Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 30, 2019 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-36463 | ||
Entity Registrant Name | Parsley Energy, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-4314192 | ||
Entity Address, Address Line One | 303 Colorado Street | ||
Entity Address, Address Line Two | Suite 3000 | ||
Entity Address, City or Town | Austin | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 78701 | ||
City Area Code | 737 | ||
Local Phone Number | 704-2300 | ||
Title of 12(b) Security | Class A common stock, $0.01 par value | ||
Trading Symbol | PE | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 5,290,889,558 | ||
Entity Central Index Key | 0001594466 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 377,559,296 | ||
Class B common stock | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 35,147,222 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 20,739 | $ 163,216 |
Accounts receivable, net of allowance for doubtful accounts: | ||
Joint interest owners and other | 48,785 | 39,564 |
Oil, natural gas and NGLs | 192,216 | 136,209 |
Related parties | 183 | 94 |
Short-term derivative instruments | 127,632 | 191,297 |
Other current assets | 8,818 | 10,332 |
Total current assets | 398,373 | 540,712 |
PROPERTY, PLANT AND EQUIPMENT | ||
Oil and natural gas properties, successful efforts method | 11,272,124 | 9,948,246 |
Accumulated depreciation, depletion, amortization and impairment | (2,117,963) | (1,295,098) |
Total oil and natural gas properties, net | 9,154,161 | 8,653,148 |
Other property, plant and equipment net | 170,306 | 170,739 |
Total property, plant and equipment, net | 9,324,467 | 8,823,887 |
NONCURRENT ASSETS | ||
Operating lease, right-of-use asset | 128,529 | |
Long-term derivative instruments | 0 | 20,124 |
Other noncurrent assets | 4,845 | 6,640 |
Total noncurrent assets | 133,374 | 26,764 |
TOTAL ASSETS | 9,856,214 | 9,391,363 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 416,346 | 364,803 |
Revenue and severance taxes payable | 154,556 | 127,265 |
Short-term derivative instruments | 158,522 | 152,330 |
Operating Lease, Liability, Current | 61,198 | |
Other current liabilities | 5,002 | 4,547 |
Total current liabilities | 795,624 | 648,945 |
NONCURRENT LIABILITIES | ||
Long-term debt | 2,182,832 | 2,181,667 |
Operating Lease, Liability, Noncurrent | 69,195 | |
Asset retirement obligations | 20,538 | 24,750 |
Deferred tax liability, net | 193,409 | 131,523 |
Payable pursuant to tax receivable agreement | 70,529 | 68,110 |
Finance Lease, Liability, Noncurrent | 1,320 | |
Long-term derivative instruments | 0 | 16,633 |
Other Liabilities, Noncurrent | 119 | |
Total noncurrent liabilities | 2,537,942 | 2,422,683 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding | 0 | 0 |
Additional paid in capital | 5,200,795 | 5,163,987 |
Retained earnings | 570,889 | 412,646 |
Treasury stock, at cost, 1,018,690 shares and 621,745 at December 31, 2019 and December 31, 2018 | (17,428) | (11,749) |
Total stockholders’ equity | 5,757,433 | 5,568,058 |
Noncontrolling interest | 765,215 | 751,677 |
Total equity | 6,522,648 | 6,319,735 |
TOTAL LIABILITIES AND EQUITY | 9,856,214 | 9,391,363 |
Class A, $0.01 par value, 600,000,000 shares authorized, 282,260,133 shares issued and 281,241,443 shares outstanding at December 31, 2019 and 280,827,038 shares issued and 280,205,293 shares outstanding at December 31, 2018 | ||
STOCKHOLDERS’ EQUITY | ||
Common stock | 2,822 | 2,808 |
Class B, $0.01 par value, 125,000,000 shares authorized, 35,420,258 and 36,547,731 issued and outstanding at December 31, 2019 and December 31, 2018 | ||
STOCKHOLDERS’ EQUITY | ||
Common stock | $ 355 | $ 366 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock, shares | 1,018,690 | 621,745 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 282,260,133 | 280,827,038 |
Common stock, shares outstanding | 281,241,443 | 280,205,293 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 125,000,000 | 125,000,000 |
Common stock, shares issued | 35,420,258 | 36,547,731 |
Common stock, shares outstanding | 35,420,258 | 36,547,731 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
REVENUES | |||
Total revenues | $ 1,958,814 | $ 1,826,431 | $ 967,044 |
OPERATING EXPENSES | |||
Lease operating expenses | 177,148 | 144,292 | 102,169 |
Transportation and processing costs | 41,198 | 32,573 | 0 |
Production and ad valorem taxes | 124,961 | 108,342 | 59,641 |
Depreciation, depletion and amortization | 794,740 | 584,857 | 352,247 |
General and administrative expenses (including stock-based compensation of $20,682, $19,877 and $19,619 for the years ended December 31, 2019, 2018 and 2017) | 152,700 | 150,955 | 124,255 |
Exploration and abandonment costs | 100,211 | 162,539 | 39,345 |
Acquisition costs | 7,616 | 167 | 10,977 |
Accretion of asset retirement obligations | 1,465 | 1,422 | 971 |
Rig termination costs | 13,250 | 0 | 0 |
(Gain) loss on sale of property | (2,095) | (6,454) | 14,332 |
Restructuring and other termination costs | 1,562 | 0 | 0 |
Other operating expenses | 8,788 | 19,863 | 10,638 |
Total operating expenses | 1,421,544 | 1,198,556 | 714,575 |
OPERATING INCOME | 537,270 | 627,875 | 252,469 |
OTHER (EXPENSES) INCOME | |||
Interest expense, net | (133,640) | (131,460) | (97,381) |
Loss on early extinguishment of debt | 0 | 0 | (3,891) |
(Loss) gain on derivatives | (131,212) | 50,342 | (66,135) |
Change in TRA liability | 0 | (437) | 35,847 |
Interest income | 801 | 5,464 | 7,936 |
Other (expenses) income | (1,364) | (340) | 783 |
Total other expenses, net | (265,415) | (76,431) | (122,841) |
INCOME BEFORE INCOME TAXES | 271,855 | 551,444 | 129,628 |
INCOME TAX EXPENSE | (61,437) | (105,475) | (5,708) |
NET INCOME | 210,418 | 445,969 | 123,920 |
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | (35,206) | (76,842) | (17,146) |
NET INCOME ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS | $ 175,212 | $ 369,127 | $ 106,774 |
Net income per common share: | |||
Basic (in dollars per share) | $ 0.63 | $ 1.36 | $ 0.44 |
Diluted (in dollars per share) | $ 0.63 | $ 1.35 | $ 0.42 |
Weighted average common shares outstanding: | |||
Basic (shares) | 279,636 | 272,226 | 240,733 |
Diluted (shares) | 280,172 | 272,884 | 296,512 |
Oil sales | |||
REVENUES | |||
Revenue | $ 1,757,315 | $ 1,536,244 | $ 802,230 |
Natural gas sales | |||
REVENUES | |||
Revenue | 36,774 | 51,231 | 56,571 |
Natural gas liquids sales | |||
REVENUES | |||
Revenue | 155,888 | 227,272 | 103,193 |
Other | |||
REVENUES | |||
Revenue | $ 8,837 | $ 11,684 | $ 5,050 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock based compensation | $ 20,682 | $ 19,877 | $ 19,619 |
General and Administrative Expense | |||
Stock based compensation | $ 20,682 | $ 19,877 | $ 19,619 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Class A common stock | Class B common stock | Common StockClass A common stock | Common StockClass B common stock | Additional paid in capital | (Accumulated deficit) retained earnings | Treasury stock | Total stockholders’ equity | Noncontrolling interest | Restricted Stock | Restricted StockClass A common stock | Restricted StockCommon StockClass A common stock | Restricted StockAdditional paid in capital |
Balance (in shares) at Dec. 31, 2016 | 179,730,000 | 28,008,000 | 139,000 | |||||||||||
Balance at Dec. 31, 2016 | $ 2,430,306 | $ 1,797 | $ 280 | $ 2,151,197 | $ (63,255) | $ (381) | $ 2,089,638 | $ 340,668 | ||||||
Issuance proceeds, net of underwriters discount and expenses (in shares) | 66,700,000 | |||||||||||||
Issuance proceeds, net of underwriters discount and expenses | 2,123,527 | $ 667 | 2,122,860 | 2,123,527 | ||||||||||
Shares of Class B common stock issued for acquisition (in shares) | 39,849,000 | |||||||||||||
Shares of Class B common stock issued for acquisition | 1,183,318 | $ 399 | 1,182,919 | 1,183,318 | ||||||||||
Change in equity due to issuance of PE Units by Parsley LLC | (915,749) | (915,749) | 915,749 | |||||||||||
Exchange of PE Units and Class B common stock for Class A common stock (in shares) | 5,729,000 | (5,729,000) | ||||||||||||
Exchange of PE Units and Class B common stock for Class A common stock | $ 57 | $ (57) | 105,522 | 105,522 | (105,522) | |||||||||
Issuance of restricted stock (in shares) | 228,000 | |||||||||||||
Issuance of restricted stock | 370 | $ 3 | (3) | 370 | ||||||||||
Vesting of restricted stock units (in shares) | 33,000 | |||||||||||||
Repurchase of common stock (in shares) | 12,000 | |||||||||||||
Repurchase of common stock | (354) | $ (354) | (354) | |||||||||||
Restricted stock forfeited (in shares) | 8,000 | |||||||||||||
Restricted stock forfeited | (14) | (14) | (14) | |||||||||||
Stock-based compensation | 19,633 | 19,633 | 19,633 | |||||||||||
Net (loss) income | 123,920 | 106,774 | 106,774 | 17,146 | ||||||||||
Balance (in shares) at Dec. 31, 2017 | 252,420,000 | 62,128,000 | 159,000 | |||||||||||
Balance at Dec. 31, 2017 | 5,880,706 | $ 2,524 | $ 622 | 4,666,365 | 43,519 | $ (735) | 4,712,295 | 1,168,411 | ||||||
Exchange of PE Units and Class B common stock for Class A common stock (in shares) | 25,580,000 | (25,580,000) | 1,098,000 | |||||||||||
Exchange of PE Units and Class B common stock for Class A common stock | $ 256 | $ (256) | 491,614 | 491,614 | (491,614) | $ 11 | $ (11) | |||||||
Change in net deferred tax liability due to exchange of PE Units and Class B common stock for Class A common stock | (13,841) | (13,841) | (13,841) | |||||||||||
Distribution to owners from consolidated subsidiary | (1,962) | (1,962) | ||||||||||||
Issuance of restricted stock (in shares) | 803,000 | |||||||||||||
Issuance of restricted stock | $ 8 | (8) | ||||||||||||
Vesting of restricted stock units (in shares) | 926,000 | |||||||||||||
Vesting of restricted stock units | $ 9 | (9) | ||||||||||||
Repurchase of common stock (in shares) | 435,000 | |||||||||||||
Repurchase of common stock | (11,014) | $ (11,014) | (11,014) | |||||||||||
Restricted stock forfeited (in shares) | 28,000 | |||||||||||||
Restricted stock forfeited | (967) | (967) | (967) | |||||||||||
Stock-based compensation | 20,844 | 20,844 | 20,844 | |||||||||||
Net (loss) income | 445,969 | 369,127 | 369,127 | 76,842 | ||||||||||
Balance (in shares) at Dec. 31, 2018 | 280,827,000 | 36,548,000 | 622,000 | |||||||||||
Balance at Dec. 31, 2018 | 6,319,735 | $ 2,808 | $ 366 | 5,163,987 | 412,646 | $ (11,749) | 5,568,058 | 751,677 | ||||||
Restated balance (in shares) | 280,205,293 | 36,547,731 | ||||||||||||
Exchange of PE Units and Class B common stock for Class A common stock (in shares) | 1,128,000 | (1,128,000) | ||||||||||||
Exchange of PE Units and Class B common stock for Class A common stock | $ 11 | $ (11) | 18,939 | 18,939 | (18,939) | |||||||||
Change in net deferred tax liability due to exchange of PE Units and Class B common stock for Class A common stock | (2,810) | (2,810) | (2,810) | |||||||||||
Distribution to owners from consolidated subsidiary | (603) | (603) | ||||||||||||
Dividends, Cash | (19,095) | (16,969) | (16,969) | (2,126) | ||||||||||
Vesting of restricted stock units (in shares) | 305,000 | 309,699 | ||||||||||||
Vesting of restricted stock units | $ 3 | (3) | ||||||||||||
Repurchase of common stock (in shares) | 311,000 | |||||||||||||
Repurchase of common stock | (5,679) | $ (5,679) | (5,679) | |||||||||||
Restricted stock forfeited (in shares) | 86,000 | |||||||||||||
Restricted stock forfeited | (1,315) | (1,315) | (1,315) | |||||||||||
Stock-based compensation | 21,997 | 21,997 | 21,997 | |||||||||||
Net (loss) income | 210,418 | 175,212 | 175,212 | 35,206 | ||||||||||
Balance (in shares) at Dec. 31, 2019 | 282,260,000 | 35,420,000 | 1,019,000 | |||||||||||
Balance at Dec. 31, 2019 | $ 6,522,648 | $ 2,822 | $ 355 | $ 5,200,795 | $ 570,889 | $ (17,428) | $ 5,757,433 | $ 765,215 | ||||||
Restated balance (in shares) | 281,241,443 | 35,420,258 | 400,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 210,418 | $ 445,969 | $ 123,920 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 794,740 | 584,857 | 352,247 |
Leasehold abandonments and impairments | 99,225 | 160,834 | 32,872 |
Accretion of asset retirement obligations | 1,465 | 1,422 | 971 |
(Gain) loss on sale of property | (2,095) | (6,454) | 14,332 |
Loss on early extinguishment of debt | 0 | 0 | 3,891 |
Amortization of bond premium | (516) | (516) | (516) |
Deferred income tax expense | 61,437 | 105,475 | 5,752 |
Change in TRA liability | 0 | 437 | (35,847) |
Stock-based compensation expense | 20,682 | 19,877 | 19,619 |
Loss (gain) on derivatives | 131,212 | (50,342) | 66,135 |
Net cash (paid) received for derivative settlements | (10,022) | 6,279 | 16,172 |
Net cash paid for option premiums | (46,242) | (47,644) | (28,426) |
Other | 9,028 | 7,762 | 6,111 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | (64,570) | (12,956) | (95,239) |
Accounts receivable—related parties | (89) | 294 | (98) |
Other current assets | 3,690 | (689) | 45,417 |
Other noncurrent assets | 524 | (100) | (536) |
Accounts payable and accrued expenses | 49,466 | (13,395) | 122,992 |
Revenue and severance taxes payable | 27,291 | 17,348 | 40,465 |
Increase (Decrease) in Other Noncurrent Liabilities | 119 | 0 | 0 |
Net cash provided by operating activities | 1,286,279 | 1,218,974 | 690,750 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Development of oil and natural gas properties | (1,373,095) | (1,787,673) | (1,089,256) |
Acquisitions of oil and natural gas properties | (52,020) | (136,972) | (2,192,093) |
Additions to other property and equipment | (22,915) | (93,457) | (54,896) |
Proceeds from sales of property, plant and equipment | 41,326 | 233,647 | 30,537 |
Maturity of short-term investments | 0 | 149,331 | 0 |
Purchases of short-term investments | 0 | 0 | (149,283) |
Other | 5,905 | 41,088 | (1,869) |
Net cash used in investing activities | (1,400,799) | (1,594,036) | (3,456,860) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings under long-term debt | 617,000 | 0 | 1,152,780 |
Payments on long-term debt | (617,000) | (2,888) | (74,769) |
Finance Lease, Principal Payments | (2,746) | 0 | 0 |
Debt issuance costs | 0 | (47) | (17,371) |
Proceeds from issuance of common stock, net | 0 | 0 | 2,123,344 |
Purchases of common stock | (5,679) | (11,014) | (354) |
Payments of Dividends | (18,929) | 0 | 0 |
Distributions to owner of consolidated subsidiary | (603) | (1,962) | 0 |
Net cash (used in) provided by financing activities | (27,957) | (15,911) | 3,183,630 |
Net (decrease) increase in cash and cash equivalents | (142,477) | (390,973) | 417,520 |
Cash, cash equivalents, and restricted cash at beginning of year | 163,216 | 554,189 | 136,669 |
Cash, cash equivalents, and restricted cash at end of year | 20,739 | 163,216 | 554,189 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||
Cash paid for interest | (129,387) | (127,668) | (63,170) |
Cash received (paid) for income taxes | 302 | 0 | (350) |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||
Asset retirement obligations incurred, including changes in estimate | (4,087) | 2,111 | 15,428 |
(Reductions) additions to oil and natural gas properties - change in capital accruals | (176) | (25,455) | 118,145 |
Net premiums paid on options that settled during the period | (43,278) | (71,566) | (37,103) |
Common stock issued for oil and natural gas properties | 0 | 0 | 1,183,501 |
Gain (Loss) on Contract Termination | (13,250) | 0 | 0 |
Gain (Loss) on Sale of Properties | $ 2,095 | $ 6,454 | $ (14,332) |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | ORGANIZATION AND NATURE OF OPERATIONS Parsley Energy, Inc. (either individually or together with its subsidiaries, as the context requires, the “Company”) is an independent oil and natural gas company focused on the acquisition, development, exploration and production of unconventional oil and natural gas properties in the Permian Basin. The Permian Basin is located in west Texas and southeastern New Mexico and is characterized by high oil and liquids-rich natural gas content, multiple vertical and horizontal target horizons, extensive production histories, long-lived reserves and historically high drilling success rates. The Company’s properties are located in two sub areas of the Permian Basin, the Midland Basin and the Delaware Basins, where, given the associated returns, it focuses predominantly on horizontal development drilling. Double Eagle Acquisition On April 20, 2017, the Company, and its subsidiary, Parsley Energy LLC (“Parsley LLC”), completed the acquisition (the “Double Eagle Acquisition”) of all of the interests in Double Eagle Lone Star LLC, DE Operating LLC, and Veritas Energy Partners, LLC (which were subsequently renamed Parsley DE Lone Star LLC, Parsley DE Operating LLC, and Parsley Veritas Energy Partners, LLC, respectively) from Double Eagle Energy Permian Operating LLC (“DE Operating”), Double Eagle Energy Permian LLC (“DE Permian”), and Double Eagle Energy Permian Member LLC (together with DE Operating and DE Permian, “Double Eagle”), as well as certain related transactions with an affiliate of Double Eagle. The aggregate purchase price for the Double Eagle Acquisition consisted of approximately (i) $1,395.6 million in cash and (ii) 39,848,518 units of Parsley LLC (“PE Units”) and a corresponding 39,848,518 shares of Class B common stock, par value $0.01 per share, of the Company (“Class B common stock”). The Double Eagle Acquisition is discussed in further detail in Note 6—Acquisitions of Oil and Natural Gas Properties . Public Offerings of Class A Common Stock During 2017, the Company entered into multiple underwriting agreements to sell a total of 66,700,000 shares of Class A common stock, par value $0.01 per share, of the Company (“Class A common stock”) (including 8,700,000 shares issued pursuant to the underwriters’ option to purchase additional shares) in multiple underwritten public offerings (the “2017 Equity Offerings”). The 2017 Equity Offerings resulted in gross proceeds to the Company of approximately $2,168.9 million and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, of approximately $2,123.5 million . As discussed in Note 6—Acquisitions of Oil and Natural Gas Properties , a portion of the net proceeds was used to fund the cash portion of the purchase price for the Double Eagle Acquisition, a portion of the net proceeds was used to fund certain other acquisitions of oil and natural gas interests, and the remaining net proceeds were used to fund a portion of its capital program and for general corporate purposes. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation These consolidated financial statements include the accounts of (i) the Company, (ii) Parsley LLC, a direct majority owned subsidiary of the Company, (iii) the direct and indirect wholly owned subsidiaries of Parsley LLC, and (iv) Pacesetter Drilling, LLC (“Pacesetter”), an indirect, majority owned subsidiary of Parsley LLC, of which Parsley LLC owns, indirectly, a 63.0% interest. Parsley LLC also owns, indirectly, a 42.5% noncontrolling interest in Spraberry Production Services, LLC (“SPS”). The Company accounts for its investment in SPS using the equity method of accounting. All significant intercompany and intra-company balances and transactions have been eliminated. Use of Estimates These consolidated financial statements and related notes are presented in accordance with GAAP. Preparation in accordance with GAAP requires the Company to (i) adopt accounting policies within accounting rules set by the Financial Accounting Standards Board (“FASB”) and by the SEC and (ii) make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s management believes the major estimates and assumptions impacting the Company’s consolidated financial statements are the following: • estimates of proved reserves of oil and natural gas, which affect the calculations of depletion, depreciation and amortization (“DD&A”) and impairment of proved oil and natural gas properties; • impairment of undeveloped properties and other assets; • depreciation of property and equipment; and • valuation of commodity derivative instruments. Although management believes these estimates are reasonable, actual results may differ from estimates and assumptions of future events and these revisions could be material. Future production may vary materially from estimated oil and natural gas proved reserves. Actual future prices may vary significantly from price assumptions used for determining proved reserves and for financial reporting. Cash and Cash Equivalents The Company considers all cash on hand, depository accounts held by banks, money market accounts and investments with an original maturity of three months or less to be cash equivalents. The Company’s cash and cash equivalents are held in financial institutions in amounts that exceed the insurance limits of the Federal Deposit Insurance Corporation. However, management believes that the Company’s counterparty risks are minimal based on the reputation and history of the institutions selected. Short-term Investments Periodically, the Company invests in commercial paper with investment grade rated entities. The Company also periodically enters into time deposits with financial institutions. Commercial paper and time deposits are included in cash and cash equivalents if they have maturity dates that are less than three months at the date of purchase; otherwise, investments are reflected as short-term investments in the accompanying consolidated balance sheets based on their maturity dates. As of December 31, 2019 , the Company had no short-term investments. Accounts Receivable Accounts receivable consist of receivables from joint interest owners on properties the Company operates and crude oil, natural gas and natural gas liquids (“NGLs”) production delivered to purchasers. The purchasers remit payment for production directly to the Company. Most payments are received within three months after the production date. For receivables from joint interest owners, the Company typically has the ability to withhold future revenue disbursements to recover any non-payment of joint interest billings. Accounts receivable outstanding longer than the contractual payment terms are considered past due. The Company recognizes an allowance for doubtful accounts in an amount equal to anticipated future uncollectible receivables. The Company determines its allowance by considering a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, the debtor’s current ability to pay its obligation to the Company, the condition of the general economy and the industry as a whole. The Company writes off specific accounts receivable when they become uncollectible and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. The Company had an allowance for doubtful accounts of $2.8 million at December 31, 2018 . No allowance was deemed necessary at December 31, 2019 . Significant Customers For the years ended December 31, 2019 , 2018 and 2017 , the following customers accounted for more than 10% of the Company’s revenue: Year Ended December 31, 2019 2018 2017 Shell Trading (US) Company 55% 53% 62% Lion Oil, Inc. 30% 22% 3% Targa Pipeline Mid-Continent, LLC 8% 11% 13% If a significant customer were to stop purchasing oil and natural gas from the Company, the Company’s revenue could decline and the Company’s operating results and financial condition could be harmed. While the Company believes that the Company could procure substitute or additional customers to offset the loss of one or more of the Company’s current significant customers, there is no assurance that the Company would be successful in doing so on terms acceptable to the Company or at all. Oil and Natural Gas Properties Oil and natural gas exploration and development activities are accounted for using the successful efforts method of accounting. Under this method, costs of acquiring properties, costs of drilling successful exploration wells and development costs are capitalized. Exploration and abandonment costs, other than exploration drilling costs, are charged to expense as incurred. These costs include seismic expenditures and other geological and geophysical costs, exploratory dry holes, impairment and amortization of unproved leasehold costs and lease rentals. The costs of exploratory wells and exploratory-type stratigraphic wells are initially capitalized pending a determination of whether proved reserves have been found. At the completion of drilling activities, the costs of exploratory wells remain capitalized if a determination is made that proved reserves have been found. If no proved reserves have been found, the costs of each of the related exploratory wells are charged to expense. In some cases, a determination of proved reserves cannot be made at the completion of drilling, requiring additional testing and evaluation of the wells. The costs of such exploratory wells are expensed if a determination of proved reserves has not been made within a 12-month period after drilling is complete. The following table summarizes exploration and abandonment costs incurred by the Company for the periods indicated (in thousands): Year Ended December 31, 2019 2018 2017 Leasehold abandonments and impairments $ 99,225 $ 160,834 $ 32,872 Geological and geophysical costs 978 1,479 5,429 Other 8 226 1,044 Total exploration and abandonment costs $ 100,211 $ 162,539 $ 39,345 As exploration and development work progresses and the reserves on these properties are proven, capitalized costs attributed to the properties and mineral interests are depleted. Depletion of capitalized costs is calculated using the units-of-production method based on proved oil and gas reserves related to the associated reservoir. Capitalized development costs of producing oil and natural gas properties are depleted over proved developed reserves and leasehold costs are depleted over total proved reserves. On the sale of a complete or partial unit of a proved property, the Company determines the impact to the unit-of-production amortization rate. If the impact to the unit-of-production amortization rate is considered significant, the cost and related accumulated DD&A are removed from the property accounts and any gain or loss is recognized. If the impact to the unit-of-production amortization rate is not considered significant, the sale is accounted for as a normal retirement with no gain or loss recognized. The Company reviews its long-lived assets to be held and used, including proved oil and natural gas properties by field. Whenever events or circumstances indicate that the carrying value of those assets may not be recoverable, an impairment loss is indicated if the sum of the expected future cash flows related to proved properties in the applicable field is less than the carrying amount of the assets. In this circumstance, the Company recognizes an impairment loss for the amount by which the carrying amount of the asset exceeds the estimated fair value of the asset (discounted future cash flows). Estimating future cash flows involves the use of judgments, including estimation of the proved oil and natural gas reserve quantities, timing of development and production, expected future commodity prices, capital expenditures and production costs. See Note 16— Disclosures About Fair Value of Financial Instruments for additional information regarding the Company’s impairment of proved oil and natural gas properties. Unproved properties consist of costs incurred to acquire unproved leases, or lease acquisition costs. Unproved costs are capitalized until reclassified from unproved properties to proved properties when proved reserves are discovered or are expensed as the leases expire or the Company specifically identifies leases that are probable of reverting to the lessor. Unproved properties are assessed periodically for impairment on a property by property basis by considering future drilling plans, the results of exploration activities, commodity price outlooks, planned future sales, remaining lease terms and the expiration of all or a portion of such projects. The Company’s periodic assessment also considers its ability to enter into leasehold exchange transactions and leasehold extensions that allow for higher concentrations of ownership and development. The Company recognizes impairment expense for unproved properties at the earlier of the time when the lease term or continuous development clause has expired or management estimates the lease will expire before it is drilled, sold or traded. The impairment of unproved oil and natural gas properties is recorded in Exploration and abandonment costs in the Company’s consolidated statements of operations. Based on this assessment, the Company expensed $62.8 million and $127.0 million of undeveloped leasehold during the years ended December 31, 2019 and 2018, respectively, related to the expected future abandonment of expiring acreage. There were no such costs incurred during the year ended December 31, 2017. At December 31, 2019 , the Company had $2.5 billion of undeveloped leasehold. Of the remaining undeveloped leasehold costs at December 31, 2019 , $183.4 million is scheduled to expire in 2020 . The leasehold expiring in 2020 relates to areas in which the Company is actively drilling. If the Company’s drilling is not successful, this leasehold could become partially or entirely impaired. The Company considers the following factors in its assessment of the impairment of unproved properties: • the remaining length of unexpired term under its leases; • its ability to actively manage and prioritize its capital expenditures to drill wells on undeveloped leases or make payments to extend leases that may be close to expiration; • its ability to exchange leasehold positions with other companies that allow for higher concentrations of ownership and development potential; and • its ability to convey partial mineral ownership to other companies in exchange for their drilling of leases. For sales of all of the Company’s working interests in unproved properties, gain or loss is recognized to the extent of the difference between the proceeds received and the net carrying value of the property. Proceeds from sales of less than all of the Company’s working interests in unproved properties are accounted for as a recovery of costs unless the proceeds exceed the entire cost of the property. As part of its business strategy, the Company regularly pursues the acquisition of oil and natural gas properties. The purchase price in an acquisition is allocated to the assets acquired and liabilities assumed based on their relative fair values as of the acquisition date, which may occur many months after the announcement date. Therefore, while the consideration to be paid may be fixed, the fair value of the assets acquired and liabilities assumed is subject to change during the period between the announcement date and the acquisition date. The Company’s most significant estimates in its allocation typically relate to the value assigned to future recoverable oil and natural gas reserves and unproved properties. As the allocation of the purchase price is subject to significant estimates and subjective judgments, the accuracy of this assessment is inherently uncertain. Asset Retirement Obligations For the Company, asset retirement obligations represent the future abandonment costs of tangible assets, namely the plugging and abandonment of wells and land remediation. The fair value of a liability for an asset’s retirement obligation is recorded in the period in which it is incurred if a reasonable estimate of fair value can be made and the corresponding cost is capitalized as part of the carrying amount of the related long-lived asset. The liability is accreted to its then present value each period. If the liability is settled for an amount other than the recorded amount, the difference is recorded in Other income (expense) in the Company’s consolidated statements of operations. Inherent to the present value calculation are numerous estimates, assumptions and judgments, including, but not limited to: the ultimate settlement amounts; inflation factors; credit-adjusted risk-free rates; timing of settlement; and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions affect the present value of the abandonment liability, the Company makes corresponding adjustments to both the asset retirement obligations and the related oil and natural gas property asset balance. These revisions result in prospective changes to DD&A expense and accretion of the discounted abandonment liability. The following table summarizes the changes in the Company’s asset retirement obligations for the periods indicated (in thousands): Year ended December 31, 2019 2018 Asset retirement obligations, beginning of year $ 26,884 $ 27,170 Additional liabilities incurred 1,490 2,111 Dispositions of wells (339 ) (3,557 ) Accretion expense 1,465 1,422 Liabilities settled upon plugging and abandoning wells (484 ) (262 ) Revision of estimates (5,577 ) — Asset retirement obligations, end of year $ 23,439 $ 26,884 Other Property and Equipment, net Other property and equipment is recorded at cost. The Company expenses maintenance and repairs in the period incurred. Upon retirements or dispositions of assets, the cost and related accumulated depreciation are removed from the consolidated balance sheet with the resulting gains or losses, if any, reflected in operations. Depreciation of other property and equipment is computed using the straight line method over their estimated useful lives, which range from two years to 35 years . Depreciation expense on other property and equipment was $18.9 million , $15.5 million and $11.5 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. See Note 16—Disclosures About Fair Value of Financial Instruments for additional information regarding the Company’s impairment of other property and equipment, net. Materials and supplies are stated at the lower of cost or market and consist of oil and gas drilling or repair items such a tubing, casing and pumping units. These items are primarily acquired for use in future drilling or repair operations and are carried at lower of cost or market. “Market,” in the context of valuation, represents net realizable value, which is the amount that the Company is allowed to bill to the joint account under joint operating agreements to which the Company is a party. The Company evaluated materials and supplies based on current operations and determined that these materials and supplies would not be utilized in the current year and included them in noncurrent assets as non-depreciable other property, plant and equipment. See Note 16—Disclosures About Fair Value of Financial Instruments for additional information regarding the Company’s impairment of materials and supplies. Capitalized Interest The Company capitalizes interest on expenditures made in connection with long-term projects that are not subject to current depletion. Interest is capitalized only for the period that activities are in progress to bring these projects to their intended use and only to the extent the Company has incurred interest expense. Equity Investments Equity investments in which the Company exercises significant influence but does not control are accounted for using the equity method. Under the equity method, the Company’s share of investees’ earnings or loss, after elimination of intra-company profit or loss, is generally recognized in the Company’s consolidated statements of operations. The Company reviews its investments to determine if a non-temporary loss in value has occurred. If such loss has occurred, the Company would recognize an impairment provision. The Company did no t recognize impairment for its equity investments during the years ended December 31, 2019 , 2018 and 2017 . Derivative Instruments The Company utilizes derivative financial instruments, including three-way collars, two-way collars and swap contracts to (i) reduce the effect of price volatility on the Company’s oil and natural gas revenues and (ii) support its annual capital budgeting and expenditure plans. The Company reports the fair value of derivatives on the consolidated balance sheets in derivative instrument assets and derivative instrument liabilities as either current or noncurrent. The Company determines the current and noncurrent classification based on the timing of expected future cash flows of individual transactions and reports these on a gross basis by contract. The Company’s derivative instruments were not designated as hedges for accounting purposes for any of the periods presented. Accordingly, the changes in fair value are recognized in the Company’s consolidated statements of operations in the period of change. Gains and losses resulting from the changes in fair value of derivatives are included in cash flows from operating activities. Fair Value of Financial Instruments Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. The Company’s assets and liabilities that are measured at fair value at each reporting date are classified according to a hierarchy that prioritizes inputs and assumptions underlying the valuation techniques. This fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs and consists of three broad levels: Level 1 : Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. Level 2 : Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1 that are either directly or indirectly observable as of the reporting date. Level 3 : Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management's best estimate of fair value. Valuation techniques that maximize the use of observable inputs are favored. Assets and liabilities are classified in their entirety based on the lowest priority level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities within the levels of the fair value hierarchy. Reclassifications of fair value between Level 1, Level 2 and Level 3 of the fair value hierarchy, if applicable, are made at the end of each quarter. Deferred Loan Costs Deferred loan costs are stated at cost, net of amortization, and are amortized to interest expense using the effective interest method over the life of the loan. Revenue Recognition Substantially all of the Company’s revenue is from the sale of crude oil, natural gas and NGLs. See Note 3—Revenue from Contracts with Customers for additional information regarding the Company’s revenue recognition. Defined Contribution Plan The Company sponsors a 401(k) defined contribution plan for the benefit of all employees beginning on their date of hire. The plan allows eligible employees to contribute a portion of their annual compensation, not to exceed annual limits established by the federal government. The Company makes matching contributions of up to a certain percentage of an employee’s contributions. For the years ended December 31, 2019 , 2018 and 2017 , the Company made contributions to the plan of $3.9 million , $3.8 million and $2.8 million , respectively. Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The tax returns and the amount of taxable income or loss are subject to examination by federal and state taxing authorities. The Company periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets, including net operating losses. In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions. The Company considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends and its outlook for future years. Earnings per Share The Company uses the “if-converted” method to determine the potential dilutive effect of its Class B common stock and the treasury stock method to determine the potential dilutive effect of outstanding restricted stock and restricted stock units. Comprehensive Income The Company has no elements of comprehensive income other than net income. Segment Reporting Operating segments are defined as components of an enterprise (i) that engage in activities from which it may earn revenues and incur expenses and (ii) for which separate operational financial information is available and is regularly evaluated by the chief operating decision maker for the purpose of allocating resources and assessing performance. Based on the organization and management of the Company, the Company has only one reportable operating segment, which is oil and natural gas exploration and production. Other services that the Company engages in are ancillary to its oil and natural gas exploration and producing activities and it manages these services to support such activities. Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current presentation. Recent Accounting Pronouncements Recently Issued but Not Yet Adopted Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses . In May 2019, ASU 2016-13 was subsequently amended by ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses and ASU 2019-05, Financial Instruments—Credit Losses (Topic 326) : Targeted Transition Relief. ASU 2016-13, as amended, affects trade receivables, financial assets and certain other instruments that are not measured at fair value through net income. This ASU will replace the currently required incurred loss approach with an expected loss model for instruments measured at amortized cost and is effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. ASU 2016-13 will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. ASU 2019-11 requires entities that did not adopt the amendments in ASU 2016-13 as of November 2019 to adopt 2019-11. This ASU contains the same effective dates and transition requirements as ASU 2016-13. This ASU did not have a material impact on the Company’s consolidated financial statements as the Company does not have a history of material credit losses. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This ASU summarizes the FASB’s recently issued ASU No. 2019-12, simplifying the Accounting for Income Taxes. The ASU enhances and simplifies various aspects of the income tax accounting guidance in Accounting Standards Codification (“ASC”) Topic 740, Income Taxes . The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is in the process of evaluating the impact this guidance will have on the Company’s consolidated financial statements and the timing of adoption. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and most industry-specific guidance. The Company adopted this standard effective January 1, 2018 using the modified retrospective approach. As a result, the Company changed its accounting policy for revenue recognition, as discussed in Note 3—Revenue from Contracts with Customers . The Company also implemented processes and controls to ensure new contracts are reviewed for the appropriate accounting treatment and to generate the required disclosures under the standards. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which requires lessees to recognize leases on balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842 ; ASU No. 2018-10, Codification Improvements to Topic 842, Leases ; ASU No. 2018-11, Targeted Improvements; ASU No. 2018-20 Leases (Topic 842); and ASU No. 2020-02, Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842) . The standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. A modified retrospective transition approach is required, applying the standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the standard for the comparative periods. The Company adopted the standard on January 1, 2019 using the modified retrospective transition approach, which allows the Company to apply the previous lease guidance and disclosure requirements under ASC Topic 840 , Leases (“ASC 840”), in the comparative periods presented for the year of adoption. The adoption did not require an adjustment to beginning retained earnings for a cumulative effect adjustment. The standard provides a number of optional practical expedients in transition. The Company has elected to apply the practical expedient to use hindsight with respect to determining lease term and in assessing any impairment of ROU assets for existing leases. The Company did not elect to apply the “package practical expedients.” The standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company did not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company has elected the practical expedient to not separate lease and non-lease components for all of its leases other than leases of vehicles. Adoption of the standard resulted in the Company recording additional operating net ROU assets and lease liabilities of $143.9 million . The current portion of the operating lease liability is included in Current operating lease liabilities and the noncurrent portion of the operating lease liability is included in Operating lease liabilities , in each case, on the Company’s consolidated balance sheets. Balances associated with finance leases have been reclassified to include the current portion in Other current liabilities and the noncurrent portion in Financing lease liabilities on the Company’s consolidated balance sheets. The adoption of this standard did not materially impact the Company’s consolidated statements of operations or cash flows. Please refer to Note 9—Leases for additional discussion. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal—Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This update requires the capitalization of implementation costs incurred in a hosting arrangement that is a service contract for internal-use software. Training and certain data conversion costs cannot be capitalized. The Company is required to expense the capitalized implementation costs over the term of the hosting agreement. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted ASU 2018-15 prospectively as of October 1, 2019. The adoption of this guidance did not have a material effect on the Company’s financial position, results of operation or cash flows. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | REVENUE FROM CONTRACTS WITH CUSTOMERS In accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), effective January 1, 2018, the Company’s revenue is measured based on considerations specified in contracts with its customers, excluding any sales incentives or amounts collected on behalf of third parties. The Company recognizes revenue when a performance obligation is satisfied by the transfer of control over a product to the ultimate customer. Sales of oil, natural gas and NGLs are recognized at the time that control of the product is transferred to the customer and collectability is reasonably assured. Generally, the pricing provisions in the Company’s contracts are tied to a market index, with certain adjustments based on, among other factors, whether a well delivers to a gathering or transmission line, the quality of the oil or natural gas, and prevailing supply and demand conditions. As a result, the prices of the Company’s oil, natural gas, and NGLs fluctuate to remain competitive with other available oil, natural gas, and NGLs supplies. The Company reports revenues disaggregated by product on its consolidated statements of operations. Oil Sales Under the Company’s oil sales contracts, the Company sells oil production at or near the wellhead and the Company collects an agreed-upon index price, net of pricing differentials. The Company recognizes revenue at the net price received when control transfers to the purchaser at or near the wellhead. Natural Gas and NGLs Sales Under the Company’s natural gas processing contracts, it delivers natural gas to a midstream processing company at the wellhead or the inlet of the midstream processing company’s system. The midstream processing company gathers and processes the natural gas and remits proceeds to the Company for the resulting natural gas and NGLs sales. In these scenarios, the Company evaluates whether it is the principal or the agent in the transaction, which includes considerations of product redelivery, take-in-kind rights and risk of loss. For those contracts where the Company has concluded that control of the product transfers at the tailgate of the plant, meaning that the Company is the principal and the ultimate third party is its customer, the Company recognizes revenue on a gross basis, with transportation and processing fees presented as transportation and processing costs on the Company’s consolidated statements of operations. Alternatively, for those contracts where the Company has concluded control of the product transfers at the inlet of the plant, meaning that the Company is the agent and the midstream processing company is the Company’s customer, the Company recognizes natural gas and NGLs sales based on the net amount of proceeds received from the midstream processing company. The Company has also determined that losses associated with shrinkage and line loss (“FL&U”) occur prior to the change in control. As a result, natural gas and NGLs sales are presented net of FL&U costs. Revenues associated with natural gas and NGLs sales at the plant inlet are considered a single combined performance obligation. For the years ended December 31, 2019 and 2018, the applicable line items on the consolidated statements of operations include $8.7 million and $13.6 million of natural gas sales and $30.3 million and $59.5 million of NGLs sales, respectively, completed at the plant inlet. Production Imbalances Previously, the Company elected to utilize the entitlements method, which is no longer applicable, to account for natural gas production imbalances. The Company now utilizes the sales method to account for natural gas production imbalances; if the Company sells natural gas to a customer in excess of its entitled share of production, the Company is required to perform a principal versus agent analysis to determine whether it should record the gross amount of revenue and transportation and processing costs equal to the other owners’ interests or recognize the net amount of revenue. In conjunction with the adoption of ASC 606, for the years ended December 31, 2019 and 2018, there were no material impacts to the financial statements due to this change in accounting for production imbalances. Transaction Price Allocated to Remaining Performance Obligations A significant number of the Company’s product sales are short-term in nature, with a contract term of one year or less. For these contracts, the Company has utilized the practical expedient in ASC 606-10-50-14, which exempts the Company from the requirements to disclose the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For the Company’s product sales that have a contract term greater than one year, the Company has utilized the practical expedient in ASC 606-10-50-14(a), which states the Company is not required to disclose the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these contracts, each unit of product generally represents a separate performance obligation; therefore, future volumes are wholly unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required. Contract Balances Under the Company’s product sales contracts, the Company invoices customers once performance obligations have been satisfied, at which point payment is unconditional. Accordingly, the Company’s product sales contracts do not give rise to contract assets or liabilities under ASC 606. Prior-Period Performance Obligations The Company records revenue in the month production is delivered to the purchaser. Settlement statements for certain natural gas and NGLs sales, however, may not be received for 30 to 90 days after the date production is delivered, and as a result the Company is required to estimate the amount of production delivered to the purchaser and the price that will be received for the sale of the product. In these situations, the Company records the differences between its estimates and the actual amounts received for product sales in the month that payment is received from the purchaser. The Company has existing internal controls for its revenue estimation process and related accruals, and any identified differences between the Company’s revenue estimates and actual revenue received have historically been insignificant. For the years ended December 31, 2019 , 2018 and 2017 , revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material. |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | DERIVATIVE FINANCIAL INSTRUMENTS Commodity Derivative Instruments and Concentration of Risk Objective and Strategy The Company utilizes derivative financial instruments, including three-way collars and swap contracts to (i) reduce the effect of price volatility on the Company’s oil and natural gas revenues and (ii) support the Company’s annual capital budgeting and expenditure plans. The Company uses collars and swaps to manage commodity price risk for its oil production. A three-way collar is a combination of options: a sold call, a purchased put and a sold put. The purchased put establishes a minimum price (floor), unless the market price falls below the sold put (sub-floor), at which point the minimum price would be the NYMEX index price plus the difference between the purchased put and the sold put strike price. The sold call establishes a maximum price (ceiling) the Company will receive for the volumes under contract. Additionally, the Company uses swap contracts to mitigate basis risk caused by the volatility of the Company’s basis differentials. The oil swap contracts establish the differential between NYMEX WTI prices and the relevant price index at which oil production is sold. Natural gas swaps establish the differential Henry Hub prices and the relevant price index at which oil production is sold. Oil Production Derivative Activities The Company’s material physical sales contracts governing its oil production are typically correlated with NYMEX WTI, including Cushing, Midland, Magellan East Houston (“MEH”) and Brent oil prices. The Company uses put spread options, swaps and three-way collars to manage oil price volatility. The Company uses basis swap contracts to reduce basis risk between NYMEX WTI prices and the actual index prices at which the oil is sold. As of December 31, 2019 , the Company had the following outstanding oil derivative contracts. When aggregating multiple contracts, the weighted average contract price is disclosed. Three-way collars Year Ending December 31, 2020 WTI Midland WTI MEH WTI Brent Volume (MBbls) 7,800 15,900 3,450 Short call price (per Bbl) $ 66.92 $ 73.24 $ 73.48 Long put price (per Bbl) $ 56.00 $ 58.55 $ 62.26 Short put price (per Bbl) $ 46.00 $ 48.55 $ 52.26 Oil swaps Year Ending December 31, 2020 Volume (MBbls) Fixed Price Swap (per Bbl) Oil swap - Midland 600 $ 55.20 Oil swap - Houston 780 $ 56.30 Basis swaps Year Ending December 31, 2020 Volume (MBbls) Fixed Price Swap (per Bbl) Basis swap - Midland-Cushing index (1) 900 $ 0.25 (1) Represents swaps that fix the basis differentials between the index prices at which the Company sells its oil and the Cushing WTI price. The table above excludes 1,800 notional MBbls with a fair value of $9.0 million related to amounts recognized under master netting agreements with derivative counterparties associated with put spreads. Natural Gas Production Derivative Activities All material physical sales contracts governing the Company’s natural gas production are tied directly or indirectly to NYMEX Henry Hub natural gas prices or regional index prices where the natural gas is sold. The Company uses swap contracts to manage natural gas price volatility. The following table sets forth the volumes associated with the Company’s outstanding natural gas derivative contracts expiring during the periods indicated and the weighted average natural gas prices for those contracts: Year Ending December 31, 2020 Volume (MMbtu) Fixed Price Swap (per MMbtu) Basis swap - Waha (1) 17,640,000 $ 0.88 (1) Represents swaps that fix the basis differentials between the index prices at which the Company sells its natural gas produced in the Permian Basin and NYMEX Henry Hub price. Effect of Derivative Instruments on the Consolidated Financial Statements All of the Company’s derivatives are accounted for as non-hedge derivatives and therefore all changes in the fair values of its derivative contracts are recognized as gains or losses in the earnings of the periods in which they occur. The table below summarizes the Company’s gains (losses) on derivative instruments for the years ended December 31, 2019 , 2018 and 2017 (in thousands): Year Ending December 31, 2019 2018 2017 Changes in fair value of derivative instruments $ (75,728 ) $ 113,824 (44,702 ) Net derivative settlements (12,206 ) 8,084 15,670 Net premiums on options that settled during the period (1) (43,278 ) (71,566 ) (37,103 ) (Loss) gain on derivatives $ (131,212 ) $ 50,342 $ (66,135 ) (1) The net premiums on options that settled during the period represents the cumulative cost of premiums paid and received on positions purchased and sold, which expired during the current period. These amounts are included in (Loss) gain on derivatives on the Company’s consolidated statements of operations. The Company classifies the fair value amounts of derivative assets and liabilities as gross current or noncurrent derivative assets or gross current or noncurrent derivative liabilities, whichever the case may be, excluding those amounts netted under master netting agreements. The fair value of the derivative instruments is discussed in Note 16—Disclosures About Fair Value of Financial Instruments . The Company has agreements in place with all of its counterparties that allow for the financial right of offset for derivative assets and liabilities at settlement or in the event of default under the agreements. Additionally, the Company maintains accounts with its brokers to facilitate financial derivative transactions in support of its risk management activities. Based on the value of the Company’s positions in these accounts and the associated margin requirements, the Company may be required to deposit cash into these broker accounts. During the years ended December 31, 2019 , 2018 and 2017 , the Company did not receive or post any material margins in connection with collateralizing its derivative positions. The following table presents the Company’s net exposure from its offsetting derivative asset and liability positions, as well as option premiums payable and receivable as of the reporting dates indicated (in thousands): Gross Amount Netting Adjustments Net Exposure December 31, 2019 Derivative assets with right of offset or master netting agreements $ 136,627 $ (8,995 ) $ 127,632 Derivative liabilities with right of offset or master netting agreements (167,517 ) 8,995 (158,522 ) December 31, 2018 Derivative assets with right of offset or master netting agreements $ 236,431 $ (25,010 ) $ 211,421 Derivative liabilities with right of offset or master netting agreements (193,973 ) 25,010 (168,963 ) Concentration of Credit Risk The Company believes that it has limited credit risk with respect to its exchange-traded contracts, as such contracts are subject to financial safeguards and transaction guarantees through NYMEX. Over-the-counter traded options expose the Company to counterparty credit risk. These over-the-counter options are entered into with large multinational financial institutions with investment grade credit ratings or through brokers that require all the transaction parties to collateralize their open option positions. The gross and net credit exposure from the Company’s commodity derivative contracts as of December 31, 2019 and 2018 is summarized in the preceding table. The Company monitors the creditworthiness of its counterparties, establishes credit limits according to the Company’s credit policies and guidelines and assesses the impact on fair values of its counterparties’ creditworthiness. The Company enters into International Swap Dealers Association Master Agreements (“ISDA Agreements”) with its derivative counterparties. The terms of the ISDA Agreements provide the Company and its counterparties and brokers with rights of net settlement of gross commodity derivative assets against gross commodity derivative liabilities. The Company routinely exercises its contractual right to offset realized gains against realized losses when settling with derivative counterparties. If the Company believes a counterparty’s creditworthiness has declined or is suspect, it may seek to novate the applicable ISDA Agreement to another financial institution that has an ISDA Agreement in place with the Company. The Company did not incur any losses due to counterparty nonperformance during any of the years ended December 31, 2019 , 2018 or 2017 . Credit Risk Related Contingent Features in Derivatives Certain commodity derivative instruments contain provisions that require the Company to either post additional collateral or collateral support (including letters of credit, security interests in an asset, or a performance bond or guarantee), or immediately settle any outstanding liability balances, upon the occurrence of a specified credit risk related event. These events, which are set forth in the Company’s existing commodity derivative contracts, include, among others, downgrades in the credit ratings of the Company and its affiliates, events of default under the Company’s Revolving Credit Agreement (as defined in Note 8—Debt ), and the release of collateral (other than as provided under the terms of the Revolving Credit Agreement). Although the Company could be required to post additional collateral or collateral support, or immediately settle any outstanding liability balances, under such conditions, the Company seeks to reduce its potential risk by entering into commodity derivative contracts with several different counterparties. |
Acquisitions of Oil and Natural
Acquisitions of Oil and Natural Gas Properties | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions of Oil and Natural Gas Properties | ACQUISITIONS OF OIL AND NATURAL GAS PROPERTIES The Company incurred costs of $52.0 million , $137.0 million and $194.5 million related to the purchase of leasehold acreage during the years ended December 31, 2019 , 2018 and 2017 , respectively. During the years ended December 31, 2019 , 2018 and 2017 , the Company reflected $27.1 million , $119.7 million and $176.5 million as part of costs not subject to depletion, respectively. During the years ended December 31, 2019 , 2018 and 2017 , the Company reflected $24.9 million , $17.3 million and $18.0 million as part of costs subject to depletion within its oil and natural gas properties, respectively. In addition to the above described acquisition of leasehold acreage, during 2017, the Company acquired, from unaffiliated individuals and entities, interests in certain oil and natural gas properties through a number of separate, individually negotiated transactions, including the Double Eagle Acquisition (as defined in Note 1—Organization and Nature of Operations ), for total consideration of $3,181.1 million . These acquisitions were accounted for using the acquisition method under ASC Topic 805, Business Combinations , which requires the acquired assets and liabilities to be recorded at fair values as of the respective acquisition dates. The Company reflected $464.2 million of the total consideration paid as part of its costs subject to depletion within its oil and natural gas properties and $2,716.9 million as unproved leasehold costs within its oil and natural gas properties for year ended December 31, 2017. Excluding the Double Eagle Acquisition, the revenues and operating expenses attributable to these acquisitions during the years ended December 31, 2019, 2018 and 2017 were not material. As described in Note 1—Organization and Nature of Operations , on April 20, 2017, the Company and Parsley LLC completed the Double Eagle Acquisition, as well as certain related transactions with an affiliate of Double Eagle. The aggregate consideration for the Double Eagle Acquisition, following post-closing adjustments, was $2,579.1 million , which consisted of (i) approximately $1,395.6 million in cash and (ii) 39,848,518 PE Units and a corresponding 39,848,518 shares of Class B common stock. The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as a result of the Double Eagle Acquisition (in thousands): Cash $ 2,469 Receivables 20,756 Derivatives 3,970 Proved oil and natural gas properties 353,000 Unproved oil and natural gas properties 2,257,266 Total assets acquired 2,637,461 Accounts payable (48,179 ) Deferred tax liability (10,167 ) Total liabilities assumed (58,346 ) Estimated fair value of net assets acquired $ 2,579,115 During 2019, 2018 and 2017, the Company also exchanged certain unproved acreage and oil and natural gas properties with certain third parties, with no gain or loss recognized. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment includes the following (in thousands): December 31, 2019 December 31, 2018 Oil and natural gas properties: Subject to depletion $ 8,799,840 $ 6,659,444 Not subject to depletion Incurred in 2019 318,190 — Incurred in 2018 402,584 677,920 Incurred in 2017 and prior 1,751,510 2,610,882 Total not subject to depletion 2,472,284 3,288,802 Oil and natural gas properties, successful efforts method 11,272,124 9,948,246 Less accumulated depreciation, depletion and impairment (2,117,963 ) (1,295,098 ) Total oil and natural gas properties, net 9,154,161 8,653,148 Other property, plant and equipment 219,857 206,662 Less accumulated depreciation (49,551 ) (35,923 ) Other property, plant and equipment, net 170,306 170,739 Total property, plant and equipment, net $ 9,324,467 $ 8,823,887 Costs subject to depletion are proved costs and costs not subject to depletion are unproved costs and current drilling projects. At December 31, 2019 and 2018 , the Company had excluded $2,472.3 million and $3,288.8 million of capitalized costs from depletion. As the Company’s exploration and development work progresses and the reserves on the Company’s properties are proven, capitalized costs attributed to the properties and mineral interests are subject to DD&A. Depletion of capitalized costs is provided using the units-of-production method based on proved oil and natural gas reserves related to the associated reservoir. Depletion expense on capitalized oil and natural gas properties was $775.8 million , $569.7 million and $340.8 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. The Company had no exploratory wells in progress at December 31, 2019 , 2018 or 2017 . Costs not subject to depletion primarily include leasehold costs, broker and legal expenses and capitalized internal costs associated with developing oil and natural gas prospects on these properties. Leasehold costs are transferred into costs subject to depletion on an ongoing basis as these properties are evaluated and proved reserves are established. Costs not subject to depletion also include costs associated with development wells in progress or awaiting completion at year-end. These costs are transferred into costs subject to depletion on an ongoing basis as these wells are completed and proved reserves are established or confirmed. These costs totaled $210.8 million and $275.3 million at December 31, 2019 and 2018 , respectively. The Company anticipates that the $210.8 million associated with the wells in progress at December 31, 2019 will be transferred to costs subject to depletion during 2020 . The $275.3 million associated with the wells in progress at December 31, 2018 was transferred to costs subject to depletion during 2019 . The Company capitalizes interest on expenditures made in connection with long-term projects that are not subject to current depletion. Interest is capitalized only for the period that activities are in progress to bring these projects to their intended use and only to the extent the company has incurred interest expense. There was no capitalized interest recorded during the years ended December 31, 2019 , 2018 or 2017 . |
Sales of Oil and Natural Gas Pr
Sales of Oil and Natural Gas Properties | 12 Months Ended |
Dec. 31, 2019 | |
Gain (Loss) on Disposition of Oil and Gas Property [Abstract] | |
