On Tuesday, Parsley Energy Inc., the industry operating on energy resources made a second deal that happens to be the largest oil patch in the United States. This deal has been made by Double Eagle Energy Permian. Parsley Energy Inc. is set to buy a few assets in the fertile Permian Basin, which is very rich in oil. Reports say that the assets are estimated to have a worth of 2.8 billion dollars.
Last year also, Parsley Energy Inc. invested about 28 million dollars in the west Texas Permian Basin when the land acquisitions took place. This amount was more than thrice of what they had spent in the year 2015.
As the Permian Basin has an extensive pipeline network, the producers charge the crude price at the rate of 52 to 53 dollars each barrel. The factors making the Permian basin so oil rich are that they have an abundance of supplies and labor and the warm winters facilitate their working throughout the year. Many companies have acquired enormous sums of fortune selling and buying the Permian lands since the year 2009 like Double Eagle.
The recent addition of 71000 net acres made the acreage of Parsley 227000 acres in total. The share of the oil producer had decreased by 4 percent in the after-hours trading. Initially, the drop was about 7 percent. The company said that they recovered after they had sold the stocks in order to carry out the acquisition.
Parsley made a statement on 10th January saying that it will buy acreage in Permian Basin for approximately 607 million dollars and it plans to increase its capital and budget for the year 2017 to carry out further activities.
The capital budget of Parsley has been hiked to 1 – 1.15 billion dollars from 750-900 million dollars.
An increase from a forecast of 57,000 to 63,000 in the case of production was displayed. The value of the year-round production is expected to be 62,000-68,000 barrels.
About 38,100 to 38,300 boed is estimated to be produced by the company and the company will have their total development expenditure in between 493 million dollars and 499 million dollars, which is within the company’s estimated spending and production ranges that was given on 10th January 2017.
An offer of about 36 million shares and debt is intended in finance by Parsley in cash part of their latest acquisition. This might open new opportunities for the company.