Upstream Texas - Fall/Winter 2017 - 16
Chairman, CEO and Founder of Parsley Energy
BRYAN SHEFFIELD COULD HAVE told his
grandfather, Joe Parsley, "Thanks, but no thanks."
After all, trading options and interest rate futures
seemed appropriate for a finance major, but
when his grandfather extended the opportunity
to operate about 100 mature Spraberry wells,
Bryan became a third-generation oil and gas man.
After 18 months of learning the ropes at Pioneer Natural
Resources, where Bryan's father Scott Sheffield had risen
to chief executive officer, the younger Sheffield relocated to
Midland, Texas, and launched Parsley Energy as a contract
operator. The company drilled its first well in 2009, and
within two years, upped its drilling activity from one rig to
five. The evolution continued into 2013, he describes, when
Parsley transitioned from vertical to horizontal projects. The
next year, in 2014, Sheffield oversaw Parsley's initial public
offering (IPO), the second-largest exploration and production
IPO ever. Since then, the company reports its production has
grown at a 17 percent compound quarterly rate.
Sheffield indicates Parsley owes its vigorous expansion to
a strategy that emphasizes "getting the most out of the best."
According to Sheffield, the company is "focused on owning
and optimizing best-of-the-best acreage and developing this
acreage as efficiently as possible in order to deliver strong
and consistent cash flow growth."
"We believe our extensive inventory of premium drilling
locations, position at the low-end of the cost curve, and
track record of first-rate well productivity set us up to deliver
leading returns on capital for many years," he says.
Parsley's Permian Basin stomping ground, in fact, has
become the country's premier producing province. Its
distinction, notes Sheffield, lies with its "layer cake" of
several distinct target zones. "We have consistently focused
on portions of the Permian with the most stacked-pay
potential, and even now are targeting new zones that are
proving highly productive."
However, obtaining "the best" is not a focus limited only
to Parsley's properties. The company's desire to secure top
talent prompted executives to relocate Parsley's headquarters
from Midland to Austin, a decision that Sheffield sees as a
way to appeal to a new crowd of oil and gas professionals.
"We will always have strong ties to Midland as a family and
as a company, but relocating our headquarters to Austin
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has helped us attract and retain talented employees and
made Parsley Energy a preferred workplace in the industry,"
And then there is the teamwork that comes naturally to
any outfit in which every participant has a stake. That-along
with a willingness to experiment-Sheffield suggests, has
helped allow the company stand out. "Parsley employees
are personally invested in the company, and I mean that
both figuratively and literally," he remarks. "We made a
decision before the IPO that every employee would receive
company stock, including all of our field personnel. That
policy, among many other factors, has contributed to a
pervasive sense that we are all in this together. We are
also a younger group on average and probably feel more
freedom to challenge conventions than other companies
and teams which may be accustomed to a certain way of
But Parsley's employees are not the only beneficiaries,
Sheffield considers, citing energy's pivotal role in human
flourishing. Even as oil and gas resources have helped
so many Americans enjoy a particular standard of living
that, to quote American essayist Tom Wolfe, "would have
made the Sun King blink," a sizable chunk of the world
population continues to need affordable and reliable
energy. "I am gratified at how oil and gas continues to
empower people in developing markets and expect that
phenomenon to continue for at least the next few decades,"
Today, the company reports an enterprise value topping
$9 billion, with nearly 450 employees and 800-plus operated
wells. "Parsley Energy is poised to deliver more oil per
dollar invested than almost any other operator, and our
hedging strategy provides a buffer if oil prices decline
and facilitates strategic growth in more constructive
commodity scenarios," adds Sheffield. "We are excited
about the future."
But that eye to the future doesn't disregard the past,
which includes many lessons learned from his own father and
grandfather. "Having managed through several commodity
price cycles, my dad is a stickler about debt," he relates.
"From the start, he asked often about Parsley Energy's
leverage, warning we should be ready for a downturn around
any corner. He was right."