Sales of Oil And Natural Gas Properties | In 2019, the Company closed sales of certain leasehold acreage for proceeds of $38.5 million , including customary purchase price adjustments. Upon closing these sales, the Company recognized no gain or loss in accordance with the guidance for partial sales of oil and natural gas properties under ASC Topic 932, Extractive Activities—Oil and Gas (“ASC 932”). In 2019, the Company completed the sale of certain property, plant and equipment for proceeds of $2.8 million . The Company recognized a $2.1 million gain on the sale. In 2018, the Company closed the sale of certain leasehold, surface and mineral acreage for proceeds of $34.4 million , subject to customary purchase price adjustments. The Company recognized a $5.2 million gain on the sale. In 2018, the Company also closed sales of certain leasehold acreage for proceeds of $188.2 million , including customary purchase price adjustments. As of December 31, 2017, the Company classified certain of these assets as held for sale. Upon closing these sales, the Company recognized no gain or loss in accordance with the guidance for partial sales of oil and natural gas properties under ASC 932. In 2018, Pacesetter closed the sale of all of its physical assets for consideration equivalent to $13.1 million , consisting of $11.0 million in cash and a $2.1 million term loan that was repaid in the first quarter of 2019. Upon the liquidation of Pacesetter, its remaining assets will be distributed to its members, including Parsley Energy Operations, LLC (“Parsley Energy Operations”), a wholly owned subsidiary of Parsley LLC. The Company recognized a $1.2 million gain on the sale. In 2017, the Company sold 21,939 gross ( 7,476 net) acres for total proceeds of $30.5 million and recognized a $14.3 million loss on the divestitures. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | DEBT The following table provides a summary of the Company’s debt for the periods indicated (in thousands): December 31, 2019 December 31, 2018 Revolving Credit Agreement $ — $ — 6.250% senior unsecured notes due 2024 400,000 400,000 5.375% senior unsecured notes due 2025 650,000 650,000 5.250% senior unsecured notes due 2025 450,000 450,000 5.625% senior unsecured notes due 2027 700,000 700,000 Capital leases (1) — 4,202 Total debt 2,200,000 2,204,202 Debt issuance costs on senior unsecured notes (19,448 ) (22,918 ) Premium on senior unsecured notes 2,280 2,796 Less: current portion — (2,413 ) Total long-term debt $ 2,182,832 $ 2,181,667 (1) As a result of the implementation of ASU No. 2016-02, Leases (Topic 842) , as of December 31, 2019, capital leases have been reclassified to include the current portion in Other current liabilities and the noncurrent portion in Financing lease liabilities on the Company’s consolidated balance sheets. Revolving Credit Agreement On October 28, 2016, the Company and its subsidiary Parsley LLC entered into five -year revolving credit agreement with, among others, Wells Fargo Bank, National Association, as administrative agent (the “Revolving Credit Agreement”) As of December 31, 2019 , the Revolving Credit Agreement, as amended to date, provides a borrowing capacity equal to the lesser of (i) the borrowing base (which currently stands at $2.7 billion ), (ii) the aggregate elected borrowing base commitments (which currently stand at $1.0 billion ) and (iii) $5.0 billion . The Revolving Credit Agreement is secured by substantially all of Parsley LLC’s and its restricted subsidiaries’ assets. There were no borrowings outstanding and $6.7 million in letters of credit outstanding under the Revolving Credit Agreement as of December 31, 2019 , resulting in availability of approximately $993.3 million . Pro forma for the Jagged Peak Acquisition (as defined below), the 2028 Notes Offering (as defined below) and the 2024 Notes Redemption (as defined below), however, there were $365.7 million of borrowings outstanding with a weighted average interest rate of 3.13% . In connection with the completion of the Jagged Peak Acquisition, the Company repaid Jagged Peak’s credit facility . The amount Parsley LLC is able to borrow under the Revolving Credit Agreement is subject to compliance with the financial covenants, satisfaction of various conditions precedent to borrowing and other provisions of the Revolving Credit Agreement. Borrowings under the Revolving Credit Agreement can be made in Eurodollars or at the alternate base rate. Eurodollar loans bear interest at a rate per annum equal to an adjusted LIBO rate plus an applicable margin ranging from 1.25% to 2.25% , depending on the percentage of the borrowing base utilized. Alternate base rate loans bear interest at a rate per annum equal to the greater of (i) the prime rate of Wells Fargo, (ii) the federal funds effective rate plus 0.5% and (iii) the adjusted LIBO rate plus 1.0% , plus an applicable margin ranging from 0.25% to 1.25% , depending on the percentage of the borrowing base utilized. The Revolving Credit Agreement also provides for a commitment fee ranging from 0.375% to 0.500% , depending on the percentage of the borrowing base utilized. As of December 31, 2019 , letters of credit outstanding under the Revolving Credit Agreement had a weighted average interest rate of 1.50% . The Company may repay any amounts borrowed prior to the maturity date without any premium or penalty other than customary LIBOR breakage costs. Parsley LLC is subject to various financial covenants under the Revolving Credit Agreement, which include, for example, the maintenance of the following financial ratios: • a minimum current ratio (based on the ratio of consolidated current assets to consolidated current liabilities) of not less than 1.0 to 1.0 as of the last day of any fiscal quarter; and • a maximum consolidated leverage ratio of not more than 4.0 to 1.0 as of the last day of any fiscal quarter for the four fiscal quarters ending on such date. The Revolving Credit Agreement places restrictions on Parsley LLC and certain of its subsidiaries with respect to, for example, additional indebtedness, liens, dividends and other payments, investments, acquisitions, mergers, asset dispositions, transactions with affiliates, hedging transactions and other matters. The Revolving Credit Agreement also places customary “holding company” restrictions on the activities of the Company. In addition, the Revolving Credit Agreement is subject to customary events of default, including a change in control. If an event of default occurs and is continuing, the administrative agent or the Majority Lenders (as defined in the Revolving Credit Agreement) may accelerate any amounts outstanding and terminate lender commitments. 6.250% Senior Unsecured Notes due 2024 On May 27, 2016, Parsley LLC and Parsley Finance Corp. (“Finance Corp.” and together with Parsley LLC, the “Issuers”) issued $200.0 million aggregate principal amount of 6.250% senior unsecured notes due 2024 (the “Initial 2024 Notes”) in an offering that was exempt from registration under the Securities Act (the “Initial 2024 Notes Offering”). The Initial 2024 Notes Offering resulted in net proceeds to the Company, after deducting initial purchaser discounts and commissions and offering expenses, of approximately $195.4 million . On August 19, 2016, the Issuers issued an additional $200.0 million aggregate principal amount of 6.250% senior notes due 2024 (the “New 2024 Notes” and together with the Initial 2024 Notes, the “2024 Notes”) at 102.000% of par, plus accrued and unpaid interest from May 27, 2016, in an offering that was exempt from registration under the Securities Act (the “New 2024 Notes Offering”). The New 2024 Notes Offering resulted in gross proceeds to the Company of $206.8 million , including a $4.0 million premium and $2.8 million of accrued and unpaid interest and net proceeds to the Company, after deducting accrued and unpaid interest, initial purchaser discounts and commissions and offering expenses, of approximately $199.6 million . The New 2024 Notes were issued as additional notes under the indenture governing the Initial 2024 Notes. The New 2024 Notes have identical terms, other than the issue date, as the Initial 2024 Notes and the New 2024 Notes and the Initial 2024 Notes are treated as a single class of securities under the indenture governing the 2024 Notes. Interest is payable on the 2024 Notes semi-annually in arrears on each June 1 and December 1. The 2024 Notes are fully and unconditionally guaranteed on a senior unsecured basis by all of the subsidiaries of Parsley LLC that guarantee the indebtedness under the Revolving Credit Agreement, other than Finance Corp. (the “Guarantor Subsidiaries”). The 2024 Notes are not guaranteed by the Company and the Company is not subject to the terms of the indenture governing the 2024 Notes. At any time prior to June 1, 2019, the Issuers may, from time to time, redeem up to 35% of the aggregate principal amount of the 2024 Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings at a redemption price equal to 106.250% of the principal amount of the 2024 Notes redeemed, plus accrued and unpaid interest, if any, to the date of redemption, provided that at least 65% of the aggregate principal amount issued under the indenture governing the 2024 Notes remains outstanding immediately after such redemption and the redemption occurs within 120 days of the closing date of such equity offering. Prior to June 1, 2019, the Issuers may, on any one or more occasions, redeem all or a part of the 2024 Notes for cash at a redemption price equal to 100% of the principal amount of the 2024 Notes redeemed, plus a “make-whole” premium as of and accrued and unpaid interest, if any, to the date of redemption. On and after June 1, 2019, the Issuers may redeem the 2024 Notes, in whole or in part, at redemption prices (expressed as percentages of principal amount) equal to 104.688% for the 12-month period beginning on June 1, 2019, 103.125% for the 12-month period beginning June 1, 2020, 101.563% for the 12-month period beginning on June 1, 2021, and 100% beginning on June 1, 2022, plus accrued and unpaid interest to the redemption date. The indenture governing the 2024 Notes contains covenants that, among other things and subject to certain exceptions and qualifications, limit the Issuers’ ability and the ability of their restricted subsidiaries to: (i) incur or guarantee additional indebtedness or issue certain types of preferred stock; (ii) pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; (iii) transfer or sell assets; (iv) make certain investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from their subsidiaries to them; (vii) consolidate, merge or transfer all or substantially all of their assets; (viii) engage in transactions with affiliates; and (ix) form unrestricted subsidiaries. Utilizing net proceeds from the 2028 Notes Offering and borrowings under the Revolving Credit Agreement, the Company expects to redeem all of the 2024 Notes on March 7, 2020 at a redemption price of 104.688% , plus accrued and unpaid interest to the redemption date, pursuant to the terms of the indenture governing the 2024 Notes. 5.375% Senior Unsecured Notes due 2025 On December 13, 2016, the Issuers issued $650.0 million aggregate principal amount of 5.375% senior unsecured notes due 2025 (the “2025 Notes”) in an offering that was exempt from registration under the Securities Act (the “2025 Notes Offering”). The 2025 Notes Offering resulted in net proceeds to the Company, after deducting initial purchaser discounts and commissions and offering expenses, of approximately $644.1 million . Interest is payable on the 2025 Notes semi-annually in arrears on each January 15 and July 15. The 2025 Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantor Subsidiaries. The 2025 Notes are not guaranteed by the Company and the Company is not subject to the terms of the indenture governing the 2025 Notes. At any time prior to January 15, 2020, the Issuers may, from time to time, redeem up to 35% of the aggregate principal amount of the 2025 Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings at a redemption price equal to 105.375% of the principal amount of the 2025 Notes redeemed, plus accrued and unpaid interest, if any, to the date of redemption, provided that at least 65% of the aggregate principal amount issued under the indenture governing the 2025 Notes remains outstanding immediately after such redemption and the redemption occurs within 120 days of the closing date of such equity offering. Prior to January 15, 2020, the Issuers may, on any one or more occasions, redeem all or a part of the 2025 Notes for cash at a redemption price equal to 100% of the principal amount of the 2025 Notes redeemed, plus a “make-whole” premium as of and accrued and unpaid interest, if any, to, the date of redemption. On and after January 15, 2020, the Issuers may redeem the 2025 Notes, in whole or in part, at redemption prices (expressed as percentages of principal amount) equal to 104.031% for the 12-month period beginning on January 15, 2020, 102.688% for the 12-month period beginning January 15, 2021, 101.344% for the 12-month period beginning on January 15, 2022, and 100% beginning on January 15, 2023, plus accrued and unpaid interest to the redemption date. The indenture governing the 2025 Notes contains covenants that, among other things and subject to certain exceptions and qualifications, limit the Issuers’ ability and the ability of their restricted subsidiaries to: (i) incur or guarantee additional indebtedness or issue certain types of preferred stock; (ii) pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; (iii) transfer or sell assets; (iv) make certain investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from their subsidiaries to them; (vii) consolidate, merge or transfer all or substantially all of their assets; (viii) engage in transactions with affiliates; and (ix) form unrestricted subsidiaries. 5.250% Senior Unsecured Notes due 2025 On February 13, 2017, the Issuers issued $450.0 million aggregate principal amount of 5.250% senior unsecured notes due 2025 (the “New 2025 Notes”) in an offering that was exempt from registration under the Securities Act (the “New 2025 Notes Offering”). The New 2025 Notes Offering resulted in net proceeds to the Company, after deducting initial purchaser discounts and commissions and offering expenses, of approximately $444.1 million . Interest is payable on the New 2025 Notes semi-annually in arrears on each February 15 and August 15. The New 2025 Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantor Subsidiaries. The New 2025 Notes are not guaranteed by the Company and the Company is not subject to the terms of the indenture governing the New 2025 Notes. At any time prior to August 15, 2020, the Issuers may, from time to time, redeem up to 35% of the aggregate principal amount of the New 2025 Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings at a redemption price equal to 105.250% of the principal amount of the New 2025 Notes redeemed, plus accrued and unpaid interest, if any, to the date of redemption, provided that at least 65% of the aggregate principal amount issued under the indenture governing the New 2025 Notes remains outstanding immediately after such redemption and the redemption occurs within 120 days of the closing date of such equity offering. Prior to August 15, 2020, the Issuers may, on any one or more occasions, redeem all or a part of the New 2025 Notes for cash at a redemption price equal to 100% of the principal amount of the New 2025 Notes redeemed, plus a “make-whole” premium as of and accrued and unpaid interest, if any, to, the date of redemption. On and after January 15, 2020, the Issuers may redeem the New 2025 Notes, in whole or in part, at redemption prices (expressed as percentages of principal amount) equal to 103.938% for the 12-month period beginning on August 15, 2020, 102.625% for the 12-month period beginning August 15, 2021, 101.313% for the 12-month period beginning on August 15, 2022, and 100% beginning on August 15, 2023, plus accrued and unpaid interest to the redemption date. The indenture governing the New 2025 Notes contains covenants that, among other things and subject to certain exceptions and qualifications, limit the Issuers’ ability and the ability of their restricted subsidiaries to: (i) incur or guarantee additional indebtedness or issue certain types of preferred stock; (ii) pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; (iii) transfer or sell assets; (iv) make certain investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from their subsidiaries to them; (vii) consolidate, merge or transfer all or substantially all of their assets; (viii) engage in transactions with affiliates; and (ix) form unrestricted subsidiaries. 5.625% Senior Unsecured Notes due 2027 On October 11, 2017, the Issuers issued $700.0 million aggregate principal amount of 5.625% senior unsecured notes due 2027 (the “2027 Notes” and together with the 2024 Notes, the 2025 Notes and the New 2025 Notes, the “Notes”) in an offering that was exempt from registration under the Securities Act (the “2027 Notes Offering”). The 2027 Notes Offering resulted in net proceeds to the Company, after deducting initial purchaser discounts and commissions and offering expenses, of approximately $692.1 million . Interest is payable on the 2027 Notes semi-annually in arrears on each April 15 and October 15. The 2027 Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantor Subsidiaries. The 2027 Notes are not guaranteed by the Company and the Company is not subject to the terms of the indenture governing the 2027 Notes. At any time prior to October 15, 2020, the Issuers may, from time to time, redeem up to 35% of the aggregate principal amount of the 2027 Notes with an amount of cash not greater than the net cash proceeds of certain equity offerings at a redemption price equal to 105.625% of the principal amount of the 2027 Notes redeemed, plus accrued and unpaid interest, if any, to the date of redemption, provided that at least 65% of the aggregate principal amount issued under the indenture governing the 2027 Notes remains outstanding immediately after such redemption and the redemption occurs within 120 days of the closing date of such equity offering. Prior to October 15, 2020, the Issuers may, on any one or more occasions, redeem all or a part of the 2027 Notes for cash at a redemption price equal to 100% of the principal amount of the 2027 Notes redeemed, plus a “make-whole” premium as of and accrued and unpaid interest, if any, to, the date of redemption. On and after October 15, 2022, the Issuers may redeem the 2027 Notes, in whole or in part, at redemption prices (expressed as percentages of principal amount) equal to 102.813% for the 12-month period beginning on October 15, 2022, 101.875% for the 12-month period beginning October 15, 2023, 100.938% for the 12-month period beginning on October 15, 2024, and 100% beginning on October 15, 2025, plus accrued and unpaid interest to the redemption date. The indenture governing the 2027 Notes contains covenants that, among other things and subject to certain exceptions and qualifications, limit the Issuers’ ability and the ability of their restricted subsidiaries to: (i) incur or guarantee additional indebtedness or issue certain types of preferred stock; (ii) pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; (iii) transfer or sell assets; (iv) make certain investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from their subsidiaries to them; (vii) consolidate, merge or transfer all or substantially all of their assets; (viii) engage in transactions with affiliates; and (ix) form unrestricted subsidiaries. At any time when the Notes are rated investment grade by either Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Services and no default or event of default has occurred and is continuing, many of the foregoing covenants will be suspended. If the ratings on the Notes were to subsequently decline to below investment grade, the suspended covenants would be reinstated. At December 31, 2019 , the Company was in compliance with all required covenants under the Revolving Credit Agreement and each of the indentures governing the Notes. Principal Maturities of Debt Principal maturities of debt outstanding at December 31, 2019 are as follows (in thousands): 2020 $ — 2021 — 2022 — 2023 — 2024 400,000 Thereafter 1,800,000 Total $ 2,200,000 Interest Expense The following amounts have been incurred and charged to interest expense for the years ended December 31, 2019 , 2018 and 2017 (in thousands): Year ended December 31, 2019 2018 2017 Cash payments for interest $ 129,387 $ 127,668 $ 63,170 Change in interest accrual 27 (437 ) 30,007 Amortization of deferred loan origination costs 4,742 4,745 3,985 Write-off of deferred loan origination costs — — 735 Amortization of bond premium (516 ) (516 ) (516 ) Total interest expense, net $ 133,640 $ 131,460 $ 97,381 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | LEASES The Company has entered into operating leases for drilling rigs, real estate, and other field and office equipment, as well as finance leases for vehicles. The Company’s leases have lease terms that include options to extend for up to 14 years, and some of which include options to terminate within one year. The exercise of lease renewal and termination options are at the Company’s sole discretion. For purposes of calculating operating lease liabilities, the Company’s leases are deemed not to include an option to extend the lease term until it is reasonably certain that the Company will exercise that option. Certain of the Company’s finance leases also include an option to purchase the leased asset. The Company determines whether a contract arrangement contains a lease at inception. The lease classification and lease measurement are determined upon lease commencement. The lease commencement date is evaluated based on when the key lease terms are available and when the Company takes possession of the underlying asset. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. The lease payments represent gross payments to vendors which, for certain of the Company’s operating assets, are offset by amounts received from other working interest owners. Because the majority of the Company’s leases do not provide an implicit rate of return, the Company uses its incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of lease payments. The incremental borrowing rate is not a quoted rate and is derived by applying a spread over U.S. Treasury rates with a similar duration to the Company’s lease payments. The spread utilized is based on the Company’s one-year borrowing cost assuming the midpoint of applicable margins under the Revolving Credit Agreement. The Company has operating lease agreements with lease and non-lease components that are accounted for as a single lease component. For vehicle leases, the Company accounts for the lease and non-lease components separately. The Company subleases certain of its real estate to third parties for office and parking space. The Company recognizes lease costs on a straight-line basis over the term of the lease. The depreciable life of assets is limited by the non-cancellable term of the lease, unless there is a transfer of title or purchase option reasonably certain of exercise. The components of the Company’s lease costs as of December 31, 2019 were as follows (in thousands): Year Ended December 31, 2019 Finance lease costs: Amortization of right-of-use assets $ 2,779 Interest on lease liabilities 242 Operating lease costs (1) 92,709 Short-term lease costs (2) 20,578 Variable lease costs (3) 29,024 Sublease income (463 ) Total lease costs $ 144,869 (1) For the year ended December 31, 2019 , operating lease costs are included in the following line items on the Company’s consolidated financial statements: $69.1 million are capitalized as part of Oil and natural gas properties ; $10.1 million , are included in General and administrative expenses ; $7.1 million are included in Lease operating expenses ; and $6.4 million are included in Other operating expenses . (2) Short-term lease costs represent costs related to leases with a contract term of one year or less. For the year ended December 31, 2019, short-term lease costs are included in the following line items on the Company’s consolidated financial statements: $3.1 million are capitalized as part of Oil and natural gas properties; and $17.5 million are included in Lease operating expenses . (3) Variable lease costs that are not dependent on an index or rate are not included in the lease liability or ROU assets. For the year ended December 31, 2019, variable lease costs are included in the following line items on the Company’s consolidated financial statements: $19.6 million are capitalized as part of Oil and natural gas properties and $9.4 million are included in General and administrative expenses. Supplemental cash flow information related to the Company’s leases as of December 31, 2019 was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 23,644 Investing cash outflows from operating leases $ 71,487 Operating cash outflows from finance leases $ 242 Financing cash outflows from finance leases $ 2,746 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 109,681 Finance leases $ 2,618 Supplemental balance sheet information related to the Company’s leases as of December 31, 2019 was as follows (in thousands): Operating leases Assets Operating lease assets, net of accumulated depreciation $ 128,529 Liabilities Current operating lease liabilities (61,198 ) Operating lease liabilities (69,195 ) Total operating lease liabilities $ (130,393 ) Finance leases Assets Property and equipment, gross $ 8,418 Accumulated depreciation (5,063 ) Property and equipment, net $ 3,355 Liabilities Other current liabilities $ (2,101 ) Financing lease liabilities (1,320 ) Total finance liabilities $ (3,421 ) Weighted average remaining lease term (in years) Operating leases 3.0 Finance leases 1.8 Weighted average discount rate Operating leases 4.7 % Finance leases 5.6 % Maturities of Lease Liabilities Maturities of the Company’s lease liabilities as of December 31, 2019 were as follows (in thousands): Operating leases Finance leases 2020 $ 65,408 $ 2,234 2021 36,386 1,176 2022 16,240 184 2023 8,792 13 2024 7,750 — Thereafter 5,063 — Total lease payments $ 139,639 $ 3,607 Less imputed interest (9,246 ) (186 ) Total lease obligations $ 130,393 $ 3,421 Less: Current obligations (61,198 ) (2,101 ) Long-term lease obligations $ 69,195 $ 1,320 In addition, the Company has entered into a contract for a 12 -year real estate lease that will commence during fiscal year 2021. On commencement of the lease, the Company will record additional operating lease liabilities of approximately $180.5 million . As of December 31, 2018, minimum future contractual payments for long-term operating leases under the scope of ASC 840 were as follows (in thousands): Operating leases (1) Finance leases 2019 $ 71,998 $ 2,413 2020 39,403 1,288 2021 26,658 436 2022 22,473 51 2023 21,822 14 Thereafter 148,508 — Total lease payments $ 330,862 $ 4,202 (1) Operating leases included minimum future contractual payments for long-term operating leases that have not commenced. |
Leases | LEASES The Company has entered into operating leases for drilling rigs, real estate, and other field and office equipment, as well as finance leases for vehicles. The Company’s leases have lease terms that include options to extend for up to 14 years, and some of which include options to terminate within one year. The exercise of lease renewal and termination options are at the Company’s sole discretion. For purposes of calculating operating lease liabilities, the Company’s leases are deemed not to include an option to extend the lease term until it is reasonably certain that the Company will exercise that option. Certain of the Company’s finance leases also include an option to purchase the leased asset. The Company determines whether a contract arrangement contains a lease at inception. The lease classification and lease measurement are determined upon lease commencement. The lease commencement date is evaluated based on when the key lease terms are available and when the Company takes possession of the underlying asset. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. The lease payments represent gross payments to vendors which, for certain of the Company’s operating assets, are offset by amounts received from other working interest owners. Because the majority of the Company’s leases do not provide an implicit rate of return, the Company uses its incremental borrowing rate based on the information available at the commencement date of the lease in determining the present value of lease payments. The incremental borrowing rate is not a quoted rate and is derived by applying a spread over U.S. Treasury rates with a similar duration to the Company’s lease payments. The spread utilized is based on the Company’s one-year borrowing cost assuming the midpoint of applicable margins under the Revolving Credit Agreement. The Company has operating lease agreements with lease and non-lease components that are accounted for as a single lease component. For vehicle leases, the Company accounts for the lease and non-lease components separately. The Company subleases certain of its real estate to third parties for office and parking space. The Company recognizes lease costs on a straight-line basis over the term of the lease. The depreciable life of assets is limited by the non-cancellable term of the lease, unless there is a transfer of title or purchase option reasonably certain of exercise. The components of the Company’s lease costs as of December 31, 2019 were as follows (in thousands): Year Ended December 31, 2019 Finance lease costs: Amortization of right-of-use assets $ 2,779 Interest on lease liabilities 242 Operating lease costs (1) 92,709 Short-term lease costs (2) 20,578 Variable lease costs (3) 29,024 Sublease income (463 ) Total lease costs $ 144,869 (1) For the year ended December 31, 2019 , operating lease costs are included in the following line items on the Company’s consolidated financial statements: $69.1 million are capitalized as part of Oil and natural gas properties ; $10.1 million , are included in General and administrative expenses ; $7.1 million are included in Lease operating expenses ; and $6.4 million are included in Other operating expenses . (2) Short-term lease costs represent costs related to leases with a contract term of one year or less. For the year ended December 31, 2019, short-term lease costs are included in the following line items on the Company’s consolidated financial statements: $3.1 million are capitalized as part of Oil and natural gas properties; and $17.5 million are included in Lease operating expenses . (3) Variable lease costs that are not dependent on an index or rate are not included in the lease liability or ROU assets. For the year ended December 31, 2019, variable lease costs are included in the following line items on the Company’s consolidated financial statements: $19.6 million are capitalized as part of Oil and natural gas properties and $9.4 million are included in General and administrative expenses. Supplemental cash flow information related to the Company’s leases as of December 31, 2019 was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 23,644 Investing cash outflows from operating leases $ 71,487 Operating cash outflows from finance leases $ 242 Financing cash outflows from finance leases $ 2,746 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 109,681 Finance leases $ 2,618 Supplemental balance sheet information related to the Company’s leases as of December 31, 2019 was as follows (in thousands): Operating leases Assets Operating lease assets, net of accumulated depreciation $ 128,529 Liabilities Current operating lease liabilities (61,198 ) Operating lease liabilities (69,195 ) Total operating lease liabilities $ (130,393 ) Finance leases Assets Property and equipment, gross $ 8,418 Accumulated depreciation (5,063 ) Property and equipment, net $ 3,355 Liabilities Other current liabilities $ (2,101 ) Financing lease liabilities (1,320 ) Total finance liabilities $ (3,421 ) Weighted average remaining lease term (in years) Operating leases 3.0 Finance leases 1.8 Weighted average discount rate Operating leases 4.7 % Finance leases 5.6 % Maturities of Lease Liabilities Maturities of the Company’s lease liabilities as of December 31, 2019 were as follows (in thousands): Operating leases Finance leases 2020 $ 65,408 $ 2,234 2021 36,386 1,176 2022 16,240 184 2023 8,792 13 2024 7,750 — Thereafter 5,063 — Total lease payments $ 139,639 $ 3,607 Less imputed interest (9,246 ) (186 ) Total lease obligations $ 130,393 $ 3,421 Less: Current obligations (61,198 ) (2,101 ) Long-term lease obligations $ 69,195 $ 1,320 In addition, the Company has entered into a contract for a 12 -year real estate lease that will commence during fiscal year 2021. On commencement of the lease, the Company will record additional operating lease liabilities of approximately $180.5 million . As of December 31, 2018, minimum future contractual payments for long-term operating leases under the scope of ASC 840 were as follows (in thousands): Operating leases (1) Finance leases 2019 $ 71,998 $ 2,413 2020 39,403 1,288 2021 26,658 436 2022 22,473 51 2023 21,822 14 Thereafter 148,508 — Total lease payments $ 330,862 $ 4,202 (1) Operating leases included minimum future contractual payments for long-term operating leases that have not commenced. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Equity | EQUITY Preferred Stock Pursuant to the Company’s amended and restated certificate of incorporation, the Company’s board of directors may, subject to any limitations prescribed by law but without further stockholder approval, establish and issue from time to time one or more classes or series of preferred stock, par value $0.01 per share, up to an aggregate of 50.0 million shares. The Company had no shares of preferred stock outstanding at December 31, 2019 and 2018 . Class A Common Stock The Company had 281.2 million shares of Class A common stock outstanding as of December 31, 2019 , which includes 0.4 million shares of time-based restricted stock (“RSAs”) and 0.8 million shares of performance-based restricted stock (“PSAs”). Holders of Class A common stock are entitled to one vote per share on all matters to be voted upon by the stockholders and are entitled to ratably receive dividends when and if declared by the Company’s board of directors. Upon liquidation, dissolution, distribution of assets or other winding up, the holders of Class A common stock are entitled to receive ratably the assets available for distribution to the stockholders after payment of liabilities and the liquidation preference of any of the Company’s outstanding shares of preferred stock. Class B Common Stock The Company had 35.4 million shares of its Class B common stock outstanding as of December 31, 2019 . Holders of the Class B common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval, except with respect to the amendment of certain provisions of the Company’s amended and restated certificate of incorporation that would alter or change the powers, preferences or special rights of the Class B common stock so as to affect them adversely, which amendments must be by a majority of the votes entitled to be cast by the holders of the shares affected by the amendment, voting as a separate class, or as otherwise required by applicable law. Holders of Class B common stock do not have any right to receive dividends, unless the dividend consists of shares of Class B common stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class B common stock paid proportionally with respect to each outstanding share of Class B common stock and a dividend consisting of shares of Class A common stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class A common stock on the same terms is simultaneously paid to the holders of Class A common stock. Holders of Class B common stock do not have any right to receive a distribution upon a liquidation or winding up of the Company. Earnings per Share Basic earnings per share (“EPS”) measures the performance of an entity over the reporting period. Diluted earnings per share measures the performance of an entity over the reporting period while giving effect to all potentially dilutive common shares that were outstanding during the period. The Company uses the “if-converted” method to determine the potential dilutive effect of exchanges of outstanding PE Units (and corresponding shares of Class B common stock), and the treasury stock method to determine the potential dilutive effect of vesting of its outstanding restricted stock and restricted stock units. For the years ended December 31, 2019 and 2018, Class B common stock was not recognized in dilutive EPS calculations as the effect would have been antidilutive. The following table reflects the allocation of net income to common stockholders and EPS computations for the periods indicated based on a weighted average number of shares of common stock outstanding for the period: Year ended December 31, 2019 2018 2017 Basic EPS (in thousands, except per share data) Numerator: Basic net income attributable to Parsley Energy, Inc. Stockholders $ 175,212 $ 369,127 $ 106,774 Denominator: Basic weighted average shares outstanding 279,636 272,226 240,733 Basic EPS attributable to Parsley Energy, Inc. Stockholders $ 0.63 $ 1.36 $ 0.44 Diluted EPS Numerator: Net income attributable to Parsley Energy, Inc. Stockholders 175,212 369,127 106,774 Effect of conversion of the shares of Company’s Class B common stock to shares of the Company’s Class A common stock — — 17,646 Diluted net income attributable to Parsley Energy, Inc. Stockholders $ 175,212 $ 369,127 $ 124,420 Denominator: Basic weighted average shares outstanding 279,636 272,226 240,733 Effect of dilutive securities: Class B common stock — — 54,665 Time-Based Restricted Stock and Time-Based Restricted Stock Units 536 658 1,114 Diluted weighted average shares outstanding (1) 280,172 272,884 296,512 Diluted EPS attributable to Parsley Energy, Inc. Stockholders $ 0.63 $ 1.35 $ 0.42 (1) As of December 31, 2019 , there were 790,507 and 358,240 PSAs and performance-based restricted stock units (“PSUs”), respectively. As of December 31, 2018 and 2017, there were 1,338,439 PSAs and 640,062 PSUs, respectively. PSAs and PSUs could vest in the future based on predetermined performance and market goals. PSAs and PSUs were not included in the computation of EPS for the years ended December 31, 2019 , 2018 and 2017 , respectively because the performance and market conditions had not been met, assuming the end of the reporting period was the end of the contingency period. Dividends During the third quarter of 2019, the Company’s board of directors initiated the Company’s first quarterly dividend, payable on issued and outstanding shares of Class A common stock, and, in its capacity as the managing member of Parsley LLC, a corresponding distribution from Parsley LLC to holders of PE Units (each, a “PE Unitholder”). The portion of the Parsley LLC distribution attributable to PE Units held by the Company was used to fund the quarterly dividend on issued and outstanding shares of Class A common stock. As described in these financial statements, as the context requires, dividends paid to holders of Class A common stock and distributions paid to PE Unitholders (other than Parsley Energy, Inc.) may be referred to collectively as “dividends.” Dividends declared are recorded as a reduction of retained earnings, to the extent that retained earnings were available at the beginning of the reporting period, with any excess recorded as a reduction in paid capital. Dividends paid to PE Unitholders (other than the Company) are treated as a partnership distribution from Parsley LLC and are recorded as a reduction in noncontrolling interests. The following table sets forth information with respect to cash dividends and distributions declared by the Company’s board of directors during 2019, on its own behalf and in its capacity as the managing member of Parsley LLC, on issued and outstanding shares of Class A common stock and PE Units: Declaration Date Record Date Payment Date Dividend/Distribution Amount (1) Total Dividend/Distribution Payment (2) August 6, 2019 September 20, 2019 September 30, 2019 $ 0.03 $ 9,547 November 5, 2019 December 10, 2019 December 20, 2019 $ 0.03 $ 9,548 (1) Per share of Class A common stock and per PE Unit. The portion of the Parsley LLC distribution attributable to PE Units held by the Company was used to fund the quarterly dividend on issued and outstanding shares of Class A common stock. (2) Reflects total cash dividend and distribution payments made, or to be made, to holders of Class A common stock and PE Unitholders (other than the Company) as of the applicable record date. The Company did not pay dividends on Class A common stock or