Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 27, 2017 | Jun. 30, 2016 | |
Document And Entity Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | PE | ||
Entity Registrant Name | Parsley Energy, Inc. | ||
Entity Central Index Key | 1,594,466 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | $ 3,250,385,356 | ||
Common Stock, Class A | |||
Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 246,479,483 | ||
Class B Common Stock | |||
Document And Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 28,008,573 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 133,379 | $ 343,084 |
Restricted cash | 3,290 | 1,139 |
Accounts receivable: | ||
Joint interest owners and other | 12,698 | 14,998 |
Oil, natural gas and NGLs | 59,174 | 21,219 |
Related parties | 290 | 390 |
Short-term derivative instruments | 39,708 | 83,262 |
Other current assets | 50,949 | 24,234 |
Total current assets | 299,488 | 488,326 |
PROPERTY, PLANT AND EQUIPMENT | ||
Oil and natural gas properties, successful efforts method | 4,063,417 | 2,246,161 |
Accumulated depreciation, depletion, amortization and impairment | (506,175) | (290,186) |
Total oil and natural gas properties, net | 3,557,242 | 1,955,975 |
Other property, plant and equipment net | 59,318 | 29,778 |
Total property, plant and equipment, net | 3,616,560 | 1,985,753 |
NONCURRENT ASSETS | ||
Long-term derivative instruments | 16,416 | 25,839 |
Other noncurrent assets | 6,318 | 5,182 |
Total noncurrent assets | 22,734 | 31,021 |
TOTAL ASSETS | 3,938,782 | 2,505,100 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 162,317 | 151,221 |
Revenue and severance taxes payable | 69,452 | 37,109 |
Current portion of long-term debt | 67,214 | 951 |
Short-term derivative instruments | 44,153 | 34,518 |
Current portion of asset retirement obligations | 1,818 | 4,698 |
Total current liabilities | 344,954 | 228,497 |
NONCURRENT LIABILITIES | ||
Long-term debt | 1,041,324 | 546,832 |
Asset retirement obligations | 9,574 | 13,522 |
Deferred tax liability, net | 5,483 | 62,962 |
Payable pursuant to tax receivable agreement | 94,326 | 51,504 |
Long-term derivative instruments | 12,815 | 15,142 |
Total noncurrent liabilities | 1,163,522 | 689,962 |
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 | 2,151,197 | 1,252,020 |
(Accumulated deficit) retained earnings | (63,255) | 10,868 |
Treasury stock, at cost, 139,416 shares and 105,421 at December 31, 2016 and December 31, 2015 | (381) | (77) |
Total stockholders' equity | 2,089,638 | 1,264,492 |
Noncontrolling interest | 340,668 | 322,149 |
Total equity | 2,430,306 | 1,586,641 |
TOTAL LIABILITIES AND EQUITY | 3,938,782 | 2,505,100 |
Class A, $0.01 par value, 600,000,000 shares authorized, 179,730,033 shares issued and 179,590,617 shares outstanding at December 31, 2016 and 136,728,906 shares issued and 136,623,407 shares outstanding at December 31, 2015 | ||
STOCKHOLDERS' EQUITY | ||
Common stock | 1,797 | 1,360 |
Class B, $0.01 par value, 125,000,000 shares authorized, 28,008,573 and 32,145,296 issued and outstanding at December 31, 2016 and December 31, 2015 | ||
STOCKHOLDERS' EQUITY | ||
Common stock | $ 280 | $ 321 |
CONSOLIDATED AND COMBINED BALAN
CONSOLIDATED AND COMBINED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
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 | 139,416 | 105,421 |
Common Stock, Class A | ||
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 | 179,730,033 | 136,728,906 |
Common stock, shares outstanding | 179,590,617 | 136,623,407 |
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 | 28,008,573 | 32,145,296 |
Common stock, shares outstanding | 28,008,573 | 32,145,296 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
REVENUES | |||
Oil sales | $ 387,303 | $ 215,795 | $ 232,554 |
Natural gas sales | 30,928 | 26,582 | 30,642 |
Natural gas liquids sales | 38,273 | 23,680 | 38,561 |
Other | 1,269 | 417 | 672 |
Total revenues | 457,773 | 266,474 | 302,429 |
OPERATING EXPENSES | |||
Lease operating expenses | 59,293 | 62,913 | 38,071 |
Production and ad valorem taxes | 27,916 | 17,800 | 18,941 |
Depreciation, depletion and amortization | 233,766 | 178,281 | 94,297 |
General and administrative expenses (including stock-based compensation of $12,871, $8,133 and $53,297 for the years ended December 31, 2016, 2015 and 2014) | 84,591 | 55,294 | 87,949 |
Exploration costs | 13,931 | 13,865 | 3,136 |
Impairment | 0 | 950 | 0 |
Acquisition costs | 1,081 | 0 | 2,527 |
Accretion of asset retirement obligations | 732 | 826 | 512 |
Rig termination costs | 0 | 8,970 | 765 |
Other operating expenses | 5,316 | 1,696 | 0 |
Total operating expenses | 426,626 | 340,595 | 246,198 |
OPERATING INCOME (LOSS) | 31,147 | (74,121) | 56,231 |
OTHER (EXPENSE) INCOME | |||
Interest expense, net | (55,233) | (45,553) | (39,624) |
Loss on sale of property | (119) | (34,374) | (2,097) |
Prepayment premium on extinguishment of debt | (36,335) | 0 | (5,107) |
(Loss) gain on derivatives | (50,835) | 60,818 | 83,858 |
Other income (expense) | 5,034 | (3,556) | (71) |
Total other (expense) income, net | (137,488) | (22,665) | 36,959 |
(LOSS) INCOME BEFORE INCOME TAXES | (106,341) | (96,786) | 93,190 |
INCOME TAX BENEFIT (EXPENSE) | 17,424 | 23,755 | (36,468) |
NET (LOSS) INCOME | (88,917) | (73,031) | 56,722 |
LESS: NET LOSS (INCOME) ATTRIBUTABLE TO NONCONTROLLING INTERESTS | $ 14,735 | $ 22,547 | (33,293) |
NET (LOSS) INCOME ATTRIBUTABLE TO PARSLEY ENERGY, INC. STOCKHOLDERS | $ 61,352 | ||
Net (loss) income per common share: | |||
Basic (in dollars per share) | $ (0.46) | $ (0.45) | $ 0.65 |
Diluted (in dollars per share) | $ (0.46) | $ (0.45) | $ 0.65 |
Weighted average common shares outstanding: | |||
Basic (shares) | 161,793 | 111,271 | 93,168 |
Diluted (shares) | 161,793 | 111,271 | 93,271 |
CONSOLIDATED STATEMENTS OF OPE5
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock based compensation | $ 12,871 | $ 8,133 | $ 53,297 |
General and Administrative Expense | |||
Stock based compensation | $ 12,871 | $ 8,133 | $ 53,297 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock, Class A | Class B Common Stock | Members' equity | Mezzanine equity | Common StockCommon Stock, Class A | Common StockClass B Common Stock | Additional paid in capital | (Accumulated deficit) retained earnings | Treasury Stock | Total stockholders' equity | Noncontrolling interest |
Balance at Dec. 31, 2014 | $ 0 | |||||||||||
Balance at Dec. 31, 2014 | $ 0 | |||||||||||
Balance (in shares) at Dec. 31, 2013 | 0 | 0 | 0 | |||||||||
Balance at Dec. 31, 2013 | $ 108,032 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||||
Preferred return on redeemable LLC interests | (1,723) | 1,723 | ||||||||||
Net loss prior to corporate reorganization | (37,923) | (37,923) | ||||||||||
Balance prior to Corporate Reorganization and IPO | 70,109 | (8,772) | 78,881 | |||||||||
Payment of Preferred Return | (6,726) | (6,726) | ||||||||||
Issuance of Class A Common Stock, net of underwriters discount and expenses (in shares) | 49,963,000 | |||||||||||
Issuance of Class A Common Stock, net of underwriters discount and expenses | 867,750 | $ 500 | 867,250 | 867,750 | ||||||||
Conversion and Exchange of Units and Common Stock for another Class of Common Stock | (42,316) | (72,155) | $ 432 | $ 321 | 113,718 | 114,471 | ||||||
Conversion and Exchange of Units and Common Stock for another Class of Common Stock (in shares) | 43,204,000 | 32,145,000 | ||||||||||
Net deferred tax liability due to corporate reorganization | (95,530) | (95,530) | (95,530) | |||||||||
Liability due to tax receivable agreement | (50,689) | (50,689) | (50,689) | |||||||||
Initial allocation of noncontrolling interest of Parsley LLC effective on the date of the IPO | (251,955) | (251,955) | 251,955 | |||||||||
Tax benefit from tax receivable agreement | 59,633 | 59,633 | 59,633 | |||||||||
Issuance of restricted stock and restricted stock unit (in shares) | 770,000 | |||||||||||
Restricted stock forfeited | (41) | (41) | (41) | |||||||||
Restricted stock forfeited (in shares) | 37,000 | |||||||||||
Stock-based compensation | 2,250 | 2,250 | 2,250 | |||||||||
Deemed contribution - incentive unit compensation | 51,088 | 51,088 | ||||||||||
Consolidated net income subsequent to the Corporate Reorganization and the IPO | 94,645 | 61,352 | 61,352 | 33,293 | ||||||||
Net (loss) income | 56,722 | |||||||||||
Balance at Dec. 31, 2013 | 30,874 | |||||||||||
Balance at Dec. 31, 2013 | 77,158 | |||||||||||
Balance (in shares) at Dec. 31, 2014 | 93,937,000 | 32,145,000 | 37,000 | |||||||||
Balance at Dec. 31, 2014 | 992,489 | $ 932 | $ 321 | 644,636 | 61,352 | 707,241 | 285,248 | |||||
Issuance of Class A Common Stock, net of underwriters discount and expenses (in shares) | 42,748,000 | |||||||||||
Issuance of Class A Common Stock, net of underwriters discount and expenses | 669,418 | $ 428 | 668,990 | 669,418 | ||||||||
Change in equity due to issuance of PE Units by Parsley LLC | 0 | (56,856) | (56,856) | 56,856 | ||||||||
Increase in net deferred tax liability due to issuance of PE Units by Parsley LLC | (18,383) | (18,383) | (18,383) | |||||||||
Initial allocation of noncontrolling interest of Parsley LLC effective on the date of the IPO | 2,592 | 2,592 | ||||||||||
Tax benefit from tax receivable agreement | 5,500 | 5,500 | 5,500 | |||||||||
Issuance of restricted stock and restricted stock unit (in shares) | 42,000 | |||||||||||
Restricted stock forfeited | (364) | (293) | $ (71) | (364) | ||||||||
Restricted stock forfeited (in shares) | 68,000 | |||||||||||
Vesting of restricted stock units | (6) | $ (6) | (6) | |||||||||
Vesting of restricted stock unit (in shares) | 2,000 | |||||||||||
Stock-based compensation | 8,426 | 8,426 | 8,426 | |||||||||
Net (loss) income | (73,031) | (50,484) | (50,484) | (22,547) | ||||||||
Balance at Dec. 31, 2014 | $ 0 | |||||||||||
Balance at Dec. 31, 2014 | $ 0 | |||||||||||
Balance (in shares) at Dec. 31, 2015 | 136,728,906 | 32,145,296 | 136,729,000 | 32,145,000 | 105,000 | |||||||
Balance at Dec. 31, 2015 | 1,586,641 | $ 1,360 | $ 321 | 1,252,020 | 10,868 | $ (77) | 1,264,492 | 322,149 | ||||
Adoption of ASU 2016-09 | Adoption of ASU 2016-09 | 59 | 59 | 59 | |||||||||
Restated balance | 1,586,700 | $ 1,360 | 321 | 1,252,020 | 10,927 | (77) | 1,264,551 | 322,149 | ||||
Issuance of Class A Common Stock, net of underwriters discount and expenses (in shares) | 38,812,000 | |||||||||||
Issuance of Class A Common Stock, net of underwriters discount and expenses | 930,315 | $ 388 | 929,927 | 930,315 | ||||||||
Change in equity due to issuance of PE Units by Parsley LLC | 0 | (80,255) | (80,255) | 80,255 | ||||||||
Increase in net deferred tax liability due to issuance of PE Units by Parsley LLC | (13,215) | (13,215) | (13,215) | |||||||||
Conversion and Exchange of Units and Common Stock for another Class of Common Stock | 0 | $ 41 | $ (41) | 47,001 | 47,001 | (47,001) | ||||||
Conversion and Exchange of Units and Common Stock for another Class of Common Stock (in shares) | 4,137,000 | (4,137,000) | ||||||||||
Change in net deferred tax liability due to exchange of PE Units and Class B Common Stock for Class A Common Stock | (5,999) | (5,999) | (5,999) | |||||||||
Tax benefit from tax receivable agreement | 8,855 | 8,855 | 8,855 | |||||||||
Issuance of restricted stock and restricted stock unit (in shares) | 37,000 | |||||||||||
Vesting of restricted stock units (in shares) | 15,000 | |||||||||||
Vesting of restricted stock units | (91) | $ 8 | (8) | $ (91) | (91) | |||||||
Repurchase of common stock (in shares) | 12,000 | |||||||||||
Repurchase of common stock | (213) | $ (213) | (213) | |||||||||
Restricted stock forfeited | (105) | (105) | (105) | |||||||||
Restricted stock forfeited (in shares) | 22,000 | |||||||||||
Stock-based compensation | 12,976 | 12,976 | 12,976 | |||||||||
Net (loss) income | (88,917) | (74,182) | (74,182) | (14,735) | ||||||||
Balance (in shares) at Dec. 31, 2016 | 179,730,033 | 28,008,573 | 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 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net (loss) income | $ (88,917) | $ (73,031) | $ 56,722 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation, depletion and amortization | 233,766 | 178,281 | 94,297 |
Impairment expense | 0 | 950 | 0 |
Inventory write down | 0 | 4,147 | 0 |
Accretion of asset retirement obligations | 732 | 826 | 512 |
Loss on sale of property | 119 | 34,374 | 2,097 |
Prepayment premium on extinguishment of debt | 36,335 | 0 | 5,107 |
Amortization and write off of deferred loan origination costs | 3,190 | 2,702 | 2,327 |
Amortization of bond premium | (874) | (764) | (574) |
Deferred income tax (benefit) expense | (17,582) | (24,041) | 36,468 |
Deferred tax asset valuation | (7,351) | 0 | 0 |
Stock-based compensation expense | 12,871 | 8,133 | 53,297 |
Loss (gain) on derivatives | 50,835 | (60,818) | (83,858) |
Net cash received for derivative settlements | 32,364 | 43,767 | 3,311 |
Net cash (paid) received for option premiums | (10,334) | 40,656 | 193 |
Net premiums received (paid) on options that settled during the period | 31,757 | 11,406 | (2,308) |
Other | 6,169 | 7,310 | 976 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Restricted cash | (2,151) | (1,139) | 0 |
Accounts receivable | (35,774) | 24,103 | 45,372 |
Accounts receivable—related parties | 100 | 3,675 | (3,055) |
Materials and supplies | 0 | 3,767 | (689) |
Other current assets | (71,052) | (22,793) | 2,229 |
Other noncurrent assets | 748 | (588) | (535) |
Accounts payable and accrued expenses | 20,897 | (7,001) | (32,121) |
Revenue and severance taxes payable | 32,343 | (1,257) | 9,947 |
Other noncurrent liabilities | 0 | (375) | 375 |
Net cash provided by operating activities | 228,191 | 172,290 | 190,090 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Development of oil and natural gas properties | (505,802) | (382,550) | (477,681) |
Acquisitions of oil and natural gas properties | (1,346,190) | (73,807) | (762,244) |
Acquisition of Pacesetter Drilling, LLC | 0 | (2,408) | 0 |
Additions to other property and equipment | (33,374) | (19,755) | (7,924) |
Proceeds from sale of property | 0 | 51,355 | 172 |
Net cash used in investing activities | (1,885,366) | (427,165) | (1,247,677) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings under long-term debt | 1,057,500 | 105,000 | 946,140 |
Payments on long-term debt | (521,944) | (225,794) | (705,873) |
Debt issue costs | (18,097) | (1,138) | (12,547) |
Proceeds from issuance of common stock, net | 930,315 | 669,418 | 867,750 |
Purchases of common stock | (213) | (71) | 0 |
Vesting of restricted stock units | (91) | (6) | 0 |
Payment of Preferred Return | 0 | 0 | (6,726) |
Net cash provided by financing activities | 1,447,470 | 547,409 | 1,088,744 |
Net (decrease) increase in cash and cash equivalents | (209,705) | 292,534 | 31,157 |
Cash and cash equivalents at beginning of year | 343,084 | 50,550 | 19,393 |
Cash and cash equivalents at end of year | 133,379 | 343,084 | 50,550 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | |||
Cash paid for interest | 65,513 | 43,993 | 27,252 |
Cash paid for income taxes | 315 | 0 | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES: | |||
Asset retirement obligations incurred, including changes in estimate | (6,646) | 3,441 | 7,498 |
(Reductions) additions to oil and natural gas properties - change in capital accruals | (9,831) | 18,300 | 13,658 |
Additions to other property and equipment funded by capital lease borrowings | $ 2,758 | $ 939 | $ 2,263 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | ORGANIZATION AND NATURE OF OPERATIONS Parsley Energy, Inc. (individually or together with its subsidiaries, as the context requires, the "Company") was formed on December 11, 2013, pursuant to the laws of the State of Delaware, as a wholly owned subsidiary of Parsley Energy, LLC ("Parsley LLC"), a Delaware limited liability company formed on June 11, 2013. Concurrent with the formation of Parsley LLC, all of the interest holders of Parsley Energy, L.P. ("Parsley LP"), Parsley Energy Management, LLC ("PEM") and Parsley Energy Operations, LLC ("Operations") exchanged their interests in each entity in return for interests in Parsley LLC (the "Exchange"), causing each of Parsley LP, PEM and Operations to become wholly owned subsidiaries of Parsley LLC. As of December 31, 2016, the Company held 86.5% of Parsley LLC. Parsley LP was formed on February 29, 2008 as a Texas limited partnership. On September 9, 2011, Parsley LP formed and held all of the interest in, Spraberry Energy, LLC ("Spraberry"), a Texas limited liability company. On November 20, 2012, Spraberry merged with and into Parsley LP, thereby terminating Spraberry’s corporate existence. PEM was formed on February 19, 2008 as a Texas limited liability company and to act as the general partner of Parsley LP. On October 7, 2016, PEM merged with and into Operations, thereby terminating PEM’s corporate existence. Operations was formed on February 19, 2008 as a Texas limited liability company. Parsley LP also owns a noncontrolling 42.5% investment in Spraberry Production Services LLC ("SPS"). SPS was formed on August 27, 2010 as a Texas limited liability company and is primarily engaged in the oilfield services business, servicing properties located in the Permian Basin in West Texas. Parsley Energy Aviation, LLC ("Parsley Aviation") was formed on March 22, 2013 as a Texas limited liability company and a wholly owned subsidiary of Operations. Parsley Finance Corp. ("Finance Corp.") was formed on January 15, 2014 as a Delaware corporation and a wholly owned subsidiary of Parsley LLC. Parsley Minerals, LLC ("Minerals LLC") was formed on May 13, 2016 as a Texas limited liability company and a wholly owned subsidiary of Parsley LP. Parsley GP, LLC ("Parsley GP") was formed on October 21, 2016 as a Delaware limited liability company and a wholly owned subsidiary of PEM. On October 27, 2016, (i) PEM conveyed its general partnership units and limited partnership units in Parsley LP to Parsley GP and (ii) immediately thereafter, merged with and into Operations, with Operations continuing as the surviving entity. As a result of these transactions, Parsley GP became a wholly owned subsidiary of Operations and the new general partner of Parsley LP. The Company, Parsley LLC and Parsley LLC’s wholly owned subsidiaries are primarily engaged in the acquisition, development, production, exploration and sale of crude oil and natural gas properties located in the Permian Basin in West Texas, and other tangential activities. Initial Public Offering On May 29, 2014, the Company completed its initial public offering (the "IPO") of 57.5 million shares of the Company’s Class A common stock, par value $0.01 per share ("Class A Common Stock"), at a price of $18.50 per share. Approximately 7.5 million of the shares of the Class A Common Stock were sold by selling stockholders and the Company did not receive any proceeds from the sale of those shares. The remaining approximately 50.0 million shares of the Company’s Class A Common Stock that were sold resulted in gross proceeds of approximately $924.3 million to the Company and net proceeds, after deducting underwriting discounts and commissions and offering expenses, of approximately $867.8 million . The material terms of the IPO are described in the Company’s final prospectus, dated May 22, 2014 and filed with the Securities and Exchange Commission ("SEC") pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended (the "Securities Act"), on May 27, 2014. Corporate Reorganization On May 29, 2014, in connection with the IPO, Parsley LLC underwent a corporate reorganization ("Corporate Reorganization") whereby (a) all of the membership interests (including incentive units) in Parsley LLC held by its then existing owners (the "Existing Owners") were converted into a single class of units in Parsley LLC ("PE Units"), (b) certain of the Existing Owners contributed all of their PE Units to the Company in exchange for an equal number of shares of the Company’s Class A Common Stock, (c) certain of the Existing Owners contributed only a portion of their PE Units to the Company in exchange for an equal number of shares of the Company’s Class A Common Stock and continue to own a portion of the PE Units and (d) Parsley Energy Employee Holdings, LLC ("PEEH"), an entity owned by certain of Parsley LLC’s officers and employees that was formed to hold a portion of the incentive units in Parsley LLC, was merged with and into the Company, with the Company surviving the merger and the members of PEEH receiving shares of the Company’s Class A Common Stock. As a result of the above transactions, the Company issued a total of 43.2 million shares of its Class A Common Stock. Upon completion of the IPO, the Company issued and contributed 32.1 million shares of its Class B common stock, par value $0.01 per share ("Class B Common Stock") and all of the net proceeds of the IPO to Parsley LLC in exchange for 93.2 million PE Units. Parsley LLC distributed to each of the Existing Owners that continued to own PE Units following the Corporate Reorganization and the IPO (collectively, the "PE Unit Holders"), one share of Class B Common Stock for each PE Unit such PE Unit Holder held. After giving effect to these transactions the Company owned an approximate 74.3% interest in Parsley LLC, with the remaining PE Unitholders owning an approximate 25.7% interest in Parsley LLC. Pacesetter Drilling, LLC On April 21, 2015, Operations, established a limited liability company, Pacesetter Drilling, LLC ("Pacesetter"), as a wholly owned subsidiary. On June 15, 2015 , Pacesetter entered into an asset purchase agreement with an oilfield drilling company to acquire certain property, equipment and other assets (the "Pacesetter Acquisition"). The Pacesetter Acquisition was accounted for using the acquisition method under Accounting Standards Codification ("ASC") Topic 805, Business Combinations. Operations and Pacesetter’s President contributed cash in exchange for ownership in Pacesetter. Pacesetter then paid total consideration of $7.0 million for its interest in the purchased assets, of which $4.4 million was allocated to Operations and $2.6 million was allocated to the noncontrolling interest. As a result of the Pacesetter Acquisition, Operations has an approximately 63.0% interest in Pacesetter. Public Offerings of Common Stock On February 5, 2015, the Company entered into an underwriting agreement to sell 14,885,797 shares of Class A Common Stock in a private placement (the "Private Placement") at a price of $15.50 per share to selected institutional investors. The Private Placement closed on February 11, 2015 and resulted in gross proceeds of approximately $230.7 million to the Company and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, of approximately $224.0 million . The net proceeds were used to repay a portion of outstanding borrowings under the Company's Revolving Credit Agreement (as defined in Note 7—Debt ) and for general corporate purposes. On September 18, 2015, the Company entered into an underwriting agreement to sell 14,950,000 shares of Class A Common Stock (including 1,950,000 shares issued pursuant to the underwriters’ option to purchase additional shares) at a price of $15.00 per share in an underwritten public offering (the "September Offering"). The September Offering resulted in gross proceeds of approximately $224.3 million to the Company and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, of approximately $217.0 million . A portion of the net proceeds was used to repay borrowings outstanding under the Company's Revolving Credit Agreement and the remainder of the net proceeds were used to fund a portion of the Company’s capital program, including acquisitions. On December 9, 2015, the Company and NGP X US Holdings, L.P., one of the Company’s stockholders ("NGP"), entered into an underwriting agreement to sell 14,202,500 shares of Class A Common Stock, including 12,911,364 shares of Class A Common Stock issued and sold by the Company and 1,291,136 shares of Class A Common Stock sold by NGP, at a price of $18.00 per share in an underwritten public offering (the "December Offering"). The December Offering resulted in gross proceeds of approximately $228.7 million to the Company and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, of approximately $228.4 million . A portion of the net proceeds from the offering was used to fund the acquisition of 6,040 gross ( 5,274 net) acres located in Upton, Reagan and Glasscock Counties, Texas and the remaining net proceeds were used to fund a portion of the Company’s capital program and for general corporate purposes. The Company did not receive any of the proceeds from the sale of shares by NGP. On April 4, 2016, the Company entered into an underwriting agreement to sell 20,987,500 shares of Class A Common Stock (including 2,737,500 shares issued pursuant to the underwriters’ option to purchase additional shares) at a price of $21.40 per share in an underwritten public offering (the "April Offering"). The April Offering closed on April 8, 2016 and resulted in gross proceeds to the Company of approximately $449.1 million and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, of approximately $433.2 million . On May 23, 2016, the Company entered into an underwriting agreement to sell 9,487,500 shares of Class A Common Stock (including 1,237,500 shares issued pursuant to the underwriters’ option to purchase additional shares) at a price of $24.60 per share in an underwritten public offering (the "May Offering"). The May Offering closed on May 27, 2016 and resulted in gross proceeds to the Company of approximately $233.4 million and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, of approximately $226.2 million . On August 15, 2016, the Company entered into an underwriting agreement to sell 8,337,500 shares of Class A Common Stock (including 1,087,500 shares issued pursuant to the underwriters’ option to purchase additional shares) at a price of $33.55 per share in an underwritten public offering (the "August Offering"). The August Offering closed on August 19, 2016 and resulted in gross proceeds to the Company of approximately $279.7 million and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, of approximately $271.1 million . On January 10, 2017 , the Company entered into an underwriting agreement to sell 25,300,000 shares of Class A Common Stock (including 3,300,000 shares issued pursuant to the underwriters’ option to purchase additional shares) at a price of $35.00 per share in an underwritten public offering (the "January Offering"). The January Offering closed on January 17, 2017 and resulted in gross proceeds to the Company of approximately $885.5 million and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, of approximately $863.0 million . As discussed in Note 14—Subsequent Events, the Company used a portion of the net proceeds from the January Offering to fund the aggregate purchase price for certain acquisitions of oil and natural gas interests in the Midland and Southern Delaware Basins and the remaining net proceeds to fund a portion of its capital program and for general corporate purposes, including potential future acquisitions. On February 7, 2017 , the Company entered into an underwriting agreement to sell 41,400,000 shares of Class A Common Stock (including 5,400,000 shares issued pursuant to the underwriters' option to purchase additional shares), at a price of $31.00 per share in an underwritten public offering (the "February Offering"). The February Offering closed on February 13, 2017 and resulted in gross proceeds to the Company of approximately $1,283.4 million and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses of approximately $1,260.6 million . As discussed in Note 14—Subsequent Events, the Company will use a portion of the net proceeds from the February Offering to fund the cash portion of the purchase price for the Double Eagle Acquisition (as defined in Note—14 Subsequent Events ) and the remaining net proceeds will be used to fund a portion of its capital program and for general corporate purposes, including potential future acquisitions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation These consolidated financial statements include the accounts of Parsley Energy, Inc., its majority-owned subsidiary, Parsley LLC and the wholly owned subsidiaries of Parsley LLC: (i) Parsley LP, (ii) PEM (a wholly owned subsidiary of the Company until its merger with Operations on October 7, 2016), (iii) Operations, (iv) Finance Corp., (v) Parsley Aviation and (vi) Minerals LLC. Operations also owns an approximately 63.0% interest in Pacesetter. The Company includes the accounts of Pacesetter in its consolidated financial statements. Parsley LP owns a 42.5% interest in 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 (1) adopt accounting policies within accounting rules set by the Financial Accounting Standards Board ("FASB") and by the SEC and (2) 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 and impairment of capitalized costs of oil and natural gas properties; • operating costs accrued and volumes and prices for revenues accrued; • estimates of asset retirement obligations; • estimates of the fair value assets acquired and liabilities assumed in business combinations; • evaluations of impairment of proved and unproved properties are subject to number uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks; • impairment of other assets; • depreciation of property and equipment; • valuation of commodity derivative instruments; and • estimates of the fair value of stock-based compensation. 