss attributable to noncontrolling interest |
5,689 |
6,534 | ||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ (17,553) |
$ (17,024) | ||
Net loss per common share: |
||||
Basic |
($0.13) |
($0.17) | ||
Diluted |
($0.13) |
($0.17) | ||
Weighted average common shares outstanding: |
||||
Basic |
135,963 |
101,273 | ||
Diluted |
135,963 |
101,273 | ||
* Certain reclassifications and adjustments to prior period amounts have been made to conform with current presentation. |
Parsley Energy, Inc. | |||||
Condensed Consolidated Balance Sheets | |||||
(Unaudited, in thousands) | |||||
March 31, |
December 31, | ||||
2016 |
2015 | ||||
Cash and cash equivalents |
$ |
28,310 |
$ |
343,084 | |
Other current assets |
147,570 |
145,242 | |||
Total current assets |
175,880 |
488,326 | |||
Total property, plant and equipment, net |
2,259,252 |
1,985,753 | |||
Total noncurrent assets |
24,741 |
31,021 | |||
Total Assets |
$ |
2,459,873 |
$ |
2,505,100 | |
Total current liabilities |
$ |
215,033 |
$ |
228,497 | |
Long-term debt |
546,817 |
546,832 | |||
Other noncurrent liabilities |
131,789 |
143,130 | |||
Total noncurrent liabilities |
678,606 |
689,962 | |||
Total liabilities |
893,639 |
918,459 | |||
Total equity |
1,566,234 |
1,586,641 | |||
Total Liabilities and Shareholders' Equity |
$ |
2,459,873 |
$ |
2,505,100 |
Parsley Energy, Inc. | |||||
Condensed Consolidated Statements of Cash Flows | |||||
(Unaudited, in thousands) | |||||
Three months ended | |||||
March 31, | |||||
2016 |
2015 | ||||
Cash flows from operating activities |
|||||
Net loss |
$ |
(23,242) |
$ |
(23,558) | |
Adjustments to reconcile net loss to net cash |
|||||
provided by operating activities: |
|||||
Non-cash and other items |
70,601 |
59,746 | |||
Changes in operating assets and liabilities |
(27,454) |
(18,201) | |||
Net cash provided by operating activities |
19,905 |
17,987 | |||
Net cash used in investing activities |
(334,459) |
(145,144) | |||
Cash flows from financing activities |
|||||
Net repayments from long-term debt |
(237) |
(120,164) | |||
Issuance of common stock |
36 |
224,007 | |||
Other |
(19) |
— | |||
Net cash (used in) provided by financing activities |
(220) |
103,843 | |||
Net decrease in cash and cash equivalents |
(314,774) |
(23,314) | |||
Cash and cash equivalents, beginning of period |
343,084 |
50,550 | |||
Cash and cash equivalents, end of period |
$ |
28,310 |
$ |
27,236 |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDAX
Adjusted EBITDAX is not a measure of net income as determined by GAAP. Adjusted EBITDAX is a supplemental non-GAAP financial measure that is used by management and external users of our consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. We define Adjusted EBITDAX as net (loss) income before depreciation, depletion and amortization, exploration costs, (gain) loss on sales of oil and natural gas properties, asset retirement obligation accretion expense, stock-based compensation, net interest expense, income tax (benefit) expense, rig termination costs, derivative (income) loss, net settlements on derivative instruments, and net premium realizations on options that settled during the period.
Management believes Adjusted EBITDAX is useful because it allows us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above from net income in arriving at Adjusted EBITDAX because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our computations of Adjusted EBITDAX may not be comparable to other similarly titled measure of other companies. We believe that Adjusted EBITDAX is a widely followed measure of operating performance and may also be used by investors to measure our ability to meet debt service requirements.
The following table presents a reconciliation of Adjusted EBITDAX to the GAAP financial measure of net income for each of the periods indicated.
Parsley Energy, Inc. | ||||
Adjusted EBITDAX | ||||
(Unaudited, in thousands) | ||||
Three months ended | ||||
March 31, | ||||
2016 |
2015 | |||
Adjusted EBITDAX reconciliation to net income: |
||||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ (17,553) |
$ (17,024) | ||
Net loss attributable to noncontrolling interests |
(5,689) |
(6,534) | ||
Depreciation, depletion and amortization |
49,384 |
37,381 | ||
Exploration costs |
688 |
3,219 | ||
Gain on sale of property |
(350) |
— | ||
Accretion of asset retirement obligations |
170 |
249 | ||
Stock-based compensation |
2,759 |
1,641 | ||
Interest expense, net(1) |
11,289 |
11,841 | ||
Income tax benefit |
(8,678) |
(5,474) | ||
Rig termination costs |
— |
5,100 | ||
Derivative income |
(5,427) |
(7,142) | ||
Net settlements on derivative instruments |
21,779 |
13,196 | ||
Net premium realization on options that settled during the period |
10,414 |
(136) | ||
Adjusted EBITDAX |
$ 58,786 |
$ 36,317 | ||
(1) Certain reclassifications to prior period amounts have been made to conform with current presentation. |
Adjusted Net Income (Loss)
Adjusted net income (loss) is a performance measure used by management to evaluate financial performance, prior to non-cash gains or losses on derivatives, net cash received for derivative settlements, net premiums received on options that settled during the period, (gain) loss on sale of property, exploration costs, and rig termination costs while adjusting for noncontrolling interest and the associated changes in estimated income tax. It should not be considered an alternative to consolidated net income, operating income, net cash provided by operating activities, or any other measure of financial performance presented in accordance with GAAP. The following table presents a reconciliation of the non-GAAP financial measure of adjusted net income (loss) to the GAAP financial measure of net income (loss).
Parsley Energy, Inc. | ||||
Adjusted Net Loss and Net Loss Per Share | ||||
(Unaudited, in thousands, except per share data) | ||||
Three months ended | ||||
March 31, 2016 |
March 31, 2015 | |||
Net loss attributable to Parsley Energy, Inc. stockholders |
$ (17,553) |
$ (17,024) | ||
Derivative income |
(5,427) |
(7,142) | ||
Net settlements on derivative instruments |
21,779 |
13,196 | ||
Net premium realization on options that settled during the period |
10,414 |
(136) | ||
Gain on sale of property |
(350) |
— | ||
Exploration costs |
688 |
3,219 | ||
Rig termination costs |
— |
5,100 | ||
Noncontrolling interest |
(5,563) |
(6,534) | ||
Change in estimated income tax |
(7,074) |
(494) | ||
Adjusted net loss |
$ (3,086) |
$ (9,815) | ||
Weighted average diluted shares outstanding |
169,006 |
133,574 | ||
Adjusted net loss per diluted share |
$ (0.02) |
$ (0.07) |
Logo: http://photos.prnewswire.com/prnh/20160504/363754LOGO
SOURCE Parsley Energy, Inc.
Subscribe now for access to Criterion Research's historical production and forecast production by company.
Subscribe now for access to Criterion Research's hedge and analysis.