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Permian operator Parsley Energy $PE reported worse than expected fourth quarter earnings Thursday after the close. $PE said with recent commodity price trends it has reduced  rig and frac spread counts and intends to reduce its 2019 capital leasing and acquisition spend.


Parsley Energy Inc NYSE: PE Reported Earnings after Close Tuesday

$0.29 Missed Exp $0.34 EPS AND $510.2M Beat $500.4 Million Revenue Forecast

Earnings

Parsley Energy Inc NYSE: PE released third quarter earnings on Tuesday of $119.7 million. On a per-share basis of 43 cents. Earnings, adjusted for non-recurring gains, were 29 cents per share. The results missed Wall Street expectations of an average estimate of 15 analysts surveyed by Zacks Investment Research was for earnings of 34 cents per share.

Revenue of $510.2 million in the period, which beat Street forecasts. Ten analysts surveyed by Zacks expected $500.4 million.

 

Parsley Energy Inc NYSE: PE

Market Reaction - After Hours $16.79 −0.29 (-1.70%)

Highlights

  • Generated positive free cash flow(1) in 3Q19.
  • Initiated dividend program in 3Q19 and declared 4Q19 quarterly dividend of $0.03 per share(2) payable on December 20, 2019.
  • Net oil production increased 6% quarter-over-quarter and 25% year-over-year to 91.7 MBo per day.
  • Total net production averaged 150.4 MBoe per day.
  • The Company registered favorable trends in lease operating expense ("LOE") and general and administrative expense ("G&A") during the third quarter of 2019, with respective costs per Boe reaching Company-low record levels.
  • Parsley is tightening its 2019 capital budget guidance from $1.40-$1.49 billion to $1.40-$1.47 billion.
  • The Company is increasing full-year 2019 net oil production guidance from 85.0-86.5 MBo per day to 86.4-87.4 MBo per day.
  • At the midpoint, the updated range translates to estimated year-over-year organic growth of approximately 25%.
  • Recently announced agreement to acquire Jagged Peak Energy Inc. ("Jagged Peak") in an accretive, low-premium and all-stock transaction valued at approximately $2.27 billion, inclusive of Jagged Peak's net debt of approximately $625 million as of June 30, 2019, expected to close in 1Q20.

Parsley Acerage 2019

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."

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.

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.

Source: Parsley Energy

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