The Merger may not be completed and the Merger Agreement may be terminated in accordance with its terms.
Current Jagged Peak stockholders will have a reduced ownership and voting interest in Parsley after the Merger compared to their current ownership in Jagged Peak on a standalone basis and will exercise less influence over management.
The Merger Agreement limits our ability to pursue alternatives to the Merger.
Failure to complete the Merger could negatively impact the price of shares of our common stock, as well as our future businesses and financial results.
We will be subject to business uncertainties while the Merger is pending, which could adversely affect our businesses.
The shares of Parsley Class A common stock to be received by our stockholders upon completion of the Merger will have different rights from shares of our common stock.
Completion of the Merger may trigger change in control or other provisions in certain agreements to which we are a party.
We will incur significant transaction and Merger-related costs in connection with the Merger, which may be in excess of those anticipated by us.
We may be a target of securities class action and derivative lawsuits which could result in substantial costs and may delay or prevent the Merger from being completed.
As reflected in the table above, our total production revenue for the three months ended September 30, 2019 was 3%, or $4.9 million, lower than that of the same period from 2018. The decrease is due to lower realized commodity prices, partially offset by higher sales volumes during the three months ended September 30, 2019. Our aggregate production volumes in the three months ended September 30, 2019 were 3,616 MBoe, comprised of 76% oil, 11% natural gas and 13% NGLs. This represents an increase of 9% over aggregate production volumes of 3,323 MBoe during the three months ended September 30, 2018.
Lease Operating Expenses. Lease operating expense (“LOE”) increased to $17.6 million in the three months ended September 30, 2019, compared to $11.2 million for the same period of 2018. The increase largely corresponds to $7.5 million of workover expense in the three months ended September 30, 2019, an increase of $4.1 million compared to the same period of 2018. Additionally, during the three months ended September 30, 2019, our production and well counts increased between periods, resulting in overall higher costs for contract labor, equipment, chemicals and electricity. LOE per Boe increased 44% to $4.85 for the three months ended September 30, 2019, as compared to the same period of 2018, primarily due to increased costs for workovers, contract labor and chemicals.
Production and Ad Valorem Taxes. Production and ad valorem taxes were $11.3 million for the three months ended September 30, 2019, an increase of $1.7 million, or 18%, from $9.5 million for the three months ended September 30, 2018. The increase is due to increased ad valorem taxes, which resulted from the addition of multiple new high-volume wells. This was partially offset by a slight decrease in production taxes that resulted from the decrease in revenues.
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