Another Permian deal for Parsley

09 February 2017, Week 05, Issue 444

Parsley Energy has entered into an agreement with Double Eagle Energy Permian to acquire undeveloped acreage and producing properties in West Texas’ Permian Basin. The acquisition follows the purchase of roughly 23,000 net acres (93 square km) in separate transactions by Parsley last month, though the Double Eagle deal is considerably larger. 

The transaction, which was announced on February 7 and is expected to close on or before April 20, would see 71,000 additional undeveloped net acres (287 square km) added to Parsley’s holdings in the Midland Basin in a US$2.8 billion cash-and-stock deal. The acquisition would see Parsley’s total holdings in the Permian increase to 227,000 net acres (919 square km), with 179,000 net acres (724 square km) in the Midland alone. The new total would be the second largest Midland Basin acreage position among publicly traded exploration and production companies in the region, according to Parsley.

Parsley expects to finance the US$1.4 billion cash portion of the acquisition through equity and debt offerings announced concurrently with news of the deal.

Parsley said the properties being acquired had net production of 3,600 boepd as of January 1 and 3,300 net horizontal drilling locations. This includes 1,800 net locations in what Parsley termed “high priority target intervals” – the Lower Spraberry, Wolfcamp A and Wolfcamp B. The company believes the acreage could support over 20 additional horizontal drilling rigs. 

In the wake of deal, Parsley has updated its annual production forecast from 37-39 million boepd to 38.1-38.3 million boepd. The total development budget for the year has also been updated to US$493-499 million from a previous projection of US$460-510 million.

This is the second Permian acquisition announced by Austin-based Parsley so far this year. On January 10, it announced US$607 million worth of separate deals to buy both undeveloped land and producing properties in the Permian, split across the Delaware and Midland basins. These purchases were also joined by a separate deal to acquire a 17% stake in mineral rights in the Southern Delaware Basin for US$43 million.

 

Edited by

Anna Kachkova

Editor

Any questions? Please get in touch