distributions on PE Units during the years ended December 31, 2018 or 2017. Noncontrolling Interests As a result of the 2017 Equity Offerings, the Company’s ownership of Parsley LLC increased from 86.5% to 89.8% and the PE Unitholders’ (other than the Company) ownership of Parsley LLC decreased from 13.5% to 10.2% . Subsequently, as a result of the consummation of the Double Eagle Acquisition, the Company’s ownership of Parsley LLC decreased from 89.8% to 78.4% and the PE Unitholders’ (other than the Company) ownership of Parsley LLC increased from 10.2% to 21.6% . Any impact to additional paid in capital as a result of the 2017 Equity Offerings was completely offset by a valuation allowance. During the year ended December 31, 2017, certain PE Unitholders exercised their exchange right under the Parsley LLC Agreement (as defined below), collectively electing to exchange an aggregate of 5.7 million PE Units (and a corresponding number of shares of Class B common stock) for an aggregate of 5.7 million shares of Class A common stock (collectively, the “2017 Exchanges”). In turn, the Company exercised its call right under the Parsley LLC Agreement, electing to issue Class A common stock directly to each of the exchanging PE Unitholders in satisfaction of their elections. As a result of the 2017 Exchanges, the Company’s ownership of Parsley LLC increased from 78.4% to 80.2% and the PE Unitholders’ (other than the Company) ownership of Parsley LLC decreased from 21.6% to 19.8% . The “Parsley LLC Agreement” refers to the Limited Liability Company Agreement of Parsley LLC, dated June 11, 2013, thereafter amended and restated by the Second Amended and Restated Limited Liability Company Agreement, dated May 29, 2014, thereafter amended and restated by the Third Amended and Restated Limited Liability Company Agreement, dated February 20, 2019, thereafter amended and restated by the Fourth Amended and Restated Limited Liability Company Agreement, dated July 22, 2019, as in effect as of the applicable date. During the year ended December 31, 2018, certain PE Unitholders exercised their exchange right under the Parsley LLC Agreement, collectively electing to exchange an aggregate of 25.6 million PE Units (and a corresponding number of shares of Class B common stock) for an aggregate of 25.6 million shares of Class A common stock (collectively, the “2018 Exchanges”). In turn, the Company exercised its call right under the Parsley LLC Agreement, electing to issue Class A common stock directly to each of the exchanging PE Unitholders in satisfaction of their elections. As a result of the 2018 Exchanges, the Company’s ownership in Parsley LLC increased from 80.2% to 88.5% and the ownership of the PE Unitholders (other than the Company) in Parsley LLC decreased from 19.8% to 11.5% . During the year ended December 31, 2019, certain PE Unitholders, including an executive officer of the Company, exercised their exchange right under the Parsley LLC Agreement, collectively electing to exchange 1.1 million PE Units (and a corresponding number of shares of Class B common stock) for 1.1 million shares of Class A common stock (collectively, the “2019 Exchanges”). In turn, the Company exercised its call right under the Parsley LLC Agreement, electing to issue Class A common stock directly to each of the exchanging PE Unitholders in satisfaction of their elections. As a result of the 2019 Exchanges, the Company’s ownership in Parsley LLC increased from 88.5% to 88.8% and the ownership of the PE Unitholders (other than the Company) in Parsley LLC decreased from 11.5% to 11.2% . Because these changes in the Company’s ownership interest in Parsley LLC did not result in a change of control, the transactions were accounted for as equity transactions under ASC Topic 810, Consolidation , which requires that any differences between the carrying value of the Company’s basis in Parsley LLC and the fair value of the consideration received are recognized directly in equity and attributed to the controlling interest. The Company has consolidated the financial position and results of operations of Parsley LLC and records noncontrolling interests for the economic interests in Parsley LLC held by PE Unitholders (other than the Company). The following table summarizes the net income (loss) attributable to noncontrolling interests: Year ended December 31, 2019 2018 2017 (in thousands) Net income (loss) attributable to the noncontrolling interests of: Parsley LLC $ 35,231 $ 76,079 $ 17,645 Pacesetter Drilling, LLC (25 ) 763 (499 ) Total net income attributable to noncontrolling interests $ 35,206 $ 76,842 $ 17,146 As discussed in Note 2—Summary of Significant Accounting Policies—Principles of Consolidation , Parsley LLC owns, indirectly a 63.0% interest in Pacesetter. The remaining 37.0% interest in Pacesetter is reflected by the Company as a noncontrolling interest. Following the sale of Pacesetter’s physical assets in 2018, discussed in Note 7—Sales of Property, Plant and Equipment , Pacesetter made distributions to its equity holders of $0.6 million and $2.0 million during the years ended December 31, 2019 and 2018, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION In connection with the Company’s initial public offering (the “IPO”), the Company adopted the Parsley Energy, Inc. 2014 Long-Term Incentive Plan (“LTIP”) for employees, consultants and directors of the Company who perform services for the Company. The shares to be delivered under the LTIP shall be made available from (i) authorized but unissued shares, (ii) shares held as treasury stock or (iii) previously issued shares reacquired by the Company including shares purchased on the open market. A total of 12.7 million shares of Class A common stock have been authorized for issuance under the LTIP. At December 31, 2019 , the Company had 7.9 million shares of Class A common stock available for future grant. On February 12, 2018, the PSUs granted in 2016 and 2017 were converted into PSAs at 200% of the target payout for such awards. Similarly, certain of the time-based restricted stock units (“RSUs”) granted in 2016 were also converted to RSAs on February 12, 2018. Upon conversion, the PSAs and RSAs became economically identical to the pre-conversion awards with the same material terms and conditions, including vesting schedules and performance criteria. Stock-based compensation expense recorded for each type of stock-based compensation award for the years ended December 31, 2019 , 2018 and 2017 is as follows (in thousands): Year ended December 31, 2019 2018 2017 Time-based restricted stock (1) $ 4,256 $ 7,200 $ 5,492 Time-based restricted stock units (1) 9,395 5,690 7,778 Performance-based restricted stock (2) 4,332 6,987 6,349 Performance-based restricted stock units 2,699 — — Total stock-based compensation $ 20,682 $ 19,877 $ 19,619 (1) Stock-based compensation expense relating to RSAs and RSUs with ratable vesting is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. (2) Includes stock-based compensation expense related to historical PSUs prior to the conversion of such awards to PSAs. Stock-based compensation is included in General and administrative expenses on the Company’s consolidated statements of operations. Time-Based Restricted Stock RSAs are awards of Class A common stock that are legally issued and outstanding. RSAs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases providing services to the Company prior to the lapse of the restrictions. The stock-based compensation expense for these awards was determined using the closing price on the date of grant applied to the total number of shares that were anticipated to fully vest. The following table summarizes the RSA activity for the year ended December 31, 2019 : Time-Based Restricted Stock Grant Date Fair Value Outstanding at January 1, 2019 715,852 $ 23.44 Forfeited (19,763 ) $ 25.55 Vested (309,699 ) $ 19.32 Outstanding at December 31, 2019 386,390 $ 26.64 Time-Based Restricted Stock Units RSUs represent the right to receive shares of Class A common stock at the end of the vesting period in an amount equal to the number of RSUs that vest. RSUs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases providing services to the Company prior to the lapse of the restriction. The stock-based compensation expense of such RSUs was determined using the closing price on the date of grant applied to the total number of shares that were anticipated to fully vest. The following table summarizes the RSU activity for the year ended December 31, 2019 : Time-Based Restricted Stock Units Grant Date Fair Value Outstanding at January 1, 2019 723,354 $ 23.78 Awards granted 992,825 $ 17.83 Forfeited (174,643 ) $ 20.82 Vested (301,078 ) $ 19.43 Outstanding at December 31, 2019 1,240,458 $ 20.48 Performance-Based Restricted Stock Units and Performance-Based Restricted Stock Awards During 2019, 2018 and 2017 , PSUs and PSAs were granted with a three -year performance period. The terms and conditions of the PSAs and PSUs allow for vesting of the awards ranging between forfeiture and 200% of target. The vesting level is calculated based on the actual total stockholder return achieved during the performance period compared to the total stockholder return of a predetermined peer group. The fair value of such PSUs or PSAs was determined using a Monte Carlo simulation and will be recognized over the applicable three-year performance period. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award to calculate the fair value of the award. Expected volatilities in the model were estimated using a historical period consistent with the performance period of approximately three years. The risk-free interest rate was based on the United States Treasury rate for a term commensurate with the expected life of the grant. The Company used the following assumptions to estimate the fair value of PSUs and PSAs granted during the periods indicated: Year Ended December 31, 2019 2018 2017 Risk-free interest rate 2.46 % 2.25 % 1.45 % Range of volatilities 32.4% - 61.8% 34.4% - 82.2% 37.7% - 79.5% During 2018, outstanding PSUs were converted into PSAs with the same terms and conditions, including vesting provisions, as the historical PSUs. Upon conversion, the PSAs became economically identical to the pre-conversion PSUs originally granted. Due to the nature of restricted stock awards, the number of as-converted PSAs is equal to the maximum number of PSAs (i.e., 200% of the target number of PSUs) that may vest. However, the PSAs will only vest based on actual performance achievement during the applicable performance period to the same extent as the pre-conversion PSUs would have vested, and any such PSAs that do not vest will be forfeited. No accounting charge was taken in connection with this conversion. The following table summarizes the PSU activity for the year ended December 31, 2019 : Performance-Based Restricted Stock Units Grant Date Fair Value Outstanding at January 1, 2019 — $ — Awards granted 376,166 $ 24.05 Vested (2,455 ) $ 24.05 Forfeited (15,471 ) $ 24.05 Outstanding at December 31, 2019 358,240 $ 24.05 The following table summarizes the PSA activity for the year ended December 31, 2019 : Performance-Based Restricted Stock Grant Date Fair Value Outstanding at January 1, 2019 1,338,439 $ 15.07 Vested (481,820 ) $ 13.07 Forfeited (66,112 ) $ 15.74 Outstanding at December 31, 2019 790,507 $ 16.24 The following table reflects the future stock-based compensation expense to be recorded for the stock-based compensation awards that were outstanding at December 31, 2019 (in thousands): Time-Based Restricted Stock Time-Based Restricted Stock Units Performance-Based Restricted Stock Performance-Based Restricted Stock Units Total 2020 $ 1,933 $ 7,324 $ 2,111 $ 2,992 $ 14,360 2021 193 4,455 — 2,984 7,632 2022 — 458 — — 458 Total $ 2,126 $ 12,237 $ 2,111 $ 5,976 $ 22,450 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES The Company is a corporation and is subject to U.S. federal income tax and the Texas Margins Tax. On December 22, 2017, Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”), was enacted by the U.S. government. The Tax Act made broad and complex changes to the U.S. corporate income tax code. Among other changes, the Tax Act: (i) reduced the U.S. federal corporate income tax rate from 35% to 21%; (ii) repealed the corporate alternative minimum tax and provides for a refund of previously accrued alternative minimum tax credits; (iii) modified the provisions relating to the limitations on deductions for executive compensation of publicly traded corporations; (iv) enacted new limitations regarding the deductibility of interest expense; and (v) imposed new limitations on the utilization of net operating losses arising in taxable years beginning after December 31, 2017. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. As a result of the Tax Act, the Company remeasured its deferred tax assets and liabilities based on the federal income and state income tax rates at which they are now expected to reverse, and they now generally reflect a federal income tax rate of 21%. The enacted rate change resulted in a non-cash increase of approximately $23.9 million to the Company’s income tax provision, a corresponding reduction of $23.9 million to the Company’s net noncurrent deferred tax asset balance, and a reduction in valuation allowance of $24.3 million at December 31, 2017. There were no adjustments recorded to these estimates during the years ended December 31, 2019 or 2018. The Company’s effective combined U.S. federal and state income tax rate as of December 31, 2019 , 2018 and 2017 was 22.6% , 19.1% and 4.4% respectively. During the years ended December 31, 2019 , 2018 and 2017 , the Company recognized income tax expenses of $61.4 million , $105.5 million and $5.7 million , respectively. Total income tax differed from amounts computed by applying the U.S. federal statutory tax rates to pre-tax income due primarily to the change in the valuation allowance, the change in the TRA liability, state taxes and the impact of income (loss) attributable to noncontrolling ownership interests. At December 31, 2019 , the Company did not have any accrued liability for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. The Company’s policy is to record interest and penalties relating to uncertain tax positions in income tax expense. The components of the income tax expense were as follows for the periods indicated (in thousands): Year Ended December 31, 2019 2018 2017 Federal: Current $ — $ — $ (44 ) Deferred 58,310 101,023 (423 ) Total federal 58,310 101,023 (467 ) State, net of federal benefit: Deferred 3,127 4,452 6,175 Total state 3,127 4,452 6,175 Income tax expense $ 61,437 $ 105,475 $ 5,708 The following table reconciles the income tax expense with income tax expense at the federal statutory rate for the periods indicated (in thousands): Year Ended December 31, 2019 2018 2017 Income before income taxes $ 271,855 $ 551,444 $ 129,628 Less: net income before income taxes attributable (35,710 ) (77,446 ) (18,725 ) Income attributable to Parsley Energy, Inc. Stockholders before income taxes 236,145 473,998 110,903 Income taxes at the federal statutory rate 49,591 99,539 38,816 State income taxes, net of federal benefit 3,127 4,452 6,175 Provision to return adjustment 2,352 (1,018 ) 178 Permanent and other (140 ) (2,285 ) 166 TRA liability change — 92 (12,547 ) Valuation allowance 6,507 4,695 (26,657 ) Valuation allowance due to the reduction in federal statutory rate — — (24,356 ) Income tax provision due to change in federal statutory rate — — 23,933 Income tax expense $ 61,437 $ 105,475 $ 5,708 Net income attributable to Parsley Energy, Inc. Stockholders $ 175,212 $ 369,127 $ 106,774 Net income attributable to noncontrolling interest $ 35,206 $ 76,842 $ 17,146 As of December 31, 2019 , the Company had approximately $0.4 million of alternative minimum tax credits available that are expected to be refunded between 2020 and 2021. In addition, the Company had approximately $587.1 million of federal net operating loss carryovers that expire during the years 2034 through 2037 . The tax benefits of carryforwards are recorded as an asset to the extent that management assesses the utilization of such carryforwards to be more likely than not. When the future utilization of some portion of the carryforwards is determined to not be more likely than not, a valuation allowance is provided to reduce the recorded tax benefits from such assets. As of December 31, 2019 , the Company had a valuation allowance of $20.4 million as a result of management’s assessment of the realizability of deferred tax assets. Internal Revenue Code of 1986, as amended (“Section 382”), addresses company ownership changes and specifically limits the utilization of certain deductions and other tax attributes on an annual basis following an ownership change. The Company does not believe it experienced an ownership change within the meaning of IRC Section 382 during 2019 . Even if the Company did experience an ownership change in 2019 , any resulting limitation on the use of the Company’s net operating loss carryforwards under Section 382 would not result in a current federal tax liability at December 31, 2019 , and the Company does not believe that the resulting Section 382 annual limitation would prevent its utilization of net operating losses prior to their expiration. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows (in thousands): December 31, 2019 2018 Assets: Asset retirement obligations $ 4,923 $ 4,723 Deferred stock-based compensation 7,196 6,718 Derivative fair value loss 5,985 — Accrued compensation 5,642 4,650 Lease liabilities 27,089 — Earnings in investment in subsidiary 182 — Other 1,910 — Net operating loss carryforward 170,520 299,250 Total deferred tax assets 223,447 315,341 Less: Valuation allowance (20,382 ) (13,862 ) Net deferred tax assets 203,065 301,479 Liabilities: Book basis of oil and natural gas properties (369,474 ) (423,102 ) Derivative fair value gain — (9,450 ) Earnings in investment in subsidiary — (156 ) Lease right-of-use assets (27,000 ) — Other — (294 ) Total deferred tax liabilities (396,474 ) (433,002 ) Net deferred tax liability $ (193,409 ) $ (131,523 ) With respect to income taxes, the Company’s policy is to account for interest charges as Interest expense, net and any penalties as Other income (expenses) in the Company’s consolidated statements of operations. The Company files income tax returns at the federal level and at the state level (Texas), and a number of such returns remain open for examination. The Company’s earliest open years in its key jurisdictions are as follows: U.S. Federal 2016 State of Texas 2015 The Company has evaluated all tax positions for which the statute of limitations remains open and believes that the material positions taken would more likely than not be sustained by examination. Therefore, at December 31, 2019 , the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions. Tax Receivable Agreement In connection with the IPO, on May 29, 2014, the Company entered into a Tax Receivable Agreement (the “TRA”) with Parsley LLC and certain PE Unitholders (each such person and any permitted transferee, a “TRA Holder”), including certain executive officers. The TRA generally provides for the payment by the Company of 85% of the net cash savings, if any, in U.S. federal, state, and local income tax or franchise tax that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the IPO as a result of (i) any tax basis increases resulting from the contribution in connection with the IPO by such TRA Holder of all or a portion of its PE Units to the Company in exchange for shares of Class A common stock, (ii) the tax basis increases resulting from the exchange by such TRA Holder of PE Units for shares of Class A common stock or, if either the Company or Parsley LLC so elects, cash, and (iii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the TRA. The term of the TRA commenced on May 29, 2014, and continues until all such tax benefits have been utilized or expired, unless the Company exercises its right to terminate the TRA. If the Company elects to terminate the TRA early, it would be required to make an immediate payment equal to the present value of the hypothetical future tax benefits that could be paid under the TRA (based upon certain assumptions and deemed events set forth in the TRA). In addition, payments due under the TRA will be similarly accelerated following certain mergers or other changes of control. The actual amount and timing of payments to be made under the TRA will depend on a number of factors, including the amount and timing of taxable income generated in the future, changes in future tax rates, the use of loss carryovers and the portion of the Company’s payments under the TRA constituting imputed interest. As of December 31, 2019 , there have been no payments associated with the TRA. As a result of the Tax Act’s reduction in the corporate tax rate from 35% to 21% and the reduction in the valuation allowance the Company recorded in 2016, during the year ended December 31, 2017, the Company recorded a net decrease to the TRA liability of $35.8 million , which is comprised of a decrease of $55.9 million associated with the corporate rate reduction and an increase of $20.1 million related to the change in valuation allowance. As of December 31, 2019 and December 31, 2018 , the Company had recorded a TRA liability of $70.5 million and $68.1 million , respectively, for the estimated payments that will be made to the PE Unitholders who have exchanged shares, along with corresponding deferred tax assets, of $83.0 million and $80.1 million , respectively, as a result of the increase in tax basis arising from such exchanges and the decrease in tax basis as a result of the decrease in the future statutory tax rate. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Well Operations During the years ended December 31, 2019 , 2018 and 2017 , certain of the Company’s directors, officers, their immediate family and entities affiliated or controlled by such parties (“Related Party Working Interest Owners”) owned non-operated working interests in certain of the oil and natural gas properties that the Company operates. The revenues disbursed to such Related Party Working Interest Owners for the years ended December 31, 2019 , 2018 and 2017 totaled $4.6 million , $1.7 million and $1.5 million , respectively. As a result of this ownership, from time to time, the Company will be in a net receivable or net payable position with these individuals and entities. The Company does not consider any net receivables from these parties to be uncollectible. Spraberry Production Services, LLC As discussed in Note 2—Summary of Significant Accounting Policies , Parsley LLC, a subsidiary of the Company, indirectly owns a 42.5% interest in SPS. The Company accounts for this investment using the equity method. Using the equity method of accounting results in transactions between the Company and SPS and its subsidiaries being accounted for as related party transactions. During the years ended December 31, 2019 , 2018 and 2017 , the Company incurred charges totaling $6.9 million , $9.8 million and $10.2 million , respectively, for services performed by SPS for the Company’s well operations and drilling activities. Lone Star Well Service, LLC The Company makes purchases of equipment used in its drilling operations from Lone Star Well Service, LLC (“Lone Star”), which is controlled by SPS. During the years ended December 31, 2018 and 2017 , the Company incurred charges totaling $3.8 million and $6.5 million , respectively, for services performed by Lone Star for the Company’s well operations and drilling activities. There were no such charges incurred for the year ended December 31, 2019 . Exchange Right In accordance with the terms of the Parsley LLC Agreement, PE Unitholders (other than the Company) generally have the right to exchange (the “Exchange Right”) their PE Units (and a corresponding number of shares of the Class B common stock) for shares of Class A common stock at an exchange ratio of one share of Class A common stock for each PE Unit (and corresponding share of Class B common stock) exchanged (subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications) or, if the Company or Parsley LLC so elects, cash. As a PE Unitholder exchanges its PE Units, the Company’s interest in Parsley LLC correspondingly increases. Refer to Note 10—Equity—Noncontrolling Interests . During the year ended December 31, 2019, an executive officer of the Company elected to exchange 420,000 PE Units (and a corresponding number of shares of Class B common stock) for 420,000 shares of Class A common stock. The Company exercised its call right under the Parsley LLC Agreement and elected to issue Class A common stock to the exchanging PE Unitholder in satisfaction of such individual’s election. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Matters The Company is party to proceedings and claims incidental to its business. While many of these matters involve inherent uncertainty, the Company believes that the amount of the liability, if any, ultimately incurred with respect to any such proceedings or claims will not have a material adverse effect, individually or in the aggregate, on the Company’s consolidated financial position as a whole or on its liquidity, capital resources or future results of operations. The Company will continue to evaluate proceedings and claims involving the Company on a regular basis and will establish and adjust any reserves as appropriate to reflect its assessment of the then-current status of the matters. Environmental Obligations The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. These laws, which are often changing, regulate the discharge of materials into the environment and may require the Company to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. Environmental expenditures are expensed as incurred. The Company has established procedures for the ongoing evaluation of its operations, to identify potential environmental exposures and to comply with regulatory policies and procedures. The Company accounts for environmental contingencies in accordance with the accounting guidance related to accounting for contingencies. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, which do not contribute to current or future revenue generation, are expensed. Liabilities are recorded when environmental assessments and/or clean-ups are probable and the costs can be reasonably estimated. Such liabilities are generally undiscounted unless the timing of cash payments is fixed and readily determinable. At December 31, 2019 and 2018 , the Company had no environmental matters requiring specific disclosure or requiring the recognition of a liability. Operating and Finance Leases The Company’s estimated future minimum lease payments under long-term operating and finance lease agreements as of December 31, 2019 are associated with the Company’s adoption of ASC 842 and relate to lease payment maturities. The Company’s operating leases include drilling rigs, real estate, and other field and office equipment and the Company’s finance leases include vehicles. See Note 9—Leases for additional information. Derivative Obligations The Company’s future deferred premium payments related to derivative agreements as of December 31, 2019 was as follows (in thousands): Payments Due by Period 2020 2021 2022 2023 2024 Thereafter Total Derivative obligations $ 58,855 $ — $ — $ — $ — $ — $ 58,855 Transportation and Crude Oil Sales Agreements The Company sells oil and natural gas under a variety of contractual agreements, some of which specify the delivery of fixed and determinable quantities. The following table presents gross volume information, as of December 31, 2019 , related to the Company’s long-term transportation and crude oil sales agreements that specify the delivery of fixed and determinable quantities of crude oil: For the years ended December 31, 2020 2021 2022 2023 2024 Thereafter Total Oil (MMBbl) (1) 26.6 45.6 43.3 39.7 36.6 61.5 253.3 Dollar commitment (2) (in thousands) $ 41,534 $ 79,530 $ 79,770 $ 75,112 $ 70,962 $ 126,666 $ 473,574 (1) This table is based on agreements that the Company has signed with third-party pipeline operators as of December 31, 2019. Of the total 253.3 MMBbls, 99.0 MMBbls are subject to the commencement of operations of third party-terminal and pipeline systems. (2) These amounts equal the total deficiency fees payable, based on assumptions management considers reasonable, if the Company is unable to meet all of its contractual delivery commitments under its long-term transportation and crude oil sales agreements. Of the total $473.6 million, $204.1 million is associated with delivery commitments subject to the commencement of operations of third-party terminal and pipeline systems. |
Disclosures about Fair Value of
Disclosures about Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Disclosures about Fair Value of Financial Instruments | DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS The Company uses a valuation framework based upon inputs that market participants use in pricing an asset or liability, which are classified into two categories: observable inputs and unobservable inputs. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect a company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. These two types of inputs are further prioritized into the following fair value input hierarchy: Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1 that are either directly or indirectly observable as of the reporting date. Level 3: Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management’s best estimate of fair value. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis. These assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments whenever events or circumstances indicate that the carrying value of those assets may not be recoverable. These assets and liabilities can include inventory, assets and liabilities acquired in a business combination or exchanged in non-monetary transactions, proved and unproved oil and natural gas properties, asset retirement obligations and other long-lived assets that are written down to fair value when they are impaired. The Company periodically reviews its long-lived assets to be held and used, including proved oil and natural gas properties, whenever events or circumstances indicate that the carrying value of those assets may not be recoverable ( e.g. , if there was a sustained decline in commodity prices or the productivity of the Company’s wells). The Company reviews its oil and natural gas properties by field. An impairment loss is recognized if the sum of the expected undiscounted future net cash flows is less than the carrying amount of the assets. If the estimated undiscounted future net cash flows are less than the carrying amount of a particular asset, the Company recognizes an impairment loss for the amount by which the carrying amount of the asset exceeds the estimated fair value of such asset. Unproved oil and natural gas properties are assessed quarterly for impairment by considering future drilling plans, the results of exploration activities, commodity price outlooks, planned future sales, remaining lease terms and the expiration of all or a portion of such projects. The Company’s periodic assessment also considers its ability to prioritize expenditures to drill leases and to make payments to extend the lease term as well as its ability to enter into exchange transactions that allow for higher concentrations of ownership and development. The Company recognizes leasehold abandonment expense for unproved properties at the time when the lease term has expired or sooner based on management’s periodic assessments. During the years ended December 31, 2019 , 2018 and 2017 , the Company recognized leasehold abandonment and impairment expense of $99.2 million , $160.8 million and $32.9 million . Other Property, Plant and Equipment. During the year ended December 31, 2019 , the Company recognized an impairment of $2.6 million to reduce the carrying value of leasehold improvements that will no longer provide economic benefit after the cease-use date associated with certain office space. The impairment charges are included in Other operating expense in the Company’s consolidated statements of operations. There were no such charges incurred during the years ended December 31, 2018 or 2017. Materials and Supplies. During the years ended December 31, 2018 and 2017 , the Company recognized impairments of $0.5 million and $1.1 million , respectively, primarily to reduce the carrying value of oil and gas drilling and repair items. There were no such impairments recognized during the year ended December 31, 2019. The Company estimates fair value of the inventory using significant Level 2 assumptions based on third-party price quotes for the asset in an active market. The impairment charges are included in Other income (expense) in the Company’s consolidated statements of operations. Proved Oil and Natural Gas Properties. During the years ended December 31, 2019 and 2018 , the Company did no t recognize impairment charges, as the carrying amount of the assets exceeds the undiscounted future cash flows of the assets. The Company calculates the estimated fair values using a discounted future cash flow model. Management’s assumptions associated with the calculation of discounted future cash flows include commodity prices based on NYMEX futures price strips (Level 1), as well as Level 3 assumptions including (i) pricing adjustments for differentials, (ii) production costs, (iii) capital expenditures, (iv) production volumes, and (v) estimated reserves. It is reasonably possible that the estimate of undiscounted future net cash flows may change in the future resulting in the need to impair carrying values. The primary factors that may affect estimates of future cash flows are (i) commodity futures prices, (ii) increases or decreases in production and capital costs, (iii) future reserve adjustments, both positive and negative, to proved reserves, and (iv) results of future drilling activities. Financial Assets and Liabilities Measured at Fair Value Commodity derivative contracts are marked-to-market each quarter and are thus stated at fair value in the Company’s consolidated balance sheets and in Note 4—Derivative Financial Instruments . The Company adjusts the valuations from the valuation model for nonperformance risk and for counterparty risk. The fair values of the Company’s commodity derivative instruments are classified as Level 2 measurements as they are calculated using industry standard models that utilize assumptions and inputs which are substantially observable in active markets throughout the full term of the instruments. These include market price curves, contract terms and prices, credit risk adjustments, implied market volatility and discount factors. The following summarizes the fair value of the Company’s derivative assets and liabilities according to their fair value hierarchy as of the reporting dates indicated (in thousands): December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Commodity derivative instruments (1) $ — $ 127,632 $ — $ 127,632 Total assets $ — $ 127,632 $ — $ 127,632 Liabilities: Commodity derivative instruments (1) $ — $ (158,522 ) $ — $ (158,522 ) Total liabilities $ — $ (158,522 ) $ — $ (158,522 ) Net liability $ — $ (30,890 ) $ — $ (30,890 ) December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Commodity derivative instruments (1) — 211,421 — 211,421 Total assets — 211,421 — 211,421 Liabilities: Commodity derivative instruments (1) — (168,963 ) — (168,963 ) Total liabilities — (168,963 ) — (168,963 ) Net asset $ — $ 42,458 $ — $ 42,458 (1) Includes deferred premiums to be settled upon expiration of the contract. Financial Instruments Not Carried at Fair Value The following table provides the fair value of financial instruments that are not recorded at fair value in the consolidated balance sheets (in thousands): December 31, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt: 6.250% senior unsecured notes due 2024 $ 400,000 417,028 $ 400,000 $ 394,144 5.375% senior unsecured notes due 2025 650,000 669,552 650,000 605,885 5.250% senior unsecured notes due 2025 450,000 464,697 450,000 424,980 5.625% senior unsecured notes due 2027 700,000 742,840 700,000 636,041 Revolving Credit Agreement — — — — The fair values of the Notes were determined using the December 31, 2019 quoted market price, a Level 1 classification in the fair value hierarchy. The book value of the Revolving Credit Agreement approximates its fair value as the interest rate is variable. As of December 31, 2019 , there were no indicators for change in the Company’s market spread. |
