Both of them look pretty all right to me. You can add punctuation to the second sentence, which is my suggestion.
"She's out, with her friends, at a party."
Also a simple alternative to this sentence would be :
"She's out partying with her friends."
The only problem with this sentence is that, it doesn't specify whose party it is. When you say "...at a party", it usually means that the party is hosted by a third person and the subject is attending it. Here, the party can mean a party organised by an unspecified third person or even a simple get together organised by the subject with her friends. So it is an optional alternative, but it can mean a different thing too.