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.