Parsley Energy — Merger or Acquisition (October 2020)
18 slides from Parsley Energy's merger presentation, Oct 20, 2020
Slide 1: Acquisition of Parsley Energy: The Premier Independent E&P
Exhibit 99.2 Acquisition of Parsley Energy The Premier Independent E&P October 20, 2020Exhibit 99.2 Acquisition of Parsley Energy The Premier Independent E&P October 20, 2020
Slide 2: Certain Notices
Certain Notices Additional Information and Where to Find It This communication may be deemed to be solicitation material in respect of the proposed transaction between Pioneer and Parsley. The proposed transaction will be submitted to Pioneer’s stockholders and Parsley’s stockholders for their consi
Slide 3: Forward-Looking Statements
Forward-Looking Statements Except for historical information contained herein, the statements in this presentation are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business
Slide 4: Creating Differentiated Value
Creating Differentiated Value Highly Accretive to Free Cash Flow per share and Corporate Returns Maintains Strong Unmatched high- Enhances new $ ~930,000 quality inventory Balance Sheet investment Permian Acres; drives sustainable $ 2021E Net Debt/EBITDAX ~1.1x; No Federal Land framework 1 Free Cash
Slide 5: Transaction Overview
Transaction Overview 1 Accretive combination creates the All Stock Consideration - $7.6 B Transaction Value 0.1252 shares of Pioneer per share of Parsley premier low-cost, Pro forma share count of 216 MM shares Permian independent E&P Significant Accretion Increases free cash flow per share and corp
Slide 6: Transaction Enhances Investment Thesis
Transaction Enhances Investment Thesis Creating Significant Value for Shareholders 1 Targeting ~10% Total Return (inclusive of base dividend, variable dividend and oil growth) Significant Free Cash Flow Reinvestment rate lowered to 65% to 75% of cash flow at 2 strip pricing Strong Increased Substant
Slide 7: Improving Free Cash Flow Profile
1 Free Cash Flow Yield Improving Free Cash Flow Profile $2,000 10% Transaction is highly accretive to free cash flow $1,500 8% Attractive corporate breakeven including dividend in the mid-$30s WTI $1,000 6% Disciplined investment framework with premier asset base increases free cash flow profile $50
Slide 8: Combining Two Premier Permian Assets
Combining Two Premier Permian Assets Combined Midland Basin 1 Enterprise Value $ 16.3 B $ 7.6 B $ 23.9 B Q2’20 Oil Production (MBOPD) 215 113 328 Q2’20 Production (MBOEPD) 375 183 558 Oil Mix 57% 61% 59% Net Permian Acreage 680,000 250,000 930,000 2 Midland Basin Gross Production by Operator 631 (MB
Slide 9: Unmatched Portfolio of Top Tier Permian Acreage
Unmatched Portfolio of Top Tier Permian Acreage 1 A – Rated Inventory ~930,000 Net Acres (Breakeven pricing <$30 WTI and <$2.00 HH) No Federal Acreage Unmatched top-tier inventory in all of U.S. shale PERMIAN + Creates the only Permian pure play independent E&P of size and scale 1) Source: Wells Far
Slide 10: Increasing Permian Scale
1 Increasing Permian Scale Bubble sizes based on Midland and 1,500 Delaware Basin gross oil production Peer 8 1,250 Pioneer 1,000 + Parsley 750 Peer 1 (37% Oil Mix) Peer 6 500 Peer 4 Peer 7 Peer 2 (53% Oil Mix) 250 Peer 5 Peer 3 - 55% 60% 65% 70% Midland and Delaware Basin Gross 2-Stream Oil Mix For
Slide 11: Strong Balance Sheet Maintained
Strong Balance Sheet Maintained 1 2021E Net Debt/EBITDAX 6x Independent Major 4x Transaction maintains Pioneer’s top-tier balance sheet 2x 0x 1) Source: FactSet Consensus 10/16/2020. Peers: APA, CLR, COP, CVX, CXO, DVN, EOG, FANG, HES, MRO, MUR, OVV, OXY, WPX, XEC and XOM. EBITDAX is a non-GAAP fina
Slide 12: Refinancing Opportunities
Refinancing Opportunities 1 Parsley Maturities and Balances Schedule $1,200 Parsley’s Average Interest Rate $1,000 ~5% $700 MM $800 5.625% $650 MM 5.375% $1.1 B credit facility Pioneer’s Average Interest Rate $495 MM $600 $430 MM drawn 5.875% 3.500% $399 MM ~2% 4.125% $400 $450 MM Expected Annual In
Slide 13: Strong Focus on ESG
Strong Focus on ESG Environmental Social Governance Focus on maintaining very low At Pioneer, a job is never so Board of Directors Committees: flaring intensity and GHG emissions important that it cannot be done Health, Safety and Environment in a safe and environmentally Continue to reduce flaring
Slide 14: The Premier Permian E&P
The Premier Permian E&P 1 1 Enterprise Value ($MM) 2020E Production (MBOEPD) $60,000 1,400 1,200 $50,000 1,000 $40,000 800 $30,000 600 $20,000 400 $10,000 200 $0 0 Creates a top tier independent E&P with (1) a strong balance sheet (2) significant free cash flow generation and (3) return of capital 1
Slide 15: Enhancing Shareholder Value
Enhancing Shareholder Value Low-cost, Disciplined Free cash flow Low leverage Significant high-return reinvestment rate generation provides financial inventory of Permian Basin underpins compelling supports return and operational low-risk, high- wells drive strong investment of capital to flexibilit
Slide 16: Supplemental Slides
Supplemental SlidesSupplemental Slides
Slide 17: Additional Information
Additional Information EBITDAX represents earnings before depletion, depreciation and amortization expense; exploration and abandonments; impairment of inventory and other property and equipment; accretion of discount on asset retirement obligations; interest expense; income taxes; net gain on the d
Slide 18: Certain Reserve Information
Certain Reserve Information Cautionary Note to U.S. Investors – The SEC prohibits oil and gas companies, in their filings with the SEC, from disclosing estimates of oil or gas resources other than reserves, as that term is defined by the SEC. In this presentation, Pioneer includes estimates of quant
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