Parsley Energy Inc. plans to drop to 12 rigs as soon as practicable, and further reductions are planned in the near-term, the company said in an operations outlook notice Mar. 9. The company said it has revised its baseline capital budget assumption to a $30-35 WTI oil price for the remainder of the year and, as of Mar. 6, dropped to three frac spreads.
During January and February, Parsley operated 15 development rigs and five frac spreads on average. In mid-February, the company reiterated 2020 guidance and plans to deploy 14-15 development rigs and four-to-five frac spreads on average in 2020 as part of a baseline capital budget that assumed a $50 WTI oil price.
Parsley had previously indicated it would expect to generate free cash flow of at least $200 million during 2020 at a $50 WTI oil price. In the context of $30-$35 WTI oil prices for the remainder of the year, the company would target at least $85 million of free cash flow, accomplished through incremental activity reductions, likely in combination with lower service and equipment costs, the company said.
Additional detail on formal 2020 guidance ranges will be released with first quarter financial results or as needed, the company said.