Parsley Spends $280 Million To Acquire Leasehold and Minerals

Transaction Details: 

Parsley is acquiring mineral rights under approximately 30,000 acres consisting of Parsley leasehold and other adjacent properties in Pecos and Reeves Counties, Texas in the Southern Delaware Basin for $280.5 million in cash from Lehm Capital Partners and Trees Capital Partners.

Parsley also announced the purchase of additional working interests in the Company's leasehold in Pecosand Reeves Counties totaling 885 net acres for $9.0 million in cash. This transaction closed on May 10, 2016.

Acquisition Highlights

Mineral Rights Acquisition

• Acquired mineral rights in 29,813 acres (hereafter "mineral acreage") with an average royalty interest of 17.5%.
• Mineral rights boost net revenue interest ("NRI") on approximately 186 gross/net horizontal drilling locations in the upper Wolfcamp interval, assuming one flow unit and 660' between-well spacing. The Company is assessing the potential for additional flow units in the Wolfcamp complex and the Bone Spring interval on acreage associated with acquired mineral rights.
• The average NRI on horizontal drilling locations associated with acquired mineral rights increases from 75% to 92.5%.
• Estimated net current production associated with acquired mineral rights is approximately 280 barrels of oil equivalent per day.
• 82% of mineral acreage represents Parsley leasehold, with the balance leased and operated by other operators.
• Parsley also acquired surface rights on approximately 80% of mineral acreage, eliminating compensation for surface damages and water procurement, among other costs, and also facilitating optimal well and facility placement.
• Consistent with the Company's previously announced capital plan, Parsley expects to complete 5-7 wells in the Southern Delaware Basin this year. Of these, the Company expects 3-5 to be completed on the acquired mineral acreage.
• The transaction is scheduled to close on or before July 14, 2016, subject to the satisfaction of customary closing conditions.

The proposed transaction is scheduled to close by July 14, 2016, subject to customary closing conditions.

Parsley intends to finance this acquisition through debt and equity issuances announced concurrently with the announcement of the acquisition.