Parsley Energy to spend $2.8 billion on Permian land

In a quest to continue their acquisitions in the area, Parsley Energy is buying rights to undeveloped acres in the heart of West Texas’ Permian Basin from Double Eagle Energy for $2.8 billion.

This will be the 10th largest purchase in the basin that has been announced by Parsley, an Austin-based company, it will add 71,000 net acres to the company’s Midland portfolio. This brings it’s total Permian acreage to 227,000, one of the largest holdings by an independent production company within the basin.

“It’s really been remarkable what Parsley’s been able to do,” said Jackson Sandeen, research firm Wood Mackenzie’s chief Permian Basin analyst. “The company’s been on a tear.”

Priced at the upper end when compared to recent averages, the purchase includes acres in six Permian counties for about $37,000 an acre.

This year is predicted to be hotter than last year in the basin. Last year companies cut more than $24 billion in Permian mergers and acquisitions, it was “a huge year,” said Sandeen. But, other companies have already spent half of that so far this year.

Since the beginning of last year, no company has made more Permian purchases than Parsley, Sandeen stated. Aside from Exxon Mobil, which announced last month the purchase of Bass family oil land for about $6.6 billion, Parsley spent more money than anyone in the basin.

The company said the new acres add 23 drilled but uncompleted wells, 3,300 horizontal drilling locations, as well as about 3,600 barrels of oil and gas per day.

Parsley will be paying half in cash and half in stock.

Double Eagle, based in Fort Worth, was considering going public. The news of the Parsley buy, released late Tuesday, took analysts by surprise.

The sale is scheduled to close by April 20.

Article written by HEI contributor Lydia Ezeakor.

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