Restructuring and Other Termina
Restructuring and Other Termination Costs Restructuring and Other Termination Costs (Notes) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Termination Costs | RESTRUCTURING AND OTHER TERMINATION COSTS During the year ended December 31, 2019, the Company incurred restructuring and termination costs as part of the Company’s continuing effort to reduce future general and administrative expenses, which included a reduction in employee count. These one-time, nonrecurring costs are reflected in Restructuring and other termination costs in the Company’s consolidated statements of operations. The following table summarizes the Company’s termination costs for the years ended December 31, 2019, 2018 and 2017, respectively (in thousands): Year ended December 31, 2019 2018 2017 Termination costs $ 1,562 $ — $ — Total restructuring and other termination costs $ 1,562 $ — $ — The Company has not recorded an additional liability for restructuring costs as no additional costs have been incurred. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS The Company has evaluated subsequent events through the date these financial statements were issued. The Company determined there were no events, other than as described below, that required disclosure or recognition in these financial statements. |
Supplemental Disclosure of Oil
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Extractive Industries [Abstract] | |
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) | SUPPLEMENTAL DISCLOSURE OF OIL AND NATURAL GAS OPERATIONS (UNAUDITED) The Company has only one reportable operating segment, which is oil and natural gas development, exploration and production in the United States. Capitalized Costs December 31, 2019 2018 (in thousands) Oil and natural gas properties: Proved properties $ 8,799,840 $ 6,659,444 Unproved properties 2,472,284 3,288,802 Total oil and natural gas properties 11,272,124 9,948,246 Less accumulated depreciation, depletion and amortization (2,117,963 ) (1,295,098 ) Net oil and natural gas properties capitalized $ 9,154,161 $ 8,653,148 Costs Incurred for Oil and Natural Gas Producing Activities Year Ended December 31, 2019 2018 2017 (in thousands) Acquisition costs: Proved properties $ 24,855 $ 17,310 $ 482,160 Unproved properties 27,165 119,662 2,893,434 Development costs 1,372,919 1,762,218 1,207,401 Total $ 1,424,939 $ 1,899,190 $ 4,582,995 Results of Operations from Oil and Natural Gas Producing Activities The following table sets forth the revenues and expenses related to the production and sale of oil, natural gas and NGLs. It does not include any interest costs or general and administrative costs and, therefore, is not necessarily indicative of the contribution to consolidated net operating results of the Company’s oil, natural gas and NGLs operations. Year Ended December 31, 2019 2018 2017 (in thousands) Oil, natural gas and natural gas liquid sales (1) $ 1,949,977 $ 1,814,747 $ 961,994 Lease operating expenses (177,148 ) (144,292 ) (102,169 ) Transportation and processing costs (1) (41,198 ) (32,573 ) — Production and ad valorem taxes (124,961 ) (108,342 ) (59,641 ) Depreciation, depletion and amortization (775,849 ) (569,691 ) (340,778 ) Accretion of asset retirement obligations (1,465 ) (1,422 ) (971 ) Total $ 829,356 $ 958,427 $ 458,435 (1) Natural gas and NGLs sales and transportation and processing costs for the years ended December 31, 2019 and 2018 reflect adjustments associated with Parsley’s adoption of ASC 606, effective January 1, 2018. Reserve Quantity Information (Unaudited) The following information represents estimates of the Company’s proved reserves as of December 31, 2019 , which have been prepared and presented in accordance with SEC rules. These rules require SEC reporting companies to prepare their reserve estimates using specified reserve definitions and pricing based on a 12 -month unweighted average of the first-day-of-the-month pricing. The pricing that was used for estimates of the Company’s reserves as of December 31, 2019 was based on an unweighted average 12-month average U.S. Energy Information Administration WTI posted price per Bbl for oil and NGLs and a Waha spot natural gas price per Mcf for natural gas, adjusted for transportation, quality and basis differentials, as set forth in the following table: Year Ended December 31, 2019 2018 2017 Oil (per Bbl) $ 53.97 $ 61.88 $ 49.17 Natural gas (per Mcf) $ 0.71 $ 1.64 $ 2.53 Natural gas liquids (per Bbl) $ 15.46 $ 28.05 $ 22.20 Subject to limited exceptions, proved undeveloped reserves may only be booked if they relate to wells scheduled to be drilled within five years of the date of booking. This requirement has limited and may continue to limit, the Company’s potential to record additional proved undeveloped reserves as it pursues its drilling program. Moreover, the Company may be required to write down its proved undeveloped reserves if it does not drill on those reserves within the required five-year timeframe. The Company does not have any proved undeveloped reserves which have remained undeveloped for five years or more. The Company’s proved oil and natural gas reserves are located in the United States in the Permian Basin of west Texas. Proved reserves were estimated in accordance with the guidelines established by the SEC and the FASB. Oil and natural gas reserve quantity estimates are subject to numerous uncertainties inherent in the estimation of quantities of proved reserves and in the projection of future rates of production and the timing of development expenditures. The accuracy of such estimates is a function of the quality of available data and of engineering and geological interpretation and judgment. Results of subsequent drilling, testing and production may cause either upward or downward revision of previous estimates. Further, the volumes considered to be commercially recoverable fluctuate with changes in prices and operating costs. The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries are more imprecise than those of currently producing oil and natural gas properties. Accordingly, these estimates are expected to change as additional information becomes available in the future. The following table and subsequent narrative disclosure provides a roll forward of the total proved reserves for the years ended December 31, 2019 , 2018 and 2017 , as well as proved developed and proved undeveloped reserves at the beginning and end of each respective year: Year Ended December 31, 2019 Crude Oil (MBbls) Natural Gas NGLs Total Proved Developed and Undeveloped Reserves: Beginning of the year 294,446 572,038 131,933 521,719 Extensions and discoveries 84,186 132,642 32,457 138,750 Revisions of previous estimates (19,269 ) 60,128 (5,043 ) (14,291 ) Purchases of reserves in place 354 556 107 554 Divestures of reserves in place (1,590 ) (4,189 ) (788 ) (3,076 ) Production (31,664 ) (51,933 ) (11,002 ) (51,322 ) End of the year 326,463 709,242 147,664 592,334 Proved Developed Reserves: Beginning of the year 170,526 358,733 81,000 311,315 End of the year 206,849 472,160 96,202 381,744 Proved Undeveloped Reserves: Beginning of the year 123,920 213,305 50,933 210,404 End of the year 119,614 237,082 51,462 210,590 Year Ended December 31, 2018 Crude Oil (MBbls) Natural Gas NGLs Total Proved Developed and Undeveloped Reserves: Beginning of the year 248,531 451,703 92,632 416,447 Extensions and discoveries 102,274 130,692 35,722 159,778 Revisions of previous estimates (22,047 ) 48,992 16,164 2,283 Purchases of reserves in place 3,379 5,963 1,240 5,613 Divestures of reserves in place (12,335 ) (27,947 ) (5,472 ) (22,465 ) Production (25,356 ) (37,365 ) (8,353 ) (39,937 ) End of the year 294,446 572,038 131,933 521,719 Proved Developed Reserves: Beginning of the year 119,591 240,337 49,751 209,399 End of the year 170,526 358,733 81,000 311,315 Proved Undeveloped Reserves: Beginning of the year 128,940 211,366 42,881 207,048 End of the year 123,920 213,305 50,933 210,404 Year Ended December 31, 2017 Crude Oil (MBbls) Natural Gas NGLs Total Proved Developed and Undeveloped Reserves: Beginning of the year 136,536 223,605 48,543 222,347 Extensions and discoveries 99,916 161,989 33,426 160,340 Revisions of previous estimates (709 ) 32,342 4,522 9,205 Purchases of reserves in place 33,017 64,055 12,121 55,814 Divestures of reserves in place (3,839 ) (6,962 ) (1,468 ) (6,467 ) Production (16,390 ) (23,326 ) (4,512 ) (24,792 ) End of the year 248,531 451,703 92,632 416,447 Proved Developed Reserves: Beginning of the year 61,133 123,946 24,306 106,097 End of the year 119,591 240,337 49,751 209,399 Proved Undeveloped Reserves: Beginning of the year 75,403 99,659 24,237 116,250 End of the year 128,940 211,366 42,881 207,048 Extensions and Discoveries. For the years ended December 31, 2019 , 2018 and 2017 , extensions and discoveries contributed to the increase of 138,750 MBoe, 159,778 MBoe and 160,340 MBoe in the Company’s proved reserves, respectively, and for each such year the increase is attributable to the Company’s horizontal drilling program in the Midland Basin and the Delaware Basin. Revisions of Previous Estimates. The Company made negative revisions in proved reserves of 14,291 MBoe and positive revisions of 2,283 MBoe and 9,205 MBoe for the years ended December 31, 2019 , 2018 and 2017 , respectively. Negative revisions of previous estimates for 2019 were 14,291 MBoe. The main driver of these revisions was the reclassification of certain proved undeveloped (“PUD”) reserves to unproved reserves, which resulted in a 23,686 MBoe downward revision to previous estimates related to the removal of reserves for PUD locations determined to be outside of the Company’s five-year capital expenditure plan. Other drivers included changes in well performance, working interest and operating expenses, which together resulted in a positive revision of 11,498 MBoe. A negative revision of 2,103 MBoe was attributable to a price adjustment due to a decrease in pricing as calculated using SEC guidelines. Positive revisions of previous estimates for 2018 were 2,283 MBoe. The main driver of these positive revisions was the adoption of ASC 606, which resulted in a positive revision of 11,434 MBoe. Other drivers included changes in well performance, working interest, operating expenses and pricing, which together resulted in a positive revision of 3,063 MBoe. The main driver of these downward revisions was the reclassification of certain PUD reserves to unproved reserves, which accounted for a 12,214 MBoe downward revision to previous estimates related to the removal of reserves for locations determined to be outside of the Company’s five-year capital expenditure plan. Positive revisions of previous estimates for 2017 were 9,205 MBoe. The main driver of these adjustments was better than expected performance for a total of 8,134 MBoe. Additionally, positive revisions of 2,752 MBoe and 3,044 MBoe were recorded due to increases in oil prices and production, respectively, as compared to the year ended December 31, 2016. These were offset by negative revisions of 4,725 MBoe associated with the reclassification of PUD reserves to unproved reserves. Purchases of Reserves in Place. For the years ended December 31, 2019 , 2018 and 2017 , the Company added 554 MBoe, 5,613 MBoe and 55,814 MBoe of reserves, respectively, primarily as a result of the acquisition of developed and undeveloped acreage in the Midland and Delaware Basins. For the year ended December 31, 2019 , the Company acquired 554 MBoe of proved reserves in the Midland Basin. For the year ended December 31, 2018 , the Company acquired 5,550 MBoe of proved reserves in the Midland Basin and 63 MBoe of proved reserves in the Delaware Basin. For the year ended December 31, 2017 , the Company acquired 53,105 MBoe of proved reserves in the Midland Basin and 2,709 MBoe of proved reserves in the Delaware Basin. Divestitures of Reserves in Place . As a result of divestitures of developed and undeveloped acreage in the Midland and Delaware Basins, the Company’s reserves decreased by 3,076 MBoe, 22,465 MBoe and 6,467 MBoe during the years ended December 31, 2019 , 2018 and 2017 , respectively. For the year ended December 31, 2019 , the Company divested 3,076 MBoe of proved reserves in the Midland Basin. For the year ended December 31, 2018 , the Company divested 22,372 MBoe of proved reserves in the Midland Basin and 93 MBoe of proved reserves in the Delaware Basin. For the year ended December 31, 2017 , the Company divested 5,936 MBoe of proved reserves in the Midland Basin and 531 MBoe of proved reserves in the Delaware Basin. Standardized Measure of Discounted Future Net Cash Flows (Unaudited) The standardized measure of discounted future net cash flows does not purport to be, nor should it be interpreted to present, the fair value of the oil and natural gas reserves of a property. An estimate of fair value would take into account, among other things, the recovery of reserves not presently classified as proved, the value of unproved properties and consideration of expected future economic and operating conditions. The estimates of future cash flows and future production and development costs as of December 31, 2019 , 2018 and 2017 are based on the unweighted arithmetic average first-day-of-the-month price for the preceding 12-month period. Estimated future production of proved reserves and estimated future production and development costs of proved reserves are based on current costs and economic conditions. All wellhead prices are held flat over the forecast period for all reserve categories. The estimated future net cash flows are then discounted at a rate of 10% . The standardized measure of discounted future net cash flows relating to proved oil, natural gas and NGLs reserves is as follows: December 31, 2019 2018 2017 (in thousands) Future cash inflows $ 20,409,082 $ 22,861,246 $ 15,421,590 Future development costs (2,280,552 ) (2,459,587 ) (2,181,447 ) Future production costs (6,240,997 ) (5,944,022 ) (4,536,530 ) Future income tax expenses (1,485,523 ) (2,061,409 ) (1,102,385 ) Future net cash flows 10,402,010 12,396,228 7,601,228 10% discount to reflect timing of cash flows (5,439,514 ) (6,502,326 ) (4,215,321 ) Standardized measure of discounted future net cash flows $ 4,962,496 $ 5,893,902 $ 3,385,907 In the foregoing determination of future cash inflows, sales prices used for oil, natural gas and NGLs for December 31, 2019 , 2018 and 2017 were estimated using the average price during the 12-month period, determined as the unweighted arithmetic average of the first-day-of-the-month price for each month. Prices were adjusted by lease for quality, transportation fees and regional price differentials. Future costs of developing and producing the proved gas and oil reserves reported at the end of each year shown were based on costs determined at each such year-end, assuming the continuation of existing economic conditions. It is not intended that the FASB’s standardized measure of discounted future net cash flows represent the fair market value of the Company’s proved reserves. The Company cautions that the disclosures shown are based on estimates of proved reserve quantities and future production schedules which are inherently imprecise and subject to revision and the 10% discount rate is arbitrary. In addition, costs and prices as of the measurement date are used in the determinations and no value may be assigned to probable or possible reserves. Changes in the standardized measure of discounted future net cash flows relating to proved oil, natural gas and NGLs reserves are as follows: Year Ended December 31, 2019 2018 2017 (in thousands) Standardized measure of discounted future net cash flows at the beginning of the year $ 5,893,902 $ 3,385,907 $ 1,304,091 Sales of oil and natural gas, net of production costs (1,606,669 ) (1,561,190 ) (800,553 ) Purchase of minerals in place 7,411 76,478 489,910 Divestiture of minerals in place (19,768 ) (167,412 ) (50,257 ) Extensions and discoveries, net of future development costs 1,714,706 3,016,035 1,864,041 Previously estimated development costs incurred during the period 469,798 290,108 58,377 Net changes in prices and production costs (2,205,679 ) 1,065,693 525,693 Changes in estimated future development costs 83,125 (177,118 ) (150,028 ) Revisions of previous quantity estimates (146,203 ) 161,860 142,510 Accretion of discount 677,486 391,803 148,314 Net change in income taxes 187,697 (348,834 ) (353,073 ) Net changes in timing of production and other (93,310 ) (239,428 ) 206,882 Standardized measure of discounted future net cash flows at the end of the year $ 4,962,496 $ 5,893,902 $ 3,385,907 |
Summary of Quarterly Financial
Summary of Quarterly Financial Results (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Results (Unaudited) | SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The Company’s unaudited quarterly financial data for the years ended December 31, 2019 and 2018 is summarized as follows: First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands, except per share amounts) 2019 Revenues $ 427,671 $ 498,541 $ 510,151 $ 522,451 Operating income $ 116,547 $ 180,837 $ 153,041 $ 86,845 Income tax benefit (expense) $ 7,790 $ (32,625 ) $ (34,953 ) $ (1,649 ) Net (loss) income $ (28,003 ) $ 134,994 $ 139,600 $ (36,173 ) Net (loss) income attributable to noncontrolling interests $ (3,939 ) $ 19,059 $ 19,890 $ 196 Net (loss) income attributable to Parsley Energy, Inc. stockholders $ (24,064 ) $ 115,935 $ 119,710 $ (36,369 ) Net (loss) income per common share: Basic $ (0.09 ) $ 0.41 $ 0.43 $ (0.13 ) Diluted $ (0.09 ) $ 0.41 $ 0.43 $ (0.13 ) 2018 Revenues $ 392,741 $ 467,788 $ 511,022 $ 454,880 Operating income $ 169,207 $ 215,505 $ 220,992 $ 22,171 Income tax expense $ (23,325 ) $ (33,243 ) $ (32,454 ) $ (16,453 ) Net income $ 105,463 $ 140,958 $ 134,149 $ 65,399 Net income attributable to noncontrolling interests $ 22,573 $ 21,803 $ 20,840 $ 11,626 Net income attributable to Parsley Energy, Inc. stockholders $ 82,890 $ 119,155 $ 113,309 $ 53,773 Net income per common share: Basic $ 0.32 $ 0.44 $ 0.41 $ 0.19 Diluted $ 0.32 $ 0.44 $ 0.41 $ 0.19 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation These consolidated financial statements include the accounts of (i) the Company, (ii) Parsley LLC, a direct majority owned subsidiary of the Company, (iii) the direct and indirect wholly owned subsidiaries of Parsley LLC, and (iv) Pacesetter Drilling, LLC (“Pacesetter”), an indirect, majority owned subsidiary of Parsley LLC, of which Parsley LLC owns, indirectly, a 63.0% interest. Parsley LLC also owns, indirectly, a 42.5% noncontrolling interest in Spraberry Production Services, LLC (“SPS”). The Company accounts for its investment in SPS using the equity method of accounting. All significant intercompany and intra-company balances and transactions have been eliminated. |
Use of Estimates | Use of Estimates These consolidated financial statements and related notes are presented in accordance with GAAP. Preparation in accordance with GAAP requires the Company to (i) adopt accounting policies within accounting rules set by the Financial Accounting Standards Board (“FASB”) and by the SEC and (ii) make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s management believes the major estimates and assumptions impacting the Company’s consolidated financial statements are the following: • estimates of proved reserves of oil and natural gas, which affect the calculations of depletion, depreciation and amortization (“DD&A”) and impairment of proved oil and natural gas properties; • impairment of undeveloped properties and other assets; • depreciation of property and equipment; and • valuation of commodity derivative instruments. Although management believes these estimates are reasonable, actual results may differ from estimates and assumptions of future events and these revisions could be material. Future production may vary materially from estimated oil and natural gas proved reserves. Actual future prices may vary significantly from price assumptions used for determining proved reserves and for financial reporting. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all cash on hand, depository accounts held by banks, money market accounts and investments with an original maturity of three months or less to be cash equivalents. The Company’s cash and cash equivalents are held in financial institutions in amounts that exceed the insurance limits of the Federal Deposit Insurance Corporation. However, management believes that the Company’s counterparty risks are minimal based on the reputation and history of the institutions selected. |
Short-term Investments | Short-term Investments Periodically, the Company invests in commercial paper with investment grade rated entities. The Company also periodically enters into time deposits with financial institutions. Commercial paper and time deposits are included in cash and cash equivalents if they have maturity dates that are less than three months at the date of purchase; otherwise, investments are reflected as short-term investments in the accompanying consolidated balance sheets based on their maturity dates. As of December 31, 2019 , the Company had no short-term investments. |
Accounts Receivable | Accounts Receivable Accounts receivable consist of receivables from joint interest owners on properties the Company operates and crude oil, natural gas and natural gas liquids (“NGLs”) production delivered to purchasers. The purchasers remit payment for production directly to the Company. Most payments are received within three months after the production date. For receivables from joint interest owners, the Company typically has the ability to withhold future revenue disbursements to recover any non-payment of joint interest billings. Accounts receivable outstanding longer than the contractual payment terms are considered past due. The Company recognizes an allowance for doubtful accounts in an amount equal to anticipated future uncollectible receivables. The Company determines its allowance by considering a number of factors, including the length of time accounts receivable are past due, the Company’s previous loss history, the debtor’s current ability to pay its obligation to the Company, the condition of the general economy and the industry as a whole. The Company writes off specific accounts receivable when they become uncollectible and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. The Company had an allowance for doubtful accounts of $2.8 million at December 31, 2018 |
Significant Customers | Significant Customers For the years ended December 31, 2019 , 2018 and 2017 , the following customers accounted for more than 10% of the Company’s revenue: Year Ended December 31, 2019 2018 2017 Shell Trading (US) Company 55% 53% 62% Lion Oil, Inc. 30% 22% 3% Targa Pipeline Mid-Continent, LLC 8% 11% 13% |
Oil and Natural Gas Properties | Unproved properties consist of costs incurred to acquire unproved leases, or lease acquisition costs. Unproved costs are capitalized until reclassified from unproved properties to proved properties when proved reserves are discovered or are expensed as the leases expire or the Company specifically identifies leases that are probable of reverting to the lessor. Unproved properties are assessed periodically for impairment on a property by property basis by considering future drilling plans, the results of exploration activities, commodity price outlooks, planned future sales, remaining lease terms and the expiration of all or a portion of such projects. The Company’s periodic assessment also considers its ability to enter into leasehold exchange transactions and leasehold extensions that allow for higher concentrations of ownership and development. The Company recognizes impairment expense for unproved properties at the earlier of the time when the lease term or continuous development clause has expired or management estimates the lease will expire before it is drilled, sold or traded. The impairment of unproved oil and natural gas properties is recorded in Exploration and abandonment costs in the Company’s consolidated statements of operations. Based on this assessment, the Company expensed $62.8 million and $127.0 million of undeveloped leasehold during the years ended December 31, 2019 and 2018, respectively, related to the expected future abandonment of expiring acreage. There were no such costs incurred during the year ended December 31, 2017. At December 31, 2019 , the Company had $2.5 billion of undeveloped leasehold. Of the remaining undeveloped leasehold costs at December 31, 2019 , $183.4 million is scheduled to expire in 2020 . The leasehold expiring in 2020 relates to areas in which the Company is actively drilling. If the Company’s drilling is not successful, this leasehold could become partially or entirely impaired. |
Exploration and Abandonment Costs | |
Oil and Gas Reserves | . |
Impairment of Oil and Natural Gas Properties | . |
Allocation of Purchase Price in Business Combinations | . |
Asset Retirement Obligations | Asset Retirement Obligations For the Company, asset retirement obligations represent the future abandonment costs of tangible assets, namely the plugging and abandonment of wells and land remediation. The fair value of a liability for an asset’s retirement obligation is recorded in the period in which it is incurred if a reasonable estimate of fair value can be made and the corresponding cost is capitalized as part of the carrying amount of the related long-lived asset. The liability is accreted to its then present value each period. If the liability is settled for an amount other than the recorded amount, the difference is recorded in Other income (expense) in the Company’s consolidated statements of operations. Inherent to the present value calculation are numerous estimates, assumptions and judgments, including, but not limited to: the ultimate settlement amounts; inflation factors; credit-adjusted risk-free rates; timing of settlement; and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions affect the present value of the abandonment liability, the Company makes corresponding adjustments to both the asset retirement obligations and the related oil and natural gas property asset balance. These revisions result in prospective changes to DD&A expense and accretion of the discounted abandonment liability. |
Other Property and Equipment, net | Other Property and Equipment, net Other property and equipment is recorded at cost. The Company expenses maintenance and repairs in the period incurred. Upon retirements or dispositions of assets, the cost and related accumulated depreciation are removed from the consolidated balance sheet with the resulting gains or losses, if any, reflected in operations. Depreciation of other property and equipment is computed using the straight line method over their estimated useful lives, which range from two years to 35 years . Depreciation expense on other property and equipment was $18.9 million , $15.5 million and $11.5 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. See Note 16—Disclosures About Fair Value of Financial Instruments for additional information regarding the Company’s impairment of other property and equipment, net. Materials and supplies are stated at the lower of cost or market and consist of oil and gas drilling or repair items such a tubing, casing and pumping units. These items are primarily acquired for use in future drilling or repair operations and are carried at lower of cost or market. “Market,” in the context of valuation, represents net realizable value, which is the amount that the Company is allowed to bill to the joint account under joint operating agreements to which the Company is a party. The Company evaluated materials and supplies based on current operations and determined that these materials and supplies would not be utilized in the current year and included them in noncurrent assets as non-depreciable other property, plant and equipment. See Note 16—Disclosures About Fair Value of Financial Instruments for additional information regarding the Company’s impairment of materials and supplies. |
Capitalized Interest | Capitalized Interest The Company capitalizes interest on expenditures made in connection with long-term projects that are not subject to current depletion. Interest is capitalized only for the period that activities are in progress to bring these projects to their intended use and only to the extent the Company has incurred interest expense. |
Equity Investments | Equity Investments Equity investments in which the Company exercises significant influence but does not control are accounted for using the equity method. Under the equity method, the Company’s share of investees’ earnings or loss, after elimination of intra-company profit or loss, is generally recognized in the Company’s consolidated statements of operations. The Company reviews its investments to determine if a non-temporary loss in value has occurred. If such loss has occurred, the Company would recognize an impairment provision. The Company did no t recognize impairment for its equity investments during the years ended December 31, 2019 , 2018 and 2017 . |
Derivatives Instruments | Derivative Instruments The Company utilizes derivative financial instruments, including three-way collars, two-way collars and swap contracts to (i) reduce the effect of price volatility on the Company’s oil and natural gas revenues and (ii) support its annual capital budgeting and expenditure plans. The Company reports the fair value of derivatives on the consolidated balance sheets in derivative instrument assets and derivative instrument liabilities as either current or noncurrent. The Company determines the current and noncurrent classification based on the timing of expected future cash flows of individual transactions and reports these on a gross basis by contract. The Company’s derivative instruments were not designated as hedges for accounting purposes for any of the periods presented. Accordingly, the changes in fair value are recognized in the Company’s consolidated statements of operations in the period of change. Gains and losses resulting from the changes in fair value of derivatives are included in cash flows from operating activities. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. The Company’s assets and liabilities that are measured at fair value at each reporting date are classified according to a hierarchy that prioritizes inputs and assumptions underlying the valuation techniques. This fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs and consists of three broad levels: Level 1 : Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. Level 2 : Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1 that are either directly or indirectly observable as of the reporting date. Level 3 : Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management's best estimate of fair value. Valuation techniques that maximize the use of observable inputs are favored. Assets and liabilities are classified in their entirety based on the lowest priority level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities within the levels of the fair value hierarchy. Reclassifications of fair value between Level 1, Level 2 and Level 3 of the fair value hierarchy, if applicable, are made at the end of each quarter. |
Deferred Loan Costs | Deferred Loan Costs Deferred loan costs are stated at cost, net of amortization, and are amortized to interest expense using the effective interest method over the life of the loan. |
Revenue Recognition | Revenue Recognition Substantially all of the Company’s revenue is from the sale of crude oil, natural gas and NGLs. See Note 3—Revenue from Contracts with Customers for additional information regarding the Company’s revenue recognition. |
Defined Contribution Plan | Defined Contribution Plan The Company sponsors a 401(k) defined contribution plan for the benefit of all employees beginning on their date of hire. The plan allows eligible employees to contribute a portion of their annual compensation, not to exceed annual limits established by the federal government. The Company makes matching contributions of up to a certain percentage of an employee’s contributions. For the years ended December 31, 2019 , 2018 and 2017 , the Company made contributions to the plan of $3.9 million , $3.8 million and $2.8 million , respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are calculated by applying existing tax laws and the rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The tax returns and the amount of taxable income or loss are subject to examination by federal and state taxing authorities. The Company periodically assesses whether it is more likely than not that it will generate sufficient taxable income to realize its deferred income tax assets, including net operating losses. In making this determination, the Company considers all available positive and negative evidence and makes certain assumptions. The Company considers, among other things, its deferred tax liabilities, the overall business environment, its historical earnings and losses, current industry trends and its outlook for future years. |
Earnings Per Share | Earnings per Share The Company uses the “if-converted” method to determine the potential dilutive effect of its Class B common stock and the treasury stock method to determine the potential dilutive effect of outstanding restricted stock and restricted stock units. |
Comprehensive Income | Comprehensive Income The Company has no elements of comprehensive income other than net income. |
Segment Reporting | Segment Reporting Operating segments are defined as components of an enterprise (i) that engage in activities from which it may earn revenues and incur expenses and (ii) for which separate operational financial information is available and is regularly evaluated by the chief operating decision maker for the purpose of allocating resources and assessing performance. Based on the organization and management of the Company, the Company has only one |
