Parsley Energy Inc. (NYSE: PE) easily eclipsed the half billion dollar market acquisition mark May 23, saying it has an agreement to acquire 30,000 mineral rights under its leasehold and other adjacent properties in Pecos and Reeves counties, Texas.
The $280.5 million cash deal is the second targeting the Delaware Basin after a slew of deals to lock up acreage in the Midland Basin in 2015. In April, Parsley said it agreed to purchase southern Delaware and Midland basin acreage for about $359 million.
The company made about $348 million in acquisitions in 2015.
Parsley will fund the larger purchase through an offering of $200 million in debt and an announced sale of 8 million shares of its Class A common stock.
Mineral rghts acquisition highlights include:
- Mineral rights, 29,813 acres;
- Average royalty interest of 17.5%;
- In total, 186 gross/net wells (will see additional net revenue interest);
- Average net revenue interest on horizontal drilling locations increased to 92.5% from 75%;
- Estimated net current production associated with acquired mineral rights is 280 barrels of oil equivalent per day (boe/d); and
- About 82% of the mineral acreage represents Parsley leasehold.
Parsley also acquired surface rights on about 80% of mineral acreage, eliminating compensation for surface damages and water procurement, among other costs, and also facilitating optimal well and facility placement.
Parsley’s plan is to complete five to seven wells in the Southern Delaware Basin this year, with three to five to be completed on the acquired mineral acreage.
The transaction is scheduled to close on or before July 14, subject to the customary closing conditions.
Parsley also said it closed a $9 million purchase of additional working interests in Pecos and Reeves counties totaling 885 net acres in the Southern Delaware Basin on May 10.
All of the incremental working interests are associated with mineral acreage, bringing Parsley's working interest to 100% and net revenue interest to 87.5% on the properties.
“Assuming just one flow unit in the upper Wolfcamp target interval, the acquired working interests translate to an additional 10 net horizontal drilling locations with an average lateral length of 7,250 feet,” the company said.
Darren Barbee can be reached at dbarbee@hartenergy.com.
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