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
- Net production averaged 29.1 MBoe/d, up 15% versus 4Q15 and 54%
year-over-year.
- Daily oil production increased 20% quarter-over-quarter and 70%
year-over-year, with oil volumes representing 65% of total
production in 1Q16.
- Parsley announced agreements to acquire 22,908 net acres in the
Southern Delaware and Midland
Basins for approximately $359 million
in cash. At the time of announcement in early April, estimated
production from the acquired properties was approximately 2,300
Boe/d. Acquired assets also include six horizontal wells in various
stages of drilling and completion.
- Lease operating expense ("LOE") per Boe decreased for the
fourth consecutive quarter, down 6% versus 4Q15 to $5.25.
- The Company's bank lending group affirmed Parsley's borrowing
base of $575 million, reflecting the
Company's strong financial position.
- As of March 31, 2016, pro forma
for the acquisitions announced and equity offering completed in
April, the Company had $164 million
of cash on hand, $738 million of
liquidity, and a net debt to annualized adjusted EBITDAX ratio of
1.7x.
- Moody's upgraded Parsley's Corporate Family Rating to B2 from
B3 and upgraded the rating on the Company's senior unsecured notes
to B3 from Caa1.
"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)
|
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SOURCE Parsley Energy, Inc.