Parsley Energy (PE) Tops Q2 EPS by 15c, Revenues Miss

Parsley Energy (NYSE: PE) reported Q2 EPS of $0.03, $0.15 better than the analyst estimate of ($0.12). Revenue for the quarter came in at $220.21 million versus the consensus estimate of $321.68 million.

Updated 2020 Outlook

• In light of improved oil pricing and reduced volatility, Parsley is revising its baseline capital budget assumption from a $20-$30 WTI oil price to a $35 WTI oil price for the remainder of 2020. In this context, the Company is narrowing its 2020 capital budget to $650-$700 million from less than $700 million.
• With regional oil prices trading below $20 per barrel during a portion of 2Q20, Parsley suspended all new drilling and completion activity during May and June. In recent weeks, with regional oil prices trading consistently above the Company's baseline capital budget assumption of $35 per barrel, Parsley has reactivated two rigs and two frac spreads. Parsley's future activity plans will continue to be driven by unhedged return profiles.
• Parsley remains committed to free cash flow generation and, in the context of $35 WTI oil prices for the remainder of the year, is now targeting at least $350 million of free cash flow(1) in 2020, which is an increase of $50 million from the Company's prior target.

Recent Highlights

• Generated positive free cash flow(1) in 2Q20.
• Paid 2Q20 quarterly dividend of $0.05 per share on June 19, 2020 and declared 3Q20 quarterly dividend of $0.05 per share(2) payable on September 18, 2020.
• Parsley has reduced natural gas flaring at locations previously operated by Jagged Peak Energy Inc. ("Jagged Peak") by approximately 90% since acquiring the properties in January 2020. At a corporate level, Parsley flared less than 1.5% of its gross natural gas production in 2Q20.
• Parsley's detailed preparation helped steer a collaborative effort across multiple disciplines to manage 2Q20 production curtailments in a safe, environmentally responsible, and efficient manner. The Company curtailed more than 20% of its oil production in May and restored the vast majority of these volumes in June.
• 2Q20 net oil production decreased 11% quarter-over-quarter and increased 30% year-over-year to 112.6 MBo per day. Total 2Q20 net production averaged 183.2 MBoe per day.

Summary Comment and Outlook

"From a macro standpoint, the second quarter represented an unforgiving stress test for much of our industry," commented Matt Gallagher, Parsley's President and CEO. "The worst may be behind us - prices have found firmer footing as oil markets seek a cautious equilibrium. However, at Parsley Energy, we harbor no illusions of the difficulties facing our industry and we remain well built for that endurance test. During this challenging second quarter, our team did not merely run in place, but instead progressed our corporate sustainability efforts on multiple fronts. On the financial front, we generated robust free cash flow and remain committed to free cash flow sustainability in 2021 and beyond. On the environmental front, we reduced natural gas flaring on recently acquired properties by approximately 90% and we will continue to advance our environmental sustainability efforts with tangible goals moving forward. I am proud of the Parsley team for focusing on controlling what was within our control and for delivering on our action plan during uncertain times."

For earnings history and earnings-related data on Parsley Energy (PE) click here.

You May Also Be Interested In

• Alphabet stock surges 11% to record high on Q1 earnings beat, first-ever dividend
• T-Mobile posts mixed Q1 top and bottom line, expects more subscribers in 2024
• Western Digital (WDC) posts FQ3 earnings, revenue beat; shares down