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. Restricted Cash Restricted cash at December 31, 2016 and 2015 of $3.3 million and $1.1 million includes cash that is contractually restricted involving a non-related party. The restricted cash includes revenues associated with an operated well. Accounts Receivable Accounts receivable consist of receivables from joint interest owners on properties the Company operates and crude oil, natural gas and 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. Amounts due from joint interest owners or purchasers are stated net of an allowance for doubtful accounts when the Company believes collection is doubtful. 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 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. No allowance was deemed necessary at December 31, 2016 or December 31, 2015 . Significant Customers For the years ended December 31, 2016 , 2015 and 2014 , each of the following purchasers accounted for more than 10% of the Company's revenue: Year Ended December 31, 2016 2015 2014 Shell Trading (US) Company 44% 23% 4% BML, Inc. 13% 19% 14% Targa Pipeline Mid-Continent, LLC 13% 12% 20% TransOil Marketing, LLC 8% 13% —% Plains Marketing, L.P. 7% 6% 15% Enterprise Crude Oil, LLC 3% —% 10% Permian Transport & Trading —% 6% 11% The Company does not require collateral and does not believe the loss of any single purchaser would materially impact its operating results, as crude oil and natural gas are fungible products with well-established markets and numerous purchasers. Material and Supplies Materials and supplies are stated at the lower of cost or market and consists 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. During 2015, the Company made significant materials and supplies purchases and evaluated assets based on current operations. The Company determined that these materials and supplies would not be utilized in the current year and therefore reclassified them to noncurrent assets as non-depreciable other property, plant and equipment. See Note 13—Disclosures about Fair Value of Financial Instruments for additional information regarding the Company’s impairment of materials and supplies. Oil and Natural Gas Properties Oil and natural gas exploration, development and production activities are accounted for in accordance with the successful efforts method of accounting. Under this method, costs of acquiring properties, costs of drilling successful exploration wells and development costs are capitalized. As exploration and development work progresses and the reserves on these properties are proven, capitalized costs attributed to the properties and mineral interests are subject to depreciation, depletion and amortization ("DD&A"). Depletion of capitalized costs is provided using the units-of-production method based on proved oil and gas reserves related to the associated reservoir. 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. On the sale of a complete or partial unit of a proved property or pipeline and related facilities, the cost and related accumulated DD&A are removed from the property accounts and any gain or loss is recognized. For sales of entire 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 partial interests in unproved properties are accounted for as a recovery of costs unless the proceeds exceed the entire cost of the property. Oil and Gas Reserves The estimates of proved oil and natural gas reserves utilized in the preparation of the consolidated financial statements are estimated in accordance with the rules established by the SEC and the FASB. These rules require that reserve estimates be prepared under existing economic and operating conditions using a trailing first day of the month 12-month average price, net of historical differentials, with no provision for price and cost escalations in future years except by contractual arrangements. Reserve estimates are inherently imprecise. Accordingly, the estimates are expected to change as more current information becomes available. Oil and gas properties are depleted by field using the units-of-production method. Capitalized drilling and development costs of producing oil and natural gas properties are depleted over proved developed reserves and leasehold costs are depleted over total proved reserves. It is possible that, because of changes in market conditions or the inherent imprecision of reserve estimates, the estimates of future cash inflows, the amount of oil and natural gas reserves, the remaining estimated lives of oil and natural gas properties, or any combination of the above may be increased or decreased. Increases in recoverable economic volumes generally reduce per unit depletion rates while decreases in recoverable economic volumes generally increase per unit depletion rates. 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 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 obligation 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 obligation for the periods indicated: Year ended December 31, 2016 2015 (in thousands) Asset retirement obligations, beginning of period $ 18,220 $ 16,207 Additional liabilities incurred 3,290 1,512 Disposition of wells (858 ) (2,254 ) Accretion expense 732 826 Liabilities settled upon plugging and abandoning wells (56 ) — Revision of estimates (9,936 ) 1,929 Asset retirement obligations, end of period $ 11,392 $ 18,220 Allocation of Purchase Price in Business Combinations 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. Impairment of Oil and Natural Gas Properties 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. The Company reviews its oil and natural gas properties by amortization base or by individual well for those wells not constituting part of an amortization base. For each property determined to be impaired, an impairment loss equal to the difference between the carrying value of the properties and the estimated fair value (discounted future cash flows) of the properties would be recognized at that time. 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 13— Disclosures about Fair Value of Financial Instruments for additional information regarding the Company’s impairment of proved oil and natural gas properties. Exploration Costs Exploration 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 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. 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 or expiration of all or a portion of such projects. The following table summarized exploration costs incurred by the Company for the periods indicated: Year Ended December 31, 2016 2015 2014 (in thousands) Leasehold abandonments $ 6,063 $ 8,227 $ 430 Geological and geophysical costs 3,015 5,459 2,394 Idle drilling rig fees 4,304 — — Unproved leasehold amortization 549 179 312 Total exploration costs $ 13,931 $ 13,865 $ 3,136 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 disposition 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 three years to 15 years . Depreciation expense on other property and equipment was $6.6 million , $4.7 million and $1.5 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. 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, generally the Company’s share of investees’ earnings or loss, after elimination of intra-company profit or loss, is recognized in the consolidated statement of operations. The Company reviews its investments to determine if a loss in value which is other than a temporary decline has occurred. If such loss has occurred, the Company would recognize an impairment provision. There was no impairment for the Company’s equity investments for the years ended December 31, 2016 , 2015 and 2014 . Derivative Instruments The Company uses derivative financial instruments to reduce exposure to fluctuations in commodity prices. These transactions are in the form of crude options and collars. 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 trades. The Company 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 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 the asset or paid to transfer the 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 Revenues from the sale of crude oil, natural gas and NGLs are recognized when the production is sold, net of any royalty interest. Because final settlement of the Company’s hydrocarbon sales can take up to two months, the expected sales volumes and prices for those properties are estimated and accrued using information available at the time the revenue is recorded. Natural gas revenues are recorded using the entitlement method of accounting whereby revenue is recognized based on the Company’s proportionate share of natural gas production. At December 31, 2016 , 2015 and 2014 , the Company did not have any natural gas imbalances. Transportation expenses are included as a reduction of natural gas revenue and are not material. Defined Contribution Plan The Company sponsors a 401(k) defined contribution plan for the benefit of all employees at 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 contribution of up to a certain percentage of an employee’s contributions. For the year ended December 31, 2016 , 2015 and 2014 , the Company made contributions to the plan of $1.9 million , $1.4 million and $0.8 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 carry forwards. 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. Parsley LLC, the Company’s accounting predecessor, is a limited liability company that is not subject to U.S. federal income tax. 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 that (i) engage in activities from which it may earn revenues and incur expenses (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. The Company considers drilling rig services ancillary to its oil and gas exploration and production activities and manages these services to support such activities. Change in Accounting Principle The Company adopted Accounting Standards Update ("ASU") 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , effective January 1, 2016. This standard requires companies that have historically presented debt issuance costs as an asset to present those costs as a direct deduction from the carrying amount of the underlying debt liability. To the extent that there are no borrowings under the Revolving Credit Agreement, the related deferred loan costs will continue to be classified as an asset. The guidance required retrospective application in the consolidated financial statements. The Company had no borrowings outstanding under the Revolving Credit Agreement (as defined in Note 7—Debt ) at December 31, 2016 and 2015 and as such, approximately $4.2 million and $2.3 million , respectively, of deferred loan costs related to the Revolving Credit Agreement are included in Other noncurrent assets on the consolidated balance sheets and as an operating activity on the consolidated statements of cash flows, included in this Annual Report. The Company’s 2025 Notes (as defined in Note 7—Debt ) and the 2024 Notes (as defined in Note 7—Debt ) are presented net of approximately $14.3 million of deferred loan costs at December 31, 2016 . The Company’s 2022 Notes (as defined in Note 7—Debt ) are presented net of approximately $9.1 million of deferred loan costs at December 31, 2015 . The Company adopted ASU 2016-09, Compensation—Stock Compensation (Topic 718)—Improvements to Employee Share-Based Payment Accounting , effective January 1, 2016. This ASU is intended to simplify the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, including interim periods within those annual periods, and early application is permitted as of the beginning of an interim or annual reporting period. The ASU did not have a material effect on the Company’s consolidated and combined financial statements and related disclosures. The Company adopted ASU 2015-17, Income Taxes (Topic 740) , effective December 31, 2015. This standard requires companies that have historically presented current and noncurrent deferred tax assets and liabilities in a classified statement of financial position to present deferred tax assets and liabilities as noncurrent in a classified statement of financial position. The guidance may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company has elected not to retrospectively adjust prior periods. Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current presentation. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and most industry-specific guidance. ASU 2014-09 provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. In addition, new qualitative and quantitative disclosure requirements aim to enable financial statement users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for one year to fiscal years beginning after December 15, 2017. Early adoption is permitted for fiscal years beginning after December 15, 2016. In May 2016, the FASB issued ASU 2016-11, which rescinds guidance from the SEC on accounting for gas balancing arrangements and will eliminate the use of the entitlements method. Entities have the option of using either a full retrospective or modified approach to adopt the new standards. The Company has selected the modified retrospective approach for transition and plans to implement the new guidance on January 1, 2018. The amended guidance is not expected to materially affect the Company's consolidated financial statements or notes to the consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall , which addresses the fair value measurements, impairment assessment and disclosure requirements of equity securities, equity investments and other financial instruments and also clarifies current guidance to aid in the reduction of diversity in practice. For public business entities, the amended guidance is effective for fiscal years beginning after December 15, 2017 and for interim periods within those years. The amended guidance should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values should be applied prospectively. The Company has not yet determined the effect of the standard on its ongoing financial reporting. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which modifies lessees’ recognition of lease assets and lease liabilities for those leases classified as operating leases under previous GAAP. The amended guidance will be effective for the Company for annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In March 2016, the FASB issued ASU No. 2016-07, Investments—Equity Method and Joint Ventures (Topic 323) , which eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amended guidance will be effective for the Company for annual periods beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Early adoption is permitted for any entity in any interim or annual period. The amended guidance is not expected to materially affect the Company’s consolidated financial statements or notes to the consolidated financial statements. In August 2016, The FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) , which provides guidance on eight specific cash flow issues, including cash payments associated with debt and debt modification, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned life insurance policies, distributions made from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. The amended guidance will be effective for the Company for annual periods beginning after December 15, 2017. The amendments should be applied using a retrospective transition method to each period presented. Early adoption is permitted for any entity in any interim or annual period. The Company is evaluating the ASU and has not determined the effect of the standard on its ongoing financial reporting. In October 2016, The FASB issued ASU No. 2016-16, Income Taxes (Topic 740) , which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU also eliminates the exception for an intra-entity transfer of an asset other than inventory. The amended guidance does not include new disclosure requirements; however, existing disclosure requirements might be applicable when accounting for the current and deferred income taxes. The amended guidance will be effective for the Company for annual periods beginning after December 15, 2017. The amendments should be applied using a modified retrospective basis through a cumulative-effect adjustment directly to retained earn |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
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 basis swap contracts, three-way collars and put spread options to (i) reduce the effect of price volatility on the commodities the Company produces and sells or consumes, (ii) support the Company's annual capital budgeting and expenditure plans and (iii) reduce commodity price risk associated with certain capital projects. The Company uses put spread options to manage commodity price risk for NYMEX WTI. A put spread option is a combination of two options: a purchased put and a sold put. The purchased put establishes the minimum price that the Company will receive for the contracted volumes unless the market price for the commodity falls below the sold put strike price, at which point the minimum price equals the reference price plus the excess of the purchased put strike price over the sold put strike price. Additionally, the Company uses basis swap contracts to mitigate basis risk caused by the volatility of the Company’s basis differentials. The basis swap contracts establish the differential between Cushing WTI prices and the relevant price index at which oil production is sold. Oil Production Derivative Activities All material physical sales contracts governing the Company's oil production are tied directly to, or are highly correlated with, NYMEX WTI oil prices. The following table sets forth the volumes associated with the Company's outstanding oil derivative contracts expiring during the periods indicated and the weighted average oil prices for those contracts: Year Ending December 31, Crude Options 2017 2018 Purchased: Puts (1) Notional (MBbl) 9,948 3,300 Weighted average strike price $ 52.04 $ 53.41 Sold: Puts (1) Notional (MBbl) (9,948 ) (3,300 ) Weighted average strike price $ 40.45 $ 42.27 Basis swap contracts: (2) Midland-Cushing index swap volume (MBbl) (3) 4,290 360 Price differential ($/Bbl) $ (1.03 ) $ (0.95 ) (1) Excludes 7,254 notional MBbls with a fair value of $10.3 million related to amounts recognized under master netting agreements with derivative counterparties. (2) Represents swaps that fix the basis differentials between the index prices at which the Company sells its oil produced in the Permian Basin and the Cushing WTI price. (3) As of December 31, 2016, the Company has remaining basis swap contracts for 4,650 MBbls of the Company’s 2017 and 2018 production with a negative price differential ranging from $0.40 per MBbl to $1.70 per MBbl between the Midland WTI price index and the Cushing WTI price index. 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 three-way collars 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, Natural Gas Three-Way Collars 2017 Purchased: Puts Notional (MMbtu) 5,700 Weighted average strike price $ 2.75 Sold: Puts Notional (MMbtu) (5,700 ) Weighted average strike price $ 2.36 Calls Notional (MMbtu) (5,700 ) Weighted average strike price $ 4.02 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 Company recognized loss on derivatives of $50.8 million and gains of $60.8 million and $83.9 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. These gains and losses are included in the consolidated statements of operations line item, (Loss) gain on derivatives . The fair value of the derivative instruments is discussed in Note 13—Disclosures about Fair Value of Financial Instruments. 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 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 year ended December 31, 2016 and 2015, the Company did not receive or post any margins in connection with collateralizing its derivative positions. During the year ended 2014 , the Company received and posted margins with some of its counterparties to collateralize certain derivative positions. The following table presents the Company’s net exposure from its offsetting derivative asset and liability positions as indicated (in thousands): Gross Amount Presented on Balance Sheet Netting Adjustments Net Exposure December 31, 2016 Derivative assets with right of offset or master netting agreements $ 66,417 $ (10,293 ) $ 56,124 Derivative liabilities with right of offset or master netting agreements (67,261 ) 10,293 (56,968 ) December 31, 2015 Derivative assets with right of offset or master netting agreements $ 407,052 $ (297,951 ) $ 109,101 Derivative liabilities with right of offset or master netting agreements (347,611 ) 297,951 (49,660 ) Concentration of Credit Risk The financial integrity of the Company’s exchange-traded contracts is assured by NYMEX through systems of financial safeguards and transaction guarantees and is therefore subject to nominal credit risk. Over-the-counter traded options expose the Company to counterparty credit risk. These over-the-counter options are entered into with a large multinational financial institution with investment grade credit rating 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, 2016 and 2015 is summarized in the table above. The Company monitors the creditworthiness of its counterparties, established credit limits according to the Company’s credit policies and guidelines and assesses the impact on fair values of its counterparties’ creditworthiness. The Company typically 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. The Company did not incur any losses due to counterparty bankruptcy filings during any of the years ended December 31, 2016 , 2015 and 2014 . Credit Risk Related Contingent Features in Derivatives Certain commodity derivative instruments contain provisions that require the Company to either post additional collateral or immediately settle any outstanding liability balances upon the occurrence of a specified credit risk related event. These events, which are defined by the existing commodity derivative contracts, are primarily downgrades in the credit ratings of the Company and its affiliates. None of the Company’s commodity derivative instruments were in a net liability position with respect to any individual counterparty at December 31, 2016 or 2015 . |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment includes the following (in thousands): December 31, 2016 December 31, 2015 Oil and natural gas properties: Subject to depletion $ 2,376,712 $ 1,627,367 Not subject to depletion Incurred in 2016 1,215,920 — Incurred in 2015 71,712 118,101 Incurred in 2014 and prior 399,073 500,693 Total not subject to depletion 1,686,705 618,794 Oil and natural gas properties, successful efforts method 4,063,417 2,246,161 Less accumulated depreciation, depletion and impairment (506,175 ) (290,186 ) Total oil and natural gas properties, net 3,557,242 1,955,975 Other property, plant and equipment 73,382 37,253 Less accumulated depreciation (14,064 ) (7,475 ) Other property, plant and equipment, net 59,318 29,778 Total property, plant and equipment, net $ 3,616,560 $ 1,985,753 Costs subject to depletion are proved costs and costs not subject to depletion are unproved costs and current drilling projects. At December 31, 2016 and 2015 , the Company had excluded $1,686.7 million and $618.8 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 gas reserves related to the associated reservoir. Depletion expense on capitalized oil and gas properties was $227.2 million , $173.6 million and $92.8 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. The Company had no exploratory wells in progress at December 31, 2016 , 2015 or 2014 . 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 $49.4 million at December 31, 2016. The Company anticipates that the $49.4 million associated with these wells in progress at December 31, 2016 will be transferred to costs subject to depletion during 2017. 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 year ended December 31, 2016 and 2015. There was $2.7 million of capitalized interest recorded during 2014. |
