Deal Insight

Parsley Energy acquires Jagged Peak Energy for US$2.4 billion

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21 October 2019

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:

  • Document

    Parsley Energy acquires Jagged Peak Energy for US$2.4 billion

    PDF 940.83 KB

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