Deal insight
| |
8 Pages

Not just garnish: Parsley becomes one of the largest Midland Basin operators with $2.8 bn Double Eagle acquisition


Not just garnish: Parsley becomes one of the largest Midland Basin operators with $2.8 bn Double Eagle acquisition

Report summary

Parsley Energy added significant inventory to its portfolio with the acquisition of Double Eagle Energy's Midland Basin assets for US$2.8 billion. The assets include 71,000 net acres with 23 drilled-but-uncompleted wells and 3.6 mboe/d of production. Coupled with last month's acquisition of nearly 18,000 net acres, the company has nearly doubled its Midland Basin acreage in 2017. Parsley will fund the acquisition through the issuance of shares and senior notes. We value the acreage at over US$43,000/acre. This is a premium to the consideration paid, and mostly due to Parsley's operational expertise in the region. Parsley is one of the premier operators in the Southern Fairway sub-play, with recent normalized IP rates 28% higher than the average. In its core operating area, the company drills wells 25% cheaper than the average in the area. We estimate Parsley's ability to drill low-cost wells adds over 25% of value (NPV10) compared to an average operator.

What's included?

This report includes 1 file(s)

  • Not just garnish: Parsley becomes one of the largest Midland Basin operators with $2.8 bn Double Eagle acquisition PDF - 702.72 KB 8 Pages, 9 Tables, 2 Figures

Description

The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Deal Insight report provides an in-depth analysis of this deal. You will also find information about upstream assets and the strategic rationale behind the deal.

For investors and businesses, this deal insight report provides an understanding of the effect this deal will have on the market, including oil and gas pricing and assumptions. Use it to keep up to date with deal announcements, gain expert insights and analyse potential developments that might affect your strategy.

Wood Mackenzie goes beyond company-reported data and announcements to give you an independent and informed view. Our unique valuation metrics are underpinned by our deep understanding of upstream assets and companies. We help you objectively benchmark and evaluate asset and corporate deals so you can compare deal economics around the world.

  • Executive summary
  • Transaction details
  • Upstream assets
  • Deal analysis
  • Upsides and risks
  • Strategic rationale
  • Oil & gas pricing and assumptions

In this report there are 11 tables or charts, including:

  • Executive summary
    • Adjusted acreage pricing for recent Midland Basin M&A deals
    • Executive summary: Table 1
  • Transaction details
  • Upstream assets
    • Parsley's general Midland Basin position offset with top 10% of wells drilled*
    • Upstream assets: Table 1
  • Deal analysis
    • Deal analysis: Table 1
    • Deal analysis: Table 2
    • Deal analysis: Table 3
    • Deal analysis: Table 4
  • Upsides and risks
  • Strategic rationale
  • Oil & gas pricing and assumptions
    • Oil & gas pricing and assumptions: Table 1
    • Oil & gas pricing and assumptions: Table 2
    • Oil & gas pricing and assumptions: Table 3
Requester's name : .............
Department : .............
Authoriser's Name : .............
Authoriser's signature : .............
Date : .............
Cost Centre : .............

Questions about this report?

Frequently Asked Questions

Mailenquiries@woodmac.com
  • Europe: +44 131 243 4699
  • Americas: +1 713 470 1900
  • Asia Pacific: +61 2 8224 8898
contact us

Why Wood Mackenzie?

As the trusted source of commercial intelligence for the world's natural resources sector for more than 40 years, we empower clients to make better strategic decisions with objective analysis and advice. Find out more...