Acquisitions of Oil and Natural
Acquisitions of Oil and Natural Gas Properties | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions of Oil and Natural Gas Properties | ACQUISITIONS OF OIL AND NATURAL GAS PROPERTIES The Company incurred $79.1 million , $38.8 million and $174.0 million of leasehold acquisition costs during the years ended December 31, 2016 , 2015 and 2014 , respectively, which are included as part of costs not subject to depletion. In addition, during the years ended December 31, 2016, 2015 and 2014, the Company acquired certain oil and natural gas properties as described below. 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. During 2016, the Company acquired, from unaffiliated individuals and entities, interests in certain oil and natural gas properties through a number of separate, individually negotiated transactions for total cash consideration of $1,267.1 million . The Company reflected $261.4 million of the total consideration paid as part of its cost subject to depletion within its oil and natural gas properties and $1,005.7 million as unproved leasehold costs within its oil and natural gas properties for the year ended December 31, 2016 . The revenues and operating expenses attributable to these acquisitions during the years ended December 31, 2016 , 2015 and 2014 were not material. During 2016, the Company also exchanged certain unproved acreage and oil and natural gas properties with a third party, with no gain or loss recognized. During 2015, the Company acquired from unaffiliated individuals and entities, interests in certain oil and natural gas properties through a number of separate, individually negotiated transactions for an aggregate total cash consideration of $35.0 million . The Company reflected $16.4 million of the total consideration paid as part of its costs subject to depletion and $18.6 million as unproved leasehold costs within its oil and gas properties. The revenues and operating expenses attributable to the working interest acquisitions during the years ended December 31, 2016 , 2015 and 2014 were not material. During 2014, the Company acquired from unaffiliated individuals and entities, interests in certain oil and natural gas properties through a number of separate, individually negotiated transactions for an aggregate total cash consideration of $588.2 million . The Company reflected $233.9 million of the total consideration paid as part of its costs subject to depletion and $354.3 million as unproved leasehold costs within its oil and gas properties. The revenues and operating expenses attributable to the working interest acquisitions during the years ended December 31, 2016 , 2015 and 2014 were not material. |
Sales of Oil and Natural Gas Pr
Sales of Oil and Natural Gas Properties | 12 Months Ended |
Dec. 31, 2016 | |
Gain (Loss) on Disposition of Oil and Gas Property [Abstract] | |
Sales of Oil And Natural Gas Properties | SALES OF OIL AND NATURAL GAS PROPERTIES In December 2015, the Company sold its interest in 91 net operated wells and 11,664 gross ( 7,155 net) acres for net proceeds of $39.4 million and realized a $36.7 million loss, net of estimated purchase price adjustments. In July 2015, the Company sold 9,164 net acres for total proceeds of $9.3 million and recognized a gain on the sale of $3.2 million . In August 2014, the Company sold its interest in one operated well and 38 net acres for total proceeds of $0.2 million and realized a $2.1 million loss on the sale. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | DEBT The Company’s debt consists of the following (in thousands): December 31, 2016 December 31, 2015 5.375% senior unsecured notes due 2025 $ 650,000 $ — 6.250% senior unsecured notes due 2024 400,000 — 7.500% senior unsecured notes due 2022 61,846 550,000 Capital leases 3,752 2,215 Other 3,500 — Revolving Credit Agreement — — Total debt 1,119,098 552,215 Debt issuance costs on senior unsecured notes (14,388 ) (9,092 ) Premium on senior unsecured notes 3,828 4,660 Less: current portion (67,214 ) (951 ) Total long-term debt $ 1,041,324 $ 546,832 Revolving Credit Agreement On October 28, 2016, the Company and its subsidiary Parsley LLC entered into a new revolving credit agreement with, among others, Wells Fargo Bank, National Association, as administrative agent (the "New Revolving Credit Agreement"), providing for an initial borrowing base of $900.0 million and an initial commitment level of $600.0 million . The Revolving Credit Agreement replaced the Company's previously existing amended and restated revolving credit agreement with, among others, Wells Fargo Bank, National Association, as administrative agent, which was terminated concurrently with entry into the New Revolving Credit Agreement. As used in this Annual Report, the term "Revolving Credit Agreement" refers, prior to October 28, 2016, to the previously existing amended and restated credit agreement and, subsequent to October 28, 2016, to the New Revolving Credit Agreement. The Revolving Credit Agreement provides for a five -year senior secured revolving credit facility, maturing on October 28, 2021, with a borrowing capacity of the lesser of (i) the borrowing base, (ii) aggregate elected borrowing base commitments and (iii) $2.5 billion . The Revolving Credit Agreement is secured by substantially all of Parsley LLC’s and its restricted subsidiaries’ assets. The Revolving Credit Agreement provides for an initial borrowing base of $900.0 million and commitment level of $600.0 million , which will be redetermined by the lenders on a semi-annual basis each April 1 and October 1, with the first such scheduled redetermination occurring on April 1, 2017. 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. As of December 31, 2016 , the borrowing base was $875.0 million with a commitment level of $600.0 million . There were no borrowings outstanding and $0.3 million in letters of credit outstanding, resulting in availability of approximately $599.8 million . 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 2.0% to 3.0% , 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 1.0% to 2.0% , depending on the percentage of the borrowing base utilized. Notwithstanding the foregoing, if the Consolidated Leverage Ratio (as defined in the Revolving Credit Agreement) as of the last day of any fiscal quarter or fiscal year of Parsley LLC, as applicable, exceeds 3.50 to 1.00 , then the applicable margin with respect to alternate base rate loans and Eurodollar loans will, in each case, increase by 0.5% until such time as the Consolidated Leverage Ratio does not exceed 3.50 to 1.00 . 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, 2016 , letters of credit outstanding under the Revolving Credit Agreement had a weighted average interest rate of 2.00% . The Company may repay any amounts borrowed prior to the maturity date without any premium or penalty other than customary LIBOR breakage costs. The Revolving Credit Agreement is subject to various financial covenants, 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 (annualized through the period ending March 31, 2017). 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. At December 31, 2016 , the Company was in compliance with all required covenants. The Revolving Credit Agreement is subject to customary events of default, including a change in control (as defined in the Revolving Credit Agreement). 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. 7.500% Senior Notes due 2022 On February 5, 2014, Parsley LLC and Finance Corp. ("the Issuers") issued $400.0 million aggregate principal amount of 7.500% senior unsecured notes due 2022 (the "2022 Notes") in an offering that was exempt from registration under the Securities Act. Interest was payable on the 2022 Notes semi-annually in arrears on each February 15 and August 15 and commenced August 15, 2014. The 2022 Notes were 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"). This issuance of 2022 Notes resulted in gross proceeds of $400.0 million and net proceeds to the Company, after deducting initial purchaser discounts and commissions and offering expenses, of approximately $391.4 million , $198.5 million of which was used repay all outstanding term debt, accrued interest and a prepayment penalty under a second lien credit facility (which was terminated concurrently with such repayment) and $175.1 million of which was used to partially repay borrowings under the Revolving Credit Agreement. On April 14, 2014, the Issuers issued an additional $150.0 million aggregate principal amount of the 2022 Notes at 104% of par in an offering that was exempt from registration under the Securities Act. This issuance of 2022 Notes resulted in gross proceeds of $156.0 million and net proceeds to the Company, after deducting initial purchaser discounts and commissions and offering expenses, of $152.8 million , $145.0 million of which was used to repay borrowings under the Revolving Credit Agreement. On December 6, 2016, Parsley LLC commenced a cash tender offer to purchase any and all of the 2022 Notes (the "Tender Offer"). On December 13, 2016, the Tender Offer expired and, at such time, $487.7 million aggregate principal amount of the 2022 Notes was validly tendered (which did not include $1.2 million aggregate principal amount of the 2022 Notes that remained subject to guaranteed delivery procedures). Parsley LLC accepted all of the 2022 Notes validly tendered and not validly withdrawn in the Tender Offer and, on December 13, 2016, made a cash payment of $537.1 million , which included principal of $487.7 million , a prepayment premium on the extinguishment of debt of $32.5 million , accrued interest of $12.0 million and other debt issuance costs of $4.9 million . On December 15, 2016, Parsley LLC made a cash payment of $0.5 million for the tender of an additional $0.4 million aggregate principal amount of the 2022 Notes and $0.1 million of prepayment premium on the extinguishment of debt and accrued interest. The Company recognized a loss on extinguishment of debt of $36.3 million , which is included in Prepayment premium on extinguishment of debt on the Company's consolidated statements of operations and in operating activities on the Company's statements of cash flows, included in this Annual Report. On January 5, 2017, Parsley LLC redeemed $61.8 million aggregate principal of the 2022 Notes that remained outstanding and made a cash payment of $67.5 million to the remaining holders of the 2022 Notes, which included principal of $61.8 million , prepayment premium on the extinguishment of debt of $3.9 million and accrued interest of $1.8 million . During 2017, the Company will recognize a loss on extinguishment of debt of $3.9 million. As of December 31, 2016, the Company had committed to repayment of the remaining $61.8 million aggregate principal amount of the 2022 Notes, which are included in Current portion of long-term debt on the Company's consolidated balance sheets, included in this Annual Report. 6.250% Senior Unsecured Notes due 2024 On May 27, 2016, 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 gross proceeds to the Company of $ 200.0 million and 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 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 Initial 2024 Notes will be 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 and commenced December 1, 2016. The 2024 Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantor Subsidiaries. The 2024 Notes are not guaranteed by the Company and the Company is not subject to the terms of the indenture. 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 interest received is included in Accounts payable and accrued expenses on the consolidated balance sheets and as an operating activity on the consolidated statements of cash flows, included in this Annual Report. At any time prior to June 1, 2019, the Issuers may, from time to time, redeem up to 35% of the aggregate principal 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 redemption date, with the proceeds of certain equity offerings so long as the redemption occurs within 120 days of completing such equity offering and at least 65% of the aggregate principal amount of the 2024 Notes remains outstanding after such redemption. 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 investments; (v) create certain liens; (vi) enter into agreements that restrict dividends or other payments from their restricted subsidiaries to them; (vii) consolidate, merge or transfer all or substantially all of their assets; (viii) engage in transactions with affiliates; and (ix) create unrestricted subsidiaries. At December 31, 2016, the Company was in compliance with all of these covenants. If at any time when the 2024 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 (as defined in the indenture governing the 2024 Notes) has occurred and is continuing, many of such covenants will be suspended. If the ratings on the 2024 Notes were to decline subsequently to below investment grade, the suspended covenants would be reinstated. 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"). Interest is payable on the 2025 Notes semi-annually in arrears on each January 15 and July 15, commencing July 15, 2017. 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. The 2025 Notes Offering resulted in gross proceeds to the Company of $650.0 million and net proceeds to the Company, after deducting initial purchaser discounts and commissions and offering expenses, of approximately $644.1 million . 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 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, 103.750% 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 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) create unrestricted subsidiaries. At December 31, 2016, the Company was in compliance with all of these covenants. If at any time when the 2025 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 (as defined in the indenture governing the 2025 Notes) has occurred and is continuing, many of such covenants will be suspended. If the ratings on the 2025 Notes were to decline subsequently to below investment grade, the suspended covenants would be reinstated. Principal Maturities of Debt Principal maturities debt outstanding at December 31, 2016 are as follows (in thousands): 2017 $ 67,214 2018 1,183 2019 673 2020 28 2021 — Thereafter 1,050,000 Total $ 1,119,098 Interest Expense The following amounts have been incurred and charged to interest expense for the year ended December 31, 2016 , 2015 and 2014 (in thousands): Year ended December 31, 2016 2015 2014 Cash payments for interest $ 65,513 $ 43,993 $ 27,252 Change in interest accrual (11,604 ) (348 ) 13,390 Payment-in-kind interest — — 234 Amortization of deferred loan origination costs 2,739 2,170 1,941 Write-off of deferred loan origination costs 451 532 386 Amortization of bond premium (874 ) (764 ) (574 ) Other interest income (992 ) (30 ) (316 ) Interest costs incurred 55,233 45,553 42,313 Less: capitalized interest — — (2,689 ) Total interest expense, net $ 55,233 $ 45,553 $ 39,624 |
Equity
Equity | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Equity | EQUITY Preferred Stock Pursuant to the Company’s amended and restated bylaws, the Company’s board of directors, subject to any limitations prescribed by law, may, 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, covering up to an aggregate of 50.0 million shares of preferred stock. The Company had no shares of preferred stock outstanding at December 31, 2016 and 2015 . Class A Common Stock The Company has 179.6 million shares of its Class A Common Stock outstanding as of December 31, 2016 , which includes 0.6 million shares of restricted stock. 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 has 28.0 million shares of its Class B Common Stock outstanding as of December 31, 2016 . 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 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. Exchange Right In accordance with the terms of the amended and restated limited liability company agreement of Parsley LLC ("Parsley LLC Agreement"), the PE Unit Holders generally have the right to exchange (the "Exchange Right") their PE Units (and a corresponding number of shares of Class B Common Stock), for shares of the Company’s Class A Common Stock at an exchange ratio of one share of Class A Common Stock for each PE Unit (and a corresponding number of shares of Class B Common Stock) exchanged, (subject to conversion rate adjustments for stock splits, stock dividends and reclassifications) or cash at the Company’s or Parsley LLC’s election. As a PE Unit Holder exchanges its PE Units, the Company’s interest in Parsley LLC will be correspondingly increased. During the year ended December 31, 2016 , certain PE Unit Holders exercised their Exchange Right under the Parsley LLC Agreement and elected to exchange an aggregate of 4.1 million PE Units (and a corresponding number of shares of Class B Common Stock) for an aggregate of 4.1 million shares of Class A Common Stock (collectively, the "Exchange"). The Company exercised its call right under the Parsley LLC Agreement and elected to issue Class A Common Stock to each of the exchanging PE Unit Holders in satisfaction of their election notices. As a result of the Exchange, the Company’s interest in Parsley LLC was increased from 83.9% to 85.9% . During the year ended December 31, 2015, no PE Unit Holders elected to exchange pursuant to their Exchange Right. Earnings per Share Basic earnings per share ("EPS") measures the performance of an entity over the reporting period. Diluted EPS 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 its Class B Common Stock and the treasury stock method to determine the potential dilutive effect of outstanding restricted stock and restricted stock units. EPS for the year ended December 31, 2016 and 2015 is calculated using the 12 months ended December 31, 2016 and 2015. EPS for the year ended December 31, 2014 is calculated for the period from May 29, 2014, the closing date of the IPO, to December 31, 2014. For the year ended December 31, 2016 and 2015, Class B Common Stock and time-based restricted stock were not recognized in dilutive EPS calculations as they would have been antidilutive. For the year ended December 31, 2014, only Class B Common Stock was not recognized in dilutive EPS calculations as it 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 common stock outstanding for the period: December 31, 2016 December 31, 2015 December 31, 2014 Basic EPS (in thousands, except per share data) Numerator: Basic net (loss) income attributable to Parsley Energy, Inc. Stockholders $ (74,182 ) $ (50,484 ) $ 61,352 Denominator: Basic weighted average shares outstanding 161,793 111,271 93,168 Basic EPS attributable to Parsley Energy, Inc. Stockholders $ (0.46 ) $ (0.45 ) $ 0.65 Diluted EPS Numerator: Net (loss) income attributable to Parsley Energy, Inc. Stockholders (74,182 ) (50,484 ) 61,352 Diluted net (loss) income attributable to Parsley Energy, Inc. Stockholders $ (74,182 ) $ (50,484 ) $ 61,352 Denominator: Basic weighted average shares outstanding 161,793 111,271 93,168 Effect of dilutive securities: Restricted Stock and Restricted Stock Units — — 103 Diluted weighted average shares outstanding (1) 161,793 111,271 93,271 Diluted EPS attributable to Parsley Energy, Inc. Stockholders $ (0.46 ) $ (0.45 ) $ 0.65 (1) Approximately 453,863 and 211,935 shares related to performance-based restricted stock units that could be converted to common shares in the future based on predetermined performance and market goals were not included in the computation of EPS for the year ended December 31, 2016 and 2015, because the performance and market conditions had not been met, assuming the end of the reporting period was the end of the contingency period. LLC Interest Issuance On May 29, 2014, in connection with the Corporate Reorganization, NGP and other preferred investors, including all of the Company's executive officers (the "Preferred Holders") interests were converted to PE Units. A portion of such PE Units were redeemed by Parsley LLC in exchange for the preferred return payment of the preferred return of approximately $6.7 million and the remainder of such PE Units were contributed to the Company in exchange for an equal number of shares of Class A Common Stock. Noncontrolling Interest Concurrent with the closing of the Pacesetter Acquisition, Pacesetter’s President acquired a 37.0% interest in Pacesetter, with Operations retaining 63.0% of Pacesetter. As a result, the Company has consolidated the financial position and results of operations of Pacesetter due to Operations’ ownership interest. The 37.0% interest retained by Pacesetter’s President is reflected as a noncontrolling interest. As a result of the Corporate Reorganization and the IPO in 2014, the Company acquired 74.3% of Parsley LLC, with the Existing Owners retaining ownership of 25.7% of Parsley LLC. Upon completion of the additional public offerings of Class A Common Stock in 2016 (as discussed in Note 1—Organization and Nature of Operations) and the exchange of PE Units (and corresponding shares of Class B Common Stock) for Class A Common Stock, at December 31, 2016 , the Company’s ownership of Parsley LLC was 86.5% and the PE Unit Holders’ ownership of Parsley LLC was 13.5% . Because the increase in the Company’s ownership interest in Parsley LLC does not result in a change of control, the transaction is accounted for as an equity transaction under ASC Topic 810, Consolidation , which requires that any differences between the amount by which the carrying value of the Company’s basis in Parsley LLC is adjusted 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 reflected that portion retained by the PE Unit Holders as a noncontrolling interest. The following table summarizes the noncontrolling interest (loss) income: Year ended December 31, 2016 2015 2014 (in thousands) Net (loss) income attributable to the noncontrolling interests of: Parsley LLC $ (14,953 ) $ (21,870 ) $ 33,293 Pacesetter Drilling, LLC 218 (677 ) — Total net (loss) income attributable to noncontrolling interest $ (14,735 ) $ (22,547 ) $ 33,293 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | STOCK-BASED COMPENSATION In connection with the IPO, the Company adopted the Parsley Energy, Inc. 2014 Long Term Incentive Plan ("LTIP") for employees 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, 2016, the Company had 10.5 million shares of Class A Common Stock available for future grant. The following table reflects stock-based compensation expense recorded for each type of stock-based compensation award for the years ended December 31, 2016, 2015 and 2014: Year ended December 31, 2016 2015 2014 (in thousands) Time-based restricted stock $ 3,523 $ 3,856 $ 2,145 Time-based restricted stock units 5,677 2,710 64 Performance-based restricted stock units 3,671 1,567 — Incentive units — — 51,088 Total $ 12,871 $ 8,133 $ 53,297 (1) Stock-based compensation expense on time-based restricted stock units with graded 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. Stock-based compensation is included in General and administrative expenses on the Company’s consolidated statement of operations, included in this Annual Report. Time-Based Restricted Stock Time-based restricted stock are awards of Class A Common Stock that are legally issued and outstanding ("RSA"). RSAs are subject to restrictions on transfer and to a risk of forfeiture if the award recipient is no longer an employee or director of the Company for any reason 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, 2016 : Time-Based Restricted Stock Grant Date Fair Value Outstanding at January 1, 2016 661,234 $ 18.50 Awards granted 36,504 $ 27.94 Forfeited (22,039 ) $ 21.11 Vested (74,938 ) $ 18.14 Outstanding at December 31, 2016 600,761 $ 19.02 Time-Based Restricted Stock Units Time-based restricted stock units ("RSU") represent the right to receive Class A Common Stock at the end of the vesting period equal to the number of restricted stock units granted. RSUs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient is no longer an employee or director of the Company for any reason 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, 2016 : Time-Based Restricted Stock Units Grant Date Fair Value Outstanding at January 1, 2016 512,852 $ 16.84 Awards granted 567,347 $ 17.05 Forfeited (19,013 ) $ 16.72 Vested (15,400 ) $ 16.85 Outstanding at December 31, 2016 1,045,786 $ 16.96 Performance-Based Restricted Stock Units During 2016 and 2015, performance-based, stock-settled restricted stock unit awards ("PSU"), were granted with a performance period of three years . The number of shares of Class A Common Stock actually delivered pursuant to these PSUs depends on the performance of the Company's Class A Common Stock over the performance period in relation to the performance of the common stock of a predetermined peer group. The conditions of the grants allow for an actual payout ranging between no payout and 200% of target. The payout level is calculated based on actual performance achieved during the performance period compared to a defined peer group. The fair value of such PSUs was determined using a Monte Carlo simulation and will be recognized over the next three years. The Monte Carlo simulation model utilizes multiple input variables that determine the probability of satisfying the market condition stipulated in the award grant and calculates 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 granted during 2016 and 2015: 2016 2015 Risk-free interest rate 0.88 % 1.05 % Range of volatilities 35.0% - 65.1% 42.2% - 84.8% The following table summarizes the PSU activity for the year ended December 31, 2016 : Performance-Based Restricted Units Grant Date Fair Value Outstanding at January 1, 2016 211,935 $ 24.20 Awards granted 241,928 $ 25.82 Outstanding at December 31, 2016 453,863 $ 25.06 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, 2016 : Time-Based Restricted Stock Time-Based Restricted Stock Units Performance-Based Restricted Units (in thousands) 2017 $ 3,136 $ 5,936 $ 3,955 2018 1,093 3,245 2,176 2019 — 390 6 Total $ 4,229 $ 9,571 $ 6,137 Incentive Units Pursuant to the Parsley LLC Agreement, certain incentive units were issued to legacy investors, management and employees of Parsley LLC. The incentive units were intended to be compensation for services rendered to Parsley LLC. The original terms of the incentive units were as follows: Tier I incentive units vested ratably over three years , but were subject to forfeiture if payout was not achieved. In addition, all unvested Tier I incentive units vested immediately upon Tier I payout. Tier I payout was realized upon the return of the Preferred Holders’ invested capital and a specified rate of return. Tier II, III and IV incentive units vested only upon the achievement of certain payout thresholds for each such tier and each tier of the incentive units was subject to forfeiture if the applicable required payouts were not achieved. In addition, vested and unvested incentive units would be forfeited if an incentive unit holder’s employment was terminated for any reason or if the incentive unit holder voluntarily terminated their employment. The incentive units were accounted for as liability-classified awards pursuant to ASC Topic 718, Compensation—Stock Compensation, as achievement of the payout conditions required the settlement of such awards by transferring cash to the incentive unit holder. As such, the fair value of the incentive unit was remeasured each reporting period through the date of settlement, with the percentage of such fair value recorded to compensation expense each period being equal to the percentage of the requisite explicit or implied service period that has been rendered at that date. In connection with the Corporate Reorganization, all of the incentive units were immediately vested and converted into PE Units and, subsequently, a portion of such PE Units were exchanged on a one for one basis for shares of Class A Common Stock. As a result, Parsley LLC was required to recognize the unrecognized cumulative incentive unit compensation expense of $51.1 million recognized during the year ended December 31, 2014 which is included in General and administrative expenses on the Company’s consolidated statement of operations, included in this Annual Report. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Parsley LLC, the Company’s accounting predecessor, is a limited liability company that is not subject to United States federal income tax. The Company is a corporation and is subject to U.S. federal income tax. The tax implications of the IPO and the Company’s concurrent Corporate Reorganization and the tax impact of the Company’s status as a taxable corporation subject to U.S. federal income tax have been reflected in the accompanying consolidated financial statements. The effective combined U.S. federal and state income tax rate as of December 31, 2016 was 16.4% . The Company's 2016 effective tax rate includes a 15.7% detriment from a valuation allowance on its deferred tax asset. Excluding the impact of the valuation allowance, the Company's effective tax rate was a 32.1% benefit in 2016. During the years ended December 31, 2016 , 2015 and 2014 , the Company recognized an income tax benefit of $17.4 million and $23.8 million and an income tax expense of $36.5 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 corporate status, state taxes and the impact of earnings (loss) attributable to noncontrolling ownership interests. At December 31, 2016 , 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. As a result of the public offerings of Class A Common Stock in 2016, as discussed in Note 1—Organization and Nature of Operations , the Company recorded additional deferred tax liability of $20.1 million during the year ended December 31, 2016 . The Company early adopted ASU 2016-09 effective January 1, 2016, which resulted in a favorable adjustment for the net excess income tax benefits from stock-based compensation. The adoption was on a prospective basis and therefore had no impact on prior years. The Company also recorded an adjustment to opening retained earnings of $0.1 million to recognize U.S. net operating loss carryforwards attributable to excess tax benefits on stock-based compensation that had not been previously recognized to additional paid in capital because they did not reduce income taxes payable. The components of the income tax (benefit) expense were as follows for the periods indicated (in thousands): Year Ended December 31, 2016 2015 2014 Federal: Current $ 158 $ 286 $ — Deferred (18,461 ) (27,535 ) 31,968 Total federal (18,303 ) (27,249 ) 31,968 State, net of federal benefit: Deferred 879 3,494 4,500 Total state 879 3,494 4,500 Income tax (benefit) expense $ (17,424 ) $ (23,755 ) $ 36,468 The following table reconciles the income tax (benefit) expense with income tax expense at the federal statutory rate for the periods indicated (in thousands): Year Ended December 31, 2016 2015 2014 (Loss) income before income taxes $ (106,341 ) $ (96,785 ) $ 93,190 Plus: net loss prior to corporate reorganization — — 37,378 Less: net loss (income) before income taxes attributable 14,579 22,438 (33,293 ) (Loss) income attributable to Parsley Energy, Inc. Stockholders before income taxes (91,762 ) (74,347 ) 97,275 Income taxes at the federal statutory rate (32,120 ) (26,022 ) 34,046 State income taxes, net of federal benefit 879 3,494 967 State income taxes, prior to corporate reorganization — — 1,246 Provision to return adjustment (237 ) (1,217 ) 170 Permanent and other (2,634 ) (10 ) 39 Valuation allowance 32,215 — — Valuation allowance charged to equity (15,527 ) — — Income tax (benefit) expense $ (17,424 ) $ (23,755 ) $ 36,468 Net (loss) income attributable to Parsley Energy, Inc. Stockholders $ (74,182 ) $ (50,484 ) $ 23,429 Net (loss) income attributable to noncontrolling interest $ (14,735 ) $ (22,547 ) $ 33,293 As of December 31, 2016 , the Company had approximately $0.2 million of alternative minimum tax credits available that do not expire. In addition, the Company had approximately $126.3 million of federal net operating loss carryovers that expire during the years 2034 through 2036 . 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 not be more likely than not, a valuation allowance is provided to reduce the recorded tax benefits from such assets. As of December 31, 2016 , the Company had a valuation allowance of $32.2 million as a result of management's assessment of the realizability of deferred tax assets, of which $24.2 million was recorded as a result of the Exchange. Internal Revenue Code ("IRC") 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 may be found to have experienced an ownership change within the meaning of IRC Section 382 during 2016 that could subject a portion of the federal net operation loss carryforwards to an IRC Section 382 limitation. Such limitation would not result in a current federal tax liability at December 31, 2016 . 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, 2016 2015 Assets: Asset retirement obligations 3,535 5,297 Deferred stock-based compensation 6,868 3,066 Derivative fair value loss 8,252 — Accrued compensation 3,398 — Net operating loss carryforward 44,407 18,141 Other 166 — Total deferred tax assets 66,626 26,504 Less: Valuation allowance (32,215 ) — Net deferred tax assets 34,411 26,504 Liabilities: Book basis of oil and natural gas properties (38,489 ) (64,792 ) Derivative fair value gain — (23,969 ) Earnings in investment in subsidiary (1,116 ) (705 ) Other (289 ) — Total deferred tax liabilities (39,894 ) (89,466 ) Net deferred tax liability $ (5,483 ) $ (62,962 ) 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 (expense) in the accompanying consolidated statements of operations, included in this Annual Report. The Company files income tax returns in the U.S. federal jurisdiction and the Texas state jurisdiction, a number of which remain open for examination. The Company's earliest open years in its key jurisdictions are as follows: U.S. federal 2013 State of Texas 2012 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, 2016, 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 holders of PE Units prior to the IPO (each such person a "TRA Holder"), including certain executive officers. This agreement 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 anticipated future tax benefits subject to 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 upon 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, 2016, there have been no payments associated with the TRA. As a result of the Exchange, the Company recorded additional TRA liability of $63.4 million before any reduction related to valuation allowance adjustments. Also related to the Exchange, the Company recorded additional deferred tax assets of $74.6 million , which resulted in the Company being in a federal net deferred tax asset position. The Company is in a cumulative net loss position and does not have sufficient positive evidence to support the utilization of deferred tax assets in excess of reversing deferred tax liabilities. As a result, the Company has recorded a $24.2 million valuation allowance against its deferred tax assets. The payable pursuant to the TRA was also reduced by $20.5 million , which is 85% of the deferred tax asset that is not expected to be realized, as the payment of the payable pursuant to the TRA is dependent on the realizability of the deferred tax assets. Due to the change in valuation allowance occurring during the fourth quarter of 2016, $7.4 million of the total reduction to the TRA liability was written off to Other income (expense) in the Company's consolidated statement of operations and is included as an operating activity in the Company's consolidated statement of cash flows, included in this Annual Report. Additional paid in capital was also reduced by $3.9 million . As of December 31, 2016 and December 31, 2015, the Company had recorded a TRA liability of $94.3 million and $51.5 million , respectively, for the estimated payments that will be made to the PE Unit Holders who have exchanged shares along with corresponding deferred tax assets, net of valuation allowance, of $111.0 million and $60.6 million , respectively, as a result of the increase in tax basis arising from such exchanges. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Well Operations During the years ended December 31, 2016 , 2015 and 2014 , several 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, 2016 , 2015 and 2014 , totaled $2.5 million , $5.2 million and $11.3 million , respectively. The revenues disbursed to the Related Party Working Interest Owners for the year ended December 31, 2014 include $2.1 million of revenues for the five months ended May 29, 2014 for entities no longer considered a related party due to their direct relationship with Diamond K (defined herein). 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. Tex-Isle Supply, Inc. Purchases The Company makes purchases of equipment used in its drilling operations from Tex-Isle Supply, Inc. ("Tex-Isle"). Tex-Isle is controlled by a party who is also the general partner of Diamond K Interests, LP ("Diamond K"), a former member of Parsley LLC. In connection with the IPO, Diamond K exchanged its membership interest for shares of Class A Common Stock. As of May 29, 2014, Diamond K is no longer considered a related party as their ownership interest fell below 10% due to this transaction, which results in Tex-Isle no longer being considered a related party. During the five months ended May 29, 2014, the Company made purchases of equipment used in its drilling operations totaling $29.3 million , from Tex-Isle. During the year ended December 31, 2014 , the Company made purchases of equipment used in its drilling operations totaling $68.1 million . Spraberry Production Services, LLC At December 31, 2016 , the Company owned a 42.5% interest in SPS and 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, 2016 , 2015 and 2014 , the Company incurred charges totaling $4.4 million , $4.8 million and $5.1 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"). Lone Star is controlled by SPS. During the years ended December 31, 2016 , 2015 and 2014 , the Company incurred charges totaling $6.3 million , $5.0 million and $0.7 million for services performed by Lone Star for the Company’s well operations and drilling activities. Davis, Gerald & Cremer, P.C. During the years ended December 31, 2016 , 2015 and 2014 , the Company incurred charges totaling $0.5 million , $0.2 million and $0.2 million , respectively, for legal services from Davis, Gerald & Cremer, P.C., of which the Company's director David H. Smith is a shareholder. Riverbend Acquisition During the year ended December 31, 2016 , the Company acquired 8,800 gross ( 6,269 net) acres located in Glasscock, Midland and Reagan Counties, Texas, along with net production of approximately 900 Boe/d from existing wells, from Riverbend Permian L.L.C. ("Riverbend"), for total consideration of $177.1 million , after customary purchase price adjustments (the "Riverbend Acquisition"). Randolph J. Newcomer, Jr., a former member of the Company’s board of directors, is the President and Chief Executive Officer of Riverbend. As the transaction involved a related party at the time it was entered into, the Riverbend Acquisition was approved by the disinterested members of the Company’s board of directors. The Company reflected $37.9 million of the total consideration paid as part of its cost subject to depletion within its oil and natural gas properties and $139.2 million as unproved leasehold costs within its oil and natural gas properties for the year ended December 31, 2016 . TRA and Exchange Right As discussed in Note 10—Income Taxes , in connection with the IPO, on May 29, 2014, the Company entered into the TRA with the TRA Holders, including certain executive officers. As discussed in Note 8—Equity, i n accordance with the terms of the Parsley LLC Agreement, the PE Unit Holders generally have the right to exchange their PE Units (and a corresponding number of shares of Class B Common Stock). As a PE Unit Holder exchanges its PE Units, the Company’s interest in Parsley LLC will be correspondingly increased. During the year ended December 31, 2016 , certain PE Unit Holders exercised their Exchange Right under the Parsley LLC Agreement and elected to exchange an aggregate of 4.1 million PE Units (and a corresponding number of shares of Class B Common Stock) for an aggregate of 4.1 million 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 each of the exchanging PE Unit Holders in satisfaction of their election notices. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Matters From time to time, the Company is a party to ongoing legal proceedings in the ordinary course of business, including workers’ compensation claims and employment-related disputes. The Company does not believe the results of these proceedings, individually or in the aggregate, will have a material adverse effect on its business, financial condition, results of operations, or liquidity. Environmental Matters 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. 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 or readily determinable. At December 31, 2016 and 2015 , the Company had no environmental matters requiring specific disclosure or requiring the recognition of a liability. Asset Retirement Obligations The following table summarizes the Company’s asset retirement obligations as of December 31, 2016 : Payments Due by Period (in thousands) 2017 2018 2019 2020 2021 Thereafter Total Asset retirement obligations $ 1,818 $ 232 $ 112 $ 262 $ 282 $ 8,686 $ 11,392 Drilling Commitments The Company periodically enters into contractual arrangements under which the Company is committed to expend funds to drill wells in the future, including agreements to secure drilling rig services, which require the Company to make future minimum payments to the rig operators. The Company records drilling commitments in the periods in which well capital is incurred or rig services are provided. The following table summarizes the Company’s drilling commitments as of December 31, 2016 : Payments Due by Period (in thousands) 2017 2018 2019 2020 2021 Thereafter Total Drilling commitments $ 21,118 $ 5,940 $ — $ — $ — $ — $ 27,058 Derivative Obligations The future deferred premium payments related to derivative agreements as of December 31, 2016 was as follows: Payments Due by Period (in thousands) 2017 2018 2019 2020 2021 Thereafter Total Derivative obligations $ 23,268 $ 6,600 $ — $ — $ — $ — $ 29,868 Operating Leases The estimated future minimum lease payments under long-term operating lease agreements as of December 31, 2016 was as follows (in thousands): For the years ended December 31, 2017 2018 2019 2020 2021 Thereafter Total Office Leases $ 4,427 $ 4,531 $ 4,656 $ 4,805 $ 4,834 $ 16,058 $ 39,311 Office Equipment 178 80 43 4 2 — 307 Total $ 4,605 $ 4,611 $ 4,699 $ 4,809 $ 4,836 $ 16,058 $ 39,618 Rent expense for the years ended December 31, 2016 , 2015 and 2014 was $7.1 million , $4.7 million and $1.5 million , respectively. |
Disclosures about Fair Value of
Disclosures about Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
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, proved and unproved oil and natural gas properties 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. Materials and Supplies. No impairment charge was recorded during the year ended December 31, 2016 . During the year ended December 31, 2015, the Company recognized impairment of $4.1 million primarily to reduce the carrying value of oil and gas drilling and repair items. 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 accompanying consolidated statements of operations, included in this Annual Report. Proved Oil and Natural Gas Properties. During the year ended December 31, 2016 , the Company did not recognize impairment charges, as the carrying amount of the assets exceeds the undiscounted future cash flows of the assets. During the year ended December 31, 2015, the Company recognized impairment charges of $1.0 million to reduce the carrying values of certain properties in Upton County, Texas to their estimated fair values. The Company estimates 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 accompanying consolidated balance sheets and in Note 3—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 using 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, 2016 Level 1 Level 2 Level 3 Total Commodity derivative contracts Assets: Short-term derivative instruments $ — $ 39,708 $ — $ 39,708 Long-term derivative instruments — 16,416 — 16,416 Total derivative instrument - asset $ — $ 56,124 $ — $ 56,124 Liabilities: Short-term derivative instruments $ — $ (44,153 ) $ — $ (44,153 ) Long-term derivative instruments — (12,815 ) — (12,815 ) Total derivative instruments - liability — (56,968 ) — (56,968 ) Net commodity derivative liability $ — $ (844 ) $ — $ (844 ) December 31, 2015 Level 1 Level 2 Level 3 Total Commodity derivative contracts Assets: Short-term derivative instruments $ — $ 83,262 $ — $ 83,262 Long-term derivative instruments — 25,839 — 25,839 Total derivative instrument - asset $ — $ 109,101 $ — $ 109,101 Liabilities: Short-term derivative instruments $ — $ (34,518 ) $ — $ (34,518 ) Long-term derivative instruments — (15,142 ) — (15,142 ) Total derivative instruments - liability — (49,660 ) — (49,660 ) Net commodity derivative asset $ — $ 59,441 $ — $ 59,441 There were no transfers in to or out of Level 2 during the years ended December 31, 2016 or 2015 . 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, 2016 December 31, 2015 Carrying Amount Fair Value Carrying Amount Fair Value Current portion of long-term debt: 7.500% senior unsecured notes due 2022 $ 61,846 $ 65,737 $ 550,000 $ 522,610 Long-term debt: 5.375% senior unsecured notes due 2025 650,000 654,531 — — 6.250% senior unsecured notes due 2024 400,000 422,548 — — Revolving Credit Agreement — — — — The fair value of the 2022 Notes included in Current portion of long-term debt is equal to the principal amount of the cash payment made on January 5, 2017. The fair values of the 2024 Notes and 2025 Notes included in long-term debt were determined using the December 31, 2016 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, 2016 , there are no indicators for change in the Company’s market spread. The Company has other financial instruments consisting primarily of cash and cash equivalents, accounts receivable, prepaid expenses, other current assets, accounts payable and accrued liabilities that approximate their fair value due to the short-term nature of these instruments. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
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. January Equity Offering and Recent Acquisitions On January 10, 2017 , the Company entered into an underwriting agreement to sell 25,300,000 shares of Class A Common Stock (including 3,300,000 shares issued pursuant to the underwriters’ option to purchase additional shares) at a price of $35.00 per share in an underwritten public offering. The January Offering closed on January 17, 2017 and resulted in gross proceeds to the Company of approximately $885.5 million and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, of approximately $863.0 million . The Company used a portion of the net proceeds from the January Offering to fund the aggregate purchase price for certain acquisitions of oil and gas interests in the Midland and Southern Delaware Basins and the remaining net proceeds will be used to fund a portion of its capital program and for general corporate purposes, including potential future acquisitions. A portion of the net proceeds from the January Offering was, or is expected to be, used to acquire, in unrelated transactions (i) approximately 31,800 gross ( 23,000 net) acres for an aggregate purchase price of $606.6 million . The Company also acquired certain mineral interests in approximately 3,926 net mineral acres, or approximately 660 net royalty acres, in the Southern Delaware Basin for an aggregate purchase price of $42.8 million . The purchase prices of these transactions are inclusive of deposits of $48.2 million paid to escrow accounts upon signing of certain of the purchase and sale agreements. The deposits are included in Other current assets on the consolidated balance sheets and as an operating activity on the consolidated statements of cash flows, included in this Annual Report. February Equity Offering On February 7, 2017 , the Company entered into an underwriting agreement to sell 41,400,000 shares of Class A Common Stock (including 5,400,000 shares issued pursuant to the underwriters' option to purchase additional shares) at a price of $31.00 per share in an underwritten public offering. The February Offering closed on February 13, 2017 and resulted in gross proceeds to the Company of approximately $1,283.4 million and net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, of approximately $1,260.6 million . The Company will use a portion of the net proceeds from the February Offering to fund the cash portion of the purchase price for the Double Eagle Acquisition and the remaining net proceeds will be used to fund a portion of the Company's capital program and for general corporate purposes, including potential future acquisitions. New 2025 Notes Offering Concurrently with the February Offering, the Company issued $450.0 million aggregate principal amount of 5.250% senior notes due 2025 (the "New 2025 Notes") (the "New 2025 Notes Offering") in an offering that was exempt from registration under the Securities Act. The New 2025 Notes Offering resulted in gross proceeds to the Company of $450.0 million and net proceeds to the Company, after deducting initial purchaser discounts and commissions and offering expenses, of approximately $444.2 million , which the Company intends to use to partially fund the cash portion of the Double Eagle Acquisition as discussed below. Double Eagle Acquisition On February 7, 2017, the Company entered into a contribution agreement (the "Double Eagle Contribution Agreement") with Double Eagle Energy Permian Operating LLC, Double Eagle Energy Permian LLC and Double Eagle Energy Permian Member LLC (collectively, "Double Eagle"), which provides for the contribution by Double Eagle of all of its interests in Double Eagle Lone Star LLC, DE Operating LLC, and Veritas Energy Partners, LLC, as well as certain related transactions with an affiliate of Double Eagle. As a result, the Company expects to acquire (the "Double Eagle Acquisition") approximately 167,000 gross ( 71,000 net) acres located in the Midland Basin and approximately 7,300 gross ( 3,300 net) associated horizontal drilling locations for an aggregate purchase price of approximately $2.8 billion , subject to certain purchase price adjustments set forth in the Double Eagle Contribution Agreement. The aggregate purchase price for the Double Eagle Acquisition consists of (i) approximately $1.4 billion in cash (which, the Company intends to fund from the net proceeds of the February Offering and the New 2025 Notes Offering) and (ii) approximately 39.4 million PE Units and a corresponding approximately 39.4 million shares of Class B Common Stock. Upon the expiration of a 90 -day lock-up period following the consummation of the Double Eagle Acquisition, each PE Unit, together with a corresponding share of the Company's Class B Common Stock, will be exchangeable, at the option of the holder, for one share of its Class A Common Stock, or, if the Company so elects, cash. In connection with the closing of the Double Eagle Acquisition, the Company intends to enter into a registration rights agreement with Double Eagle containing provisions by which the Company will agree to, among other things and subject to certain restrictions, file an automatically effective registration statement with the SEC on Form S-3 providing for the registration of the shares of the Company's Class A Common Stock issuable upon exchange of the PE Units (and corresponding shares of the Company's Class B Common Stock) to be issued as consideration to Double Eagle and to conduct certain underwritten offerings thereof. The Double Eagle Contribution Agreement contains customary representations and warranties, covenants and indemnification provisions and has an effective date of January 1, 2017. The Company expects to close the Double Eagle Acquisition on or before April 20, 2017, subject to the satisfaction of customary closing conditions. |
Supplemental Disclosure of Oil
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Extractive Industries [Abstract] | |
