INVESTOR PRESENTATION 2Q 2018
Forward Looking Statements and Cautionary Statements Forward-Looking Statements The information in this presentation includes “forward-looking statements” that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on Parsley Energy, Inc.’s (“Parsley Energy,” “Parsley,” or the “Company”) current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. We caution you that these forward-looking statements are subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our control, incident to the exploration for and development, production, gathering and sale of oil and natural gas. These risks include, but are not limited to, commodity price volatility, inflation, lack of availability of drilling and production equipment and services, environmental risks, drilling and other operating risks, regulatory changes, the uncertainty inherent in estimating reserves and in projecting future rates of production, the production potential of our undeveloped acreage, cash flow and access to capital, the timing of development expenditures and the risk factors discussed in or referenced in our filings with the United States Securities and Exchange Commission (“SEC”), including our Annual Report on Form 10-K and our subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this presentation. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this presentation. Our production forecasts and expectations for future periods are dependent upon many assumptions, including estimates of production decline rates from existing wells and the undertaking and outcome of future drilling activity, which may be affected by significant commodity price declines or cost increases. Industry and Market Data This presentation has been prepared by Parsley and includes market data and other statistical information from third-party sources, including independent industry publications, government publications or other published independent sources. Although Parsley believes these third-party sources are reliable as of their respective dates, Parsley has not independently verified the accuracy or completeness of this information. Some data are also based on Parsley’s good faith estimates, which are derived from its review of internal sources as well as the third-party sources described above. Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”) Natural gas and natural gas liquids (“NGLs”) sales and associated production volumes for the three months ended June 30, 2018 reflect adjustments associated with Parsley’s adoption of Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“ASC 606”), effective January 1, 2018. Unless otherwise noted, all references to 2Q18 production volumes and per Boe unit costs likewise reflect this adoption, which has the effect of increasing certain natural gas and NGLs volumes and revenues, offset by a corresponding transportation and processing cost such that there is no change to reported net income. The recognition and presentation of oil volumes and associated revenues and expenses are unaffected by the adoption of ASC 606. For more information on ASC 606 and a reconciliation of 2Q18 production and unit costs under ASC 605 and as adjusted under ASC 606, please see slide 22. 2
Parsley Energy Overview Premier Permian Pure-Play Parsley Leasehold Parsley Energy Acreage (5) Midland Superior acreage portfolio Basin ANDREWS MARTIN Advantaged marketing position LEA HOWARD Track record of efficient capital investment Central GLASSCOCK Basin Platform WINKLER MIDLAND Efficient and sustainable growth profile ECTOR Delaware Financial flexibility with strong balance sheet Basin WARD CRANE UPTON Minerals ownership provides economic uplift REAGAN REEVES PECOS 2Q18 Highlights Market Snapshot NYSE Symbol: PE Generated company-record operating cash Market Cap: $9,937 MM (2) margin (1) Net Debt: $1,882 MM (3) Enterprise Value: $11,819 MM (4) Compressed cycle times Share Count: 317 MM Permian Basin Net Leasehold Acreage: ~210,000 (5) Bolstered takeaway capacity Midland Basin: ~164,000 Delaware Basin: ~46,000 Posted peer-leading oil price realization Permian Basin Net Royalty Acreage: ~7,000 (1) Operating cash margin is a non-GAAP financial measure. For reconciliation of operating cash margin to a GAAP financial measure, please see slide 21; (2) Calculated using fully diluted share count of 317 mm shares (280 mm Class A shares plus 37 mm Class B shares) as of 8/7/2018 and closing price as of 8/6/2018; (3) As of 6/30/2018. Net Debt is a non-GAAP financial measure that is defined as total debt less cash and cash equivalents and short-term investments; (4) Enterprise value is calculated as market capitalization plus net debt, where market capitalization is calculated as share price times the sum of Class A shares outstanding and Class B shares outstanding. Because non-controlling interest represents the portion of total book value of equity allocated to Class B shareholders, it is already represented in the enterprise value calculation by the inclusion of Class B shares in the calculation of market capitalization, and therefore should not be added separately as a component of enterprise value; (5) As of 8/7/2018. 3
Achieving Scale in Record Time Fastest to 100 MBoe/d Parsley 100 Net Production (MBoe/d) 80 60 40 No oil-focused E&P has grown production from 10 to 100 MBoe/d faster than Parsley Energy (1) 20 16% compound quarterly production growth rate since IPO, (2) with minimal contribution from acquired volumes 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Years Peer-Leading Production Growth Translated to Significant Value Creation 50% Compound Annual Growth Rate Volume growth has accrued to shareholders, as evidenced by: Superior production growth per debt-adjusted share (3) 25% Positive total shareholder return (TSR) (4) despite 35% decline in oil prices (5) 0% -25% -50% Peer 1 PE Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Peer 8 Peer 9 Peer 10 Peer 11 Peer 12 Peer 13 Peer 14 Peer 15 Peer 16 Peer 17 Peer 18 Peer 19 Peer 20 Peer 21 Peer 22 Peer 23 Peer 24 Production per DAS 2014-18E CAGR TSR CAGR from 6/30/2014 (1) Bloomberg; Peers include all oil-focused E&Ps (oil represents at least 40% of reported production) for which relevant production data is available. Peers include AREX, BCEI, CDEV, CLR, CPE, CRZO, CXO, FANG, HK, JAG, MTDR, NOG, OAS, PDCE, PetroHawk, ROSE, RSPP, SM, SN, SRCI, and WLL. Production adjusted for non-controlling interest where applicable; (2) Parsley completed its initial public offering on 5/29/2014; (3) Evercore ISI; Peers include APA, APC, AR, CHK, CLR, COG, CPE, CXO, DVN, ECA, EGN, EOG, FANG, MRO, NBL, NFX, OAS, PXD, QEP, RRC, SWN, WLL, WPX, and XEC; (4) FactSet; Total shareholder return (TSR) calculated as (End Price – Beginning Price + Dividends) / Beginning Price. Priced as of 7/31/2018; (5) FactSet; WTI front month price as of 7/30/2018 compared to 6/30/2014. 4
Best-in-Class Reinvestment Runway Parsley Energy Acreage Durable, high quality inventory Parsley Operated Rigs (1) Midland yields long reinvestment runway MARTIN % of Dev Inventory Drilled Basin % of Dev Inventory Remaining Robust production trend on Inventory Life at Current Pace geographically balanced activity ANDREWS profile implies sustainably strong growth trajectory Over 6,000 gross operated HOWARD development locations in proven formations (2) GLASSCOCK Central Basin Over a decade of operated Platform development inventory life (2) in STERLING each distinct core geography MIDLAND ECTOR Delineation inventory (3) comprising LOVING WINKLER almost 4,000 identified locations offers substantial resource upside Delaware WARD Basin CRANE UPTON IRION REEVES REAGAN PECOS (1) Excludes surface and service rigs. Rig distribution based on average 2Q18 activity levels operating in each development area; (2) Development inventory includes operated locations in Lower Spraberry, Wolfcamp A, Wolfcamp B, and Wolfcamp C zones. Assumes no future trades or new organic leasing activity; (3) Delineation inventory includes operated locations in Middle Spraberry, Cline, Atoka, 2nd Bone Spring and 3rd Bone Spring zones. Assumes no future trades or new organic leasing activity. 5
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