Parsley Energy note sale, revolver boost bring ‘advantaged’ position

By Devika Patel

Knoxville, Tenn., Nov. 8 – Parsley Energy, Inc. issued $700 million of 10-year notes and increased its revolver borrowing base to $1.8 billion in October, giving the company an “advantaged” liquidity position.

“In early October, we issued $700 million of 10-year notes,” executive vice president and chief financial officer Ryan Dalton said on the company’s third quarter earnings conference call on Wednesday.

“This bolstered our liquidity.

“We see this funding as a bridge to cash-flow neutrality at current oil prices,” he said.

The company amended its revolving credit agreement on Oct. 11, increasing its borrowing base to $1.8 billion while maintaining the commitment amount of $1 billion.

“Our revolver is available if necessary,” Dalton said.

“We recently increased our borrowing base to $1.8 billion while leaving the committed amount unchanged at $1 billion.

“Capital markets can open and shut without much warning and we think it makes sense to work from an advantaged liquidity position,” he said.

Adjusted EBITDAX rose 15% in the third quarter versus the second quarter to $165 million.

As of the end of the third quarter, pro forma for the October sale of $700 million senior notes due 2027, liquidity stands at approximately $1.9 billion, consisting of $934 million of cash on hand and an undrawn availability of $997.3 million on the revolver.

On Oct. 5, Parsley Energy, LLC and Parsley Finance Corp. priced an upsized $700 million issue of 10-year senior notes (B2/BB-) at par to yield 5 5/8% in a quick-to-market trade.

The issue size was increased from $600 million.

The yield printed on top of yield talk in the 5 5/8% area.

Credit Suisse Securities (USA) LLC was the bookrunner.

The Austin, Texas-based energy exploration and production company, which is solely focused on the Permian Basin, earmarked the proceeds to fund a portion of its capital program and for general corporate purposes.

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