Supplemental Disclosure of Oil and Natural Gas Operations (Unaudited) | SUPPLEMENTAL DISCLOSURE OF OIL AND NATURAL GAS OPERATIONS (Unaudited) The Company’s oil and natural gas reserves are attributable solely to properties within the U.S. Capitalized Costs December 31, 2016 2015 Oil and natural gas properties: (in thousands) Proved properties $ 2,376,712 $ 1,627,367 Unproved properties 1,686,705 618,794 Total oil and natural gas properties 4,063,417 2,246,161 Less accumulated depreciation, depletion and amortization (506,175 ) (290,186 ) Net oil and natural gas properties capitalized $ 3,557,242 $ 1,955,975 Costs Incurred for Oil and Natural Gas Producing Activities Year Ended December 31, 2016 2015 2014 Acquisition costs: (in thousands) Proved properties $ 273,940 $ 16,422 $ 233,899 Unproved properties 1,072,250 57,385 528,301 Development costs 495,971 404,291 488,673 Total $ 1,842,161 $ 478,098 $ 1,250,873 Reserve Quantity Information The following information represents estimates of the Company’s proved reserves as of December 31, 2016 , which have been prepared and presented under 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, 2016 was based on an unweighted average 12-month average WTI posted price per Bbl for oil and NGLs and a Henry Hub spot natural gas price per Mcf for natural gas, as set forth in the following table: Year Ended December 31, 2016 2015 2014 Oil (per Bbl) $ 39.36 $ 46.54 $ 85.99 Natural gas liquids (per Bbl) $ 15.04 $ 16.42 $ 35.27 Natural gas (per Mcf) $ 2.23 $ 2.53 $ 4.28 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 with 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 U.S. 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 provides a roll forward of the total proved reserves for the years ended December 31, 2016 , 2015 and 2014 , as well as proved developed and proved undeveloped reserves at the beginning and end of each respective year: Year Ended December 31, 2016 Crude Oil (Bbls) Liquids (Bbls) Natural Gas (Mcf) Boe (in thousands) Proved Developed and Undeveloped Reserves: Beginning of the year 73,877 23,738 157,175 123,811 Extensions and discoveries 64,005 20,698 83,815 98,672 Revisions of previous estimates (4,476 ) 3,898 (19,032 ) (3,750 ) Purchases of reserves in place 16,041 4,023 25,024 24,235 Divestures of reserves in place (3,543 ) (1,424 ) (9,914 ) (6,619 ) Production (9,368 ) (2,390 ) (13,463 ) (14,002 ) End of the year 136,536 48,543 223,605 222,347 Proved Developed Reserves: Beginning of the year 27,628 10,890 77,612 51,453 End of the year 61,133 24,306 123,946 106,097 Proved Undeveloped Reserves: Beginning of the year 46,249 12,848 79,563 72,358 End of the year 75,403 24,237 99,659 116,250 Year Ended December 31, 2015 Crude Oil (Bbls) Liquids (Bbls) Natural Gas (Mcf) Boe (in thousands) Proved Developed and Undeveloped Reserves: Beginning of the year 47,617 22,667 123,645 90,891 Extensions and discoveries 38,518 9,232 53,044 56,590 Revisions of previous estimates (6,688 ) (6,934 ) (11,825 ) (15,592 ) Purchases of reserves in place 1,133 551 4,138 2,374 Divestures of reserves in place (1,896 ) (278 ) (1,488 ) (2,422 ) Production (4,807 ) (1,500 ) (10,339 ) (8,030 ) End of the year 73,877 23,738 157,175 123,811 Proved Developed Reserves: Beginning of the year 23,547 11,491 65,484 45,952 End of the year 27,628 10,890 77,612 51,453 Proved Undeveloped Reserves: Beginning of the year 24,070 11,176 58,161 44,939 End of the year 46,249 12,848 79,563 72,358 Year Ended December 31, 2014 Crude Oil (Bbls) Liquids (Bbls) Natural Gas (Mcf) Boe (in thousands) Proved Developed and Undeveloped Reserves: Beginning of the year 29,507 12,357 77,818 54,834 Extensions and discoveries 18,776 8,157 41,348 33,824 Revisions of previous estimates (7,832 ) (528 ) (6,714 ) (9,480 ) Purchases of reserves in place 10,006 3,906 18,244 16,953 Divestures of reserves in place — — — — Production (2,840 ) (1,225 ) (7,051 ) (5,240 ) End of the year 47,617 22,667 123,645 90,891 Proved Developed Reserves: Beginning of the year 13,560 4,762 31,301 23,539 End of the year 23,547 11,491 65,484 45,952 Proved Undeveloped Reserves: Beginning of the year 15,947 7,595 46,517 31,295 End of the year 24,070 11,176 58,161 44,939 Extensions and discoveries of 98,672 MBoe, 56,590 MBoe and 33,824 MBoe during the years ended December 31, 2016 , 2015 and 2014 , result primarily from the drilling of new wells during each year and from new proved undeveloped locations added during each year. Standardized Measure of Discounted Future Net Cash Flows 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 the 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, 2016 , 2015 and 2014 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, 2016 2015 2014 (in thousands) Future cash inflows $ 6,603,206 $ 4,225,912 $ 5,423,551 Future development costs (1,019,823 ) (829,560 ) (642,746 ) Future production costs (2,176,081 ) (1,534,011 ) (1,640,422 ) Future income tax expenses (370,337 ) (240,203 ) (903,354 ) Future net cash flows 3,036,965 1,622,138 2,237,029 10% discount to reflect timing of cash flows (1,852,653 ) (1,024,290 ) (1,281,400 ) Standardized measure of discounted future net cash flows $ 1,184,312 $ 597,848 $ 955,629 In the foregoing determination of future cash inflows, sales prices used for oil, natural gas and NGLs for December 31, 2016 , 2015 and 2014 , 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 its’ predecessor’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, 2016 2015 2014 (in thousands) Standardized measure of discounted future net cash flows at the beginning of the year $ 597,848 $ 955,629 $ 720,780 Sales of oil and natural gas, net of production costs (369,295 ) (185,344 ) (244,745 ) Purchase of minerals in place 118,795 4,872 279,725 Divestiture of minerals in place (14,591 ) (53,018 ) — Extensions and discoveries, net of future development costs 770,947 485,380 537,241 Previously estimated development costs incurred during the period 61,756 12,560 96,881 Net changes in prices and production costs (80,492 ) (821,783 ) (74,080 ) Changes in estimated future development costs 118,930 77,621 (9,517 ) Revisions of previous quantity estimates 84,309 (225,485 ) (126,395 ) Accretion of discount 69,731 131,442 73,107 Net change in income taxes (199,368 ) 249,065 (348,501 ) Net changes in timing of production and other 25,742 (33,091 ) 51,133 Standardized measure of discounted future net cash flows at the end of the year $ 1,184,312 $ 597,848 $ 955,629 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation These consolidated financial statements include the accounts of Parsley Energy, Inc., its majority-owned subsidiary, Parsley LLC and the wholly owned subsidiaries of Parsley LLC: (i) Parsley LP, (ii) PEM (a wholly owned subsidiary of the Company until its merger with Operations on October 7, 2016), (iii) Operations, (iv) Finance Corp., (v) Parsley Aviation and (vi) Minerals LLC. Operations also owns an approximately 63.0% interest in Pacesetter. The Company includes the accounts of Pacesetter in its consolidated financial statements. Parsley LP owns a 42.5% interest in 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 (1) adopt accounting policies within accounting rules set by the Financial Accounting Standards Board ("FASB") and by the SEC and (2) 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 and impairment of capitalized costs of oil and natural gas properties; • operating costs accrued and volumes and prices for revenues accrued; • estimates of asset retirement obligations; • estimates of the fair value assets acquired and liabilities assumed in business combinations; • evaluations of impairment of proved and unproved properties are subject to number uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks; • impairment of other assets; • depreciation of property and equipment; • valuation of commodity derivative instruments; and • estimates of the fair value of stock-based compensation. 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. |
Restricted Cash | Restricted Cash Restricted cash at December 31, 2016 and 2015 of $3.3 million and $1.1 million includes cash that is contractually restricted involving a non-related party. The restricted cash includes revenues associated with an operated well. |
Accounts Receivable | Accounts Receivable Accounts receivable consist of receivables from joint interest owners on properties the Company operates and crude oil, natural gas and 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. Amounts due from joint interest owners or purchasers are stated net of an allowance for doubtful accounts when the Company believes collection is doubtful. 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 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. No allowance was deemed necessary at December 31, 2016 or December 31, 2015 . |
Significant Customers | Significant Customers For the years ended December 31, 2016 , 2015 and 2014 , each of the following purchasers accounted for more than 10% of the Company's revenue: Year Ended December 31, 2016 2015 2014 Shell Trading (US) Company 44% 23% 4% BML, Inc. 13% 19% 14% Targa Pipeline Mid-Continent, LLC 13% 12% 20% TransOil Marketing, LLC 8% 13% —% Plains Marketing, L.P. 7% 6% 15% Enterprise Crude Oil, LLC 3% —% 10% Permian Transport & Trading —% 6% 11% The Company does not require collateral and does not believe the loss of any single purchaser would materially impact its operating results, as crude oil and natural gas are fungible products with well-established markets and numerous purchasers. |
Material and Supplies | Material and Supplies Materials and supplies are stated at the lower of cost or market and consists 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. During 2015, the Company made significant materials and supplies purchases and evaluated assets based on current operations. The Company determined that these materials and supplies would not be utilized in the current year and therefore reclassified them to noncurrent assets as non-depreciable other property, plant and equipment. See Note 13—Disclosures about Fair Value of Financial Instruments for additional information regarding the Company’s impairment of materials and supplies. Oil and |
Oil and Natural Gas Properties | Oil and Natural Gas Properties Oil and natural gas exploration, development and production activities are accounted for in accordance with the successful efforts method of accounting. Under this method, costs of acquiring properties, costs of drilling successful exploration wells and development costs are capitalized. As exploration and development work progresses and the reserves on these properties are proven, capitalized costs attributed to the properties and mineral interests are subject to depreciation, depletion and amortization ("DD&A"). Depletion of capitalized costs is provided using the units-of-production method based on proved oil and gas reserves related to the associated reservoir. 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. On the sale of a complete or partial unit of a proved property or pipeline and related facilities, the cost and related accumulated DD&A are removed from the property accounts and any gain or loss is recognized. For sales of entire 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 partial interests in unproved properties are accounted for as a recovery of costs unless the proceeds exceed the entire cost of the property. |
Oil and Gas Reserves | Oil and Gas Reserves The estimates of proved oil and natural gas reserves utilized in the preparation of the consolidated financial statements are estimated in accordance with the rules established by the SEC and the FASB. These rules require that reserve estimates be prepared under existing economic and operating conditions using a trailing first day of the month 12-month average price, net of historical differentials, with no provision for price and cost escalations in future years except by contractual arrangements. Reserve estimates are inherently imprecise. Accordingly, the estimates are expected to change as more current information becomes available. Oil and gas properties are depleted by field using the units-of-production method. Capitalized drilling and development costs of producing oil and natural gas properties are depleted over proved developed reserves and leasehold costs are depleted over total proved reserves. It is possible that, because of changes in market conditions or the inherent imprecision of reserve estimates, the estimates of future cash inflows, the amount of oil and natural gas reserves, the remaining estimated lives of oil and natural gas properties, or any combination of the above may be increased or decreased. Increases in recoverable economic volumes generally reduce per unit depletion rates while decreases in recoverable economic volumes generally increase per unit depletion rates. |
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 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 obligation 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 obligation for the periods indicated: Year ended December 31, 2016 2015 (in thousands) Asset retirement obligations, beginning of period $ 18,220 $ 16,207 Additional liabilities incurred 3,290 1,512 Disposition of wells (858 ) (2,254 ) Accretion expense 732 826 Liabilities settled upon plugging and abandoning wells (56 ) — Revision of estimates (9,936 ) 1,929 Asset retirement obligations, end of period $ 11,392 $ 18,220 |
Allocation of Purchase Price in Business Combinations | Allocation of Purchase Price in Business Combinations 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. |
Impairment of Oil and Natural Gas Properties | Impairment of Oil and Natural Gas Properties 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. The Company reviews its oil and natural gas properties by amortization base or by individual well for those wells not constituting part of an amortization base. For each property determined to be impaired, an impairment loss equal to the difference between the carrying value of the properties and the estimated fair value (discounted future cash flows) of the properties would be recognized at that time. 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 13— Disclosures about Fair Value of Financial Instruments for additional information regarding the Company’s impairment of proved oil and natural gas properties. |
Exploration Costs | Exploration Costs Exploration 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 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. 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 or expiration of all or a portion of such projects. The following table summarized exploration costs incurred by the Company for the periods indicated: Year Ended December 31, 2016 2015 2014 (in thousands) Leasehold abandonments $ 6,063 $ 8,227 $ 430 Geological and geophysical costs 3,015 5,459 2,394 Idle drilling rig fees 4,304 — — Unproved leasehold amortization 549 179 312 Total exploration costs $ 13,931 $ 13,865 $ 3,136 |
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 disposition 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 three years to 15 years . Depreciation expense on other property and equipment was $6.6 million , $4.7 million and $1.5 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. |
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, generally the Company’s share of investees’ earnings or loss, after elimination of intra-company profit or loss, is recognized in the consolidated statement of operations. The Company reviews its investments to determine if a loss in value which is other than a temporary decline has occurred. If such loss has occurred, the Company would recognize an impairment provision. There was no impairment for the Company’s equity investments for the years ended December 31, 2016 , 2015 and 2014 . |
Derivatives Instruments | Derivative Instruments The Company uses derivative financial instruments to reduce exposure to fluctuations in commodity prices. These transactions are in the form of crude options and collars. 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 trades. The Company 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 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 the asset or paid to transfer the 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 Revenues from the sale of crude oil, natural gas and NGLs are recognized when the production is sold, net of any royalty interest. Because final settlement of the Company’s hydrocarbon sales can take up to two months, the expected sales volumes and prices for those properties are estimated and accrued using information available at the time the revenue is recorded. Natural gas revenues are recorded using the entitlement method of accounting whereby revenue is recognized based on the Company’s proportionate share of natural gas production. At December 31, 2016 , 2015 and 2014 , the Company did not have any natural gas imbalances. Transportation expenses are included as a reduction of natural gas revenue and are not material. |
Defined Contribution Plan | Defined Contribution Plan The Company sponsors a 401(k) defined contribution plan for the benefit of all employees at 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 contribution of up to a certain percentage of an employee’s contributions. For the year ended December 31, 2016 , 2015 and 2014 , the Company made contributions to the plan of $1.9 million , $1.4 million and $0.8 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 carry forwards. 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. Parsley LLC, the Company’s accounting predecessor, is a limited liability company that is not subject to U.S. federal income tax. |
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 that (i) engage in activities from which it may earn revenues and incur expenses (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. The Company considers drilling rig services ancillary to its oil and gas exploration and production activities and manages these services to support such activities. |
Change in Accounting Principle | Change in Accounting Principle The Company adopted Accounting Standards Update ("ASU") 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , effective January 1, 2016. This standard requires companies that have historically presented debt issuance costs as an asset to present those costs as a direct deduction from the carrying amount of the underlying debt liability. To the extent that there are no borrowings under the Revolving Credit Agreement, the related deferred loan costs will continue to be classified as an asset. The guidance required retrospective application in the consolidated financial statements. The Company had no borrowings outstanding under the Revolving Credit Agreement (as defined in Note 7—Debt ) at December 31, 2016 and 2015 and as such, approximately $4.2 million and $2.3 million , respectively, of deferred loan costs related to the Revolving Credit Agreement are included in Other noncurrent assets on the consolidated balance sheets and as an operating activity on the consolidated statements of cash flows, included in this Annual Report. The Company’s 2025 Notes (as defined in Note 7—Debt ) and the 2024 Notes (as defined in Note 7—Debt ) are presented net of approximately $14.3 million of deferred loan costs at December 31, 2016 . The Company’s 2022 Notes (as defined in Note 7—Debt ) are presented net of approximately $9.1 million of deferred loan costs at December 31, 2015 . |
Reclassifications | Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current presentation. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition , and most industry-specific guidance. ASU 2014-09 provides companies with a single model for use in accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. In addition, new qualitative and quantitative disclosure requirements aim to enable financial statement users to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU 2014-09 for one year to fiscal years beginning after December 15, 2017. Early adoption is permitted for fiscal years beginning after December 15, 2016. In May 2016, the FASB issued ASU 2016-11, which rescinds guidance from the SEC on accounting for gas balancing arrangements and will eliminate the use of the entitlements method. Entities have the option of using either a full retrospective or modified approach to adopt the new standards. The Company has selected the modified retrospective approach for transition and plans to implement the new guidance on January 1, 2018. The amended guidance is not expected to materially affect the Company's consolidated financial statements or notes to the consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Overall , which addresses the fair value measurements, impairment assessment and disclosure requirements of equity securities, equity investments and other financial instruments and also clarifies current guidance to aid in the reduction of diversity in practice. For public business entities, the amended guidance is effective for fiscal years beginning after December 15, 2017 and for interim periods within those years. The amended guidance should be applied by means of a cumulative-effect adjustment to the balance sheet as of the beginning of the fiscal year of adoption. The amendments related to equity securities without readily determinable fair values should be applied prospectively. The Company has not yet determined the effect of the standard on its ongoing financial reporting. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which modifies lessees’ recognition of lease assets and lease liabilities for those leases classified as operating leases under previous GAAP. The amended guidance will be effective for the Company for annual periods beginning after December 15, 2018. Early adoption is permitted. The Company is evaluating the effect that ASU 2016-02 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. In March 2016, the FASB issued ASU No. 2016-07, Investments—Equity Method and Joint Ventures (Topic 323) , which eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amended guidance will be effective for the Company for annual periods beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Early adoption is permitted for any entity in any interim or annual period. The amended guidance is not expected to materially affect the Company’s consolidated financial statements or notes to the consolidated financial statements. In August 2016, The FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) , which provides guidance on eight specific cash flow issues, including cash payments associated with debt and debt modification, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and corporate-owned life insurance policies, distributions made from equity method investees, beneficial interests in securitization transactions and separately identifiable cash flows and application of the predominance principle. The amended guidance will be effective for the Company for annual periods beginning after December 15, 2017. The amendments should be applied using a retrospective transition method to each period presented. Early adoption is permitted for any entity in any interim or annual period. The Company is evaluating the ASU and has not determined the effect of the standard on its ongoing financial reporting. In October 2016, The FASB issued ASU No. 2016-16, Income Taxes (Topic 740) , which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This ASU also eliminates the exception for an intra-entity transfer of an asset other than inventory. The amended guidance does not include new disclosure requirements; however, existing disclosure requirements might be applicable when accounting for the current and deferred income taxes. The amended guidance will be effective for the Company for annual periods beginning after December 15, 2017. The amendments should be applied using a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Early adoption is permitted for any entity as of the beginning of an annual reporting period for which financial statements have not been issued or been made available for issuance. The Company is evaluating the ASU and has not determined the effect of the standard on its ongoing financial reporting. In November 2016, The FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) , which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. The amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statements of cash flows. The amended guidance will be effective for the Company for annual periods beginning after December 15, 2017. The amendments should be applied using a retrospective transition method to each period presented. Early adoption is permitted for any entity in any interim or annual period. The Company is evaluating the ASU and has not determined the effect of the standard on its ongoing financial reporting. In January 2017, The FASB issued ASU No. 2017-01, Business Combinations (Topic 805) , which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this ASU provide a screen to determine when a set is not a business, which requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not considered a business. This reduces the number of transactions that require further evaluation. Further, this ASU provides a framework to assist entities in evaluating whether both an input and a substantive process are present as well as narrows the definition of the term output so that the term is consistent with how outputs are described in Topic 606. The amended guidance will be effective for the Company for annual periods beginning after December 15, 2017, including interim periods within those periods. The amendments should be applied prospectively on or after their effective date and no disclosures are required at transition. Early adoption is for transactions for which the acquisition date or disposal date occurs before the issuance date or effective date of the amendment, only when the transaction has not been reported in financial statements that have been issued or made available for issuance. The Company is evaluating the ASU and has not determined the effect of the standard on its ongoing financial reporting. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Revenue Percentage Accounted by Purchasers | For the years ended December 31, 2016 , 2015 and 2014 , each of the following purchasers accounted for more than 10% of the Company's revenue: Year Ended December 31, 2016 2015 2014 Shell Trading (US) Company 44% 23% 4% BML, Inc. 13% 19% 14% Targa Pipeline Mid-Continent, LLC 13% 12% 20% TransOil Marketing, LLC 8% 13% —% Plains Marketing, L.P. 7% 6% 15% Enterprise Crude Oil, LLC 3% —% 10% Permian Transport & Trading —% 6% 11% |
