Deal Insight
Parsley Energy acquires Jagged Peak Energy for US$2.4 billion
Report summary
On October 14, Parsley Energy announced that it is attempting to acquire Jagged Peak in all-stock deal, valued at US$2.4 billion. Post completion, shareholders of Parsley and Jagged Peak will own 77% and 33% of the pro-forma company respectively. The deal is very consistent with current M&A themes: gain more inventory, reduce combined G&A, add shared lease lines, and cut combined capex. It's all a path to create cashflow. However, we believe Parsley should've cored up its Midland position instead of expanding the lower tier portion of its asset base. The company has 10+ years of remaining inventory in the Midland with lower break-evens compared to its pro-forma Delaware Basin assets. If the goal is to eventually flip the position to a larger outfit, it is unclear who that buyer will be given the environmental/capex/volume risk.
Table of contents
- Executive summary
- Transaction details
- Upstream assets
- Deal analysis
- Upsides and risks
- Strategic rationale
- Oil & gas pricing and assumptions
Tables and charts
This report includes 13 images and tables including:
- Executive summary: Table 1
- Jagged Peak and Parsley acreage map (Oil in Place)
- Average Delaware Basin well productivity by reservoir since 2016
- Upstream assets: Table 1
- Deal analysis: Table 1
- Deal analysis: Table 2
- Aggregate Wolfcamp well productivity for Delaware Basin operators since 2017
- Deal analysis: Table 3
- Deal analysis: Table 4
- Deal analysis: Table 5
- Parsley Energy
- Oil & gas pricing and assumptions: Table 1
- Oil & gas pricing and assumptions: Table 2
What's included
This report contains:
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