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Parsley Energy provides operational update

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Oilfield Technology,

Parsley expects to report full-year 2017 net production of approximately 68 Mboe/d, 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/d. Full-year expected production is based on anticipated 4Q17 net production of 80-81 Mboe/d and 51-52 Mbo/d.

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 US$410-420 million, translating to full-year 2017 capital expenditures of approximately US$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 Programme 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/d of associated production. Accordingly, Parsley now expects average net oil production of 65-70 Mbo/d in 2018, representing year-over-year growth of 50% at the midpoint. The Company expects corresponding total production volumes of 98-108 Mboe/d 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 US$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 ft. In addition, the Char Hughes 28-2-4803H, turned to production two weeks ago with a lateral length of approximately 11 000 ft in central Reagan County, achieved a peak 24-hour production rate of more than 1000 bo/d, 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 US$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 programme that applies 2017 delineation and testing results and will increasingly be characterised 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."

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