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What: Shares of Parsley Energy (NYSE:PE) soared on Thursday morning and were up 13% at 10:45 a.m. EDT.

So what: Parsley Energy surprised the market by reporting an adjusted profit of $6.8 million, or $0.04 per share, which beat the consensus estimate by $0.05 per share. Driving that expectation-beating result was a combination of strong production to go along with below-guidance costs.

Production jumped 23% from just last quarter and is up 60% from the year-ago quarter, to 35,700 barrels of oil equivalent per day (BOE/d). Great well results across both its legacy and newly acquired acreage drove this robust growth. Meanwhile, lease operating expenses (LOE) were down 17% from just last quarter to $4.37 per BOE. General and administrative costs (G&A), likewise, plunged and were down 32% from last quarter. Overall, costs came in much lower than the company anticipated, which led it to lower its full-year guidance for both LOE and G&A costs.

In commenting on the results, CEO Brian Sheffield said:

The substantial production growth and cost compression Parsley generated during the second quarter are exactly what we envisioned earlier this year when we made a non-consensus decision to maintain operational momentum in the face of unsteady commodity prices.

The company is keeping up with its non-consensus decision-making by announcing that it is increasing its capex budget despite the recent slump in oil prices. The company is ramping spending from a range of $410 million to $460 million up to a range of $460 million to $510 million. Because of that incremental spending, as well as its efficiency gains, Parsley Energy anticipates that its production will average between 36,000 BOE/d to 38,000 BOE/d this year, which is up from its prior projected range of 31,500 BOE/d to 34,500 BOE/d.

Now what: Parsley Energy is enjoying remarkable success in the current challenging environment thanks to its strong balance sheet and prime position in the Permian. That's worth noting because its relative strength during the downturn will pale in comparison to its upside potential once conditions actually improve.