Parsley Energy Inc. reactivated two rigs and two frac spreads in July and, if prices do not deteriorate, the company anticipates moving to a stabilized activity level of four to five rigs and one to two frac spreads early in this year’s fourth quarter.
Detailed guidance on production and activity was not reinstated, “out of an abundance of caution,” given ongoing uncertainty caused by the coronavirus (COVID-19) pandemic, the company said as part of its second-quarter report.
Parsley posted a net loss attributable to stockholders of $400 million for the quarter. Excluding, on a tax-adjusted basis, certain items that the company does not view as indicative of its ongoing financial performance, adjusted net income for the quarter was $10.1 million.
Adjusted earnings before interest, income taxes, depreciation, depletion, amortization, and exploration expense for the quarter was $211.6 million.
Capital expenditures for the quarter were $64 million, comprised of $60 million for operated drilling, completion, and equipment activity, and $4 million associated with water infrastructure and non-operated development activity.
As of June 30, Parsley had $640.6 million of liquidity, consisting of $2.3 million of cash and cash equivalents and an availability of $638.3 million on the company's revolver.
With a revised baseline capital budget assumption of a $35 WTI oil price from a $20-30 WTI oil price for the remainder of 2020, Parsley has narrowed its 2020 capital budget to $650-700 million from less than $700 million. First-half 2020 capital expenditures of $443 million represent more than 60% of the full-year budget.
Operations
During January and February, Parsley operated 15 development rigs and five frac spreads before steadily dropping activity throughout March. In late April, as a result of regional oil prices trading below $20/bbl, Parsley suspended all new drilling and completion operations and did not deploy any rigs or frac spreads during May or June.
The company curtailed more than 20% of its net oil production in during May. A vast majority of the curtailed volumes were restored in June.
During the quarter, and after 6 months of operating assets acquired from Jagged Peak in January, the company utilized a variety of midstream solutions to help reduce natural gas flaring by about 90% (OGJ Online, Oct. 14, 2019).
The company spud eight and placed on production 17 gross operated horizontal wells during second-quarter 2020. Working interest on wells was about 85%, with an average completed lateral length of 9,500 ft. Thirteen gross operated horizontal wells were placed on production in the Midland basin, with the remainder placed on production in the Delaware basin.