Summary of Changes in Asset Retirement Obligations | The following table summarizes the changes in the Company’s asset retirement obligation for the periods indicated: Year ended December 31, 2016 2015 (in thousands) Asset retirement obligations, beginning of period $ 18,220 $ 16,207 Additional liabilities incurred 3,290 1,512 Disposition of wells (858 ) (2,254 ) Accretion expense 732 826 Liabilities settled upon plugging and abandoning wells (56 ) — Revision of estimates (9,936 ) 1,929 Asset retirement obligations, end of period $ 11,392 $ 18,220 Asset Retirement Obligations The following table summarizes the Company’s asset retirement obligations as of December 31, 2016 : Payments Due by Period (in thousands) 2017 2018 2019 2020 2021 Thereafter Total Asset retirement obligations $ 1,818 $ 232 $ 112 $ 262 $ 282 $ 8,686 $ 11,392 |
Exploration Costs | The following table summarized exploration costs incurred by the Company for the periods indicated: Year Ended December 31, 2016 2015 2014 (in thousands) Leasehold abandonments $ 6,063 $ 8,227 $ 430 Geological and geophysical costs 3,015 5,459 2,394 Idle drilling rig fees 4,304 — — Unproved leasehold amortization 549 179 312 Total exploration costs $ 13,931 $ 13,865 $ 3,136 |
Derivative Financial Instrume25
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Outstanding Oil and Gas Derivative Contracts and Weighted Average Oil and Gas Prices | The following table sets forth the volumes associated with the Company's outstanding oil derivative contracts expiring during the periods indicated and the weighted average oil prices for those contracts: Year Ending December 31, Crude Options 2017 2018 Purchased: Puts (1) Notional (MBbl) 9,948 3,300 Weighted average strike price $ 52.04 $ 53.41 Sold: Puts (1) Notional (MBbl) (9,948 ) (3,300 ) Weighted average strike price $ 40.45 $ 42.27 Basis swap contracts: (2) Midland-Cushing index swap volume (MBbl) (3) 4,290 360 Price differential ($/Bbl) $ (1.03 ) $ (0.95 ) (1) Excludes 7,254 notional MBbls with a fair value of $10.3 million related to amounts recognized under master netting agreements with derivative counterparties. (2) Represents swaps that fix the basis differentials between the index prices at which the Company sells its oil produced in the Permian Basin and the Cushing WTI price. (3) As of December 31, 2016, the Company has remaining basis swap contracts for 4,650 MBbls of the Company’s 2017 and 2018 production with a negative price differential ranging from $0.40 per MBbl to $1.70 per MBbl between the Midland WTI price index and the Cushing WTI price index. 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, Natural Gas Three-Way Collars 2017 Purchased: Puts Notional (MMbtu) 5,700 Weighted average strike price $ 2.75 Sold: Puts Notional (MMbtu) (5,700 ) Weighted average strike price $ 2.36 Calls Notional (MMbtu) (5,700 ) Weighted average strike price $ 4.02 |
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 indicated (in thousands): Gross Amount Presented on Balance Sheet Netting Adjustments Net Exposure December 31, 2016 Derivative assets with right of offset or master netting agreements $ 66,417 $ (10,293 ) $ 56,124 Derivative liabilities with right of offset or master netting agreements (67,261 ) 10,293 (56,968 ) December 31, 2015 Derivative assets with right of offset or master netting agreements $ 407,052 $ (297,951 ) $ 109,101 Derivative liabilities with right of offset or master netting agreements (347,611 ) 297,951 (49,660 ) |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Oil and Natural Gas Properties | Property, plant and equipment includes the following (in thousands): December 31, 2016 December 31, 2015 Oil and natural gas properties: Subject to depletion $ 2,376,712 $ 1,627,367 Not subject to depletion Incurred in 2016 1,215,920 — Incurred in 2015 71,712 118,101 Incurred in 2014 and prior 399,073 500,693 Total not subject to depletion 1,686,705 618,794 Oil and natural gas properties, successful efforts method 4,063,417 2,246,161 Less accumulated depreciation, depletion and impairment (506,175 ) (290,186 ) Total oil and natural gas properties, net 3,557,242 1,955,975 Other property, plant and equipment 73,382 37,253 Less accumulated depreciation (14,064 ) (7,475 ) Other property, plant and equipment, net 59,318 29,778 Total property, plant and equipment, net $ 3,616,560 $ 1,985,753 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The Company’s debt consists of the following (in thousands): December 31, 2016 December 31, 2015 5.375% senior unsecured notes due 2025 $ 650,000 $ — 6.250% senior unsecured notes due 2024 400,000 — 7.500% senior unsecured notes due 2022 61,846 550,000 Capital leases 3,752 2,215 Other 3,500 — Revolving Credit Agreement — — Total debt 1,119,098 552,215 Debt issuance costs on senior unsecured notes (14,388 ) (9,092 ) Premium on senior unsecured notes 3,828 4,660 Less: current portion (67,214 ) (951 ) Total long-term debt $ 1,041,324 $ 546,832 |
Schedule of Principal Maturities of Long-term Debt | Principal maturities debt outstanding at December 31, 2016 are as follows (in thousands): 2017 $ 67,214 2018 1,183 2019 673 2020 28 2021 — Thereafter 1,050,000 Total $ 1,119,098 |
Schedule of Interest Expense | Interest Expense The following amounts have been incurred and charged to interest expense for the year ended December 31, 2016 , 2015 and 2014 (i |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 common stock outstanding for the period: December 31, 2016 December 31, 2015 December 31, 2014 Basic EPS (in thousands, except per share data) Numerator: Basic net (loss) income attributable to Parsley Energy, Inc. Stockholders $ (74,182 ) $ (50,484 ) $ 61,352 Denominator: Basic weighted average shares outstanding 161,793 111,271 93,168 Basic EPS attributable to Parsley Energy, Inc. Stockholders $ (0.46 ) $ (0.45 ) $ 0.65 Diluted EPS Numerator: Net (loss) income attributable to Parsley Energy, Inc. Stockholders (74,182 ) (50,484 ) 61,352 Diluted net (loss) income attributable to Parsley Energy, Inc. Stockholders $ (74,182 ) $ (50,484 ) $ 61,352 Denominator: Basic weighted average shares outstanding 161,793 111,271 93,168 Effect of dilutive securities: Restricted Stock and Restricted Stock Units — — 103 Diluted weighted average shares outstanding (1) 161,793 111,271 93,271 Diluted EPS attributable to Parsley Energy, Inc. Stockholders $ (0.46 ) $ (0.45 ) $ 0.65 (1) Approximately 453,863 and 211,935 shares related to performance-based restricted stock units that could be converted to common shares in the future based on predetermined performance and market goals were not included in the computation of EPS for the year ended December 31, 2016 and 2015, 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 noncontrolling interest (loss) income: Year ended December 31, 2016 2015 2014 (in thousands) Net (loss) income attributable to the noncontrolling interests of: Parsley LLC $ (14,953 ) $ (21,870 ) $ 33,293 Pacesetter Drilling, LLC 218 (677 ) — Total net (loss) income attributable to noncontrolling interest $ (14,735 ) $ (22,547 ) $ 33,293 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, by Award | The following table reflects stock-based compensation expense recorded for each type of stock-based compensation award for the years ended December 31, 2016, 2015 and 2014: Year ended December 31, 2016 2015 2014 (in thousands) Time-based restricted stock $ 3,523 $ 3,856 $ 2,145 Time-based restricted stock units 5,677 2,710 64 Performance-based restricted stock units 3,671 1,567 — Incentive units — — 51,088 Total $ 12,871 $ 8,133 $ 53,297 (1) Stock-based compensation expense on time-based restricted stock units with graded 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. |
Summary of RSA, Activity | The following table summarizes the RSA activity for the year ended December 31, 2016 : Time-Based Restricted Stock Grant Date Fair Value Outstanding at January 1, 2016 661,234 $ 18.50 Awards granted 36,504 $ 27.94 Forfeited (22,039 ) $ 21.11 Vested (74,938 ) $ 18.14 Outstanding at December 31, 2016 600,761 $ 19.02 |
Schedule of Nonvested Restricted Stock Units Activity | The following table summarizes the RSU activity for the year ended December 31, 2016 : Time-Based Restricted Stock Units Grant Date Fair Value Outstanding at January 1, 2016 512,852 $ 16.84 Awards granted 567,347 $ 17.05 Forfeited (19,013 ) $ 16.72 Vested (15,400 ) $ 16.85 Outstanding at December 31, 2016 1,045,786 $ 16.96 |
Schedule of Valuation Assumptions | The Company used the following assumptions to estimate the fair value of PSUs granted during 2016 and 2015: 2016 2015 Risk-free interest rate 0.88 % 1.05 % Range of volatilities 35.0% - 65.1% 42.2% - 84.8% |
Schedule of PSU, Activity | The following table summarizes the PSU activity for the year ended December 31, 2016 : Performance-Based Restricted Units Grant Date Fair Value Outstanding at January 1, 2016 211,935 $ 24.20 Awards granted 241,928 $ 25.82 Outstanding at December 31, 2016 453,863 $ 25.06 |
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, 2016 : Time-Based Restricted Stock Time-Based Restricted Stock Units Performance-Based Restricted Units (in thousands) 2017 $ 3,136 $ 5,936 $ 3,955 2018 1,093 3,245 2,176 2019 — 390 6 Total $ 4,229 $ 9,571 $ 6,137 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Provision | The components of the income tax (benefit) expense were as follows for the periods indicated (in thousands): Year Ended December 31, 2016 2015 2014 Federal: Current $ 158 $ 286 $ — Deferred (18,461 ) (27,535 ) 31,968 Total federal (18,303 ) (27,249 ) 31,968 State, net of federal benefit: Deferred 879 3,494 4,500 Total state 879 3,494 4,500 Income tax (benefit) expense $ (17,424 ) $ (23,755 ) $ 36,468 |
Schedule of Reconciliation of Income Tax (Benefit) Provision with Income Tax Expense at Federal Statutory Rate | The following table reconciles the income tax (benefit) expense with income tax expense at the federal statutory rate for the periods indicated (in thousands): Year Ended December 31, 2016 2015 2014 (Loss) income before income taxes $ (106,341 ) $ (96,785 ) $ 93,190 Plus: net loss prior to corporate reorganization — — 37,378 Less: net loss (income) before income taxes attributable 14,579 22,438 (33,293 ) (Loss) income attributable to Parsley Energy, Inc. Stockholders before income taxes (91,762 ) (74,347 ) 97,275 Income taxes at the federal statutory rate (32,120 ) (26,022 ) 34,046 State income taxes, net of federal benefit 879 3,494 967 State income taxes, prior to corporate reorganization — — 1,246 Provision to return adjustment (237 ) (1,217 ) 170 Permanent and other (2,634 ) (10 ) 39 Valuation allowance 32,215 — — Valuation allowance charged to equity (15,527 ) — — Income tax (benefit) expense $ (17,424 ) $ (23,755 ) $ 36,468 Net (loss) income attributable to Parsley Energy, Inc. Stockholders $ (74,182 ) $ (50,484 ) $ 23,429 Net (loss) income attributable to noncontrolling interest $ (14,735 ) $ (22,547 ) $ 33,293 |
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, 2016 2015 Assets: Asset retirement obligations 3,535 5,297 Deferred stock-based compensation 6,868 3,066 Derivative fair value loss 8,252 — Accrued compensation 3,398 — Net operating loss carryforward 44,407 18,141 Other 166 — Total deferred tax assets 66,626 26,504 Less: Valuation allowance (32,215 ) — Net deferred tax assets 34,411 26,504 Liabilities: Book basis of oil and natural gas properties (38,489 ) (64,792 ) Derivative fair value gain — (23,969 ) Earnings in investment in subsidiary (1,116 ) (705 ) Other (289 ) — Total deferred tax liabilities (39,894 ) (89,466 ) Net deferred tax liability $ (5,483 ) $ (62,962 ) |
Schedule Of Open Tax Years | The Company's earliest open years in its key jurisdictions are as follows: U.S. federal 2013 State of Texas 2012 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Changes in Asset Retirement Obligations | The following table summarizes the changes in the Company’s asset retirement obligation for the periods indicated: Year ended December 31, 2016 2015 (in thousands) Asset retirement obligations, beginning of period $ 18,220 $ 16,207 Additional liabilities incurred 3,290 1,512 Disposition of wells (858 ) (2,254 ) Accretion expense 732 826 Liabilities settled upon plugging and abandoning wells (56 ) — Revision of estimates (9,936 ) 1,929 Asset retirement obligations, end of period $ 11,392 $ 18,220 Asset Retirement Obligations The following table summarizes the Company’s asset retirement obligations as of December 31, 2016 : Payments Due by Period (in thousands) 2017 2018 2019 2020 2021 Thereafter Total Asset retirement obligations $ 1,818 $ 232 $ 112 $ 262 $ 282 $ 8,686 $ 11,392 |
Schedule of Company Drilling and Derivative Commitments | The following table summarizes the Company’s drilling commitments as of December 31, 2016 : Payments Due by Period (in thousands) 2017 2018 2019 2020 2021 Thereafter Total Drilling commitments $ 21,118 $ 5,940 $ — $ — $ — $ — $ 27,058 Derivative Obligations The future deferred premium payments related to derivative agreements as of December 31, 2016 was as follows: Payments Due by Period (in thousands) 2017 2018 2019 2020 2021 Thereafter Total Derivative obligations $ 23,268 $ 6,600 $ — $ — $ — $ — $ 29,868 |
Schedule of Future Minimum Lease Payments under Long Term Operating Lease Agreements | The estimated future minimum lease payments under long-term operating lease agreements as of December 31, 2016 was as follows (in thousands): For the years ended December 31, 2017 2018 2019 2020 2021 Thereafter Total Office Leases $ 4,427 $ 4,531 $ 4,656 $ 4,805 $ 4,834 $ 16,058 $ 39,311 Office Equipment 178 80 43 4 2 — 307 Total $ 4,605 $ 4,611 $ 4,699 $ 4,809 $ 4,836 $ 16,058 $ 39,618 |
Disclosures about Fair Value 32
Disclosures about Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 Level 1 Level 2 Level 3 Total Commodity derivative contracts Assets: Short-term derivative instruments $ — $ 39,708 $ — $ 39,708 Long-term derivative instruments — 16,416 — 16,416 Total derivative instrument - asset $ — $ 56,124 $ — $ 56,124 Liabilities: Short-term derivative instruments $ — $ (44,153 ) $ — $ (44,153 ) Long-term derivative instruments — (12,815 ) — (12,815 ) Total derivative instruments - liability — (56,968 ) — (56,968 ) Net commodity derivative liability $ — $ (844 ) $ — $ (844 ) December 31, 2015 Level 1 Level 2 Level 3 Total Commodity derivative contracts Assets: Short-term derivative instruments $ — $ 83,262 $ — $ 83,262 Long-term derivative instruments — 25,839 — 25,839 Total derivative instrument - asset $ — $ 109,101 $ — $ 109,101 Liabilities: Short-term derivative instruments $ — $ (34,518 ) $ — $ (34,518 ) Long-term derivative instruments — (15,142 ) — (15,142 ) Total derivative instruments - liability — (49,660 ) — (49,660 ) Net commodity derivative asset $ — $ 59,441 $ — $ 59,441 |
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, 2016 December 31, 2015 Carrying Amount Fair Value Carrying Amount Fair Value Current portion of long-term debt: 7.500% senior unsecured notes due 2022 $ 61,846 $ 65,737 $ 550,000 $ 522,610 Long-term debt: 5.375% senior unsecured notes due 2025 650,000 654,531 — — 6.250% senior unsecured notes due 2024 400,000 422,548 — — Revolving Credit Agreement — — — — |
Supplemental Disclosure of Oi33
Supplemental Disclosure of Oil and Natural Gas Operations (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Extractive Industries [Abstract] | |
Schedule of Capitalized Costs | Capitalized Costs December 31, 2016 2015 Oil and natural gas properties: (in thousands) Proved properties $ 2,376,712 $ 1,627,367 Unproved properties 1,686,705 618,794 Total oil and natural gas properties 4,063,417 2,246,161 Less accumulated depreciation, depletion and amortization (506,175 ) (290,186 ) Net oil and natural gas properties capitalized $ 3,557,242 $ 1,955,975 |
Schedule of Costs Incurred for Oil and Gas Producing Activities | Costs Incurred for Oil and Natural Gas Producing Activities Year Ended December 31, 2016 2015 2014 Acquisition costs: (in thousands) Proved properties $ 273,940 $ 16,422 $ 233,899 Unproved properties 1,072,250 57,385 528,301 Development costs 495,971 404,291 488,673 Total $ 1,842,161 $ 478,098 $ 1,250,873 |
Schedule of Reserve Quantity Information Average Sales Price | The pricing that was used for estimates of the Company’s reserves as of December 31, 2016 was based on an unweighted average 12-month average WTI posted price per Bbl for oil and NGLs and a Henry Hub spot natural gas price per Mcf for natural gas, as set forth in the following table: Year Ended December 31, 2016 2015 2014 Oil (per Bbl) $ 39.36 $ 46.54 $ 85.99 Natural gas liquids (per Bbl) $ 15.04 $ 16.42 $ 35.27 Natural gas (per Mcf) $ 2.23 $ 2.53 $ 4.28 |
Schedule of Proved Developed and Proved Undeveloped Reserves | The following table provides a roll forward of the total proved reserves for the years ended December 31, 2016 , 2015 and 2014 , as well as proved developed and proved undeveloped reserves at the beginning and end of each respective year: Year Ended December 31, 2016 Crude Oil (Bbls) Liquids (Bbls) Natural Gas (Mcf) Boe (in thousands) Proved Developed and Undeveloped Reserves: Beginning of the year 73,877 23,738 157,175 123,811 Extensions and discoveries 64,005 20,698 83,815 98,672 Revisions of previous estimates (4,476 ) 3,898 (19,032 ) (3,750 ) Purchases of reserves in place 16,041 4,023 25,024 24,235 Divestures of reserves in place (3,543 ) (1,424 ) (9,914 ) (6,619 ) Production (9,368 ) (2,390 ) (13,463 ) (14,002 ) End of the year 136,536 48,543 223,605 222,347 Proved Developed Reserves: Beginning of the year 27,628 10,890 77,612 51,453 End of the year 61,133 24,306 123,946 106,097 Proved Undeveloped Reserves: Beginning of the year 46,249 12,848 79,563 72,358 End of the year 75,403 24,237 99,659 116,250 Year Ended December 31, 2015 Crude Oil (Bbls) Liquids (Bbls) Natural Gas (Mcf) Boe (in thousands) Proved Developed and Undeveloped Reserves: Beginning of the year 47,617 22,667 123,645 90,891 Extensions and discoveries 38,518 9,232 53,044 56,590 Revisions of previous estimates (6,688 ) (6,934 ) (11,825 ) (15,592 ) Purchases of reserves in place 1,133 551 4,138 2,374 Divestures of reserves in place (1,896 ) (278 ) (1,488 ) (2,422 ) Production (4,807 ) (1,500 ) (10,339 ) (8,030 ) End of the year 73,877 23,738 157,175 123,811 Proved Developed Reserves: Beginning of the year 23,547 11,491 65,484 45,952 End of the year 27,628 10,890 77,612 51,453 Proved Undeveloped Reserves: Beginning of the year 24,070 11,176 58,161 44,939 End of the year 46,249 12,848 79,563 72,358 Year Ended December 31, 2014 Crude Oil (Bbls) Liquids (Bbls) Natural Gas (Mcf) Boe (in thousands) Proved Developed and Undeveloped Reserves: Beginning of the year 29,507 12,357 77,818 54,834 Extensions and discoveries 18,776 8,157 41,348 33,824 Revisions of previous estimates (7,832 ) (528 ) (6,714 ) (9,480 ) Purchases of reserves in place 10,006 3,906 18,244 16,953 Divestures of reserves in place — — — — Production (2,840 ) (1,225 ) (7,051 ) (5,240 ) End of the year 47,617 22,667 123,645 90,891 Proved Developed Reserves: Beginning of the year 13,560 4,762 31,301 23,539 End of the year 23,547 11,491 65,484 45,952 Proved Undeveloped Reserves: Beginning of the year 15,947 7,595 46,517 31,295 End of the year 24,070 11,176 58,161 44,939 |
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, 2016 2015 2014 (in thousands) Future cash inflows $ 6,603,206 $ 4,225,912 $ 5,423,551 Future development costs (1,019,823 ) (829,560 ) (642,746 ) Future production costs (2,176,081 ) (1,534,011 ) (1,640,422 ) Future income tax expenses (370,337 ) (240,203 ) (903,354 ) Future net cash flows 3,036,965 1,622,138 2,237,029 10% discount to reflect timing of cash flows (1,852,653 ) (1,024,290 ) (1,281,400 ) Standardized measure of discounted future net cash flows $ 1,184,312 $ 597,848 $ 955,629 |
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, 2016 2015 2014 (in thousands) Standardized measure of discounted future net cash flows at the beginning of the year $ 597,848 $ 955,629 $ 720,780 Sales of oil and natural gas, net of production costs (369,295 ) (185,344 ) (244,745 ) Purchase of minerals in place 118,795 4,872 279,725 Divestiture of minerals in place (14,591 ) (53,018 ) — Extensions and discoveries, net of future development costs 770,947 485,380 537,241 Previously estimated development costs incurred during the period 61,756 12,560 96,881 Net changes in prices and production costs (80,492 ) (821,783 ) (74,080 ) Changes in estimated future development costs 118,930 77,621 (9,517 ) Revisions of previous quantity estimates 84,309 (225,485 ) (126,395 ) Accretion of discount 69,731 131,442 73,107 Net change in income taxes (199,368 ) 249,065 (348,501 ) Net changes in timing of production and other 25,742 (33,091 ) 51,133 Standardized measure of discounted future net cash flows at the end of the year $ 1,184,312 $ 597,848 $ 955,629 |
Organization and Nature of Op34
Organization and Nature of Operations - Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Thousands | May 29, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsidiary, Sale of Stock [Line Items] | ||||
Proceeds from issuance of common stock, net | $ 930,315 | $ 669,418 | $ 867,750 | |
IPO | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common stock sold in initial public offering net of offering costs (in shares) | 7,500,000 | |||
Common Stock, Class A | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Common stock sold in initial public offering net of offering costs (in shares) | 43,200,000 | |||
Common Stock, Class A | IPO | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares sold | 57,500,000 | |||
Common stock, par value (in dollars per share) | $ 0.01 | |||
Price per share (in dollars per share) | $ 18.50 | |||
Common stock sold in initial public offering net of offering costs (in shares) | 50,000,000 | |||
Gross proceeds received from public offering | $ 924,300 | |||
Proceeds from issuance of common stock, net | $ 867,800 | |||
Common Stock, Class A | Common Stock | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Common stock sold in initial public offering net of offering costs (in shares) | 38,812,000 | 42,748,000 | 49,963,000 |
Organization and Nature of Op35
Organization and Nature of Operations - Corporate Reorganization (Details) - $ / shares | May 29, 2014 | Dec. 31, 2016 | Dec. 31, 2015 |
Common Stock, Class A | |||
Restructuring Cost and Reserve [Line Items] | |||
Stock issued (shares) | 43,200,000 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Conversion of stock, shares converted | 1 | ||
Class B Common Stock | |||
Restructuring Cost and Reserve [Line Items] | |||
Number of shares sold | 32,100,000 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Conversion of stock, shares issued | 93,200,000 | ||
Parsley LLC | |||
Restructuring Cost and Reserve [Line Items] | |||
Percentage of ownership interest, parent | 74.30% | ||
Parsley LLC | Public Offering | |||
Restructuring Cost and Reserve [Line Items] | |||
Percentage of ownership interest, Noncontrolling owners | 25.70% |
Organization and Nature of Op36
Organization and Nature of Operations (Details) $ / shares in Units, $ in Thousands | Feb. 13, 2017USD ($) | Feb. 07, 2017$ / sharesshares | Jan. 17, 2017USD ($) | Jan. 10, 2017$ / sharesshares | Aug. 19, 2016USD ($) | Aug. 15, 2016$ / sharesshares | May 27, 2016USD ($) | May 23, 2016$ / sharesshares | Apr. 08, 2016USD ($) | Apr. 04, 2016$ / sharesshares | Dec. 10, 2015USD ($) | Dec. 09, 2015a$ / sharesshares | Sep. 18, 2015USD ($)$ / sharesshares | Sep. 18, 2015$ / sharesshares | Jun. 15, 2015USD ($) | Feb. 11, 2015USD ($) | Feb. 05, 2015$ / sharesshares | May 29, 2014shares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)shares |
Organization And Nature Of Operations [Line Items] | |||||||||||||||||||||
Proceeds from issuance of common stock, net | $ | $ 930,315 | $ 669,418 | $ 867,750 | ||||||||||||||||||
Upton, Reagan and Glasscock Counties | |||||||||||||||||||||
Organization And Nature Of Operations [Line Items] | |||||||||||||||||||||
Proceeds from offering to fund acquisition of acres, gross | a | 6,040 | ||||||||||||||||||||
Proceeds from offering to fund acquisition of acres, net | a | 5,274 | ||||||||||||||||||||
Pacesetter Acquisition | |||||||||||||||||||||
Organization And Nature Of Operations [Line Items] | |||||||||||||||||||||
Purchase consideration | $ | $ 7,000 | ||||||||||||||||||||
Cash consideration | $ | 4,400 | ||||||||||||||||||||
Noncontrolling interest acquired | $ | $ 2,600 | ||||||||||||||||||||
Common Stock, Class A | |||||||||||||||||||||
Organization And Nature Of Operations [Line Items] | |||||||||||||||||||||
Common stock sold in initial public offering net of offering costs (in shares) | shares | 43,200,000 | ||||||||||||||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||||||||||||||||||
Common Stock | Common Stock, Class A | |||||||||||||||||||||
Organization And Nature Of Operations [Line Items] | |||||||||||||||||||||
Common stock sold in initial public offering net of offering costs (in shares) | shares | 38,812,000 | 42,748,000 | 49,963,000 | ||||||||||||||||||
Common Stock | Common Stock, Class A | Public Offering | |||||||||||||||||||||
Organization And Nature Of Operations [Line Items] | |||||||||||||||||||||
Common stock sold in initial public offering net of offering costs (in shares) | shares | 8,337,500 | 9,487,500 | 20,987,500 | 14,950,000 | 14,885,797 | ||||||||||||||||
Option to purchase additional shares (in shares) | shares | 1,087,500 | 1,237,500 | 2,737,500 | 12,911,364 | 1,950,000 | 1,950,000 | |||||||||||||||
Price per share (in dollars per share) | $ / shares | $ 33.55 | $ 24.60 | $ 21.40 | $ 18 | $ 15 | $ 15 | $ 15.50 | ||||||||||||||
Gross proceeds received from public offering | $ | $ 279,700 | $ 233,400 | $ 449,100 | $ 228,700 | $ 224,300 | $ 230,700 | |||||||||||||||
Proceeds from issuance of common stock, net | $ | $ 271,100 | $ 226,200 | $ 433,200 | $ 228,400 | $ 217,000 | $ 224,000 | |||||||||||||||
SPS | |||||||||||||||||||||
Organization And Nature Of Operations [Line Items] | |||||||||||||||||||||
Equity method investment, ownership percentage | 42.50% | ||||||||||||||||||||
Parsley LLC | |||||||||||||||||||||
Organization And Nature Of Operations [Line Items] | |||||||||||||||||||||
Equity method investment, ownership percentage | 86.50% | ||||||||||||||||||||
Percentage of ownership interest, parent | 74.30% | ||||||||||||||||||||
Parsley LLC | Pacesetter Acquisition | |||||||||||||||||||||
Organization And Nature Of Operations [Line Items] | |||||||||||||||||||||
Percentage of ownership interest, parent | 63.00% | ||||||||||||||||||||
