Parsley Energy, Inc.NYSE
Tue, Oct. 18, 3:49 PM
- SM Energy (SM +1.5%) surged to a 52-week high at the open before pulling back following news of its purchase of 35.7K acres in the Midland Basin in west Texas for $1.1B in cash and 13.4M shares valued at ~$500M.
- SM expects to use the proceeds from a $785M sale of property and other assets in the Williston Basin to Oasis Petroleum, also announced today, to pay for the bulk of its cash outlay for the deal.
- “Our Permian growth rate will be huge, higher than our more highly valued competitors,” SM CEO and President Jay Ottoson says without naming the competitors, but the company’s slide presentation lists Diamondback Energy (FANG -0.5%), Callon Petroleum (CPE -0.1%), Parsley Energy (PE -0.5%) and RSP Permian (RSPP -1.1%) as its top peers in the area.
- CapitalOne upgrades SM to Overweight from Equal Weight with a $50 price target, lifted from $46, as it estimates SM paid ~$42K/acre for the acreage when backing out 2.4M boe/day production from the total $1.6B purchase price.
- Williams Capital considers SM its top pick in the sector, saying the deal gives it "the scale to command an improved valuation and trade more like a Permian Basin company, especially when considering its execution of selling non-core assets."
Tue, Aug. 30, 3:42 PM
- Parsley Energy (PE +1.2%) is named by Morgan Stanley as a top pick in the mid-cap E&P sector, as the firm expects PE to grow dramatically faster than consensus forecasts, driving multiple expansion.
- "The consensus view is that PE has materially outperformed and is now expensive, and that its superior growth is reflected in the stock. We disagree and would be buyers here," the firm writes.
- Stanley projects PE to add two rigs in 2017 and six more in 2018, averaging four rigs a year and implying much higher spending than the company's own scenario.
- The firm reiterates an Outperform rating on the shares and raises its price target by $4 to $48.
Mon, Aug. 29, 6:25 PM
- Williams Capital believes oil industry fundamentals are solid despite current commodity price levels but is cautious overall and advises investors not to chase the recent run at current valuations.
- However, the firm recommends select underappreciated companies with lower expectations and re-rating potential, and thinks companies situated in core resource plays that can demonstrate further capital efficiency improvements with catalysts will continue to garner top valuations and M&A premiums.
- Two of Williams' favorites are SM Energy (NYSE:SM), which the firm says remains one of the cheapest names in the sector with a solid balance sheet and assets as well as a conservative management team, and Newfield Exploration (NYSE:NFX), which Williams sees thriving through the current downturn given its strong balance sheet, ample financial liquidity and strong hedge book.
- Also initiated with Buy ratings: Cabot Oil & Gas (NYSE:COG), Energen (NYSE:EGN), Gulfport Energy (NASDAQ:GPOR), Oasis Petroleum (NYSE:OAS), PDC Energy (NASDAQ:PDCE), Pioneer Natural Resources (NYSE:PXD).
- Driven largely by valuation, Williams assigns Hold ratings on Diamondback Energy (NASDAQ:FANG), Gastar Exploration (NYSEMKT:GST), Laredo Petroleum (NYSE:LPI), Parsley Energy (NYSE:PE), Rice Energy (NYSE:RICE) and Cimarex Energy (NYSE:XEC).
Fri, Aug. 26, 5:23 AM
- Blackstone yesterday announced an agreement to invest $1.5B in a pair of drilling deals in West Texas, and committed another $500M to a group who has just purchased 16K acres in another area of the Permian Basin. The money for the deals came from an $8B pool raised early last year, but had mostly sat untapped.
- Other investors of late include Wilbur Ross, EIG Global Energy Partners, and Apollo Global. Wall Street's rush could be a sign of a bottom ... or a bubble - in some cases properties are going for higher prices that exceed those paid when oil was above $100 per barrel two years ago.
- "There’s this one corner of the world, the Permian Basin, where investors will keep financing you to keep on acquiring,” says Parsley Energy (NYSE:PE) CEO Bryan Sheffield, whose company has sold stock to buy land five times since 2014 (including a sale last week). PDC Energy (NASDAQ:PDCE) shot higher earlier this week on an agreement to buy $1.5B of Permian fields fro a NY investment firm.
- “It’s like musical chairs,” says a Dallas portfolio manager. “At some point in time, there’s not going to be a chair, and [oil producers] want to make sure they have a seat.”
Mon, Aug. 15, 5:52 PM
- Parsley Energy (NYSE:PE) agrees to acquire 11,672 leasehold acres of undeveloped acreage and producing oil and gas properties, as well as associated mineral and overriding royalty interests, in Texas' Midland Basin from unnamed sellers for a combined $400M.
- PE also says its first producing horizontal well on the Glasscock County acreage acquired in May registered a strong peak 30-day initial production rate of 1,161 boe/day.