Reclassifications | Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Issued but Not Yet Adopted Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses . In May 2019, ASU 2016-13 was subsequently amended by ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses and ASU 2019-05, Financial Instruments—Credit Losses (Topic 326) : Targeted Transition Relief. ASU 2016-13, as amended, affects trade receivables, financial assets and certain other instruments that are not measured at fair value through net income. This ASU will replace the currently required incurred loss approach with an expected loss model for instruments measured at amortized cost and is effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. ASU 2016-13 will be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments—Credit Losses. ASU 2019-11 requires entities that did not adopt the amendments in ASU 2016-13 as of November 2019 to adopt 2019-11. This ASU contains the same effective dates and transition requirements as ASU 2016-13. This ASU did not have a material impact on the Company’s consolidated financial statements as the Company does not have a history of material credit losses. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This ASU summarizes the FASB’s recently issued ASU No. 2019-12, simplifying the Accounting for Income Taxes. The ASU enhances and simplifies various aspects of the income tax accounting guidance in Accounting Standards Codification (“ASC”) Topic 740, Income Taxes . The amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is in the process of evaluating the impact this guidance will have on the Company’s consolidated financial statements and the timing of adoption. Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and most industry-specific guidance. The Company adopted this standard effective January 1, 2018 using the modified retrospective approach. As a result, the Company changed its accounting policy for revenue recognition, as discussed in Note 3—Revenue from Contracts with Customers . The Company also implemented processes and controls to ensure new contracts are reviewed for the appropriate accounting treatment and to generate the required disclosures under the standards. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which requires lessees to recognize leases on balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842 ; ASU No. 2018-10, Codification Improvements to Topic 842, Leases ; ASU No. 2018-11, Targeted Improvements; ASU No. 2018-20 Leases (Topic 842); and ASU No. 2020-02, Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842) . The standard establishes a right-of-use (“ROU”) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. A modified retrospective transition approach is required, applying the standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. If an entity chooses the second option, the transition requirements for existing leases also apply to leases entered into between the date of initial application and the effective date. The entity must also recast its comparative period financial statements and provide the disclosures required by the standard for the comparative periods. The Company adopted the standard on January 1, 2019 using the modified retrospective transition approach, which allows the Company to apply the previous lease guidance and disclosure requirements under ASC Topic 840 , Leases (“ASC 840”), in the comparative periods presented for the year of adoption. The adoption did not require an adjustment to beginning retained earnings for a cumulative effect adjustment. The standard provides a number of optional practical expedients in transition. The Company has elected to apply the practical expedient to use hindsight with respect to determining lease term and in assessing any impairment of ROU assets for existing leases. The Company did not elect to apply the “package practical expedients.” The standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company did not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company has elected the practical expedient to not separate lease and non-lease components for all of its leases other than leases of vehicles. Adoption of the standard resulted in the Company recording additional operating net ROU assets and lease liabilities of $143.9 million . The current portion of the operating lease liability is included in Current operating lease liabilities and the noncurrent portion of the operating lease liability is included in Operating lease liabilities , in each case, on the Company’s consolidated balance sheets. Balances associated with finance leases have been reclassified to include the current portion in Other current liabilities and the noncurrent portion in Financing lease liabilities on the Company’s consolidated balance sheets. The adoption of this standard did not materially impact the Company’s consolidated statements of operations or cash flows. Please refer to Note 9—Leases for additional discussion. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other—Internal—Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This update requires the capitalization of implementation costs incurred in a hosting arrangement that is a service contract for internal-use software. Training and certain data conversion costs cannot be capitalized. The Company is required to expense the capitalized implementation costs over the term of the hosting agreement. This update will be effective for financial statements issued for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This update should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted ASU 2018-15 prospectively as of October 1, 2019. The adoption of this guidance did not have a material effect on the Company’s financial position, results of operation or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Revenue Percentage Accounted by Purchasers | For the years ended December 31, 2019 , 2018 and 2017 , the following customers accounted for more than 10% of the Company’s revenue: Year Ended December 31, 2019 2018 2017 Shell Trading (US) Company 55% 53% 62% Lion Oil, Inc. 30% 22% 3% Targa Pipeline Mid-Continent, LLC 8% 11% 13% |
Summary of Changes in Asset Retirement Obligations | The following table summarizes the changes in the Company’s asset retirement obligations for the periods indicated (in thousands): Year ended December 31, 2019 2018 Asset retirement obligations, beginning of year $ 26,884 $ 27,170 Additional liabilities incurred 1,490 2,111 Dispositions of wells (339 ) (3,557 ) Accretion expense 1,465 1,422 Liabilities settled upon plugging and abandoning wells (484 ) (262 ) Revision of estimates (5,577 ) — Asset retirement obligations, end of year $ 23,439 $ 26,884 |
Exploration Costs | Year Ended December 31, 2019 2018 2017 Leasehold abandonments and impairments $ 99,225 $ 160,834 $ 32,872 Geological and geophysical costs 978 1,479 5,429 Other 8 226 1,044 Total exploration and abandonment costs $ 100,211 $ 162,539 $ 39,345 |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Outstanding Oil and Gas Derivative Contracts and Weighted Average Oil and Gas Prices | As of December 31, 2019 , the Company had the following outstanding oil derivative contracts. When aggregating multiple contracts, the weighted average contract price is disclosed. Three-way collars Year Ending December 31, 2020 WTI Midland WTI MEH WTI Brent Volume (MBbls) 7,800 15,900 3,450 Short call price (per Bbl) $ 66.92 $ 73.24 $ 73.48 Long put price (per Bbl) $ 56.00 $ 58.55 $ 62.26 Short put price (per Bbl) $ 46.00 $ 48.55 $ 52.26 Oil swaps Year Ending December 31, 2020 Volume (MBbls) Fixed Price Swap (per Bbl) Oil swap - Midland 600 $ 55.20 Oil swap - Houston 780 $ 56.30 Basis swaps Year Ending December 31, 2020 Volume (MBbls) Fixed Price Swap (per Bbl) Basis swap - Midland-Cushing index (1) 900 $ 0.25 (1) Represents swaps that fix the basis differentials between the index prices at which the Company sells its oil and the Cushing WTI price. The following table sets forth the volumes associated with the Company’s outstanding natural gas derivative contracts expiring during the periods indicated and the weighted average natural gas prices for those contracts: Year Ending December 31, 2020 Volume (MMbtu) Fixed Price Swap (per MMbtu) Basis swap - Waha (1) 17,640,000 $ 0.88 (1) Represents swaps that fix the basis differentials between the index prices at which the Company sells its natural gas produced in the Permian Basin and NYMEX Henry Hub price. |
Derivative Instruments, Gain (Loss) | The table below summarizes the Company’s gains (losses) on derivative instruments for the years ended December 31, 2019 , 2018 and 2017 (in thousands): Year Ending December 31, 2019 2018 2017 Changes in fair value of derivative instruments $ (75,728 ) $ 113,824 (44,702 ) Net derivative settlements (12,206 ) 8,084 15,670 Net premiums on options that settled during the period (1) (43,278 ) (71,566 ) (37,103 ) (Loss) gain on derivatives $ (131,212 ) $ 50,342 $ (66,135 ) (1) The net premiums on options that settled during the period represents the cumulative cost of premiums paid and received on positions purchased and sold, which expired during the current period. These amounts are included in (Loss) gain on derivatives on the Company’s consolidated statements of operations. |
Schedule of Netting Offsets of Derivative Asset and Liability Positions | The following table presents the Company’s net exposure from its offsetting derivative asset and liability positions, as well as option premiums payable and receivable as of the reporting dates indicated (in thousands): Gross Amount Netting Adjustments Net Exposure December 31, 2019 Derivative assets with right of offset or master netting agreements $ 136,627 $ (8,995 ) $ 127,632 Derivative liabilities with right of offset or master netting agreements (167,517 ) 8,995 (158,522 ) December 31, 2018 Derivative assets with right of offset or master netting agreements $ 236,431 $ (25,010 ) $ 211,421 Derivative liabilities with right of offset or master netting agreements (193,973 ) 25,010 (168,963 ) |
Acquisitions of Oil and Natur_2
Acquisitions of Oil and Natural Gas Properties (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as a result of the Double Eagle Acquisition (in thousands): Cash $ 2,469 Receivables 20,756 Derivatives 3,970 Proved oil and natural gas properties 353,000 Unproved oil and natural gas properties 2,257,266 Total assets acquired 2,637,461 Accounts payable (48,179 ) Deferred tax liability (10,167 ) Total liabilities assumed (58,346 ) Estimated fair value of net assets acquired $ 2,579,115 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Oil and Natural Gas Properties | Property, plant and equipment includes the following (in thousands): December 31, 2019 December 31, 2018 Oil and natural gas properties: Subject to depletion $ 8,799,840 $ 6,659,444 Not subject to depletion Incurred in 2019 318,190 — Incurred in 2018 402,584 677,920 Incurred in 2017 and prior 1,751,510 2,610,882 Total not subject to depletion 2,472,284 3,288,802 Oil and natural gas properties, successful efforts method 11,272,124 9,948,246 Less accumulated depreciation, depletion and impairment (2,117,963 ) (1,295,098 ) Total oil and natural gas properties, net 9,154,161 8,653,148 Other property, plant and equipment 219,857 206,662 Less accumulated depreciation (49,551 ) (35,923 ) Other property, plant and equipment, net 170,306 170,739 Total property, plant and equipment, net $ 9,324,467 $ 8,823,887 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table provides a summary of the Company’s debt for the periods indicated (in thousands): December 31, 2019 December 31, 2018 Revolving Credit Agreement $ — $ — 6.250% senior unsecured notes due 2024 400,000 400,000 5.375% senior unsecured notes due 2025 650,000 650,000 5.250% senior unsecured notes due 2025 450,000 450,000 5.625% senior unsecured notes due 2027 700,000 700,000 Capital leases (1) — 4,202 Total debt 2,200,000 2,204,202 Debt issuance costs on senior unsecured notes (19,448 ) (22,918 ) Premium on senior unsecured notes 2,280 2,796 Less: current portion — (2,413 ) Total long-term debt $ 2,182,832 $ 2,181,667 (1) As a result of the implementation of ASU No. 2016-02, Leases (Topic 842) , as of December 31, 2019, capital leases have been reclassified to include the current portion in Other current liabilities and the noncurrent portion in Financing lease liabilities on the Company’s consolidated balance sheets. |
Schedule of Principal Maturities of Long-term Debt | Principal maturities of debt outstanding at December 31, 2019 are as follows (in thousands): 2020 $ — 2021 — 2022 — 2023 — 2024 400,000 Thereafter 1,800,000 Total $ 2,200,000 |
Schedule of Interest Expense | Interest Expense The following amounts have been incurred and charged to interest expense for the years ended December 31, 2019 , 2018 and 2017 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease, Cost | The components of the Company’s lease costs as of December 31, 2019 were as follows (in thousands): Year Ended December 31, 2019 Finance lease costs: Amortization of right-of-use assets $ 2,779 Interest on lease liabilities 242 Operating lease costs (1) 92,709 Short-term lease costs (2) 20,578 Variable lease costs (3) 29,024 Sublease income (463 ) Total lease costs $ 144,869 (1) For the year ended December 31, 2019 , operating lease costs are included in the following line items on the Company’s consolidated financial statements: $69.1 million are capitalized as part of Oil and natural gas properties ; $10.1 million , are included in General and administrative expenses ; $7.1 million are included in Lease operating expenses ; and $6.4 million are included in Other operating expenses . (2) Short-term lease costs represent costs related to leases with a contract term of one year or less. For the year ended December 31, 2019, short-term lease costs are included in the following line items on the Company’s consolidated financial statements: $3.1 million are capitalized as part of Oil and natural gas properties; and $17.5 million are included in Lease operating expenses . (3) Variable lease costs that are not dependent on an index or rate are not included in the lease liability or ROU assets. For the year ended December 31, 2019, variable lease costs are included in the following line items on the Company’s consolidated financial statements: $19.6 million are capitalized as part of Oil and natural gas properties and $9.4 million are included in General and administrative expenses. Supplemental cash flow information related to the Company’s leases as of December 31, 2019 was as follows (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 23,644 Investing cash outflows from operating leases $ 71,487 Operating cash outflows from finance leases $ 242 Financing cash outflows from finance leases $ 2,746 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 109,681 Finance leases $ 2,618 |
Assets And Liabilities, Leases | Supplemental balance sheet information related to the Company’s leases as of December 31, 2019 was as follows (in thousands): Operating leases Assets Operating lease assets, net of accumulated depreciation $ 128,529 Liabilities Current operating lease liabilities (61,198 ) Operating lease liabilities (69,195 ) Total operating lease liabilities $ (130,393 ) Finance leases Assets Property and equipment, gross $ 8,418 Accumulated depreciation (5,063 ) Property and equipment, net $ 3,355 Liabilities Other current liabilities $ (2,101 ) Financing lease liabilities (1,320 ) Total finance liabilities $ (3,421 ) Weighted average remaining lease term (in years) Operating leases 3.0 Finance leases 1.8 Weighted average discount rate Operating leases 4.7 % Finance leases 5.6 % |
Lessee, Operating Lease, Liability, Maturity | Maturities of the Company’s lease liabilities as of December 31, 2019 were as follows (in thousands): Operating leases Finance leases 2020 $ 65,408 $ 2,234 2021 36,386 1,176 2022 16,240 184 2023 8,792 13 2024 7,750 — Thereafter 5,063 — Total lease payments $ 139,639 $ 3,607 Less imputed interest (9,246 ) (186 ) Total lease obligations $ 130,393 $ 3,421 Less: Current obligations (61,198 ) (2,101 ) Long-term lease obligations $ 69,195 $ 1,320 |
Finance Lease, Liability, Maturity | Maturities of the Company’s lease liabilities as of December 31, 2019 were as follows (in thousands): Operating leases Finance leases 2020 $ 65,408 $ 2,234 2021 36,386 1,176 2022 16,240 184 2023 8,792 13 2024 7,750 — Thereafter 5,063 — Total lease payments $ 139,639 $ 3,607 Less imputed interest (9,246 ) (186 ) Total lease obligations $ 130,393 $ 3,421 Less: Current obligations (61,198 ) (2,101 ) Long-term lease obligations $ 69,195 $ 1,320 |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 31, 2018, minimum future contractual payments for long-term operating leases under the scope of ASC 840 were as follows (in thousands): Operating leases (1) Finance leases 2019 $ 71,998 $ 2,413 2020 39,403 1,288 2021 26,658 436 2022 22,473 51 2023 21,822 14 Thereafter 148,508 — Total lease payments $ 330,862 $ 4,202 (1) Operating leases included minimum future contractual payments for long-term operating leases that have not commenced. |
Schedule of Future Minimum Lease Payments for Capital Leases | As of December 31, 2018, minimum future contractual payments for long-term operating leases under the scope of ASC 840 were as follows (in thousands): Operating leases (1) Finance leases 2019 $ 71,998 $ 2,413 2020 39,403 1,288 2021 26,658 436 2022 22,473 51 2023 21,822 14 Thereafter 148,508 — Total lease payments $ 330,862 $ 4,202 (1) Operating leases included minimum future contractual payments for long-term operating leases that have not commenced. |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Allocation of Net Income to Common Stockholders and EPS Computations | The following table reflects the allocation of net income to common stockholders and EPS computations for the periods indicated based on a weighted average number of shares of common stock outstanding for the period: Year ended December 31, 2019 2018 2017 Basic EPS (in thousands, except per share data) Numerator: Basic net income attributable to Parsley Energy, Inc. Stockholders $ 175,212 $ 369,127 $ 106,774 Denominator: Basic weighted average shares outstanding 279,636 272,226 240,733 Basic EPS attributable to Parsley Energy, Inc. Stockholders $ 0.63 $ 1.36 $ 0.44 Diluted EPS Numerator: Net income attributable to Parsley Energy, Inc. Stockholders 175,212 369,127 106,774 Effect of conversion of the shares of Company’s Class B common stock to shares of the Company’s Class A common stock — — 17,646 Diluted net income attributable to Parsley Energy, Inc. Stockholders $ 175,212 $ 369,127 $ 124,420 Denominator: Basic weighted average shares outstanding 279,636 272,226 240,733 Effect of dilutive securities: Class B common stock — — 54,665 Time-Based Restricted Stock and Time-Based Restricted Stock Units 536 658 1,114 Diluted weighted average shares outstanding (1) 280,172 272,884 296,512 Diluted EPS attributable to Parsley Energy, Inc. Stockholders $ 0.63 $ 1.35 $ 0.42 (1) As of December 31, 2019 , there were 790,507 and 358,240 PSAs and performance-based restricted stock units (“PSUs”), respectively. As of December 31, 2018 and 2017, there were 1,338,439 PSAs and 640,062 PSUs, respectively. PSAs and PSUs could vest in the future based on predetermined performance and market goals. PSAs and PSUs were not included in the computation of EPS for the years ended December 31, 2019 , 2018 and 2017 , respectively because the performance and market conditions had not been met, assuming the end of the reporting period was the end of the contingency period. |
Summary of Noncontrolling Interest Income | The following table summarizes the net income (loss) attributable to noncontrolling interests: Year ended December 31, 2019 2018 2017 (in thousands) Net income (loss) attributable to the noncontrolling interests of: Parsley LLC $ 35,231 $ 76,079 $ 17,645 Pacesetter Drilling, LLC (25 ) 763 (499 ) Total net income attributable to noncontrolling interests $ 35,206 $ 76,842 $ 17,146 |
Dividends Declared | The following table sets forth information with respect to cash dividends and distributions declared by the Company’s board of directors during 2019, on its own behalf and in its capacity as the managing member of Parsley LLC, on issued and outstanding shares of Class A common stock and PE Units: Declaration Date Record Date Payment Date Dividend/Distribution Amount (1) Total Dividend/Distribution Payment (2) August 6, 2019 September 20, 2019 September 30, 2019 $ 0.03 $ 9,547 November 5, 2019 December 10, 2019 December 20, 2019 $ 0.03 $ 9,548 (1) Per share of Class A common stock and per PE Unit. The portion of the Parsley LLC distribution attributable to PE Units held by the Company was used to fund the quarterly dividend on issued and outstanding shares of Class A common stock. (2) Reflects total cash dividend and distribution payments made, or to be made, to holders of Class A common stock and PE Unitholders (other than the Company) as of the applicable record date. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, by Award | Stock-based compensation expense recorded for each type of stock-based compensation award for the years ended December 31, 2019 , 2018 and 2017 is as follows (in thousands): Year ended December 31, 2019 2018 2017 Time-based restricted stock (1) $ 4,256 $ 7,200 $ 5,492 Time-based restricted stock units (1) 9,395 5,690 7,778 Performance-based restricted stock (2) 4,332 6,987 6,349 Performance-based restricted stock units 2,699 — — Total stock-based compensation $ 20,682 $ 19,877 $ 19,619 (1) Stock-based compensation expense relating to RSAs and RSUs with ratable vesting is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in-substance, multiple awards. (2) Includes stock-based compensation expense related to historical PSUs prior to the conversion of such awards to PSAs. |
Summary of RSA, Activity | RSA activity for the year ended December 31, 2019 : Time-Based Restricted Stock Grant Date Fair Value Outstanding at January 1, 2019 715,852 $ 23.44 Forfeited (19,763 ) $ 25.55 Vested (309,699 ) $ 19.32 Outstanding at December 31, 2019 386,390 $ 26.64 |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes the RSU activity for the year ended December 31, 2019 : Time-Based Restricted Stock Units Grant Date Fair Value Outstanding at January 1, 2019 723,354 $ 23.78 Awards granted 992,825 $ 17.83 Forfeited (174,643 ) $ 20.82 Vested (301,078 ) $ 19.43 Outstanding at December 31, 2019 1,240,458 $ 20.48 |
Schedule of Valuation Assumptions | The Company used the following assumptions to estimate the fair value of PSUs and PSAs granted during the periods indicated: Year Ended December 31, 2019 2018 2017 Risk-free interest rate 2.46 % 2.25 % 1.45 % Range of volatilities 32.4% - 61.8% 34.4% - 82.2% 37.7% - 79.5% |
Schedule of PSU, Activity | The following table summarizes the PSU activity for the year ended December 31, 2019 : Performance-Based Restricted Stock Units Grant Date Fair Value Outstanding at January 1, 2019 — $ — Awards granted 376,166 $ 24.05 Vested (2,455 ) $ 24.05 Forfeited (15,471 ) $ 24.05 Outstanding at December 31, 2019 358,240 $ 24.05 The following table summarizes the PSA activity for the year ended December 31, 2019 : Performance-Based Restricted Stock Grant Date Fair Value Outstanding at January 1, 2019 1,338,439 $ 15.07 Vested (481,820 ) $ 13.07 Forfeited (66,112 ) $ 15.74 Outstanding at December 31, 2019 790,507 $ 16.24 |
Schedule of Expected Share Based Compensation Expense | The following table reflects the future stock-based compensation expense to be recorded for the stock-based compensation awards that were outstanding at December 31, 2019 (in thousands): Time-Based Restricted Stock Time-Based Restricted Stock Units Performance-Based Restricted Stock Performance-Based Restricted Stock Units Total 2020 $ 1,933 $ 7,324 $ 2,111 $ 2,992 $ 14,360 2021 193 4,455 — 2,984 7,632 2022 — 458 — — 458 Total $ 2,126 $ 12,237 $ 2,111 $ 5,976 $ 22,450 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Provision | The components of the income tax expense were as follows for the periods indicated (in thousands): Year Ended December 31, 2019 2018 2017 Federal: Current $ — $ — $ (44 ) Deferred 58,310 101,023 (423 ) Total federal 58,310 101,023 (467 ) State, net of federal benefit: Deferred 3,127 4,452 6,175 Total state 3,127 4,452 6,175 Income tax expense $ 61,437 $ 105,475 $ 5,708 |
Schedule of Reconciliation of Income Tax (Benefit) Provision with Income Tax Expense at Federal Statutory Rate | The following table reconciles the income tax expense with income tax expense at the federal statutory rate for the periods indicated (in thousands): Year Ended December 31, 2019 2018 2017 Income before income taxes $ 271,855 $ 551,444 $ 129,628 Less: net income before income taxes attributable (35,710 ) (77,446 ) (18,725 ) Income attributable to Parsley Energy, Inc. Stockholders before income taxes 236,145 473,998 110,903 Income taxes at the federal statutory rate 49,591 99,539 38,816 State income taxes, net of federal benefit 3,127 4,452 6,175 Provision to return adjustment 2,352 (1,018 ) 178 Permanent and other (140 ) (2,285 ) 166 TRA liability change — 92 (12,547 ) Valuation allowance 6,507 4,695 (26,657 ) Valuation allowance due to the reduction in federal statutory rate — — (24,356 ) Income tax provision due to change in federal statutory rate — — 23,933 Income tax expense $ 61,437 $ 105,475 $ 5,708 Net income attributable to Parsley Energy, Inc. Stockholders $ 175,212 $ 369,127 $ 106,774 Net income attributable to noncontrolling interest $ 35,206 $ 76,842 $ 17,146 |
Schedule of Tax Effects of Significant Portions of the Deferred Tax Assets and Deferred Tax Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows (in thousands): December 31, 2019 2018 Assets: Asset retirement obligations $ 4,923 $ 4,723 Deferred stock-based compensation 7,196 6,718 Derivative fair value loss 5,985 — Accrued compensation 5,642 4,650 Lease liabilities 27,089 — Earnings in investment in subsidiary 182 — Other 1,910 — Net operating loss carryforward 170,520 299,250 Total deferred tax assets 223,447 315,341 Less: Valuation allowance (20,382 ) (13,862 ) Net deferred tax assets 203,065 301,479 Liabilities: Book basis of oil and natural gas properties (369,474 ) (423,102 ) Derivative fair value gain — (9,450 ) Earnings in investment in subsidiary — (156 ) Lease right-of-use assets (27,000 ) — Other — (294 ) Total deferred tax liabilities (396,474 ) (433,002 ) Net deferred tax liability $ (193,409 ) $ (131,523 ) |
Schedule Of Open Tax Years | The Company’s earliest open years in its key jurisdictions are as follows: U.S. Federal 2016 State of Texas 2015 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Company Drilling and Derivative Commitments | Derivative Obligations The Company’s future deferred premium payments related to derivative agreements as of December 31, 2019 was as follows (in thousands): Payments Due by Period 2020 2021 2022 2023 2024 Thereafter Total Derivative obligations $ 58,855 $ — $ — $ — $ — $ — $ 58,855 |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 31, 2018, minimum future contractual payments for long-term operating leases under the scope of ASC 840 were as follows (in thousands): Operating leases (1) Finance leases 2019 $ 71,998 $ 2,413 2020 39,403 1,288 2021 26,658 436 2022 22,473 51 2023 21,822 14 Thereafter 148,508 — Total lease payments $ 330,862 $ 4,202 (1) Operating leases included minimum future contractual payments for long-term operating leases that have not commenced. |
Oil and Gas Delivery Commitments and Contracts Disclosure | For the years ended December 31, 2020 2021 2022 2023 2024 Thereafter Total Oil (MMBbl) (1) 26.6 45.6 43.3 39.7 36.6 61.5 253.3 Dollar commitment (2) (in thousands) $ 41,534 $ 79,530 $ 79,770 $ 75,112 $ 70,962 $ 126,666 $ 473,574 (1) This table is based on agreements that the Company has signed with third-party pipeline operators as of December 31, 2019. Of the total 253.3 MMBbls, 99.0 MMBbls are subject to the commencement of operations of third party-terminal and pipeline systems. (2) These amounts equal the total deficiency fees payable, based on assumptions management considers reasonable, if the Company is unable to meet all of its contractual delivery commitments under its long-term transportation and crude oil sales agreements. Of the total $473.6 million, $204.1 million is associated with delivery commitments subject to the commencement of operations of third-party terminal and pipeline systems. |
Disclosures about Fair Value _2
Disclosures about Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value | The following summarizes the fair value of the Company’s derivative assets and liabilities according to their fair value hierarchy as of the reporting dates indicated (in thousands): December 31, 2019 Level 1 Level 2 Level 3 Total Assets: Commodity derivative instruments (1) $ — $ 127,632 $ — $ 127,632 Total assets $ — $ 127,632 $ — $ 127,632 Liabilities: Commodity derivative instruments (1) $ — $ (158,522 ) $ — $ (158,522 ) Total liabilities $ — $ (158,522 ) $ — $ (158,522 ) Net liability $ — $ (30,890 ) $ — $ (30,890 ) December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Commodity derivative instruments (1) — 211,421 — 211,421 Total assets — 211,421 — 211,421 Liabilities: Commodity derivative instruments (1) — (168,963 ) — (168,963 ) Total liabilities — (168,963 ) — (168,963 ) Net asset $ — $ 42,458 $ — $ 42,458 (1) Includes deferred premiums to be settled upon expiration of the contract. |
Schedule Of Fair Value Of Financial Instruments Not Recorded At Fair Value Table | The following table provides the fair value of financial instruments that are not recorded at fair value in the consolidated balance sheets (in thousands): December 31, 2019 December 31, 2018 Carrying Amount Fair Value Carrying Amount Fair Value Long-term debt: 6.250% senior unsecured notes due 2024 $ 400,000 417,028 $ 400,000 $ 394,144 5.375% senior unsecured notes due 2025 650,000 669,552 650,000 605,885 5.250% senior unsecured notes due 2025 450,000 464,697 450,000 424,980 5.625% senior unsecured notes due 2027 700,000 742,840 700,000 636,041 Revolving Credit Agreement — — — — |
Schedule of Cash and Cash Equivalents [Table Text Block] | . |
Restructuring and Other Termi_2
Restructuring and Other Termination Costs (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Termination Costs | The following table summarizes the Company’s termination costs for the years ended December 31, 2019, 2018 and 2017, respectively (in thousands): Year ended December 31, 2019 2018 2017 Termination costs $ 1,562 $ — $ — Total restructuring and other termination costs $ 1,562 $ — $ — |
Supplemental Disclosure of Oi_2
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Extractive Industries [Abstract] | |
Schedule of Capitalized Costs | Capitalized Costs December 31, 2019 2018 (in thousands) Oil and natural gas properties: Proved properties $ 8,799,840 $ 6,659,444 Unproved properties 2,472,284 3,288,802 Total oil and natural gas properties 11,272,124 9,948,246 Less accumulated depreciation, depletion and amortization (2,117,963 ) (1,295,098 ) Net oil and natural gas properties capitalized $ 9,154,161 $ 8,653,148 |
Schedule of Costs Incurred for Oil and Gas Producing Activities | Costs Incurred for Oil and Natural Gas Producing Activities Year Ended December 31, 2019 2018 2017 (in thousands) Acquisition costs: Proved properties $ 24,855 $ 17,310 $ 482,160 Unproved properties 27,165 119,662 2,893,434 Development costs 1,372,919 1,762,218 1,207,401 Total $ 1,424,939 $ 1,899,190 $ 4,582,995 |
Results of Operations for Oil and Gas Producing Activities Disclosure | The following table sets forth the revenues and expenses related to the production and sale of oil, natural gas and NGLs. It does not include any interest costs or general and administrative costs and, therefore, is not necessarily indicative of the contribution to consolidated net operating results of the Company’s oil, natural gas and NGLs operations. Year Ended December 31, 2019 2018 2017 (in thousands) Oil, natural gas and natural gas liquid sales (1) $ 1,949,977 $ 1,814,747 $ 961,994 Lease operating expenses (177,148 ) (144,292 ) (102,169 ) Transportation and processing costs (1) (41,198 ) (32,573 ) — Production and ad valorem taxes (124,961 ) (108,342 ) (59,641 ) Depreciation, depletion and amortization (775,849 ) (569,691 ) (340,778 ) Accretion of asset retirement obligations (1,465 ) (1,422 ) (971 ) Total $ 829,356 $ 958,427 $ 458,435 (1) Natural gas and NGLs sales and transportation and processing costs for the years ended December 31, 2019 and 2018 reflect adjustments associated with Parsley’s adoption of ASC 606, effective January 1, 2018. |
Schedule of Reserve Quantity Information Average Sales Price | The pricing that was used for estimates of the Company’s reserves as of December 31, 2019 was based on an unweighted average 12-month average U.S. Energy Information Administration WTI posted price per Bbl for oil and NGLs and a Waha spot natural gas price per Mcf for natural gas, adjusted for transportation, quality and basis differentials, as set forth in the following table: Year Ended December 31, 2019 2018 2017 Oil (per Bbl) $ 53.97 $ 61.88 $ 49.17 Natural gas (per Mcf) $ 0.71 $ 1.64 $ 2.53 Natural gas liquids (per Bbl) $ 15.46 $ 28.05 $ 22.20 |
Schedule of Proved Developed and Proved Undeveloped Reserves | The following table and subsequent narrative disclosure provides a roll forward of the total proved reserves for the years ended December 31, 2019 , 2018 and 2017 , as well as proved developed and proved undeveloped reserves at the beginning and end of each respective year: Year Ended December 31, 2019 Crude Oil (MBbls) Natural Gas NGLs Total Proved Developed and Undeveloped Reserves: Beginning of the year 294,446 572,038 131,933 521,719 Extensions and discoveries 84,186 132,642 32,457 138,750 Revisions of previous estimates (19,269 ) 60,128 (5,043 ) (14,291 ) Purchases of reserves in place 354 556 107 554 Divestures of reserves in place (1,590 ) (4,189 ) (788 ) (3,076 ) Production (31,664 ) (51,933 ) (11,002 ) (51,322 ) End of the year 326,463 709,242 147,664 592,334 Proved Developed Reserves: Beginning of the year 170,526 358,733 81,000 311,315 End of the year 206,849 472,160 96,202 381,744 Proved Undeveloped Reserves: Beginning of the year 123,920 213,305 50,933 210,404 End of the year 119,614 237,082 51,462 210,590 Year Ended December 31, 2018 Crude Oil (MBbls) Natural Gas NGLs Total Proved Developed and Undeveloped Reserves: Beginning of the year 248,531 451,703 92,632 416,447 Extensions and discoveries 102,274 130,692 35,722 159,778 Revisions of previous estimates (22,047 ) 48,992 16,164 2,283 Purchases of reserves in place 3,379 5,963 1,240 5,613 Divestures of reserves in place (12,335 ) (27,947 ) (5,472 ) (22,465 ) Production (25,356 ) (37,365 ) (8,353 ) (39,937 ) End of the year 294,446 572,038 131,933 521,719 Proved Developed Reserves: Beginning of the year 119,591 240,337 49,751 209,399 End of the year 170,526 358,733 81,000 311,315 Proved Undeveloped Reserves: Beginning of the year 128,940 211,366 42,881 207,048 End of the year 123,920 213,305 50,933 210,404 Year Ended December 31, 2017 Crude Oil (MBbls) Natural Gas NGLs Total Proved Developed and Undeveloped Reserves: Beginning of the year 136,536 223,605 48,543 222,347 Extensions and discoveries 99,916 161,989 33,426 160,340 Revisions of previous estimates (709 ) 32,342 4,522 9,205 Purchases of reserves in place 33,017 64,055 12,121 55,814 Divestures of reserves in place (3,839 ) (6,962 ) (1,468 ) (6,467 ) Production (16,390 ) (23,326 ) (4,512 ) (24,792 ) End of the year 248,531 451,703 92,632 416,447 Proved Developed Reserves: Beginning of the year 61,133 123,946 24,306 106,097 End of the year 119,591 240,337 49,751 209,399 Proved Undeveloped Reserves: Beginning of the year 75,403 99,659 24,237 116,250 End of the year 128,940 211,366 42,881 207,048 |
Schedule of Standardized Measure of Discounted Future Net Cash Flows | The standardized measure of discounted future net cash flows relating to proved oil, natural gas and NGLs reserves is as follows: December 31, 2019 2018 2017 (in thousands) Future cash inflows $ 20,409,082 $ 22,861,246 $ 15,421,590 Future development costs (2,280,552 ) (2,459,587 ) (2,181,447 ) Future production costs (6,240,997 ) (5,944,022 ) (4,536,530 ) Future income tax expenses (1,485,523 ) (2,061,409 ) (1,102,385 ) Future net cash flows 10,402,010 12,396,228 7,601,228 10% discount to reflect timing of cash flows (5,439,514 ) (6,502,326 ) (4,215,321 ) Standardized measure of discounted future net cash flows $ 4,962,496 $ 5,893,902 $ 3,385,907 |
Schedule of Changes in Standardized Measure Discounted Future Net Cash Flows | Changes in the standardized measure of discounted future net cash flows relating to proved oil, natural gas and NGLs reserves are as follows: Year Ended December 31, 2019 2018 2017 (in thousands) Standardized measure of discounted future net cash flows at the beginning of the year $ 5,893,902 $ 3,385,907 $ 1,304,091 Sales of oil and natural gas, net of production costs (1,606,669 ) (1,561,190 ) (800,553 ) Purchase of minerals in place 7,411 76,478 489,910 Divestiture of minerals in place (19,768 ) (167,412 ) (50,257 ) Extensions and discoveries, net of future development costs 1,714,706 3,016,035 1,864,041 Previously estimated development costs incurred during the period 469,798 290,108 58,377 Net changes in prices and production costs (2,205,679 ) 1,065,693 525,693 Changes in estimated future development costs 83,125 (177,118 ) (150,028 ) Revisions of previous quantity estimates (146,203 ) 161,860 142,510 Accretion of discount 677,486 391,803 148,314 Net change in income taxes 187,697 (348,834 ) (353,073 ) Net changes in timing of production and other (93,310 ) (239,428 ) 206,882 Standardized measure of discounted future net cash flows at the end of the year $ 4,962,496 $ 5,893,902 $ 3,385,907 |
Summary of Quarterly Financia_2
