Parsley is reiterating the development plan outlined in its preliminary 2020 outlook issued on October 14, 2019, and plans to deploy 15 development rigs and four-to-five frac spreads on average in 2020. Parsley is also reaffirming its pro forma 2020 oil production outlook, but is decreasing its pro forma 2020 capital budget range at the midpoint, reflecting continued efficiency gains and savings on services following a comprehensive integrated budgeting process. Parsley is also providing initial guidance on its projected unit costs for 2020.
Parsley's baseline capital budget assumes a $50 WTI oil price. In this context, the Company would expect to generate free cash flow(2) of at least $200 million during 2020. In a higher oil price scenario, Parsley would expect to generate additional free cash flow and would not plan to increase its development activity in 2020. For further detail on Parsley's 2020 guidance, please see the table below.
Parsley closed its acquisition of Jagged Peak on January 10, 2020. After adjusting for the transaction closing date(4), the Company expects first quarter 2020 net oil production to average 123-129 MBo/d. With a full quarter of contribution from Jagged Peak, Parsley would expect first quarter pro forma 2020 net oil production to average 126-132 MBo/d.