Parsley Energy (PE) Raises Quarterly Dividend 66.7% to $0.05, 0.3% Yield; Lowers FY20 Capital Budget, Provides FY20 Guidance

Parsley Energy (NYSE: PE) declared a quarterly dividend of $0.05 per share. This is a 66.7% increase from the prior dividend of $0.03.

The dividend will be payable on March 20, 2020, to stockholders of record on March 10, 2020, with an ex-dividend date of March 23, 2020.

The annual yield on the dividend is 0.3 percent.

Additionally, Parsley provided an overview of its 2020 development program and updated expectations for certain full-year 2019 results.

Summary Comment and Outlook

"Parsley's 2019 action plan was a resounding success as our team delivered a step-change improvement in capital efficiency and inflected to free cash flow generation ahead of schedule," commented Matt Gallagher, Parsley's President and CEO. "We remain committed to an enhanced free cash flow profile in 2020, and, importantly, we have reinforced this commitment with a meaningful increase to our regular dividend program. Integration of our Jagged Peak acquisition has our urgent focus and I am proud of our teams' collective dedication and efforts out of the gate. Ultimately, though, 'well done' is better than 'well said'. We look forward to delivering on our 2020 objectives in the coming quarters."

2020 Guidance

Parsley is reiterating the development plan outlined in its preliminary 2020 outlook issued on October 14, 2019, and plans to deploy 15 development rigs and four-to-five frac spreads on average in 2020. Parsley is also reaffirming its pro forma 2020 oil production outlook, but is decreasing its pro forma 2020 capital budget range at the midpoint, reflecting continued efficiency gains and savings on services following a comprehensive integrated budgeting process. Parsley is also providing initial guidance on its projected unit costs for 2020.

Parsley's baseline capital budget assumes a $50 WTI oil price. In this context, the Company would expect to generate free cash flow(2) of at least $200 million during 2020. In a higher oil price scenario, Parsley would expect to generate additional free cash flow and would not plan to increase its development activity in 2020. For further detail on Parsley's 2020 guidance, please see the table below.

Return of Capital Program

Parsley's Board of Directors approved an increase to the Company's quarterly dividend from $0.03 per share to $0.05 per share(1). The dividend is payable on March 20, 2020, to shareholders of record on March 10, 2020.

1Q20 Guidance

Parsley closed its acquisition of Jagged Peak on January 10, 2020. After adjusting for the transaction closing date(4), the Company expects first quarter 2020 net oil production to average 123-129 MBo/d. With a full quarter of contribution from Jagged Peak, Parsley would expect first quarter pro forma 2020 net oil production to average 126-132 MBo/d.

Fourth Quarter and Full-Year 2019 Update

Activity Overview

During the fourth quarter of 2019, Parsley placed on production 37 gross operated horizontal wells with more than half of those wells coming online in December. Parsley expects to report fourth quarter capital expenditures of approximately $275-285 million, translating to full-year 2019 capital expenditures below the low end of the full-year guidance range of $1.40-$1.47 billion. Fourth quarter development spending decreased relative to third quarter spending, driven by lower well costs and quarter-over-quarter decreases in facilities and infrastructure spending. For the fourth quarter of 2019, Parsley expects net oil production of 89.5-89.7 MBo per day.

Parsley continues to lower its cost structure in the Delaware Basin, recently completing a four-well project in Pecos County with an estimated average drilling, completion and equipment cost of under $1,100 per lateral foot.

"The Parsley team finished the year strong, carrying efficient operational momentum through year-end and paving the way for a compelling start to 2020," said David Dell'Osso, Parsley's COO. "I am proud of the strides our team continues to make in the Delaware Basin, and look forward to delivering the capital efficiency gains we have previously outlined across our recently expanded acreage footprint."

For a dividend history and other dividend-related data on Parsley Energy (PE) click here.

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