NGP X US Holdings, L.P. | Common Stock | Common Stock, Class A | Public Offering | |||||||||||||||||||||
Organization And Nature Of Operations [Line Items] | |||||||||||||||||||||
Common stock sold in initial public offering net of offering costs (in shares) | shares | 14,202,500 | ||||||||||||||||||||
Option to purchase additional shares (in shares) | shares | 1,291,136 | ||||||||||||||||||||
Subsequent Event | Common Stock | Common Stock, Class A | Public Offering | |||||||||||||||||||||
Organization And Nature Of Operations [Line Items] | |||||||||||||||||||||
Common stock sold in initial public offering net of offering costs (in shares) | shares | 41,400,000 | 25,300,000 | |||||||||||||||||||
Option to purchase additional shares (in shares) | shares | 5,400,000 | 3,300,000 | |||||||||||||||||||
Price per share (in dollars per share) | $ / shares | $ 31 | $ 35 | |||||||||||||||||||
Gross proceeds received from public offering | $ | $ 1,283,400 | $ 885,500 | |||||||||||||||||||
Proceeds from issuance of common stock, net | $ | $ 1,260,600 | $ 863,000 |
Summary of Significant Accoun37
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |||
Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | May 29, 2014 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Restricted cash | $ 3,290,000 | $ 1,139,000 | ||
Allowance for doubtful accounts receivable | 0 | 0 | ||
Depreciation expense | 6,600,000 | 4,700,000 | $ 1,500,000 | |
Impairment of equity investments | 0 | 0 | 0 | |
Contribution by company | $ 1,900,000 | $ 1,400,000 | $ 800,000 | |
Number of segments | segment | 1 | |||
Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, estimated useful lives | 3 years | |||
Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Property and equipment, estimated useful lives | 15 years | |||
SPS | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Equity method investment, ownership percentage | 42.50% | |||
Parsley LLC | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of ownership interest, parent | 74.30% | |||
Equity method investment, ownership percentage | 86.50% | |||
Parsley LLC | Parent | Pacesetter Drilling, LLC | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Percentage of ownership interest, parent | 63.00% |
Summary of Significant Accoun38
Summary of Significant Accounting Policies - Summary of Revenue Percentage Accounted by Purchasers (Details) - Customer Concentration Risk - Sales Revenue, Net | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Shell Trading (US) Company | |||
Concentration Risk [Line Items] | |||
Revenue percentage accounted by purchasers | 44.00% | 23.00% | 4.00% |
BML, Inc. | |||
Concentration Risk [Line Items] | |||
Revenue percentage accounted by purchasers | 13.00% | 19.00% | 14.00% |
Targa Pipeline Mid-Continent, LLC | |||
Concentration Risk [Line Items] | |||
Revenue percentage accounted by purchasers | 13.00% | 12.00% | 20.00% |
TransOil Marketing, LLC | |||
Concentration Risk [Line Items] | |||
Revenue percentage accounted by purchasers | 8.00% | 13.00% | 0.00% |
Plains Marketing, L.P. | |||
Concentration Risk [Line Items] | |||
Revenue percentage accounted by purchasers | 7.00% | 6.00% | 15.00% |
Enterprise Crude Oil, LLC | |||
Concentration Risk [Line Items] | |||
Revenue percentage accounted by purchasers | 3.00% | 0.00% | 10.00% |
Permian Transport & Trading | |||
Concentration Risk [Line Items] | |||
Revenue percentage accounted by purchasers | 0.00% | 6.00% | 11.00% |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Summary of Changes in Asset Retirement Obligations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Asset retirement obligations, beginning of period | $ 18,220 | $ 16,207 | |
Additional liabilities incurred | 3,290 | 1,512 | |
Disposition of wells | (858) | (2,254) | |
Accretion expense | 732 | 826 | $ 512 |
Liabilities settled upon plugging and abandoning wells | (56) | 0 | |
Revision of estimates | (9,936) | 1,929 | |
Asset retirement obligations, end of period | $ 11,392 | $ 18,220 | $ 16,207 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Summary of Exploration Costs Incurred (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items] | |||
Exploration costs | $ 13,931 | $ 13,865 | $ 3,136 |
Leasehold abandonments | |||
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items] | |||
Exploration costs | 6,063 | 8,227 | 430 |
Geological and geophysical costs | |||
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items] | |||
Exploration costs | 3,015 | 5,459 | 2,394 |
Idle drilling rig fees | |||
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items] | |||
Exploration costs | 4,304 | 0 | 0 |
Unproved leasehold amortization | |||
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items] | |||
Exploration costs | $ 549 | $ 179 | $ 312 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Change in Accounting Principle (Details) - USD ($) | Dec. 31, 2016 | Dec. 13, 2016 | Dec. 31, 2015 | Feb. 05, 2014 |
Debt Instrument [Line Items] | ||||
Revolving credit agreement | $ 0 | $ 0 | ||
Revolving Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Revolving credit agreement | 0 | |||
Other Noncurrent Assets | Revolving Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Deferred loan costs, net | 4,200,000 | 2,300,000 | ||
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Deferred loan costs, net | $ 14,300,000 | $ 9,100,000 | ||
Senior Notes | 5.375% Senior Notes Due 2025 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 5.375% | 5.375% | ||
Senior Notes | 7.500% senior unsecured notes due 2022 | ||||
Debt Instrument [Line Items] | ||||
Stated interest rate | 7.50% |
Derivative Financial Instrume42
Derivative Financial Instruments - Summary of Outstanding Oil and Gas Derivative Contracts and Weighted Average Oil and Gas Prices (Details) - Forecast $ in Millions | 12 Months Ended | |
Dec. 31, 2018USD ($)$ / MBblsMBbls | Dec. 31, 2017USD ($)MMBTU$ / MBbls$ / MMBTUMBbls | |
Crude Oil (MBbls) | Purchased: | Puts | ||
Derivative [Line Items] | ||
Notional (MBbl) | MBbls | 3,300,000 | 9,948,000 |
Weighted average strike price (in dollars per unit) | $ / MBbls | 53.41 | 52.04 |
Crude Oil (MBbls) | Sold: | Puts | ||
Derivative [Line Items] | ||
Notional (MBbl) | MBbls | 3,300,000 | 9,948,000 |
Weighted average strike price (in dollars per unit) | $ / MBbls | 42.27 | 40.45 |
Natural Gas Liquids | Purchased: | Puts | ||
Derivative [Line Items] | ||
Notional (MMbtu) | MMBTU | 5,700 | |
Weighted average strike price (in dollars per unit) | $ / MMBTU | 2.75 | |
Natural Gas Liquids | Sold: | Puts | ||
Derivative [Line Items] | ||
Notional (MMbtu) | MMBTU | 5,700 | |
Weighted average strike price (in dollars per unit) | $ / MMBTU | 2.36 | |
Natural Gas Liquids | Sold: | Calls | ||
Derivative [Line Items] | ||
Notional (MMbtu) | MMBTU | 5,700 | |
Weighted average strike price (in dollars per unit) | $ / MMBTU | 4.02 | |
Basis Swap | Crude Oil (MBbls) | ||
Derivative [Line Items] | ||
Price differential ($/Bbl) | $ / MBbls | 0.95 | 1.03 |
Basis Swap | Crude Oil (MBbls) | Midland-Cushing Index | ||
Derivative [Line Items] | ||
Notional (MBbl) | MBbls | 360,000 | 4,290,000 |
Subject to Master Netting Agreement with Counter Party | Crude Oil (MBbls) | Sold: | Puts | ||
Derivative [Line Items] | ||
Notional (MBbl) | MBbls | 7,254 | 7,254 |
Fair value of notional MBbls excluded | $ | $ 10.3 | $ 10.3 |
Subject to Master Netting Agreement with Counter Party | Crude Oil (MBbls) | Sold: | Midland-Cushing Index | ||
Derivative [Line Items] | ||
Notional (MBbl) | MBbls | 4,650 | 4,650 |
Minimum | Subject to Master Netting Agreement with Counter Party | Crude Oil (MBbls) | Sold: | Midland-Cushing Index | ||
Derivative [Line Items] | ||
Price differential ($/Bbl) | $ / MBbls | 0.40 | 0.40 |
Maximum | Subject to Master Netting Agreement with Counter Party | Crude Oil (MBbls) | Sold: | Midland-Cushing Index | ||
Derivative [Line Items] | ||
Price differential ($/Bbl) | $ / MBbls | 1.70 | 1.70 |
Derivative Financial Instrume43
Derivative Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Derivative gain (loss) | $ (50,835) | $ 60,818 | $ 83,858 |
Derivative Financial Instrume44
Derivative Financial Instruments - Schedule of Netting Offsets of Derivative Asset and Liability Positions (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative asset, Gross Amount Presented on Balance Sheet | $ 66,417 | $ 407,052 |
Derivative asset, Netting Adjustments | (10,293) | (297,951) |
Derivative asset, Net Exposure | 56,124 | 109,101 |
Derivative liability, Gross Amount Presented on Balance Sheet | (67,261) | (347,611) |
Derivative liability, Netting Adjustments | 10,293 | 297,951 |
Derivative liability, Net Exposure | $ (56,968) | $ (49,660) |
Oil and Natural Gas Properties
Oil and Natural Gas Properties - Oil and Natural Gas Properties (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Oil and natural gas properties: | ||
Subject to depletion | $ 2,376,712 | $ 1,627,367 |
Not subject to depletion | 1,686,705 | 618,794 |
Oil and natural gas properties, successful efforts method | 4,063,417 | 2,246,161 |
Less accumulated depreciation, depletion and impairment | (506,175) | (290,186) |
Total oil and natural gas properties, net | 3,557,242 | 1,955,975 |
Other property, plant and equipment | 73,382 | 37,253 |
Less accumulated depreciation | (14,064) | (7,475) |
Other property, plant and equipment, net | 59,318 | 29,778 |
Total property, plant and equipment, net | 3,616,560 | 1,985,753 |
Incurred in 2016 | ||
Oil and natural gas properties: | ||
Not subject to depletion | 1,215,920 | 0 |
Incurred in 2015 | ||
Oil and natural gas properties: | ||
Not subject to depletion | 71,712 | 118,101 |
Incurred in 2014 and prior | ||
Oil and natural gas properties: | ||
Not subject to depletion | $ 399,073 | $ 500,693 |
Oil and Natural Gas Propertie46
Oil and Natural Gas Properties - Additional Information (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)Well | Dec. 31, 2015USD ($)Well | Dec. 31, 2014USD ($)Well | |
Property, Plant and Equipment [Abstract] | |||
Capitalized costs excluded from depletion | $ 1,686,705,000 | $ 618,794,000 | |
Depletion expense on capitalized oil and gas property | $ 227,200,000 | $ 173,600,000 | $ 92,800,000 |
Number of exploratory wells in progress | Well | 0 | 0 | 0 |
Additions pending determination of proved reserves | $ 49,400,000 | ||
Interest costs capitalized | $ 0 | $ 0 | $ 2,700,000 |
Acquisitions of Oil and Natur47
Acquisitions of Oil and Natural Gas Properties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||
Acquisition costs | $ 1,081 | $ 0 | $ 2,527 |
Costs incurred, acquisition of unproved oil and gas properties | 1,072,250 | 57,385 | 528,301 |
Acquisition from Unaffiliated Individuals and Entities | |||
Business Acquisition [Line Items] | |||
Total consideration for acquisition | 1,300,000 | 35,000 | 588,200 |
Depletion expense on capitalized oil and gas property | 261,400 | 16,400 | 233,900 |
Costs incurred, acquisition of unproved oil and gas properties | 1,005,700 | 18,600 | 354,300 |
Leasehold Improvements | |||
Business Acquisition [Line Items] | |||
Acquisition costs | $ 79,100 | $ 38,800 | $ 174,000 |
Sales of Oil and Natural Gas 48
Sales of Oil and Natural Gas Properties (Details) $ in Thousands | Dec. 31, 2015USD ($)aWell | Jul. 31, 2015USD ($)a | Aug. 31, 2014USD ($)aWell | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Gain (Loss) on Disposition of Oil and Gas Property [Abstract] | ||||||
Number of operated wells sold | Well | 91 | 1 | ||||
Oil and natural gas properties sold, gross | a | 11,664 | |||||
Oil and natural gas properties sold | a | 7,155 | 9,164 | 38 | |||
Proceeds from sale of property | $ | $ 39,400 | $ 9,300 | $ 200 | $ 0 | $ 51,355 | $ 172 |
Gain (loss) on sale of oil and natural gas properties | $ | $ (36,700) | $ 3,200 | $ (2,100) |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) | Dec. 31, 2016 | Aug. 19, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Capital leases | $ 3,752,000 | $ 2,215,000 | |
Other | 3,500,000 | 0 | |
Revolving Credit Agreement | 0 | 0 | |
Total debt | 1,119,098,000 | 552,215,000 | |
Debt issuance costs on senior unsecured notes | (14,388,000) | (9,092,000) | |
Premium on senior unsecured notes | 3,828,000 | 4,660,000 | |
Less: current portion | (67,214,000) | (951,000) | |
Total long-term debt | 1,041,324,000 | 546,832,000 | |
Senior Notes | 5.375% Senior Notes Due 2025 | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes | 650,000,000 | 0 | |
Senior Notes | 7.500% senior unsecured notes due 2022 | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes | 400,000,000 | 0 | |
Senior Notes | 6.250% senior unsecured notes due 2024 | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes | 61,846,000 | 550,000,000 | |
Premium on senior unsecured notes | $ 4,000,000 | ||
Revolving Credit Agreement | |||
Debt Instrument [Line Items] | |||
Revolving Credit Agreement | $ 0 | ||
Revolving Credit Agreement | Line of Credit | |||
Debt Instrument [Line Items] | |||
Revolving Credit Agreement | $ 0 |
Debt - Revolving Credit Agreeme
Debt - Revolving Credit Agreement (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($) | Oct. 28, 2016USD ($) | Dec. 31, 2015USD ($) | |
Debt Instrument [Line Items] | |||
Revolving credit agreement | $ 0 | $ 0 | |
Revolving Credit Agreement | |||
Debt Instrument [Line Items] | |||
Revolving credit agreement | $ 0 | ||
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 | 2.00% | ||
Line of Credit | |||
Debt Instrument [Line Items] | |||
Revolving credit agreement, borrowing base | $ 2,500,000,000 | ||
Revolving credit agreement, current borrowing base | $ 875,000,000 | 900,000,000 | |
Aggregate elected borrowing capacity | 600,000,000 | $ 600,000,000 | |
Revolving credit agreement, borrowing remaining | $ 599,800,000 | ||
Line of Credit | Revolving Credit Agreement | |||
Debt Instrument [Line Items] | |||
Term | 5 years | ||
Revolving credit agreement | $ 0 | ||
Consolidated Leverage Ratio threshold | 3.50 | ||
Current ratio | 1.00% | ||
Maximum permitted consolidated leverage ratio | 0.04 | ||
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 | Revolving Credit Agreement | Base Rate | |||
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 [Member] | |||
Debt Instrument [Line Items] | |||
Revolving credit agreement | $ 300,000 | ||
Eurodollar Loans | Line of Credit | Revolving Credit Agreement | Maximum | LIBOR | |||
Debt Instrument [Line Items] | |||
Applicable margin basis rate | 3.00% | ||
Eurodollar Loans | Line of Credit | Revolving Credit Agreement | Minimum | LIBOR | |||
Debt Instrument [Line Items] | |||
Applicable margin basis rate | 2.00% | ||
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 | 2.00% | ||
Alternate Base Rate Loans | Line of Credit | Revolving Credit Agreement | Minimum | LIBOR | |||
Debt Instrument [Line Items] | |||
Applicable margin basis rate | 1.00% |
- 7.500% Senior Notes due 2022
- 7.500% Senior Notes due 2022 (Details) - USD ($) | Jan. 05, 2017 | Dec. 15, 2016 | Dec. 13, 2016 | Apr. 14, 2014 | Feb. 05, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 06, 2016 |
Debt Instrument [Line Items] | |||||||||
Repayments of long-term debt | $ 521,944,000 | $ 225,794,000 | $ 705,873,000 | ||||||
Payments of Debt Issuance Costs | 18,097,000 | $ 1,138,000 | $ 12,547,000 | ||||||
7.500% senior unsecured notes due 2022 | |||||||||
Debt Instrument [Line Items] | |||||||||
Percentage of par value on issuance of senior notes | 104.00% | ||||||||
Senior Notes | 7.500% senior unsecured notes due 2022 | |||||||||
Debt Instrument [Line Items] | |||||||||
Senior unsecured notes, issued amount | $ 150,000,000 | $ 400,000,000 | |||||||
Stated interest rate | 7.50% | ||||||||
Net proceeds from note issuance | 152,800,000 | $ 391,400,000 | |||||||
Repayment of outstanding borrowings | 198,500,000 | ||||||||
Repayment of revolving credit agreement | 145,000,000 | $ 175,100,000 | |||||||
Gross proceeds from note issuance | $ 156,000,000 | ||||||||
Parsley LLC | Senior Notes | 7.500% senior unsecured notes due 2022 | |||||||||
Debt Instrument [Line Items] | |||||||||
Extinguishment of debt, amount | $ 400,000 | 61,800,000 | $ 487,700,000 | ||||||
Prepayment expense | $ (36,300,000) | ||||||||
Face amount, subject to guaranteed delivery procedures | $ 1,200,000 | ||||||||
Repayments of debt | 500,000 | $ 537,100,000 | |||||||
Extinguishment of debt, prepayment expense | $ 100,000 | 32,500,000 | |||||||
Extinguishment of debt, accrued interest | 12,000,000 | ||||||||
Payments of Debt Issuance Costs | $ 4,900,000 | ||||||||
Subsequent Event | Parsley LLC | Senior Notes | 7.500% senior unsecured notes due 2022 | |||||||||
Debt Instrument [Line Items] | |||||||||
Extinguishment of debt, amount | $ 61,800,000 | ||||||||
Repayments of long-term debt | 67,500,000 | ||||||||
Extinguishment of debt, prepayment expense | 3,900,000 | ||||||||
Extinguishment of debt, accrued interest | $ 1,800,000 |
Debt - 6.250% Senior Unsecured
Debt - 6.250% Senior Unsecured Notes Due 2024 (Details) - USD ($) | Aug. 19, 2016 | May 27, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||||
Premium on senior unsecured notes | $ 3,828,000 | $ 4,660,000 | |||
Cash paid for interest | $ 65,513,000 | $ 43,993,000 | $ 27,252,000 | ||
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 | $ 200,000,000 | |||
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 | 12-month period beginning June 1, 2019 | |||||
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) - Senior Notes - 5.375% Senior Notes Due 2025 - USD ($) | Dec. 13, 2016 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Gross proceeds from note issuance | $ 650,000,000 | |
Stated interest rate | 5.375% | 5.375% |
Net proceeds from note issuance | $ 650,000,000 | |
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 | |
Period Prior to January 15, 2020 | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 100.00% | |
12-month period beginning January 15, 2020 | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 104.031% | |
12-month period beginning January 15, 2021 | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 103.75% | |
12-month period beginning January 15, 2022 | ||
Debt Instrument [Line Items] | ||
Redemption price, expressed as percentage of principal amount | 101.344% | |
12-month period beginning January 15, 2023 | ||
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, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
2,017 | $ 67,214 | |
2,018 | 1,183 | |
2,019 | 673 | |
2,020 | 28 | |
2,021 | 0 | |
Thereafter | 1,050,000 | |
Total debt | $ 1,119,098 | $ 552,215 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |||
Cash payments for interest | $ 65,513 | $ 43,993 | $ 27,252 |
Change in interest accrual | (11,604) | (348) | 13,390 |
Payment-in-kind interest | 0 | 0 | 234 |
Amortization of deferred loan origination costs | 2,739 | 2,170 | 1,941 |
Write-off of deferred loan origination costs | 451 | 532 | 386 |
Amortization of bond premium | (874) | (764) | (574) |
Other interest income | (992) | (30) | (316) |
Interest costs incurred | 55,233 | 45,553 | 42,313 |
Less: capitalized interest | 0 | 0 | (2,689) |
Total interest expense, net | $ 55,233 | $ 45,553 | $ 39,624 |
Equity - Additional Information
Equity - Additional Information (Details) $ / shares in Units, $ in Millions | May 29, 2014USD ($)shares | Dec. 31, 2016vote$ / sharesshares | Jul. 27, 2016 | Jul. 26, 2016 | Dec. 31, 2015$ / sharesshares |
Equity [Line Items] | |||||
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 | |||
Common stock, conversion basis | a portion of such PE Units were exchanged on a one for one basis for shares of Class A Common Stock. | ||||
Conversion of stock, amount converted | $ | $ 6.7 | ||||
Common Stock, Class A | |||||
Equity [Line Items] | |||||
Common stock, shares outstanding | 179,590,617 | 136,623,407 | |||
Number of votes per share | vote | 1 | ||||
Conversion of stock, shares converted | 1 | ||||
Class B Common Stock | |||||
Equity [Line Items] | |||||
Common stock, shares outstanding | 28,008,573 | 32,145,296 | |||
Number of votes per share | vote | 1 | ||||
Common stock, conversion basis | the PE Unit Holders generally have the right to exchange (the "Exchange Right") their PE Units (and a corresponding number of shares of Class B Common Stock), for shares of the Company’s Class A Common Stock at an exchange ratio of one share of Class A Common Stock for each PE Unit (and a corresponding number of shares of Class B Common Stock) exchanged, (subject to conversion rate adjustments for stock splits, stock dividends and reclassifications) or cash at the Company’s or Parsley LLC’s election. | ||||
Conversion of stock, shares issued | 93,200,000 | ||||
Time-based restricted stock | Common Stock, Class A | |||||
Equity [Line Items] | |||||
Common stock, shares outstanding | 600,000 | ||||
Public Offering | |||||
Equity [Line Items] | |||||
Percentage of shares acquired of Parsley LLC | 86.50% | 85.90% | 83.90% | ||
PE Units | Class B Common Stock | |||||
Equity [Line Items] | |||||
Conversion of stock, shares issued | (4,100,000) | ||||
Common Stock | Common Stock, Class A | |||||
Equity [Line Items] | |||||
Conversion of stock, shares issued | 4,100,000 |
Equity - Allocation of Net Inco
Equity - Allocation of Net Income to Common Stockholders and EPS Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Numerator: | |||
Net (loss) income attributable to Parsley Energy, Inc. Stockholders | $ (74,182) | $ (50,484) | $ 23,429 |
Basic net (loss) income attributable to Parsley Energy, Inc. Stockholders | $ 61,352 | ||
Denominator: | |||
Basic weighted average shares outstanding (shares) | 161,793 | 111,271 | 93,168 |
Basic EPS attributable to Parsley Energy, Inc. Stockholders (in dollars per share) | $ (0.46) | $ (0.45) | $ 0.65 |
Numerator: | |||
Net (loss) income attributable to Parsley Energy, Inc. Stockholders | $ (74,182) | $ (50,484) | $ 23,429 |
Net (loss) income attributable to Parsley Energy, Inc. Stockholders | 61,352 | ||
Diluted net (loss) income attributable to Parsley Energy, Inc. Stockholders | $ (74,182) | $ (50,484) | $ 61,352 |
Denominator: | |||
Basic weighted average shares outstanding (shares) | 161,793 | 111,271 | 93,168 |
Effect of dilutive securities: | |||
Restricted Stock and Restricted Stock Units (shares) | 0 | 0 | 103 |
Diluted weighted average shares outstanding (shares) | 161,793 | 111,271 | 93,271 |
Diluted EPS attributable to Parsley Energy, Inc. Stockholders (in dollars per share) | $ (0.46) | $ (0.45) | $ 0.65 |
Equity - Shares Excluded in Com
Equity - Shares Excluded in Computation of EPS (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Performance-based restricted stock units | ||
Class Of Stock [Line Items] | ||
Shares related to performance based restricted stock units | 453,863 | 211,935 |
Equity - Noncontrolling Interes
Equity - Noncontrolling Interest - Additional Information (Details) | Dec. 31, 2016 | Jul. 27, 2016 | Jul. 26, 2016 | Dec. 31, 2015 | Jun. 15, 2015 | May 29, 2014 |
Public Offering | ||||||
Minority Interest [Line Items] | ||||||
Percentage of shares acquired of Parsley LLC | 86.50% | 85.90% | 83.90% | |||
Parsley Energy LLC | ||||||
Minority Interest [Line Items] | ||||||
Percentage of shares held by Parent | 74.30% | |||||
Parsley Energy LLC | Public Offering | ||||||
Minority Interest [Line Items] | ||||||
Percentage of ownership interest, Noncontrolling owners | 25.70% | |||||
Parsley LLC | ||||||
Minority Interest [Line Items] | ||||||
Percentage of shares held by Parent | 74.30% | |||||
Parsley LLC | Public Offering | ||||||
Minority Interest [Line Items] | ||||||
Percentage of ownership interest, Noncontrolling owners | 25.70% | |||||
Parsley LLC | Public Offering | PE Unit Holders | ||||||
Minority Interest [Line Items] | ||||||
Percentage of ownership interest, Noncontrolling owners | 13.50% | |||||
Pacesetter Acquisition | Pacesetter Drilling, LLC | ||||||
Minority Interest [Line Items] | ||||||
Percentage of shares held by Parent | 63.00% | |||||
Pacesetter Acquisition | Pacesetter Drilling, LLC | President | ||||||
Minority Interest [Line Items] | ||||||
Percentage of ownership interest, Noncontrolling owners | 37.00% | |||||
Pacesetter Acquisition | Parsley LLC | ||||||
Minority Interest [Line Items] | ||||||
Percentage of shares held by Parent | 63.00% |
Equity - Summary of Noncontroll
Equity - Summary of Noncontrolling Interest Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Total net (loss) income attributable to noncontrolling interest | $ (14,735) | $ (22,547) | $ 33,293 |
Parsley LLC | |||
Total net (loss) income attributable to noncontrolling interest | (14,953) | (21,870) | 33,293 |
Pacesetter Drilling, LLC | |||
Total net (loss) income attributable to noncontrolling interest | $ 218 | $ (677) | $ 0 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Common stock, conversion basis | a portion of such PE Units were exchanged on a one for one basis for shares of Class A Common Stock. | ||
Stock based compensation expense | $ 12,871 | $ 8,133 | $ 53,297 |
Time-based restricted stock | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Awards granted (shares) | 36,504 | ||
Stock based compensation expense | $ 3,523 | 3,856 | 2,145 |
Time-based restricted stock units | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Awards granted (shares) | 567,347 | ||
Stock based compensation expense | $ 5,677 | $ 2,710 | 64 |
Performance-based restricted stock units | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Performance unit awards granted period | 3 years | 3 years | |
Awards granted (shares) | 241,928 | ||
Stock based compensation expense | $ 3,671 | $ 1,567 | 0 |
Performance-based restricted stock units | Minimum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Performance share awards actual payout percentage | 0.00% | ||
Performance-based restricted stock units | Maximum | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Performance share awards actual payout percentage | 200.00% | ||
Incentive units | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Stock based compensation expense | $ 0 | $ 0 | 51,088 |
Incentive units | General and Administrative Expenses | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock based compensation expense | $ 51,100 | ||
Common Stock, Class A | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Number of shares authorized | 12,700,000 | ||
Number of shares available for grant | 10,500,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock, Restricted Stock Unit and Performance Unit Activity (Details) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Time-based restricted stock | |
Outstanding Awards | |
Outstanding, beginning balance (shares) | shares | 661,234 |
Awards granted (shares) | shares | 36,504 |