Summary of Quarterly Financial Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Results (Unaudited) | The Company’s unaudited quarterly financial data for the years ended December 31, 2019 and 2018 is summarized as follows: First Quarter Second Quarter Third Quarter Fourth Quarter (in thousands, except per share amounts) 2019 Revenues $ 427,671 $ 498,541 $ 510,151 $ 522,451 Operating income $ 116,547 $ 180,837 $ 153,041 $ 86,845 Income tax benefit (expense) $ 7,790 $ (32,625 ) $ (34,953 ) $ (1,649 ) Net (loss) income $ (28,003 ) $ 134,994 $ 139,600 $ (36,173 ) Net (loss) income attributable to noncontrolling interests $ (3,939 ) $ 19,059 $ 19,890 $ 196 Net (loss) income attributable to Parsley Energy, Inc. stockholders $ (24,064 ) $ 115,935 $ 119,710 $ (36,369 ) Net (loss) income per common share: Basic $ (0.09 ) $ 0.41 $ 0.43 $ (0.13 ) Diluted $ (0.09 ) $ 0.41 $ 0.43 $ (0.13 ) 2018 Revenues $ 392,741 $ 467,788 $ 511,022 $ 454,880 Operating income $ 169,207 $ 215,505 $ 220,992 $ 22,171 Income tax expense $ (23,325 ) $ (33,243 ) $ (32,454 ) $ (16,453 ) Net income $ 105,463 $ 140,958 $ 134,149 $ 65,399 Net income attributable to noncontrolling interests $ 22,573 $ 21,803 $ 20,840 $ 11,626 Net income attributable to Parsley Energy, Inc. stockholders $ 82,890 $ 119,155 $ 113,309 $ 53,773 Net income per common share: Basic $ 0.32 $ 0.44 $ 0.41 $ 0.19 Diluted $ 0.32 $ 0.44 $ 0.41 $ 0.19 |
Organization and Nature of Op_2
Organization and Nature of Operations - Double Eagle Acquisition (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 20, 2017 | Dec. 31, 2019 | Dec. 31, 2018 |
Double Eagle Acquisition | |||
Business Acquisition [Line Items] | |||
Total consideration for acquisition | $ 1,395.6 | ||
PE Units | Double Eagle Acquisition | |||
Business Acquisition [Line Items] | |||
Consideration transferred (shares) | 39,848,518 | ||
Class B common stock | |||
Business Acquisition [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Class B common stock | Common Stock | Double Eagle Acquisition | |||
Business Acquisition [Line Items] | |||
Consideration transferred (shares) | 39,848,518 | ||
Common stock, par value (in dollars per share) | $ 0.01 |
Organization and Nature of Op_3
Organization and Nature of Operations - Public Offering Of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Subsidiary, Sale of Stock [Line Items] | |||
Proceeds from issuance of common stock, net | $ 0 | $ 0 | $ 2,123,344 |
Class A Common Stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Class A Common Stock | Common Stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Common stock sold in initial public offering net of offering costs (in shares) | 66,700,000 | ||
Class A Common Stock | Public Offering | Common Stock | |||
Subsidiary, Sale of Stock [Line Items] | |||
Common stock sold in initial public offering net of offering costs (in shares) | 66,700,000 | ||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Option to purchase additional shares (in shares) | 8,700,000 | ||
Gross proceeds received from public offering | $ 2,168,900 | ||
Proceeds from issuance of common stock, net | $ 2,123,500 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Summary Of Significant Accounting Policies [Line Items] | |||||
Allowance for doubtful accounts receivable | $ 0 | $ 2,800,000 | $ 0 | $ 2,800,000 | |
Undeveloped leasehold costs | 2,500,000,000 | 2,500,000,000 | |||
Undeveloped leasehold costs to expire in 2020 | 183,400,000 | 183,400,000 | |||
Undeveloped leasehold expense | $ 62,800,000 | $ 127,000,000 | |||
Depreciation expense | 18,900,000 | 15,500,000 | $ 11,500,000 | ||
Impairment of equity investments | 0 | 0 | 0 | ||
Contribution by company | $ 3,900,000 | $ 3,800,000 | $ 2,800,000 | ||
Number of segments | segment | 1 | ||||
Minimum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, estimated useful lives | 2 years | ||||
Maximum | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Property and equipment, estimated useful lives | 35 years | ||||
SPS | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Equity method investment, ownership percentage | 42.50% | 42.50% | |||
Parsley LLC | Parent | Pacesetter Drilling, LLC | |||||
Summary Of Significant Accounting Policies [Line Items] | |||||
Percentage of ownership interest, parent | 63.00% | 63.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Revenue Percentage Accounted by Purchasers (Details) - Customer Concentration Risk - Sales Revenue, Net | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shell Trading (US) Company | |||
Concentration Risk [Line Items] | |||
Revenue percentage accounted by purchasers | 55.00% | 53.00% | 62.00% |
Lion Oil, Inc. | |||
Concentration Risk [Line Items] | |||
Revenue percentage accounted by purchasers | 30.00% | 22.00% | 3.00% |
Targa Pipeline Mid-Continent, LLC | |||
Concentration Risk [Line Items] | |||
Revenue percentage accounted by purchasers | 8.00% | 11.00% | 13.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Exploration Costs Incurred (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items] | |||||
Undeveloped leasehold expense | $ 62,800 | $ 127,000 | |||
Exploration and abandonment costs | $ 100,211 | $ 162,539 | $ 39,345 | ||
Leasehold abandonments and impairments | |||||
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items] | |||||
Exploration and abandonment costs | 99,225 | 160,834 | 32,872 | ||
Geological and geophysical costs | |||||
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items] | |||||
Exploration and abandonment costs | 978 | 1,479 | 5,429 | ||
Other | |||||
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items] | |||||
Exploration and abandonment costs | $ 8 | $ 226 | $ 1,044 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Changes in Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Asset retirement obligations, beginning of year | $ 26,884 | $ 27,170 | |
Additional liabilities incurred | 1,490 | 2,111 | |
Dispositions of wells | (339) | (3,557) | |
Accretion expense | 1,465 | 1,422 | $ 971 |
Liabilities settled upon plugging and abandoning wells | (484) | (262) | |
Revision of estimates | (5,577) | 0 | |
Asset retirement obligations, end of year | $ 23,439 | $ 26,884 | $ 27,170 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - New Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Increase (decrease) in operating activities | $ 1,286,279 | $ 1,218,974 | $ 690,750 | |
Provisional income tax expense | 23,900 | |||
Remeasurement of deferred taxes | 23,900 | |||
Deferred taxes valuation allowance reduction | $ 24,300 | |||
Operating lease liabilities | 130,393 | |||
Operating lease, right-of-use asset | $ 128,529 | |||
Minimum | ASU 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease liabilities | $ 143,900 | |||
Operating lease, right-of-use asset | 145,000 | |||
Maximum | ASU 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease, right-of-use asset | $ 155,000 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - ASC Topic 606 (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Net income attributable to Parsley Energy, Inc. stockholders | $ (36,369) | $ 119,710 | $ 115,935 | $ (24,064) | $ 53,773 | $ 113,309 | $ 119,155 | $ 82,890 | $ 175,212 | $ 369,127 | $ 106,774 |
Minimum | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Oil and gas delivery commitments and contracts, term | 30 days | ||||||||||
Maximum | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Oil and gas delivery commitments and contracts, term | 90 days | ||||||||||
Oil sales | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenues | $ 1,757,315 | 1,536,244 | 802,230 | ||||||||
Natural gas sales | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenues | 36,774 | 51,231 | 56,571 | ||||||||
NGLs (MBbls) | Plant Inlet | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenues | 8,700 | 13,600 | |||||||||
Natural gas liquids sales | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenues | 155,888 | 227,272 | $ 103,193 | ||||||||
Natural gas liquids sales | Plant Inlet | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Revenues | $ 30,300 | $ 59,500 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Summary of Outstanding Oil and Gas Derivative Contracts and Weighted Average Oil and Gas Prices (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2020MMBTU$ / MBbls$ / MMBTU$ / bblMBbls | Dec. 31, 2019USD ($)MBbls | |
Subject to Master Netting Agreement with Counter Party | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount, Volume | MBbls | 1,800 | |
Fair value of notional MBbls excluded | $ | $ 9 | |
Crude Options | Put Option | Subject to Master Netting Agreement with Counter Party | ||
Derivative [Line Items] | ||
Fair value of notional MBbls excluded | $ | $ 9 | |
Crude Options | Forecast | Put Option | Subject to Master Netting Agreement with Counter Party | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount, Volume | MBbls | 1,800 | |
Three-way collars | Crude Options | Forecast | Put Option | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount, Volume | MBbls | 7,800 | |
Midland-Cushing Index | Crude Options | Forecast | Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount, Volume | MBbls | 600 | |
Derivative, Swap Type, Fixed Price | $ / bbl | 55.20 | |
Midland-Cushing Index | Crude Options | Forecast | Basis Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount, Volume | MBbls | 900 | |
Strike price ($/Bbl) | 0.25 | |
Houston-Cushing Index | Crude Options | Forecast | Swap [Member] | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount, Volume | MBbls | 780 | |
Derivative, Swap Type, Fixed Price | $ / bbl | 56.30 | |
Waha | NGLs (MBbls) | Forecast | Swap [Member] | ||
Derivative [Line Items] | ||
Notional (MBbl) | MMBTU | 17,640,000 | |
Strike price ($/Bbl) | $ / MMBTU | 0.88 | |
Three Way Collars, WTI Magellan East Houston | Crude Options | Forecast | Put Option | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount, Volume | MBbls | 15,900 | |
Three way collars, Brent | Crude Options | Forecast | Put Option | ||
Derivative [Line Items] | ||
Derivative, Nonmonetary Notional Amount, Volume | MBbls | 3,450 | |
Long | Three-way collars | Crude Options | Forecast | Put Option | ||
Derivative [Line Items] | ||
Weighted average strike price (in dollars per unit) | 56 | |
Long | Three Way Collars, WTI Magellan East Houston | Crude Options | Forecast | Put Option | ||
Derivative [Line Items] | ||
Weighted average strike price (in dollars per unit) | 58.55 | |
Long | Three way collars, Brent | Crude Options | Forecast | Put Option | ||
Derivative [Line Items] | ||
Weighted average strike price (in dollars per unit) | 62.26 | |
Short | Three-way collars | Crude Options | Forecast | Put Option | ||
Derivative [Line Items] | ||
Weighted average strike price (in dollars per unit) | 46 | |
Short | Three-way collars | Crude Options | Forecast | Call Option | ||
Derivative [Line Items] | ||
Weighted average strike price (in dollars per unit) | 66.92 | |
Short | Three Way Collars, WTI Magellan East Houston | Crude Options | Forecast | Put Option | ||
Derivative [Line Items] | ||
Weighted average strike price (in dollars per unit) | 48.55 | |
Short | Three Way Collars, WTI Magellan East Houston | Crude Options | Forecast | Call Option | ||
Derivative [Line Items] | ||
Weighted average strike price (in dollars per unit) | 73.24 | |
Short | Three way collars, Brent | Crude Options | Forecast | Put Option | ||
Derivative [Line Items] | ||
Weighted average strike price (in dollars per unit) | 52.26 | |
Short | Three way collars, Brent | Crude Options | Forecast | Call Option | ||
Derivative [Line Items] | ||
Weighted average strike price (in dollars per unit) | 73.48 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Derivative Instruments, Gain (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | |||
Changes in fair value of derivative instruments | $ (131,212) | $ 50,342 | $ (66,135) |
Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Changes in fair value of derivative instruments | (75,728) | 113,824 | (44,702) |
Net derivative settlements | (12,206) | 8,084 | 15,670 |
Net premiums on options that settled during the period | (43,278) | (71,566) | (37,103) |
(Loss) gain on derivatives | $ (131,212) | $ 50,342 | $ (66,135) |
Derivative Financial Instrume_5
Derivative Financial Instruments - Schedule of Netting Offsets of Derivative Asset and Liability Positions (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Derivative assets with right of offset or master netting agreements | ||
Gross Amount | $ 136,627 | $ 236,431 |
Netting Adjustments | (8,995) | (25,010) |
Net Exposure | 127,632 | 211,421 |
Derivative liabilities with right of offset or master netting agreements | ||
Gross Amount | (167,517) | (193,973) |
Netting Adjustments | 8,995 | 25,010 |
Net Exposure | $ (158,522) | $ (168,963) |
Acquisitions of Oil and Natur_3
Acquisitions of Oil and Natural Gas Properties (Details) - USD ($) $ in Thousands | Apr. 20, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||
Acquisition costs | $ 7,616 | $ 167 | $ 10,977 | |
Costs incurred, acquisition of unproved oil and gas properties | 27,165 | 119,662 | 2,893,434 | |
Costs Incurred, Acquisition of Oil and Gas Properties with Proved Reserves | 24,855 | 17,310 | 482,160 | |
Acquisition from Unaffiliated Individuals and Entities | ||||
Business Acquisition [Line Items] | ||||
Total consideration for acquisition | 3,181,100 | |||
Costs incurred, acquisition of unproved oil and gas properties | 2,716,900 | |||
Costs Incurred, Acquisition of Oil and Gas Properties with Proved Reserves | 464,200 | |||
Double Eagle Acquisition | ||||
Business Acquisition [Line Items] | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents | $ 2,469 | |||
Total consideration for acquisition | 1,395,600 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 20,756 | |||
BusinessCombinationRecognizedIdentifiableAssetsAcquiredandLiabilitiesAssumedDerivatives | 3,970 | |||
BusinessCombinationRecognizedIdentifiableAssetsAcquiredandLiabilitiesAssumedProvedOilandNaturalGasProperties | 353,000 | |||
BusinessCombinationRecognizedIdentifiableAssetsAcquiredandLiabilitiesAssumedUnprovedOilandNaturalGasProperties | 2,257,266 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets | 2,637,461 | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable | (48,179) | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Liabilities Noncurrent | (10,167) | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities | (58,346) | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net | $ 2,579,115 | |||
Leasehold Improvements | ||||
Business Acquisition [Line Items] | ||||
Acquisition costs | 52,000 | 137,000 | 194,500 | |
Costs incurred, acquisition of unproved oil and gas properties | 27,100 | 119,700 | $ 176,500 | |
Costs Incurred, Acquisition of Oil and Gas Properties with Proved Reserves | $ 24,900 | $ 17,300 | ||
PE Units | Double Eagle Acquisition | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred (shares) | 39,848,518 | |||
Class B common stock | Common Stock | Double Eagle Acquisition | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred (shares) | 39,848,518 |
Oil and Natural Gas Properties
Oil and Natural Gas Properties - Oil and Natural Gas Properties (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Oil and natural gas properties: | ||
Subject to depletion | $ 8,799,840 | $ 6,659,444 |
Not subject to depletion | 2,472,284 | 3,288,802 |
Oil and natural gas properties, successful efforts method | 11,272,124 | 9,948,246 |
Less accumulated depreciation, depletion and impairment | (2,117,963) | (1,295,098) |
Total oil and natural gas properties, net | 9,154,161 | 8,653,148 |
Other property, plant and equipment | 219,857 | 206,662 |
Less accumulated depreciation | (49,551) | (35,923) |
Other property, plant and equipment, net | 170,306 | 170,739 |
Total property, plant and equipment, net | 9,324,467 | 8,823,887 |
Incurred in 2019 | ||
Oil and natural gas properties: | ||
Not subject to depletion | 318,190 | 0 |
Incurred in 2018 | ||
Oil and natural gas properties: | ||
Not subject to depletion | 402,584 | 677,920 |
Incurred in 2017 and prior | ||
Oil and natural gas properties: | ||
Not subject to depletion | $ 1,751,510 | $ 2,610,882 |
Oil and Natural Gas Propertie_2
Oil and Natural Gas Properties - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)Well | Dec. 31, 2018USD ($)Well | Dec. 31, 2017USD ($)Well | |
Property, Plant and Equipment [Abstract] | |||
Capitalized costs excluded from depletion | $ 2,472,284,000 | $ 3,288,802,000 | |
Depletion expense on capitalized oil and gas property | $ 775,800,000 | $ 569,700,000 | $ 340,800,000 |
Number of exploratory wells in progress | Well | 0 | 0 | 0 |
Additions pending determination of proved reserves | $ 210,800,000 | $ 275,300,000 | |
Interest costs capitalized | $ 0 | $ 0 | $ 0 |
Sales of Oil and Natural Gas _2
Sales of Oil and Natural Gas Properties (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)a | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on sale of property | $ 2,095,000 | $ 6,454,000 | $ (14,332,000) |
Proceeds from sale and exchanges of properties | 38,500,000 | 188,200,000 | |
Loss on sale of oil and natural gas properties | 0 | 0 | 14,300,000 |
Proceeds from sales of property, plant and equipment | 41,326,000 | 233,647,000 | $ 30,537,000 |
Gain (Loss) on Disposition of Property Plant Equipment | 2,100,000 | ||
Oil and natural gas properties sold, gross | a | 21,939 | ||
Oil and natural gas properties sold | a | 7,476 | ||
2019 Disposals | Disposed of by sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Proceeds from sales of property, plant and equipment | $ 2,800,000 | ||
Certain Surface And Mineral Acreage | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Receivable for proceeds from sale of properties | 34,400,000 | ||
Gain on sale of property | 5,200,000 | ||
Pacesetter Physical Assets | Disposed of by sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on sale of property | 1,200,000 | ||
Proceeds from sales of property, plant and equipment | 11,000,000 | ||
Disposal consideration | 13,100,000 | ||
Term loan | Pacesetter Physical Assets | Disposed of by sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Financing receivable | $ 2,100,000 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 13, 2016 | Aug. 19, 2016 | May 27, 2016 |
Debt Instrument [Line Items] | |||||
Revolving Credit Agreement | $ 0 | $ 0 | |||
Capital leases(1) | 0 | 4,202 | |||
Total debt | 2,200,000 | 2,204,202 | |||
Debt issuance costs on senior unsecured notes | (19,448) | (22,918) | |||
Premium on senior unsecured notes | 2,280 | 2,796 | |||
Less: current portion | 0 | (2,413) | |||
Total long-term debt | $ 2,182,832 | 2,181,667 | |||
6.250% senior unsecured notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 6.25% | ||||
5.375% senior unsecured notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.375% | ||||
5.250% senior unsecured notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.25% | ||||
5.625% senior unsecured notes due 2027 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.625% | ||||
Senior Notes | 6.250% senior unsecured notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured notes | $ 400,000 | 400,000 | |||
Premium on senior unsecured notes | $ 4,000 | ||||
Stated interest rate | 6.25% | 6.25% | 6.25% | ||
Senior Notes | 5.375% senior unsecured notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured notes | $ 650,000 | 650,000 | |||
Stated interest rate | 5.375% | 5.375% | |||
Senior Notes | 5.250% senior unsecured notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured notes | $ 450,000 | 450,000 | |||
Stated interest rate | 5.25% | ||||
Senior Notes | 5.625% senior unsecured notes due 2027 | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured notes | $ 700,000 | $ 700,000 | |||
Stated interest rate | 5.625% |
Debt - Revolving Credit Agreeme
Debt - Revolving Credit Agreement (Details) - USD ($) | Oct. 28, 2016 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | |||
Revolving credit agreement | $ 0 | $ 0 | |
Revolving Credit Agreement | |||
Debt Instrument [Line Items] | |||
Term | 5 years | ||
Revolving credit agreement, borrowing base | $ 1,000,000,000 | ||
Revolving credit agreement, current borrowing base | 2,700,000,000 | ||
Revolving Credit Agreement | Maximum | |||
Debt Instrument [Line Items] | |||
Revolving credit agreement, commitment fee | 0.50% | ||
Revolving Credit Agreement | Minimum | |||
Debt Instrument [Line Items] | |||
Revolving credit agreement, commitment fee | 0.375% | ||
Revolving Credit Agreement | Weighted Average | |||
Debt Instrument [Line Items] | |||
Revolving credit agreement, weighted average interest rate | 1.50% | ||
Line of Credit | |||
Debt Instrument [Line Items] | |||
Revolving credit agreement, borrowing base | $ 5,000,000,000 | ||
Revolving credit agreement, borrowing remaining | $ 993,300,000 | ||
Line of Credit | Revolving Credit Agreement | |||
Debt Instrument [Line Items] | |||
Term | 5 years | ||
Revolving credit agreement | $ 0 | ||
Current ratio | 1.00% | ||
Maximum permitted consolidated leverage ratio | 0.040 | ||
Line of Credit | Revolving Credit Agreement | Eurodollar | |||
Debt Instrument [Line Items] | |||
Alternate margin basis rate if consolidated leverage ratio is greater than 3.5 | 0.50% | ||
Line of Credit | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Revolving credit agreement | $ 6,700,000 | ||
Eurodollar Loans | Line of Credit | Revolving Credit Agreement | Maximum | LIBOR | |||
Debt Instrument [Line Items] | |||
Applicable margin basis rate | 2.25% | ||
Eurodollar Loans | Line of Credit | Revolving Credit Agreement | Minimum | LIBOR | |||
Debt Instrument [Line Items] | |||
Applicable margin basis rate | 1.25% | ||
Alternate Base Rate Loans | Line of Credit | Revolving Credit Agreement | LIBOR | |||
Debt Instrument [Line Items] | |||
Applicable margin basis rate | 1.00% | ||
Alternate Base Rate Loans | Line of Credit | Revolving Credit Agreement | Federal Funds Effective Swap Rate | |||
Debt Instrument [Line Items] | |||
Applicable margin basis rate | 0.50% | ||
Alternate Base Rate Loans | Line of Credit | Revolving Credit Agreement | Maximum | LIBOR | |||
Debt Instrument [Line Items] | |||
Applicable margin basis rate | 1.25% | ||
Alternate Base Rate Loans | Line of Credit | Revolving Credit Agreement | Minimum | LIBOR | |||
Debt Instrument [Line Items] | |||
Applicable margin basis rate | 0.25% | ||
6.250% senior unsecured notes due 2024 | Line of Credit | Revolving Credit Agreement | |||
Debt Instrument [Line Items] | |||
Revolving credit agreement | $ 365,700,000 | ||
Weighted average interest rate | 3.13% |
Debt - 6.250% Senior Unsecured
Debt - 6.250% Senior Unsecured Notes Due 2024 (Details) - USD ($) | Aug. 19, 2016 | May 27, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | |||||
Premium on senior unsecured notes | $ 2,280,000 | $ 2,796,000 | |||
Cash paid for interest | $ 129,387,000 | $ 127,668,000 | $ 63,170,000 | ||
6.250% senior unsecured notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 6.25% | ||||
Senior Notes | 6.250% senior unsecured notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Gross proceeds from note issuance | $ 200,000,000 | $ 200,000,000 | |||
Stated interest rate | 6.25% | 6.25% | 6.25% | ||
Net proceeds from note issuance | $ 206,800,000 | ||||
Proceeds from debt issuance, net | $ 199,600,000 | $ 195,400,000 | |||
Offering price percentage of par | 102.00% | ||||
Premium on senior unsecured notes | $ 4,000,000 | ||||
Cash paid for interest | $ 2,800,000 | ||||
Maximum percent of aggregate principal amount redeemable | 35.00% | ||||
Redemption price, expressed as percentage of principal amount | 106.25% | ||||
Number of days within closing date redemption can occur | 120 days | ||||
Minimum required principal amount to remain outstanding subsequent to redemption | 65.00% | ||||
Senior Notes | 6.250% senior unsecured notes due 2024 | Period Prior to June 1, 2019 | |||||
Debt Instrument [Line Items] | |||||
Redemption price, expressed as percentage of principal amount | 100.00% | ||||
Senior Notes | 6.250% senior unsecured notes due 2024 | Debt Instrument, Redemption, Period One | |||||
Debt Instrument [Line Items] | |||||
Redemption price, expressed as percentage of principal amount | 104.688% | ||||
Senior Notes | 6.250% senior unsecured notes due 2024 | 12-month period beginning June 1, 2020 | |||||
Debt Instrument [Line Items] | |||||
Redemption price, expressed as percentage of principal amount | 103.125% | ||||
Senior Notes | 6.250% senior unsecured notes due 2024 | 12-month period beginning June 1, 2021 | |||||
Debt Instrument [Line Items] | |||||
Redemption price, expressed as percentage of principal amount | 101.563% | ||||
Senior Notes | 6.250% senior unsecured notes due 2024 | 12-month period beginning June 1, 2022 | |||||
Debt Instrument [Line Items] | |||||
Redemption price, expressed as percentage of principal amount | 100.00% |
Debt - 5.375% Senior Unsecured
Debt - 5.375% Senior Unsecured Notes due 2025 (Details) - 5.375% senior unsecured notes due 2025 - USD ($) | Dec. 13, 2016 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Stated interest rate | 5.375% | |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Gross proceeds from note issuance | $ 650,000,000 | |
Stated interest rate | 5.375% | 5.375% |
Proceeds from debt issuance, net | $ 644,100,000 | |
Maximum percent of aggregate principal amount redeemable | 35.00% | |
Redemption price, expressed as percentage of principal amount | 105.375% | |
Minimum required principal amount to remain outstanding subsequent to redemption | 65.00% | |
Number of days within closing date redemption can occur | 120 days | |
Senior Notes | Period Prior to January 15, 2020 | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 100.00% | |
Senior Notes | 12-month period beginning January 15, 2020 | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 104.031% | |
Senior Notes | 12-month period beginning January 15, 2021 | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 102.688% | |
Senior Notes | 12-month period beginning January 15, 2022 | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 101.344% | |
Senior Notes | 12-month period beginning January 15, 2023 | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 100.00% |
Debt - 5.250% Senior Unsecured
Debt - 5.250% Senior Unsecured Notes due 2025 (Details) - 5.250% senior unsecured notes due 2025 - USD ($) | Feb. 13, 2017 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Stated interest rate | 5.25% | |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Gross proceeds from note issuance | $ 450,000,000 | |
Stated interest rate | 5.25% | |
Proceeds from debt issuance, net | $ 444,100,000 | |
Maximum percent of aggregate principal amount redeemable | 35.00% | |
Redemption price, expressed as percentage of principal amount | 105.25% | |
Minimum required principal amount to remain outstanding subsequent to redemption | 65.00% | |
Number of days within closing date redemption can occur | 120 days | |
Senior Notes | Debt Instrument, Redemption, Period Five | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 100.00% | |
Senior Notes | Debt Instrument, Redemption, Period One | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 103.938% | |
Senior Notes | Debt Instrument, Redemption, Period Two | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 102.625% | |
Senior Notes | Debt Instrument, Redemption, Period Three | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 101.313% | |
Senior Notes | Debt Instrument, Redemption, Period Four | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 100.00% |
Debt - 5.625% Senior Unsecured
Debt - 5.625% Senior Unsecured Notes due 2027 (Details) - USD ($) | Oct. 11, 2017 | Feb. 13, 2017 | Dec. 31, 2019 |
5.625% senior unsecured notes due 2027 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.625% | ||
5.250% senior unsecured notes due 2025 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.25% | ||
Senior Notes | 5.625% senior unsecured notes due 2027 | |||
Debt Instrument [Line Items] | |||
Gross proceeds from note issuance | $ 700,000,000 | ||
Stated interest rate | 5.625% | ||
Proceeds from debt issuance, net | $ 692,100,000 | ||
Maximum percent of aggregate principal amount redeemable | 35.00% | ||
Redemption price, expressed as percentage of principal amount | 105.625% | ||
Minimum required principal amount to remain outstanding subsequent to redemption | 65.00% | ||
Senior Notes | 5.625% senior unsecured notes due 2027 | Debt Instrument, Redemption, Period Five | |||
Debt Instrument [Line Items] | |||
Redemption price, expressed as percentage of principal amount | 100.00% | ||
Senior Notes | 5.625% senior unsecured notes due 2027 | Debt Instrument, Redemption, Period One | |||
Debt Instrument [Line Items] | |||
Redemption price, expressed as percentage of principal amount | 102.813% | ||
Senior Notes | 5.625% senior unsecured notes due 2027 | Debt Instrument, Redemption, Period Two | |||
Debt Instrument [Line Items] | |||
Redemption price, expressed as percentage of principal amount | 101.875% | ||
Senior Notes | 5.625% senior unsecured notes due 2027 | Debt Instrument, Redemption, Period Three | |||
Debt Instrument [Line Items] | |||
Redemption price, expressed as percentage of principal amount | 100.938% | ||
Senior Notes | 5.625% senior unsecured notes due 2027 | Debt Instrument, Redemption, Period Four | |||
Debt Instrument [Line Items] | |||
Redemption price, expressed as percentage of principal amount | 100.00% | ||
Senior Notes | 5.250% senior unsecured notes due 2025 | |||
Debt Instrument [Line Items] | |||
Gross proceeds from note issuance | $ 450,000,000 | ||
Stated interest rate | 5.25% | ||
Proceeds from debt issuance, net | $ 444,100,000 | ||
Maximum percent of aggregate principal amount redeemable | 35.00% | ||
Redemption price, expressed as percentage of principal amount | 105.25% | ||
Minimum required principal amount to remain outstanding subsequent to redemption | 65.00% | ||
Senior Notes | 5.250% senior unsecured notes due 2025 | Debt Instrument, Redemption, Period Five | |||
Debt Instrument [Line Items] | |||
Redemption price, expressed as percentage of principal amount | 100.00% | ||
Senior Notes | 5.250% senior unsecured notes due 2025 | Debt Instrument, Redemption, Period One | |||
Debt Instrument [Line Items] | |||
Redemption price, expressed as percentage of principal amount | 103.938% | ||
Senior Notes | 5.250% senior unsecured notes due 2025 | Debt Instrument, Redemption, Period Two | |||
Debt Instrument [Line Items] | |||
Redemption price, expressed as percentage of principal amount | 102.625% | ||
Senior Notes | 5.250% senior unsecured notes due 2025 | Debt Instrument, Redemption, Period Three | |||
Debt Instrument [Line Items] | |||
Redemption price, expressed as percentage of principal amount | 101.313% | ||
Senior Notes | 5.250% senior unsecured notes due 2025 | Debt Instrument, Redemption, Period Four | |||
Debt Instrument [Line Items] | |||
Redemption price, expressed as percentage of principal amount | 100.00% |
Debt - Schedule of Principal Ma
Debt - Schedule of Principal Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
2019 | $ 0 | |
2020 | 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 400,000 | |
Thereafter | 1,800,000 | |
Total debt | $ 2,200,000 | $ 2,204,202 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |||
Cash payments for interest | $ 129,387 | $ 127,668 | $ 63,170 |
Change in interest accrual | 27 | (437) | 30,007 |
Amortization of deferred loan origination costs | 4,742 | 4,745 | 3,985 |
Write-off of deferred loan origination costs | 0 | 0 | 735 |
Amortization of bond premium | (516) | (516) | (516) |
Total interest expense, net | $ 133,640 | $ 131,460 | $ 97,381 |
Leases - Additional Information
Leases - Additional Information (Details) - Real Estate Lease $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 12 years |
Operating Lease, Lease Not Yet Commenced, Expense | $ 180.5 |
Leases - Lease Costs (Details)
Leases - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finance lease costs: | ||||
Amortization of right-of-use assets | $ 2,779 | |||
Interest on lease liabilities | 242 | |||
Operating lease costs | 92,709 | |||
Short-term lease costs | 20,578 | |||
Variable lease costs | 29,024 | |||
Sublease income | (463) | |||
Total lease costs | 144,869 | |||
Operating cash flows from operating leases | 23,644 | |||
Investing cash flows from operating leases | 71,487 | |||
Operating cash flows from finance leases | 242 | |||
Financing cash flows from finance leases | 2,746 | $ 0 | $ 0 | |
Right-of-use assets obtained in exchange for lease obligations, operating leases | 109,681 | |||
Right-of-use assets obtained in exchange for lease obligations, finance leases | $ 2,618 | |||
Oil And Natural Gas Properties | ||||
Finance lease costs: | ||||
Operating lease costs | $ 69,100 | |||
Short-term lease costs | 3,100 | |||
Variable lease costs | 19,600 | |||
General and Administrative Expense | ||||
Finance lease costs: | ||||
Operating lease costs | 10,100 | |||
Variable lease costs | 9,400 | |||
Lease Operating Expenses | ||||
Finance lease costs: | ||||
Operating lease costs | 7,100 | |||
Short-term lease costs | 17,500 | |||
Other operating expenses | ||||
Finance lease costs: | ||||
Operating lease costs | $ 6,400 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 23,644 | ||
Operating lease assets, net of accumulated depreciation | 128,529 | ||
Current operating lease liabilities | (61,198) | ||
Operating lease liability | (69,195) | ||
Total lease obligations | (130,393) | ||
Finance leases | |||
Property and equipment, gross | 8,418 | ||
Accumulated depreciation | (5,063) | ||
Property and equipment, net | 3,355 | ||
Other current liabilities | (2,101) | ||
Financing lease liability | (1,320) | ||
Total lease obligations | $ (3,421) | ||
Weighted average remaining lease term (in years), operating leases | 3 years | ||
Weighted average remaining lease term (in years), finance leases | 1 year 9 months 18 days | ||
Weighted average discount rate, operating leases | 4.70% | ||
Weighted average discount rate, finance leases | 5.60% | ||
Investing cash flows from operating leases | $ 71,487 | ||
Operating cash flows from finance leases | 242 | ||
Financing cash flows from finance leases | 2,746 | $ 0 | $ 0 |
Right-of-use assets obtained in exchange for lease obligations, operating leases | 109,681 | ||
Right-of-use assets obtained in exchange for lease obligations, finance leases | $ 2,618 |
Leases - Lease Maturities (Deta
Leases - Lease Maturities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating leases | |
2019 | $ 65,408 |
2020 | 36,386 |
2021 | 16,240 |
2022 | 8,792 |
2023 | 7,750 |
Thereafter | 5,063 |
Total lease payments | 139,639 |
Less imputed interest | (9,246) |
Total lease obligations | 130,393 |
Less: Current obligations | (61,198) |
Long-term lease obligations | 69,195 |
Finance leases | |
2019 | 2,234 |
2020 | 1,176 |
2021 | 184 |
2022 | 13 |
2023 | 0 |
Thereafter | 0 |
Total lease payments | 3,607 |
Less imputed interest | (186) |
Total lease obligations | 3,421 |
Less: Current obligations | (2,101) |
Long-term lease obligations | $ 1,320 |
Leases - Topic 840 (Details)
Leases - Topic 840 (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating leases | |
2019 | $ 71,998 |
2020 | 39,403 |
2021 | 26,658 |
2022 | 22,473 |
2023 | 21,822 |
Thereafter | 148,508 |
Total lease payments | 330,862 |
Finance leases | |
2019 | 2,413 |
2020 | 1,288 |
2021 | 436 |
2022 | 51 |
2023 | 14 |
Thereafter | 0 |
Total lease payments | $ 4,202 |
Equity - Additional Information
Equity - Additional Information (Details) | Jan. 23, 2020$ / shares | Nov. 05, 2019$ / shares | Aug. 06, 2019$ / shares | Dec. 31, 2019vote$ / sharesshares | Dec. 31, 2018$ / sharesshares |
Equity [Line Items] | |||||
Dividends declared | $ / shares | $ 0.03 | $ 0.03 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | |||
Preferred stock, shares outstanding | 0 | 0 | |||
Class A Common Stock | |||||
Equity [Line Items] | |||||
Common stock, shares outstanding | 281,241,443 | 280,205,293 | |||
Number of votes per share | vote | 1 | ||||
Class B common stock | |||||
Equity [Line Items] | |||||
Common stock, shares outstanding | 35,420,258 | 36,547,731 | |||
Number of votes per share | vote | 1 | ||||
Time-based restricted stock(1) | |||||
Equity [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 386,390 | 715,852 | |||