- To help fund the deal, PE says it has launched a 7M-share public offering, with an underwriters option to purchase up to an additional 1.05M common shares, and a $200M private placement of additional 6.250% senior notes due 2024.
Mon, Aug. 8, 11:57 AM
- SM Energy’s (SM +7.2%) $980M purchase of drilling rights in the Permian Basin shows that producers are willing to pay a premium for access to one of the few spots where oil exploration still turns a profit, Bloomberg reports.
- SM will pay the equivalent of $39.5K/acre for drilling rights across 24,783 acres in the Permian Basin, will ahead of the $25K-$35K that acreage in the Permian’s Midland Basin section had been fetching as recently as May and almost doubling SM's holdings in the region.
- Other Permian producers also are trading higher, including: PXD +2.2%, CXO +1.8%, XEC +2.1%, CWEI +6.1%, APA +3.8%, FANG +2.1%, PE +1.2%, QEP +3.6%, RSPP +2.4%, APC +2.6%, DVN +3.7%, MTDR +2.3%.
Thu, Aug. 4, 2:02 PM
Wed, Aug. 3, 4:25 PM
Tue, Aug. 2, 5:35 PM
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Tue, Jul. 26, 2:56 PM
- Parsley Energy (PE +2.3%) is initiated with an Outperform rating and $34 price target at Imperial Capital, which notes that PE's activity in the Midland Basin has resulted in improving efficiencies and peer leading internal rates of return, while early Delaware Basin results show similar promise.
- PE boasts a lean balance sheet, with $821M of pro forma liquidity, and the company's hedging strategy protects it from the fall in crude prices, which also results in lower service costs, the firm says.
- With liquidity, a low cost structure, smart hedges, and no finger on the pause button, Imperial believes PE has all the ingredients to continue to outperform the group.
Thu, Jul. 21, 3:49 PM
- Parsley Energy (PE -0.5%) is initiated with an Overweight rating and a $39 price target at Morgan Stanley, which says the stock deserves to trade at a significant premium to peers, given its peer-leading growth, strong management and high quality assets.
- The firm says PE will enjoy multiple expansion if it continues to beat consensus expectations or if it grows its drilling inventory through accretive acquisitions and leasing, and it believes both possibilities are likely over the coming year.
- Stanley also starts RSP Permian (RSPP -0.6%) at Equal Weight with a $43 target, citing high quality assets and an outstanding management team that are nevertheless offset by decelerating growth.
- The firm is optimistic about RSPP's longer-term upside, noting the company’s “strong track record of continuously improving capital efficiency, fostering upside to growth and resource potential.”
Fri, Jun. 17, 3:17 PM
- Parsley Energy (PE +0.7%) is initiated with a Buy rating and $32 price target at Wunderlich, which says it is "impressed by how the company has managed to grow through this downturn while keeping a very strong balance sheet."
- Wunderlich likes PE's success in growing production and reserves, both organically and by acquisition, since its May 2014 IPO.
- With Midland Basin assets mostly in development mode, the firm thinks all eyes will be on the Trees Ranch prospect in the Southern Delaware Basin where the company is a first mover.
Tue, May 24, 3:27 PM
- Parsley Energy's (PE +0.6%) $200M bond offering, which will help fund the company's acquisition of mineral rights in Texas' Southern Delaware Basin, may have broader implications as the first junk-rated E&P bond priced this year, analysts say.
- "It’s a small deal, but the fact that it even launched is noteworthy," says MacKay Shields high-yield analyst Nate Hudson. “This shows that companies from out-of-favor sectors are able to access the markets again."
- PE's concurrent stock offering was upsized to 8.25M shares, raising $203M in gross proceeds, and there's an overallotment option for underwriters to purchase up to an additional 1.2375M shares.
- BofA Merrill Lynch reiterates its Buy rating and $27 price target, believing the deal portrays PE’s confidence in the Delaware Basin as a second core area, with inventory that likely will rival the Midland Basin.
- "With moderate debt and a strong hedge book, PE should be able to weather the current commodity weakness and re-accelerate growth, should prices recover," BofA says.
Mon, May 23, 5:37 PM
Mon, May 23, 4:42 PM
- Parsley Energy (NYSE:PE) -2.2% AH after agreeing to acquire mineral rights under ~30K acres consisting of Parsley leasehold and other adjacent properties in the Southern Delaware basin in Texas for $280.5M.
- PE says estimated net current production associated with the acquired mineral rights totals ~280 boe/day.
- To help fund the deal, PE announces concurrent equity and debt offerings of 8M common shares, with an underwriters option to purchase up to an additional 1.2M shares, and $200M in aggregate principal amount of senior unsecured notes due 2024.
Wed, May 4, 4:46 PM
- Parsley Energy (NYSE:PE): Q1 EPS of -$0.03 beats by $0.06.
- Revenue of $62.27M (+12.8% Y/Y) misses by $12.64M.