Summary
Parsley's realized oil prices continue to be strong for a Permian producer, with Q3 2018 realized prices around $7 to $8 higher than the Permian average (without hedges).
This should allow Parsley to realize in the mid-$50s for its oil in 2019 at current strip prices, vs. around $51 for the typical Permian producer.
At $55 realized oil prices, Parsley can still achieve solid well-level returns, estimated at around 55% IRR for its previous type curves.
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Parsley Energy (PE) continues to achieve strong realized prices for its oil, realizing around $7 to $8 more per barrel (excluding hedges) compared to the average Permian producer. This should allow it to realize in the mid-$50s for oil in 2019 using current strip prices, when other Permian producers may realize around $51 per barrel without hedges. At that price, Parsley still appears to be able to generate solid well-level returns.
Strong Realized Oil Pricing For A Permian Producer
As Parsley mentioned before, its production is able to access diversified markets (such as the Gulf Coast) and thus it's able to avoid the brunt of wide Midland differentials. This can be seen with its Q3 2018 results, where it realized $62.78 per barrel for its oil (excluding hedges), a premium of $7.43 per barrel to WTI Midland prices (and approximately a $6.75 per barrel discount to NYMEX/WTI Cushing prices).
