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
- Net production averaged 71.5 MBoe per day, up 11% versus 2Q17
and 66% year-over-year. Daily net oil production increased 10%
versus 2Q17 and 63% year-over-year.
- The Company continues to execute acreage trades that optimize
the development potential of its Midland Basin footprint. Net of
acreage traded away, Parsley added more than 1.2 million net
lateral feet to the Company's horizontal drilling inventory through
trades executed since its last quarterly update in August.
Including this footage, Parsley has added approximately 2.6 million
net lateral feet through acreage trades since announcing the
acquisition of Midland Basin assets from Double Eagle Permian, LLC
and certain of its affiliates in February
2017, while consolidating key development areas.
- Parsley built upon an encouraging 2Q17 result from a well
utilizing a compressed stage completion design with several
additional compressed stage tests during 3Q17. Relative to offset
wells utilizing the Company's standard completion design, these
compressed stage wells in the Midland Basin exhibit a meaningful
uplift in oil production accompanied by a more modest cost
increase, translating to an enhanced return profile.
- The Company amended its revolving credit agreement on
October 11, 2017, thereby increasing
its borrowing base to $1.8 billion
while maintaining the Company's elected commitment amount of
$1.0 billion. As of the end of 3Q17,
pro forma for the October issuance of $700
million of senior unsecured notes due 2027, liquidity stands
at approximately $1.9 billion,
including $934 million of cash on
hand.
Preliminary 2018 Outlook
- Parsley's preliminary 2018 capital program targets high-margin
oil volume growth with top-tier capital efficiency on a steady
development pace.
- The Company estimates that capital expenditures of $1.35-$1.55 billion would translate to oil
production of 67.5-72.5 MBo per day.
- While almost half of the wells Parsley has drilled and
completed over the past four quarters have been located in new
counties, targeted new formations, and/or implemented new spacing
arrangements, the Company intends to focus on relatively
established areas, formations, and configurations in 2018.
"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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
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.
|
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SOURCE Parsley Energy, Inc.