Time-based restricted stock(1) | Class A Common Stock | |||||
Equity [Line Items] | |||||
Common stock, shares outstanding | 400,000 | ||||
Performance-based restricted stock(2) | |||||
Equity [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 790,507 | 1,338,439 | |||
Subsequent Event | Common Stock | Class A Common Stock | |||||
Equity [Line Items] | |||||
Dividends declared | $ / shares | $ 0.05 | ||||
Subsequent Event | Common Stock | PE Units | |||||
Equity [Line Items] | |||||
Dividends declared | $ / shares | $ 0.05 |
Equity - Allocation of Net Inco
Equity - Allocation of Net Income to Common Stockholders and EPS Computations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | |||||||||||
Net income attributable to Parsley Energy, Inc. stockholders | $ (36,369) | $ 119,710 | $ 115,935 | $ (24,064) | $ 53,773 | $ 113,309 | $ 119,155 | $ 82,890 | $ 175,212 | $ 369,127 | $ 106,774 |
Denominator: | |||||||||||
Basic weighted average shares outstanding (shares) | 279,636,000 | 272,226,000 | 240,733,000 | ||||||||
Basic EPS attributable to Parsley Energy, Inc. Stockholders (in dollars per share) | $ (0.13) | $ 0.43 | $ 0.41 | $ (0.09) | $ 0.19 | $ 0.41 | $ 0.44 | $ 0.32 | $ 0.63 | $ 1.36 | $ 0.44 |
Numerator: | |||||||||||
Net income attributable to Parsley Energy, Inc. stockholders | $ (36,369) | $ 119,710 | $ 115,935 | $ (24,064) | $ 53,773 | $ 113,309 | $ 119,155 | $ 82,890 | $ 175,212 | $ 369,127 | $ 106,774 |
Effect of conversion of the shares of Company’s Class B common stock to shares of the Company’s Class A common stock | 0 | 0 | 17,646 | ||||||||
Diluted net income attributable to Parsley Energy, Inc. Stockholders | $ 175,212 | $ 369,127 | $ 124,420 | ||||||||
Denominator: | |||||||||||
Basic weighted average shares outstanding (shares) | 279,636,000 | 272,226,000 | 240,733,000 | ||||||||
Effect of dilutive securities: | |||||||||||
Class B Common Stock (shares) | 0 | 0 | 54,665,000 | ||||||||
Restricted Stock and Restricted Stock Units (shares) | 536,000 | 658,000 | 1,114,000 | ||||||||
Diluted weighted average shares outstanding (shares) | 280,172,000 | 272,884,000 | 296,512,000 | ||||||||
Diluted EPS attributable to Parsley Energy, Inc. Stockholders (in dollars per share) | $ (0.13) | $ 0.43 | $ 0.41 | $ (0.09) | $ 0.19 | $ 0.41 | $ 0.44 | $ 0.32 | $ 0.63 | $ 1.35 | $ 0.42 |
Performance-based restricted stock(2) | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Shares related to performance based restricted stock units | 790,507 | 1,338,439 | |||||||||
Performance-based RSUs | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Shares related to performance based restricted stock units | 358,240 | 640,062 |
Equity - Shares Excluded in Com
Equity - Shares Excluded in Computation of EPS (Details) - shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Performance-based restricted stock(2) | |||
Class Of Stock [Line Items] | |||
Shares related to performance based restricted stock units | 790,507 | 1,338,439 | |
Performance-based RSUs | |||
Class Of Stock [Line Items] | |||
Shares related to performance based restricted stock units | 358,240 | 640,062 |
Equity - Dividends (Details)
Equity - Dividends (Details) - USD ($) | Nov. 05, 2019 | Sep. 30, 2019 | Sep. 20, 2019 | Aug. 06, 2019 |
Equity [Abstract] | ||||
Dividends per share declared | $ 30 | $ 30 | ||
Dividends declared | $ 0.03 | $ 0.03 | ||
Dividends | $ 9,548 | $ 9,547 | $ 9,548 | $ 9,547 |
Equity - Noncontrolling Interes
Equity - Noncontrolling Interest - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Minority Interest [Line Items] | ||||||||||||
Distribution to owner of consolidated subsidiary | $ 603 | $ 1,962 | $ 0 | |||||||||
Net Income (Loss) Attributable to Noncontrolling Interest | $ 196 | $ 19,890 | $ 19,059 | $ (3,939) | $ 11,626 | $ 20,840 | $ 21,803 | $ 22,573 | 35,206 | 76,842 | $ 17,146 | |
Pacesetter Drilling, LLC | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Distribution to owner of consolidated subsidiary | $ 600 | 2,000 | ||||||||||
Pacesetter Acquisition | Pacesetter Drilling, LLC | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Percentage of shares held by Parent | 63.00% | 63.00% | ||||||||||
Pacesetter Acquisition | Pacesetter Drilling, LLC | President | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Percentage of ownership interest, Noncontrolling owners | 37.00% | 37.00% | ||||||||||
Parsley LLC | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Percentage of ownership interest, Noncontrolling owners | 21.60% | 10.20% | ||||||||||
Percentage of shares held by Parent | 89.80% | |||||||||||
Net Income (Loss) Attributable to Noncontrolling Interest | $ 35,231 | 76,079 | $ 17,645 | |||||||||
Pacesetter Drilling, LLC | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Net Income (Loss) Attributable to Noncontrolling Interest | $ (25) | $ 763 | $ (499) | |||||||||
2017 Equity Offerings | Parsley LLC | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Percentage of ownership interest, Noncontrolling owners | 10.20% | 13.50% | ||||||||||
Percentage of shares held by Parent | 89.80% | 86.50% | ||||||||||
Exchange Rights During 2017 | Parsley LLC | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Percentage of ownership interest, Noncontrolling owners | 19.80% | 21.60% | ||||||||||
Percentage of shares held by Parent | 80.20% | 78.40% | ||||||||||
Exchange Rights During 2017 | PE Units | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Conversion of stock, shares converted | 5,700,000 | |||||||||||
Exchange Rights During 2017 | Class A Common Stock | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Conversion of stock, shares issued | 5,700,000 | |||||||||||
Exchange Rights During 2018 | Parsley LLC | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Percentage of ownership interest, Noncontrolling owners | 11.20% | 11.50% | 11.20% | 11.50% | 19.80% | |||||||
Percentage of shares held by Parent | 88.80% | 88.50% | 88.80% | 88.50% | 80.20% | |||||||
Exchange Rights During 2018 | PE Units | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Conversion of stock, shares converted | 1,100,000 | 25,600,000 | ||||||||||
Exchange Rights During 2018 | Class A Common Stock | ||||||||||||
Minority Interest [Line Items] | ||||||||||||
Conversion of stock, shares issued | 1,100,000 | 25,600,000 |
Equity - Summary of Noncontroll
Equity - Summary of Noncontrolling Interest Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Total net income (loss) attributable to noncontrolling interests | $ 196 | $ 19,890 | $ 19,059 | $ (3,939) | $ 11,626 | $ 20,840 | $ 21,803 | $ 22,573 | $ 35,206 | $ 76,842 | $ 17,146 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation expense | $ 20,682 | $ 19,877 | $ 19,619 |
Time-based restricted stock(1) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation expense | $ 4,256 | 7,200 | 5,492 |
Time-based restricted stock units(1) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Awards granted (shares) | 992,825 | ||
Stock based compensation expense | $ 9,395 | $ 5,690 | $ 7,778 |
Performance-based restricted stock(2) | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Performance unit awards granted period | 3 years | 3 years | 3 years |
Awards granted (shares) | 376,166 | ||
Stock based compensation expense | $ 4,332 | $ 6,987 | $ 6,349 |
Performance-based restricted stock(2) | Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Performance share awards actual payout percentage | 200.00% | 200.00% | |
Performance-based RSUs | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation expense | $ 2,699 | $ 0 | $ 0 |
Class A common stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares authorized | 12,700,000 | ||
Number of shares available for grant | 7,900,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock, Restricted Stock Unit and Performance Unit Activity (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Time-based restricted stock(1) | |
Outstanding Awards | |
Outstanding, beginning balance (shares) | shares | 715,852 |
Forfeited (shares) | shares | (19,763) |
Vested (shares) | shares | (309,699) |
Outstanding, ending balance (shares) | shares | 386,390 |
Grant Date Fair Value | |
Weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 23.44 |
Forfeited, grant date fair value (in dollars per share) | $ / shares | 25.55 |
Vested, grant date fair value (in dollars per share) | $ / shares | 19.32 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 26.64 |
Time-based restricted stock units(1) | |
Outstanding Awards | |
Outstanding, beginning balance (shares) | shares | 723,354 |
Awards granted (shares) | shares | 992,825 |
Forfeited (shares) | shares | (174,643) |
Vested (shares) | shares | (301,078) |
Outstanding, ending balance (shares) | shares | 1,240,458 |
Grant Date Fair Value | |
Weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 23.78 |
Awards granted, grant date fair value (in dollars per share) | $ / shares | 17.83 |
Forfeited, grant date fair value (in dollars per share) | $ / shares | 20.82 |
Vested, grant date fair value (in dollars per share) | $ / shares | 19.43 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 20.48 |
Performance-based RSUs | |
Outstanding Awards | |
Outstanding, beginning balance (shares) | shares | 0 |
Forfeited (shares) | shares | (15,471) |
Vested (shares) | shares | (2,455) |
Outstanding, ending balance (shares) | shares | 358,240 |
Grant Date Fair Value | |
Weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 0 |
Forfeited, grant date fair value (in dollars per share) | $ / shares | 24.05 |
Vested, grant date fair value (in dollars per share) | $ / shares | 24.05 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 24.05 |
Performance-based restricted stock(2) | |
Outstanding Awards | |
Outstanding, beginning balance (shares) | shares | 1,338,439 |
Awards granted (shares) | shares | 376,166 |
Forfeited (shares) | shares | (66,112) |
Vested (shares) | shares | (481,820) |
Outstanding, ending balance (shares) | shares | 790,507 |
Grant Date Fair Value | |
Weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 15.07 |
Awards granted, grant date fair value (in dollars per share) | $ / shares | 24.05 |
Forfeited, grant date fair value (in dollars per share) | $ / shares | 15.74 |
Vested, grant date fair value (in dollars per share) | $ / shares | 13.07 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 16.24 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions Performance Based Restricted Stock Units (Details) - Performance-based restricted stock(2) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Risk-free interest rate | 2.46% | 2.25% | 1.45% |
Expected volatility, minimum | 32.40% | 34.40% | 37.70% |
Expected volatility, maximum | 61.80% | 82.20% | 79.50% |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expected Stock-Based Compensation (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Time-Based Restricted Stock | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
2019 | $ 1,933 |
2020 | 193 |
2021 | 0 |
Total | 2,126 |
Time-based restricted stock units(1) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
2019 | 7,324 |
2020 | 4,455 |
2021 | 458 |
Total | 12,237 |
Performance-based restricted stock(2) | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
2019 | 2,111 |
2020 | 0 |
2021 | 0 |
Total | 2,111 |
Performance-based RSUs | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
2019 | 2,992 |
2020 | 2,984 |
2021 | 0 |
Total | 5,976 |
Restricted Stock | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
2019 | 14,360 |
2020 | 7,632 |
2021 | 458 |
Total | $ 22,450 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Line Items] | |||||||||||
Provisional income tax expense | $ 23,900 | ||||||||||
Remeasurement of deferred taxes | 23,900 | ||||||||||
Deferred taxes valuation allowance reduction | $ 24,300 | ||||||||||
Effective income tax rate | 22.60% | 19.10% | 4.40% | ||||||||
Income tax expense | $ (1,649) | $ (34,953) | $ (32,625) | $ 7,790 | $ (16,453) | $ (32,454) | $ (33,243) | $ (23,325) | $ (61,437) | $ (105,475) | $ (5,708) |
Alternative minimum tax credits | 400 | 400 | |||||||||
Valuation allowance | 20,382 | $ 13,862 | 20,382 | $ 13,862 | |||||||
Federal | |||||||||||
Income Tax Disclosure [Line Items] | |||||||||||
Net operating loss carryovers | $ 587,100 | $ 587,100 |
Income Taxes - Components of th
Income Taxes - Components of the Income Tax (Benefit) Provision (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Federal: | |||||||||||
Current | $ 0 | $ 0 | $ (44) | ||||||||
Deferred | 58,310 | 101,023 | (423) | ||||||||
Total federal | 58,310 | 101,023 | (467) | ||||||||
State, net of federal benefit: | |||||||||||
Deferred | 3,127 | 4,452 | 6,175 | ||||||||
Total state | 3,127 | 4,452 | 6,175 | ||||||||
Income tax expense | $ 1,649 | $ 34,953 | $ 32,625 | $ (7,790) | $ 16,453 | $ 32,454 | $ 33,243 | $ 23,325 | $ 61,437 | $ 105,475 | $ 5,708 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax (Benefit) Provision with Income Tax Expense at Federal Statutory Rate (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||||||||
Income before income taxes | $ 271,855 | $ 551,444 | $ 129,628 | ||||||||
Less: net income before income taxes attributable to noncontrolling interest | (35,710) | (77,446) | (18,725) | ||||||||
Income attributable to Parsley Energy, Inc. Stockholders before income taxes | 236,145 | 473,998 | 110,903 | ||||||||
Income taxes at the federal statutory rate | 49,591 | 99,539 | 38,816 | ||||||||
State income taxes, net of federal benefit | 3,127 | 4,452 | 6,175 | ||||||||
Provision to return adjustment | 2,352 | (1,018) | 178 | ||||||||
Permanent and other | (140) | (2,285) | 166 | ||||||||
TRA liability change | 0 | 92 | (12,547) | ||||||||
Valuation allowance | 6,507 | 4,695 | (26,657) | ||||||||
Valuation allowance due to the reduction in federal statutory rate | 0 | 0 | (24,356) | ||||||||
Income tax provision due to change in federal statutory rate | 0 | 0 | 23,933 | ||||||||
Income tax expense | $ 1,649 | $ 34,953 | $ 32,625 | $ (7,790) | $ 16,453 | $ 32,454 | $ 33,243 | $ 23,325 | 61,437 | 105,475 | 5,708 |
Net income attributable to Parsley Energy, Inc. Stockholders | (36,369) | 119,710 | 115,935 | (24,064) | 53,773 | 113,309 | 119,155 | 82,890 | 175,212 | 369,127 | 106,774 |
Net income attributable to noncontrolling interest | $ 196 | $ 19,890 | $ 19,059 | $ (3,939) | $ 11,626 | $ 20,840 | $ 21,803 | $ 22,573 | $ 35,206 | $ 76,842 | $ 17,146 |
Income Taxes - Schedule of Tax
Income Taxes - Schedule of Tax Effects of Significant Portions of the Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets: | ||
Asset retirement obligations | $ 4,923 | $ 4,723 |
Deferred stock-based compensation | 7,196 | 6,718 |
Derivative fair value loss | 5,985 | 0 |
Accrued compensation | 5,642 | 4,650 |
Lease liabilities | 27,089 | 0 |
Earnings in investment in subsidiary | 182 | 0 |
Net operating loss carryforward | 170,520 | 299,250 |
Other | 1,910 | 0 |
Total deferred tax assets | 223,447 | 315,341 |
Less: Valuation allowance | (20,382) | (13,862) |
Net deferred tax assets | 203,065 | 301,479 |
Liabilities: | ||
Book basis of oil and natural gas properties in excess of tax basis | (369,474) | (423,102) |
Derivative fair value gain | 0 | (9,450) |
Earnings in investment in subsidiary | 0 | (156) |
Lease right-of-use assets | (27,000) | 0 |
Other | 0 | (294) |
Total deferred tax liabilities | (396,474) | (433,002) |
Net deferred tax liability | $ (193,409) | $ (131,523) |
Income Taxes - Tax Receivable A
Income Taxes - Tax Receivable Agreement (Details) - USD ($) $ in Thousands | May 29, 2014 | Dec. 31, 2018 | Dec. 31, 2019 |
Operating Loss Carryforwards [Line Items] | |||
Payable pursuant to tax receivable agreement | $ 68,110 | $ 70,529 | |
Valuation allowance | (13,862) | (20,382) | |
Deferred tax assets, net of valuation allowance | 301,479 | 203,065 | |
Tax Receivable Agreement | IPO | |||
Operating Loss Carryforwards [Line Items] | |||
Payment of net cash savings from tax, percent | 85.00% | ||
Payable pursuant to tax receivable agreement | 68,100 | 70,500 | |
Deferred tax assets, net of valuation allowance | 80,100 | $ 83,000 | |
TRA Liability [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred tax asset valuation increase (decrease) | 35,800 | ||
TRA Liability, Corporate Rate Reduction [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred tax asset valuation increase (decrease) | 55,900 | ||
TRA Liability, Change In Valuation [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred tax asset valuation increase (decrease) | $ 20,100 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Related Party Transaction [Line Items] | |||
Amounts disbursed to related parties | $ 4,600 | $ 1,700 | $ 1,500 |
Depletion expense on capitalized oil and gas property | 775,800 | 569,700 | 340,800 |
Costs incurred, acquisition of unproved oil and gas properties | $ 27,165 | 119,662 | 2,893,434 |
Conversion ratio | 1 | ||
SPS | |||
Related Party Transaction [Line Items] | |||
Equity method investment, ownership percentage | 42.50% | ||
Company incurred charges for services performed | $ 6,900 | 9,800 | 10,200 |
Lone Star Well Service, LLC | |||
Related Party Transaction [Line Items] | |||
Company incurred charges for services performed | $ 0 | $ 3,800 | $ 6,500 |
PE Units | Officer [Member] | |||
Related Party Transaction [Line Items] | |||
Conversion of stock, shares converted | shares | 420,000 | ||
Class A Common Stock | Officer [Member] | |||
Related Party Transaction [Line Items] | |||
Conversion of stock, shares issued | shares | 420,000 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Company Drilling and Derivative Commitments (Details) $ in Thousands | Dec. 31, 2019USD ($)MBbls |
Commitment And Contingencies [Line Items] | |
2019 | $ 58,855 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total | 58,855 |
Firm Transportation and Crude Oil Sales Agreements | |
Commitment And Contingencies [Line Items] | |
2019 | 41,534 |
2020 | 79,530 |
2021 | 79,770 |
2022 | 75,112 |
2023 | 70,962 |
Thereafter | 126,666 |
Total | $ 473,574 |
Oil and Gas Delivery Commitments and Contracts Additional Information [Abstract] | |
2019 | MBbls | 26,600 |
2020 | MBbls | 45,600 |
2021 | MBbls | 43,300 |
2022 | MBbls | 39,700 |
2023 | MBbls | 36,600 |
Thereafter | MBbls | 61,500 |
Total | MBbls | 253,300 |
Delivery commitments and contracts, available amounts to be received in commencement of third party | MBbls | 99 |
Delivery commitment, commencement of operations of third-party | $ 204,100 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Lease Payments under Long Term Operating Lease Agreements (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 39,403 |
2021 | 26,658 |
2022 | 22,473 |
2023 | 21,822 |
Thereafter | 148,508 |
Total lease payments | $ 330,862 |
Disclosures about Fair Value _3
Disclosures about Fair Value of Financial Instruments - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Exploration Expense | $ 100,211,000 | $ 162,539,000 | $ 39,345,000 |
Leasehold abandonments and impairments | 99,225,000 | 160,834,000 | 32,872,000 |
Interest income | (133,640,000) | (131,460,000) | (97,381,000) |
Level 2 | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Impairment of oil and gas properties | 0 | 500,000 | 1,100,000 |
Upton County | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Impairment of oil and gas properties | 0 | ||
Leasehold abandonments and impairments | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Exploration Expense | 99,225,000 | $ 160,834,000 | $ 32,872,000 |
Leasehold Improvements | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Leasehold abandonments and impairments | $ 2,600,000 |
Disclosures about Fair Value _4
Disclosures about Fair Value of Financial Instruments - Schedule of Financial Assets and Liabilities Measured at Fair Value (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Exploration Expense | $ 100,211,000 | $ 162,539,000 | $ 39,345,000 |
Assets: | |||
Total assets | 127,632,000 | 211,421,000 | |
Liabilities: | |||
Total liabilities | (158,522,000) | (168,963,000) | |
Net liability | (30,890,000) | 42,458,000 | |
Level 1 | |||
Assets: | |||
Total assets | 0 | 0 | |
Liabilities: | |||
Total liabilities | 0 | 0 | |
Net liability | 0 | 0 | |
Level 2 | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Impairment of oil and gas properties | 0 | 500,000 | $ 1,100,000 |
Assets: | |||
Total assets | 127,632,000 | 211,421,000 | |
Liabilities: | |||
Total liabilities | (158,522,000) | (168,963,000) | |
Net liability | (30,890,000) | 42,458,000 | |
Level 3 | |||
Assets: | |||
Total assets | 0 | 0 | |
Liabilities: | |||
Total liabilities | 0 | 0 | |
Net liability | 0 | 0 | |
Commodity derivative instruments(1) | |||
Assets: | |||
Commodity derivative contracts | 127,632,000 | 211,421,000 | |
Liabilities: | |||
Commodity derivative instruments(1) | (158,522,000) | (168,963,000) | |
Commodity derivative instruments(1) | Level 1 | |||
Assets: | |||
Commodity derivative contracts | 0 | 0 | |
Liabilities: | |||
Commodity derivative instruments(1) | 0 | 0 | |
Commodity derivative instruments(1) | Level 2 | |||
Assets: | |||
Commodity derivative contracts | 127,632,000 | 211,421,000 | |
Liabilities: | |||
Commodity derivative instruments(1) | (158,522,000) | (168,963,000) | |
Commodity derivative instruments(1) | Level 3 | |||
Assets: | |||
Commodity derivative contracts | 0 | 0 | |
Liabilities: | |||
Commodity derivative instruments(1) | $ 0 | $ 0 |
Disclosures about Fair Value _5
Disclosures about Fair Value of Financial Instruments - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 13, 2016 | Aug. 19, 2016 | May 27, 2016 |
Carrying Amount | |||||
Debt Instrument [Line Items] | |||||
Revolving Credit Agreement | $ 0 | $ 0 | |||
Fair Value | |||||
Debt Instrument [Line Items] | |||||
Revolving Credit Agreement | $ 0 | 0 | |||
6.250% senior unsecured notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 6.25% | ||||
5.375% senior unsecured notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.375% | ||||
5.250% senior unsecured notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.25% | ||||
5.625% senior unsecured notes due 2027 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.625% | ||||
Senior Notes | 6.250% senior unsecured notes due 2024 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 6.25% | 6.25% | 6.25% | ||
Senior Notes | 6.250% senior unsecured notes due 2024 | Carrying Amount | |||||
Debt Instrument [Line Items] | |||||
Senior notes, fair value | $ 400,000 | 400,000 | |||
Senior Notes | 6.250% senior unsecured notes due 2024 | Fair Value | |||||
Debt Instrument [Line Items] | |||||
Senior notes, fair value | $ 417,028 | 394,144 | |||
Senior Notes | 5.375% senior unsecured notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.375% | 5.375% | |||
Senior Notes | 5.375% senior unsecured notes due 2025 | Carrying Amount | |||||
Debt Instrument [Line Items] | |||||
Senior notes, fair value | $ 650,000 | 650,000 | |||
Senior Notes | 5.375% senior unsecured notes due 2025 | Fair Value | |||||
Debt Instrument [Line Items] | |||||
Senior notes, fair value | $ 669,552 | 605,885 | |||
Senior Notes | 5.250% senior unsecured notes due 2025 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.25% | ||||
Senior Notes | 5.250% senior unsecured notes due 2025 | Carrying Amount | |||||
Debt Instrument [Line Items] | |||||
Senior notes, fair value | $ 450,000 | 450,000 | |||
Senior Notes | 5.250% senior unsecured notes due 2025 | Fair Value | |||||
Debt Instrument [Line Items] | |||||
Senior notes, fair value | $ 464,697 | 424,980 | |||
Senior Notes | 5.625% senior unsecured notes due 2027 | |||||
Debt Instrument [Line Items] | |||||
Stated interest rate | 5.625% | ||||
Senior Notes | 5.625% senior unsecured notes due 2027 | Carrying Amount | |||||
Debt Instrument [Line Items] | |||||
Senior notes, fair value | $ 700,000 | 700,000 | |||
Senior Notes | 5.625% senior unsecured notes due 2027 | Fair Value | |||||
Debt Instrument [Line Items] | |||||
Senior notes, fair value | $ 742,840 | $ 636,041 |
Restructuring and Other Termi_3
Restructuring and Other Termination Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Costs | $ 1,562 | $ 0 | $ 0 |
One-time Termination Benefits | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Costs | $ 1,562 | $ 0 | $ 0 |
Subsequent Events Jagged Peak A
Subsequent Events Jagged Peak Acquisition (Details) - Jagged Peak Acquisition $ in Millions | Jan. 10, 2020USD ($)shares |
Subsequent Event [Line Items] | |
Business Combination, Acquisition Related Costs | $ | $ 7.4 |
Subsequent Event | |
Subsequent Event [Line Items] | |
Business Combination, Common Stock, Right To Receive | shares | 0.447 |
Common stock, shares issued | shares | 95,900,000 |
Jagged Peak | Subsequent Event | |
Subsequent Event [Line Items] | |
Stated interest rate | 5.875% |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Long-term Debt | $ | $ 500 |
Subsequent Events Dividends (De
Subsequent Events Dividends (Details) - $ / shares | Jan. 23, 2020 | Nov. 05, 2019 | Aug. 06, 2019 |
Subsequent Event [Line Items] | |||
Dividends declared | $ 0.03 | $ 0.03 | |
Common Stock | Class A Common Stock | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Dividends declared | $ 0.05 | ||
Common Stock | PE Units | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Dividends declared | $ 0.05 |
Subsequent Events - Notes (Deta
Subsequent Events - Notes (Details) - USD ($) | Feb. 11, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsequent Event [Line Items] | ||||
Write-off of deferred loan origination costs | $ 0 | $ 0 | $ 735,000 | |
Premium on senior unsecured notes | $ 2,280,000 | $ 2,796,000 | ||
4.125 Percent Senior Unsecured Notes Due 2028 | Senior Notes | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Gross proceeds from note issuance | $ 400,000,000 | |||
Debt instrument, redemption premium | 425,500,000 | |||
Extinguishment of debt, prepayment expense | 18,800,000 | |||
Debt instrument, increase, accrued interest | 6,700,000 | |||
Write-off of deferred loan origination costs | (4,800,000) | |||
Premium on senior unsecured notes | $ 2,200,000 | |||
Stated interest rate | 4.125% | |||
Proceeds from debt issuance, net | $ 395,200,000 | |||
Debt Instrument, Redemption, Period One | 4.125 Percent Senior Unsecured Notes Due 2028 | Senior Notes | Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Redemption price, expressed as percentage of principal amount | 104.688% |
Supplemental Disclosure of Oi_3
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) - Schedule of Capitalized Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Oil and natural gas properties: | ||
Proved properties | $ 8,799,840 | $ 6,659,444 |
Unproved properties | 2,472,284 | 3,288,802 |
Total oil and natural gas properties | 11,272,124 | 9,948,246 |
Less accumulated depreciation, depletion and amortization | (2,117,963) | (1,295,098) |
Net oil and natural gas properties capitalized | $ 9,154,161 | $ 8,653,148 |
Supplemental Disclosure of Oi_4
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) - Schedule of Costs Incurred for Oil and Natural Gas Producing Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Acquisition costs: | |||
Proved properties | $ 24,855 | $ 17,310 | $ 482,160 |
Unproved properties | 27,165 | 119,662 | 2,893,434 |
Development costs | 1,372,919 | 1,762,218 | 1,207,401 |
Total | $ 1,424,939 | $ 1,899,190 | $ 4,582,995 |
Supplemental Disclosure of Oi_5
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) - Results of Operations from Oil and Natural Gas Producing Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Extractive Industries [Abstract] | |||
Oil, natural gas and natural gas liquid sales | $ 1,949,977 | $ 1,814,747 | $ 961,994 |
Lease operating expenses | (177,148) | (144,292) | (102,169) |
Transportation and processing costs | (41,198) | (32,573) | 0 |
Production and ad valorem taxes | (124,961) | (108,342) | (59,641) |
Depreciation, depletion and amortization | (775,849) | (569,691) | (340,778) |
Accretion of asset retirement obligations | (1,465) | (1,422) | (971) |
Total | $ 829,356 | $ 958,427 | $ 458,435 |
Supplemental Disclosure of Oi_6
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) - Schedule of Reserve Quantity Information Average Sales Price (Details) | 12 Months Ended | ||
Dec. 31, 2019$ / bbl$ / Mcf | Dec. 31, 2018$ / bbl$ / Mcf | Dec. 31, 2017$ / bbl$ / Mcf | |
Oil | |||
Average Sales Price And Production Costs Per Unit Of Production [Line Items] | |||
Average sales price | 53.97 | 61.88 | 49.17 |
Natural gas liquids sales | |||
Average Sales Price And Production Costs Per Unit Of Production [Line Items] | |||
Average sales price | 15.46 | 28.05 | 22.20 |
Natural Gas | |||
Average Sales Price And Production Costs Per Unit Of Production [Line Items] | |||
Average sales price | $ / Mcf | 0.71 | 1.64 | 2.53 |
Supplemental Disclosure of Oi_7
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) - Schedule of Proved Developed and Proved Undeveloped Reserves (Details) | 12 Months Ended | |||
Dec. 31, 2019MBoeMBblsMMcf | Dec. 31, 2018MBoeMBblsMMcf | Dec. 31, 2017MBoeMBblsMMcf | Dec. 31, 2016MBoeMBblsMMcf | |
Proved Developed and Undeveloped Reserves: | ||||
Beginning of the year | MBoe | 521,719 | 416,447 | 222,347 | |
Extensions and discoveries | MBoe | 138,750 | 159,778 | 160,340 | |
Revisions of previous estimates | MBoe | (14,291) | 2,283 | 9,205 | |
Purchases of reserves in place | MBoe | 554 | 5,613 | 55,814 | |
Divestures of reserves in place | MBoe | (3,076) | (22,465) | (6,467) | |
Production | MBoe | (51,322) | (39,937) | (24,792) | |
End of the year | MBoe | 592,334 | 521,719 | 416,447 | |
Proved developed reserves (energy) | MBoe | 381,744 | 311,315 | 209,399 | 106,097 |
Proved undeveloped reserves (energy) | MBoe | 210,590 | 210,404 | 207,048 | 116,250 |
Crude Oil (MBbls) | ||||
Proved Developed and Undeveloped Reserves: | ||||
Beginning of the year | 294,446 | 248,531 | 136,536 | |
Extensions and discoveries | 84,186 | 102,274 | 99,916 | |
Revisions of previous estimates | (19,269) | (22,047) | (709) | |
Purchases of reserves in place | 354 | 3,379 | 33,017 | |
Divestures of reserves in place | (1,590) | (12,335) | (3,839) | |
Production | (31,664) | (25,356) | (16,390) | |
End of the year | 326,463 | 294,446 | 248,531 | |
Proved developed reserves (volume) | 206,849 | 170,526 | 119,591 | 61,133 |
Proved undeveloped reserves (volume) | 119,614 | 123,920 | 128,940 | 75,403 |
Natural Gas (MMcf) | ||||
Proved Developed and Undeveloped Reserves: | ||||
Beginning of the year | 131,933 | 92,632 | 48,543 | |
Extensions and discoveries | 32,457 | 35,722 | 33,426 | |
Revisions of previous estimates | (5,043) | 16,164 | 4,522 | |
Purchases of reserves in place | 107 | 1,240 | 12,121 | |
Divestures of reserves in place | (788) | (5,472) | (1,468) | |
Production | (11,002) | (8,353) | (4,512) | |
End of the year | 147,664 | 131,933 | 92,632 | |
Proved developed reserves (volume) | 96,202 | 81,000 | 49,751 | 24,306 |
Proved undeveloped reserves (volume) | 51,462 | 50,933 | 42,881 | 24,237 |
NGLs (MBbls) | ||||
Proved Developed and Undeveloped Reserves: | ||||
Beginning of the year | MMcf | 572,038 | 451,703 | 223,605 | |
Extensions and discoveries | MMcf | 132,642 | 130,692 | 161,989 | |
Revisions of previous estimates | MMcf | 60,128 | 48,992 | 32,342 | |
Purchases of reserves in place | MMcf | 556 | 5,963 | 64,055 | |
Divestures of reserves in place | MMcf | (4,189) | (27,947) | (6,962) | |
Production | MMcf | (51,933) | (37,365) | (23,326) | |
End of the year | MMcf | 709,242 | 572,038 | 451,703 | |
Proved developed reserves (volume) | MMcf | 472,160 | 358,733 | 240,337 | 123,946 |
Proved undeveloped reserves (volume) | MMcf | 237,082 | 213,305 | 211,366 | 99,659 |
Supplemental Disclosure of Oi_8
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) - Additional Information (Details) - MBoe | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reserve Quantities [Line Items] | |||
Extensions and discoveries | 138,750 | 159,778 | 160,340 |
Revisions of previous estimates | 14,291 | (2,283) | (9,205) |
Revision of previous estimates due to ASC 606 | 11,434 | ||
Revision of previous estimates, removal of reserve locations | (23,686) | 12,214 | |
Reclassification of proved undeveloped reserves to unproved reserves | (4,725) | ||
Revision of previous estimates, better than expected performance | 11,498 | 3,063 | 8,134 |
Revision of estimates, increase (decrease) due to oil prices | 2,103 | (2,752) | |
Revision of previous estimates, production | 3,044 | ||
Purchases of reserves in place | 554 | 5,613 | 55,814 |
Divestures of reserves in place | 3,076 | 22,465 | 6,467 |
Midland Basin | |||
Reserve Quantities [Line Items] | |||
Purchases of reserves in place | 554 | 5,550 | 53,105 |
Divestures of reserves in place | 3,076 | 22,372 | 5,936 |
Delaware Basin | |||
Reserve Quantities [Line Items] | |||
Purchases of reserves in place | 63 | 2,709 | |
Divestures of reserves in place | 93 | 531 |
Supplemental Disclosure of Oi_9
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) - Schedule of Standardized Measure of Discounted Future Net Cash Flows (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Extractive Industries [Abstract] | ||||
Future cash inflows | $ 20,409,082 | $ 22,861,246 | $ 15,421,590 | |
Future development costs | (2,280,552) | (2,459,587) | (2,181,447) | |
Future production costs | (6,240,997) | (5,944,022) | (4,536,530) | |
Future income tax expenses | (1,485,523) | (2,061,409) | (1,102,385) | |
Future net cash flows | 10,402,010 | 12,396,228 | 7,601,228 | |
10% discount to reflect timing of cash flows | (5,439,514) | (6,502,326) | (4,215,321) | |
Standardized measure of discounted future net cash flows | $ 4,962,496 | $ 5,893,902 | $ 3,385,907 | $ 1,304,091 |
Supplemental Disclosure of O_10
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) - Schedule of Changes in Standardized Measure of Discounted Future Net Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Increase (Decrease) in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves [Roll Forward] | |||
Standardized measure of discounted future net cash flows at the beginning of the year | $ 5,893,902 | $ 3,385,907 | $ 1,304,091 |
Sales of oil and natural gas, net of production costs | (1,606,669) | (1,561,190) | (800,553) |
Purchase of minerals in place | 7,411 | 76,478 | 489,910 |
Divestiture of minerals in place | (19,768) | (167,412) | (50,257) |
Extensions and discoveries, net of future development costs | 1,714,706 | 3,016,035 | 1,864,041 |
Previously estimated development costs incurred during the period | 469,798 | 290,108 | 58,377 |
Net changes in prices and production costs | (2,205,679) | 1,065,693 | 525,693 |
Changes in estimated future development costs | 83,125 | (177,118) | (150,028) |
Revisions of previous quantity estimates | (146,203) | 161,860 | 142,510 |
Accretion of discount | 677,486 | 391,803 | 148,314 |
Net change in income taxes | 187,697 | (348,834) | (353,073) |
Net changes in timing of production and other | (93,310) | (239,428) | 206,882 |
Standardized measure of discounted future net cash flows at the end of the year | $ 4,962,496 | $ 5,893,902 | $ 3,385,907 |
Summary of Quarterly Financia_3
Summary of Quarterly Financial Results (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 522,451 | $ 510,151 | $ 498,541 | $ 427,671 | $ 454,880 | $ 511,022 | $ 467,788 | $ 392,741 | $ 1,958,814 | $ 1,826,431 | $ 967,044 |
Operating income | 86,845 | 153,041 | 180,837 | 116,547 | 22,171 | 220,992 | 215,505 | 169,207 | 537,270 | 627,875 | 252,469 |
Income tax expense | (1,649) | (34,953) | (32,625) | 7,790 | (16,453) | (32,454) | (33,243) | (23,325) | (61,437) | (105,475) | (5,708) |
Net income | (36,173) | 139,600 | 134,994 | (28,003) | 65,399 | 134,149 | 140,958 | 105,463 | 210,418 | 445,969 | 123,920 |
Net income attributable to noncontrolling interest | 196 | 19,890 | 19,059 | (3,939) | 11,626 | 20,840 | 21,803 | 22,573 | 35,206 | 76,842 | 17,146 |
Net income attributable to Parsley Energy, Inc. stockholders | $ (36,369) | $ 119,710 | $ 115,935 | $ (24,064) | $ 53,773 | $ 113,309 | $ 119,155 | $ 82,890 | $ 175,212 | $ 369,127 | $ 106,774 |
Basic (in dollars per share) | $ (0.13) | $ 0.43 | $ 0.41 | $ (0.09) | $ 0.19 | $ 0.41 | $ 0.44 | $ 0.32 | $ 0.63 | $ 1.36 | $ 0.44 |
Diluted (in dollars per share) | $ (0.13) | $ 0.43 | $ 0.41 | $ (0.09) | $ 0.19 | $ 0.41 | $ 0.44 | $ 0.32 | $ 0.63 | $ 1.35 | $ 0.42 |