Forfeited (shares) | shares | (22,039) |
Vested (shares) | shares | (74,938) |
Outstanding, ending balance (shares) | shares | 600,761 |
Grant Date Fair Value | |
Weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 18.50 |
Awards granted, grant date fair value (in dollars per share) | $ / shares | 27.94 |
Forfeited, grant date fair value (in dollars per share) | $ / shares | 21.11 |
Vested, grant date fair value (in dollars per share) | $ / shares | 18.14 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 19.02 |
Time-based restricted stock units | |
Outstanding Awards | |
Outstanding, beginning balance (shares) | shares | 512,852 |
Awards granted (shares) | shares | 567,347 |
Forfeited (shares) | shares | (19,013) |
Vested (shares) | shares | (15,400) |
Outstanding, ending balance (shares) | shares | 1,045,786 |
Grant Date Fair Value | |
Weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 16.84 |
Awards granted, grant date fair value (in dollars per share) | $ / shares | 17.05 |
Forfeited, grant date fair value (in dollars per share) | $ / shares | 16.72 |
Vested, grant date fair value (in dollars per share) | $ / shares | 16.85 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 16.96 |
Performance-based restricted stock units | |
Outstanding Awards | |
Outstanding, beginning balance (shares) | shares | 211,935 |
Awards granted (shares) | shares | 241,928 |
Outstanding, ending balance (shares) | shares | 453,863 |
Grant Date Fair Value | |
Weighted average grant date fair value, beginning balance (in dollars per share) | $ / shares | $ 24.20 |
Awards granted, grant date fair value (in dollars per share) | $ / shares | 25.82 |
Weighted average grant date fair value, ending balance (in dollars per share) | $ / shares | $ 25.06 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions Performance Based Restricted Stock Units (Details) - Performance-based restricted stock units | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate | 0.88% | 1.05% |
Expected volatility, minimum | 35.00% | 42.20% |
Expected volatility, maximum | 65.10% | 84.80% |
Stock-Based Compensation - Expe
Stock-Based Compensation - Expected Stock-Based Compensation (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Time-based restricted stock | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
2,017 | $ 3,136 |
2,018 | 1,093 |
2,019 | 0 |
Total | 4,229 |
Time-based restricted stock units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
2,017 | 5,936 |
2,018 | 3,245 |
2,019 | 390 |
Total | 9,571 |
Performance-based restricted stock units | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
2,017 | 3,955 |
2,018 | 2,176 |
2,019 | 6 |
Total | $ 6,137 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | May 29, 2014 | |
Income Tax Disclosure [Line Items] | ||||
Effective income tax rate | 16.40% | |||
Detriment from a valuation allowance | 15.70% | |||
Federal tax rate | 32.10% | |||
Income tax (benefit) expense | $ (17,424,000) | $ (23,755,000) | $ 36,468,000 | |
Additional deferred tax liability due to Private Placement | 20,100,000 | |||
Alternative minimum tax credits | 200,000 | |||
Valuation allowance | 32,215,000 | $ 0 | ||
Federal | ||||
Income Tax Disclosure [Line Items] | ||||
Net operating loss carryovers | 126,300,000 | |||
Valuation Allowance, Operating Loss Carryforwards [Member] | ||||
Income Tax Disclosure [Line Items] | ||||
Cumulative effect of new accounting principle (ASU 2016-09) | $ 100,000 | |||
Tax Receivable Agreement | IPO | ||||
Income Tax Disclosure [Line Items] | ||||
Valuation allowance | $ 24,200,000 |
Income Taxes - Components of th
Income Taxes - Components of the Income Tax (Benefit) Provision (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Federal: | |||
Current | $ 158 | $ 286 | $ 0 |
Deferred | (18,461) | (27,535) | 31,968 |
Total federal | (18,303) | (27,249) | 31,968 |
State, net of federal benefit: | |||
Deferred | 879 | 3,494 | 4,500 |
Total state | 879 | 3,494 | 4,500 |
Income tax (benefit) expense | $ (17,424) | $ (23,755) | $ 36,468 |
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 | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
(Loss) income before income taxes | $ (106,341) | $ (96,785) | $ 93,190 |
Plus: net loss prior to corporate reorganization | 0 | 0 | 37,378 |
Less: net loss (income) before income taxes attributable to noncontrolling interest | 14,579 | 22,438 | (33,293) |
(Loss) income attributable to Parsley Energy, Inc. Stockholders before income taxes | (91,762) | (74,347) | 97,275 |
Income taxes at the federal statutory rate | (32,120) | (26,022) | 34,046 |
State income taxes, net of federal benefit | 879 | 3,494 | 967 |
State income taxes, prior to corporate reorganization | 0 | 0 | 1,246 |
Provision to return adjustment | (237) | (1,217) | 170 |
Permanent and other | (2,634) | (10) | 39 |
Valuation allowance charged to equity | 32,215 | 0 | 0 |
Valuation allowance charged to equity | (15,527) | 0 | 0 |
Income tax (benefit) expense | (17,424) | (23,755) | 36,468 |
Net (loss) income attributable to Parsley Energy, Inc. Stockholders | (74,182) | (50,484) | 23,429 |
Net (loss) income attributable to noncontrolling interest | $ (14,735) | $ (22,547) | $ 33,293 |
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 ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Asset retirement obligations | $ 3,535,000 | $ 5,297,000 |
Deferred stock-based compensation | 6,868,000 | 3,066,000 |
Derivative fair value loss | 8,252,000 | 0 |
Accrued compensation | 3,398,000 | 0 |
Net operating loss carryforward | 44,407,000 | 18,141,000 |
Other | 166,000 | 0 |
Total deferred tax assets | 66,626,000 | 26,504,000 |
Less: Valuation allowance | (32,215,000) | 0 |
Net deferred tax assets | 34,411,000 | 26,504,000 |
Liabilities: | ||
Book basis of oil and natural gas properties in excess of tax basis | (38,489,000) | (64,792,000) |
Derivative fair value gain | 0 | (23,969,000) |
Earnings in investment in subsidiary | (1,116,000) | (705,000) |
Other | (289,000) | 0 |
Total deferred tax liabilities | (39,894,000) | (89,466,000) |
Net deferred tax liability | $ (5,483,000) | $ (62,962,000) |
Income Taxes - Tax Receivable A
Income Taxes - Tax Receivable Agreement (Details) - USD ($) | May 29, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Operating Loss Carryforwards [Line Items] | ||||
Payable pursuant to tax receivable agreement | $ 94,326,000 | $ 51,504,000 | ||
Valuation allowance | (32,215,000) | 0 | ||
Deferred tax asset valuation increase (decrease) | 7,351,000 | 0 | $ 0 | |
Tax benefit from tax receivable agreement | 8,855,000 | 5,500,000 | $ 59,633,000 | |
Deferred tax assets, net of valuation allowance | 34,411,000 | 26,504,000 | ||
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 | $ 63,400,000 | 94,300,000 | 51,500,000 | |
Deferred tax assets | 74,600,000 | |||
Valuation allowance | (24,200,000) | |||
Liability increase (decrease), tax receivable agreement | 20,500,000 | |||
Deferred tax asset valuation increase (decrease) | (7,400,000) | |||
Tax benefit from tax receivable agreement | $ 3,900,000 | |||
Deferred tax assets, net of valuation allowance | $ 111,000,000 | $ 60,600,000 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands, shares in Millions | May 29, 2014shares | May 29, 2014USD ($) | Dec. 31, 2016USD ($)aBoeshares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Related Party Transaction [Line Items] | |||||
Amounts disbursed to related parties | $ 2,100 | $ 2,500 | $ 5,200 | $ 11,300 | |
Depletion expense on capitalized oil and gas property | 227,200 | 173,600 | 92,800 | ||
Costs incurred, acquisition of unproved oil and gas properties | $ 1,072,250 | 57,385 | 528,301 | ||
Class B Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Conversion of stock, shares issued | shares | 93.2 | ||||
Common Stock | Common Stock, Class A | |||||
Related Party Transaction [Line Items] | |||||
Conversion of stock, shares issued | shares | 4.1 | ||||
PE Units | Class B Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Conversion of stock, shares issued | shares | (4.1) | ||||
Tex-Isle | |||||
Related Party Transaction [Line Items] | |||||
Purchases of equipment used in drilling operations | $ 29,300 | 68,100 | |||
SPS | |||||
Related Party Transaction [Line Items] | |||||
Equity method investment, ownership percentage | 42.50% | ||||
Company incurred charges for services performed | $ 4,400 | 4,800 | 5,100 | ||
Lone Star Well Service, LLC | |||||
Related Party Transaction [Line Items] | |||||
Company incurred charges for services performed | 6,300 | 5,000 | 700 | ||
Davis, Gerald, and Cremer | |||||
Related Party Transaction [Line Items] | |||||
Legal service charges | 500 | $ 200 | $ 200 | ||
Randolph J. Newcomer, Jr. Former Member Of Board Of Directors | Riverbend Acquisition | |||||
Related Party Transaction [Line Items] | |||||
Total consideration for acquisition | $ 177,100 | ||||
Acres of oil and gas property, gross | a | 8,800 | ||||
Acres of oil and gas property, net | a | 6,269 | ||||
Production (in Boe/d) | Boe | 900 | ||||
Depletion expense on capitalized oil and gas property | $ 37,900 | ||||
Costs incurred, acquisition of unproved oil and gas properties | $ 139,200 |
Commitments and Contingencies -
Commitments and Contingencies - Asset Retirement Obligations (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Other Commitments [Line Items] | |
2,017 | $ 23,268 |
2,018 | 6,600 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
Thereafter | 0 |
Total | 29,868 |
Asset retirement obligations | |
Other Commitments [Line Items] | |
2,017 | 1,818 |
2,018 | 232 |
2,019 | 112 |
2,020 | 262 |
2,021 | 282 |
Thereafter | 8,686 |
Total | $ 11,392 |
Commitments and Contingencies72
Commitments and Contingencies - Schedule of Company Drilling and Derivative Commitments (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Commitment And Contingencies [Line Items] | |
2,017 | $ 23,268 |
2,018 | 6,600 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
Thereafter | 0 |
Total | 29,868 |
Drilling Commitments | |
Commitment And Contingencies [Line Items] | |
2,017 | 21,118 |
2,018 | 5,940 |
2,019 | 0 |
2,020 | 0 |
2,021 | 0 |
Thereafter | 0 |
Total | $ 27,058 |
Commitments and Contingencies73
Commitments and Contingencies - Schedule of Future Minimum Lease Payments under Long Term Operating Lease Agreements (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Operating Leased Assets [Line Items] | |
2,017 | $ 4,605 |
2,018 | 4,611 |
2,019 | 4,699 |
2,020 | 4,809 |
2,021 | 4,836 |
Thereafter | 16,058 |
Total | 39,618 |
Office Leases | |
Operating Leased Assets [Line Items] | |
2,017 | 4,427 |
2,018 | 4,531 |
2,019 | 4,656 |
2,020 | 4,805 |
2,021 | 4,834 |
Thereafter | 16,058 |
Total | 39,311 |
Office Equipment | |
Operating Leased Assets [Line Items] | |
2,017 | 178 |
2,018 | 80 |
2,019 | 43 |
2,020 | 4 |
2,021 | 2 |
Thereafter | 0 |
Total | $ 307 |
Commitments and Contingencies74
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 7.1 | $ 4.7 | $ 1.5 |
Disclosures about Fair Value 75
Disclosures about Fair Value of Financial Instruments - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Level 2 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Impairment of oil and gas properties | $ 4,100,000 | $ 0 |
Upton County | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Impairment of oil and gas properties | $ 0 | $ 1,000,000 |
Disclosures about Fair Value 76
Disclosures about Fair Value of Financial Instruments - Schedule of Financial Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | ||
Short-term derivative instruments | $ 39,708 | $ 83,262 |
Long-term derivative instruments | 16,416 | 25,839 |
Liabilities: | ||
Short-term derivative instruments | (44,153) | (34,518) |
Long-term derivative instruments | (12,815) | (15,142) |
Commodity derivative contracts | ||
Assets: | ||
Short-term derivative instruments | 39,708 | 83,262 |
Long-term derivative instruments | 16,416 | 25,839 |
Total derivative instrument - asset | 56,124 | 109,101 |
Liabilities: | ||
Short-term derivative instruments | (44,153) | (34,518) |
Long-term derivative instruments | (12,815) | (15,142) |
Total derivative instruments - liability | (56,968) | (49,660) |
Net commodity derivative liability | (844) | 59,441 |
Commodity derivative contracts | Level 1 | ||
Assets: | ||
Short-term derivative instruments | 0 | 0 |
Long-term derivative instruments | 0 | 0 |
Total derivative instrument - asset | 0 | 0 |
Liabilities: | ||
Short-term derivative instruments | 0 | 0 |
Long-term derivative instruments | 0 | 0 |
Total derivative instruments - liability | 0 | 0 |
Net commodity derivative liability | 0 | 0 |
Commodity derivative contracts | Level 2 | ||
Assets: | ||
Short-term derivative instruments | 39,708 | 83,262 |
Long-term derivative instruments | 16,416 | 25,839 |
Total derivative instrument - asset | 56,124 | 109,101 |
Liabilities: | ||
Short-term derivative instruments | (44,153) | (34,518) |
Long-term derivative instruments | (12,815) | (15,142) |
Total derivative instruments - liability | (56,968) | (49,660) |
Net commodity derivative liability | (844) | 59,441 |
Commodity derivative contracts | Level 3 | ||
Assets: | ||
Short-term derivative instruments | 0 | 0 |
Long-term derivative instruments | 0 | 0 |
Total derivative instrument - asset | 0 | 0 |
Liabilities: | ||
Short-term derivative instruments | 0 | 0 |
Long-term derivative instruments | 0 | 0 |
Total derivative instruments - liability | 0 | 0 |
Net commodity derivative liability | $ 0 | $ 0 |
Disclosures about Fair Value 77
Disclosures about Fair Value of Financial Instruments - Financial Instruments Not Carried at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 13, 2016 | Aug. 19, 2016 | May 27, 2016 | Dec. 31, 2015 | Feb. 05, 2014 |
Carrying Amount | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Agreement | $ 0 | $ 0 | ||||
Fair Value | ||||||
Debt Instrument [Line Items] | ||||||
Revolving Credit Agreement | $ 0 | 0 | ||||
Senior Notes | 7.500% senior unsecured notes due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 7.50% | |||||
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 | 0 | ||||
Senior Notes | 5.375% senior unsecured notes due 2025 | Fair Value | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes, fair value | $ 654,531 | 0 | ||||
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 | 0 | ||||
Senior Notes | 6.250% senior unsecured notes due 2024 | Fair Value | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes, fair value | $ 422,548 | 0 | ||||
Senior Notes | 7.500% senior unsecured notes due 2022 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 7.50% | |||||
Senior Notes | 7.500% senior unsecured notes due 2022 | Carrying Amount | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes, fair value | $ 61,846 | 550,000 | ||||
Senior Notes | 7.500% senior unsecured notes due 2022 | Fair Value | ||||||
Debt Instrument [Line Items] | ||||||
Senior notes, fair value | $ 65,737 | $ 522,610 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ / shares in Units, $ in Thousands | Feb. 13, 2017USD ($) | Feb. 07, 2017USD ($)alocation$ / sharesshares | Jan. 17, 2017USD ($)a | Jan. 10, 2017$ / sharesshares | Aug. 19, 2016USD ($) | Aug. 15, 2016$ / sharesshares | May 27, 2016USD ($) | May 23, 2016$ / sharesshares | Apr. 08, 2016USD ($) | Apr. 04, 2016$ / sharesshares | Dec. 10, 2015USD ($) | Sep. 18, 2015USD ($)$ / sharesshares | Sep. 18, 2015$ / sharesshares | Feb. 11, 2015USD ($) | Feb. 05, 2015$ / sharesshares | May 29, 2014shares | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Dec. 09, 2015$ / sharesshares |
Subsequent Event [Line Items] | ||||||||||||||||||||
Proceeds from issuance of common stock, net | $ 930,315 | $ 669,418 | $ 867,750 | |||||||||||||||||
Subsequent Event | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Acres of oil and gas property, gross | a | 167,000 | |||||||||||||||||||
Acres of oil and gas property, net | a | 71,000 | |||||||||||||||||||
Subsequent Event | Upton, Reagan and Glasscock Counties | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Total consideration for acquisition | $ 606,600 | |||||||||||||||||||
Company deposit | $ 48,200 | |||||||||||||||||||
Acres of oil and gas property, gross | a | 31,800 | |||||||||||||||||||
Acres of oil and gas property, net | a | 23,000 | |||||||||||||||||||
Subsequent Event | Southern Delaware Basin | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Total consideration for acquisition | $ 42,800 | |||||||||||||||||||
Acres of oil and gas property, gross | a | 3,926 | |||||||||||||||||||
Acres of oil and gas property, net | a | 660 | |||||||||||||||||||
Common Stock, Class A | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Common stock sold in initial public offering net of offering costs (in shares) | shares | 43,200,000 | |||||||||||||||||||
Common Stock | Common Stock, Class A | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Common stock sold in initial public offering net of offering costs (in shares) | shares | 38,812,000 | 42,748,000 | 49,963,000 | |||||||||||||||||
Public Offering | Common Stock | Common Stock, Class A | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Common stock sold in initial public offering net of offering costs (in shares) | shares | 8,337,500 | 9,487,500 | 20,987,500 | 14,950,000 | 14,885,797 | |||||||||||||||
Option to purchase additional shares (in shares) | shares | 1,087,500 | 1,237,500 | 2,737,500 | 1,950,000 | 1,950,000 | 12,911,364 | ||||||||||||||
Price per share (in dollars per share) | $ / shares | $ 33.55 | $ 24.60 | $ 21.40 | $ 15 | $ 15 | $ 15.50 | $ 18 | |||||||||||||
Gross proceeds received from public offering | $ 279,700 | $ 233,400 | $ 449,100 | $ 228,700 | $ 224,300 | $ 230,700 | ||||||||||||||
Proceeds from issuance of common stock, net | $ 271,100 | $ 226,200 | $ 433,200 | $ 228,400 | $ 217,000 | $ 224,000 | ||||||||||||||
Public Offering | Common Stock | Common Stock, Class A | Subsequent Event | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Common stock sold in initial public offering net of offering costs (in shares) | shares | 41,400,000 | 25,300,000 | ||||||||||||||||||
Option to purchase additional shares (in shares) | shares | 5,400,000 | 3,300,000 | ||||||||||||||||||
Price per share (in dollars per share) | $ / shares | $ 31 | $ 35 | ||||||||||||||||||
Gross proceeds received from public offering | $ 1,283,400 | $ 885,500 | ||||||||||||||||||
Proceeds from issuance of common stock, net | $ 1,260,600 | $ 863,000 | ||||||||||||||||||
Double Eagle Acquisition | Subsequent Event | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Total consideration for acquisition | $ 1,400,000 | |||||||||||||||||||
Gas and oil horizontal drilling locations, gross | location | 7,300 | |||||||||||||||||||
Gas and oil horizontal drilling locations, net | location | 3,300 | |||||||||||||||||||
Purchase consideration | $ 2,800,000 | |||||||||||||||||||
Conversion of stock, lock-up period | 90 days | |||||||||||||||||||
Double Eagle Acquisition | Common Stock | Class B Common Stock | Subsequent Event | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Consideration transferred (shares) | shares | 39,400,000 | |||||||||||||||||||
Double Eagle Acquisition | PE Units | Subsequent Event | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Consideration transferred (shares) | shares | 39,400,000 | |||||||||||||||||||
New Senior Notes Due 2025 | Senior Notes | Subsequent Event | ||||||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||||||
Gross proceeds from note issuance | $ 450,000 | |||||||||||||||||||
Stated interest rate | 5.25% | |||||||||||||||||||
Net proceeds from note issuance | $ 450,000 | |||||||||||||||||||
Proceeds from debt issuance | $ 444,200 |
Supplemental Disclosure of Oi79
Supplemental Disclosure of Oil and Natural Gas Operations - Schedule of Capitalized Costs (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Oil and natural gas properties: | ||
Proved properties | $ 2,376,712 | $ 1,627,367 |
Unproved properties | 1,686,705 | 618,794 |
Total oil and natural gas properties | 4,063,417 | 2,246,161 |
Less accumulated depreciation, depletion and amortization | (506,175) | (290,186) |
Net oil and natural gas properties capitalized | $ 3,557,242 | $ 1,955,975 |
Supplemental Disclosure of Oi80
Supplemental Disclosure of Oil and Natural Gas Operations - Schedule of Costs Incurred for Oil and Natural Gas Producing Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Acquisition costs: | |||
Proved properties | $ 273,940 | $ 16,422 | $ 233,899 |
Unproved properties | 1,072,250 | 57,385 | 528,301 |
Development costs | 495,971 | 404,291 | 488,673 |
Total | $ 1,842,161 | $ 478,098 | $ 1,250,873 |
Supplemental Disclosure of Oi81
Supplemental Disclosure of Oil and Natural Gas Operations - Schedule of Reserve Quantity Information Average Sales Price (Details) | 12 Months Ended | ||
Dec. 31, 2016$ / bbl$ / Mcf | Dec. 31, 2015$ / bbl$ / Mcf | Dec. 31, 2014$ / bbl$ / Mcf | |
Oil | |||
Average Sales Price And Production Costs Per Unit Of Production [Line Items] | |||
Average sales price | 39.36 | 46.54 | 85.99 |
Natural Gas Liquids | |||
Average Sales Price And Production Costs Per Unit Of Production [Line Items] | |||
Average sales price | 15.04 | 16.42 | 35.27 |
Natural Gas | |||
Average Sales Price And Production Costs Per Unit Of Production [Line Items] | |||
Average sales price | $ / Mcf | 2.23 | 2.53 | 4.28 |
Supplemental Disclosure of Oi82
Supplemental Disclosure of Oil and Natural Gas Operations - Schedule of Proved Developed and Proved Undeveloped Reserves (Details) bbl in Thousands, Mcf in Thousands, Boe in Thousands | 12 Months Ended | |||
Dec. 31, 2016BoebblMcf | Dec. 31, 2015BoebblMcf | Dec. 31, 2014BoebblMcf | Dec. 31, 2013BoebblMcf | |
Proved Developed and Undeveloped Reserves: | ||||
Beginning of the year | Boe | 123,811 | 90,891 | 54,834 | |
Extensions and discoveries | Boe | 98,672 | 56,590 | 33,824 | |
Revisions of previous estimates | Boe | (3,750) | (15,592) | (9,480) | |
Purchases of reserves in place | Boe | 24,235 | 2,374 | 16,953 | |
Divestures of reserves in place | Boe | (6,619) | (2,422) | 0 | |
Production | Boe | (14,002) | (8,030) | (5,240) | |
End of the year | Boe | 222,347 | 123,811 | 90,891 | |
Proved developed reserves (energy) | Boe | 106,097 | 51,453 | 45,952 | 23,539 |
Proved undeveloped reserves (energy) | Boe | 116,250 | 72,358 | 44,939 | 31,295 |
Crude Oil (Bbls) | ||||
Proved Developed and Undeveloped Reserves: | ||||
Beginning of the year | 73,877 | 47,617 | 29,507 | |
Extensions and discoveries | 64,005 | 38,518 | 18,776 | |
Revisions of previous estimates | (4,476) | (6,688) | (7,832) | |
Purchases of reserves in place | 16,041 | 1,133 | 10,006 | |
Divestures of reserves in place | (3,543) | (1,896) | 0 | |
Production | (9,368) | (4,807) | (2,840) | |
End of the year | 136,536 | 73,877 | 47,617 | |
Proved developed reserves (volume) | 61,133 | 27,628 | 23,547 | 13,560 |
Proved undeveloped reserves (volume) | 75,403 | 46,249 | 24,070 | 15,947 |
Liquids (Bbls) | ||||
Proved Developed and Undeveloped Reserves: | ||||
Beginning of the year | 23,738 | 22,667 | 12,357 | |
Extensions and discoveries | 20,698 | 9,232 | 8,157 | |
Revisions of previous estimates | 3,898 | (6,934) | (528) | |
Purchases of reserves in place | 4,023 | 551 | 3,906 | |
Divestures of reserves in place | (1,424) | (278) | 0 | |
Production | (2,390) | (1,500) | (1,225) | |
End of the year | 48,543 | 23,738 | 22,667 | |
Proved developed reserves (volume) | 24,306 | 10,890 | 11,491 | 4,762 |
Proved undeveloped reserves (volume) | 24,237 | 12,848 | 11,176 | 7,595 |
Natural Gas (Mcf) | ||||
Proved Developed and Undeveloped Reserves: | ||||
Beginning of the year | Mcf | 157,175 | 123,645 | 77,818 | |
Extensions and discoveries | Mcf | 83,815 | 53,044 | 41,348 | |
Revisions of previous estimates | Mcf | (19,032) | (11,825) | (6,714) | |
Purchases of reserves in place | Mcf | 25,024 | 4,138 | 18,244 | |
Divestures of reserves in place | Mcf | (9,914) | (1,488) | 0 | |
Production | Mcf | (13,463) | (10,339) | (7,051) | |
End of the year | Mcf | 223,605 | 157,175 | 123,645 | |
Proved developed reserves (volume) | Mcf | 123,946 | 77,612 | 65,484 | 31,301 |
Proved undeveloped reserves (volume) | Mcf | 99,659 | 79,563 | 58,161 | 46,517 |
Supplemental Disclosure of Oi83
Supplemental Disclosure of Oil and Natural Gas Operations - Additional Information (Details) - Boe Boe in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Extractive Industries [Abstract] | |||
Extensions and discoveries | 98,672 | 56,590 | 33,824 |
Supplemental Disclosure of Oi84
Supplemental Disclosure of Oil and Natural Gas Operations - Schedule of Standardized Measure of Discounted Future Net Cash Flows (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Extractive Industries [Abstract] | ||||
Future cash inflows | $ 6,603,206 | $ 4,225,912 | $ 5,423,551 | |
Future development costs | (1,019,823) | (829,560) | (642,746) | |
Future production costs | (2,176,081) | (1,534,011) | (1,640,422) | |
Future income tax expenses | (370,337) | (240,203) | (903,354) | |
Future net cash flows | 3,036,965 | 1,622,138 | 2,237,029 | |
10% discount to reflect timing of cash flows | (1,852,653) | (1,024,290) | (1,281,400) | |
Standardized measure of discounted future net cash flows | $ 1,184,312 | $ 597,848 | $ 955,629 | $ 720,780 |
Supplemental Disclosure of Oi85
Supplemental Disclosure of Oil and Natural Gas Operations - Schedule of Changes in Standardized Measure of Discounted Future Net Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Increase (Decrease) in Standardized Measure of Discounted Future Net Cash Flow Relating to Proved Oil and Gas Reserves [Roll Forward] | |||
Standardized measure of discounted future net cash flows at the beginning of the year | $ 597,848 | $ 955,629 | $ 720,780 |
Sales of oil and natural gas, net of production costs | (369,295) | (185,344) | (244,745) |
Purchase of minerals in place | 118,795 | 4,872 | 279,725 |
Divestiture of minerals in place | (14,591) | (53,018) | 0 |
Extensions and discoveries, net of future development costs | 770,947 | 485,380 | 537,241 |
Previously estimated development costs incurred during the period | 61,756 | 12,560 | 96,881 |
Net changes in prices and production costs | (80,492) | (821,783) | (74,080) |
Changes in estimated future development costs | 118,930 | 77,621 | (9,517) |
Revisions of previous quantity estimates | 84,309 | (225,485) | (126,395) |
Accretion of discount | 69,731 | 131,442 | 73,107 |
Net change in income taxes | (199,368) | 249,065 | (348,501) |
Net changes in timing of production and other | 25,742 | (33,091) | 51,133 |
Standardized measure of discounted future net cash flows at the end of the year | $ 1,184,312 | $ 597,848 | $ 955,629 |