ICYMI, re-posting:
The Pioneer - Parsley tie-up: who caught this? It's a father-son deal. Amazing how "everyone" knows this but it's very rarely being reported. From Bloomberg yesterday, behind a paywall (we'll sort that out later). Here's the story, when times were good, from The WSJ back on August 5, 2016.
The shares have made [Bryan] Sheffield, a 38-year-old, third-generation oil man, one of the youngest billionaires in the energy business at a time when falling crude prices have bankrupted more than 85 North American energy producers, erased profits at oil giants and stung investors. [His grandfather, Parsley; and father, Scott, in the photo at The WSJ link.]
Parsley, with a stock-market value of about $6.4 billion, possesses the qualities investors have sought amid collapsing oil prices: It operates in West Texas’ prolific Permian Basin, has relatively little debt and aggressively hedges its output to lock in above-market prices.
More from the linked WSJ article:
Since oil prices began to tumble in 2014, Parsley and its competitors in the Permian, including Diamondback Energy Inc., Concho Resources Inc. and Pioneer Natural Resources Co. , which is run by Mr. Sheffield’s father, Scott Sheffield, have sold billions of dollars worth of their shares to make acquisitions and keep drilling.
Investors are betting on them to not only survive the biggest oil bust in decades but to vie with the Organization of the Petroleum Exporting Countries for global market share.
Really? And I thought I was overly exuberant about the Bakken. LOL.
Updates
From SeekingAlpha, October 20, 2020:
[Scott Sheffield] has agreed to purchase [his son's energy company] in an all-stock deal valued at about $4.5B. Adding debt to be assumed by Pioneer brings the value to $7.6B. The deal price works out to a 7.9% premium to Parsley's closing share price on October 19, 2020.
Parsley owners are to receive 0.1252 shares of Pioneer common stock for each share of Parsley they hold.
Annual synergies of $325M are seen, and the deal is expected to be accretive to cash flow per share, free cash flow per share, EPS, and corporate returns, beginning in year one.
The combined company will have about 930K net acres in the Permian basin, and a production base of 328K barrels of oil per day, and 558K barrels of oil equivalent per day.
It's interesting, when you first learn it, but I learned it ages ago. And it's not just the Bryan-Scott connection. Scott literally married the boss's daughter to get where he was. All that said, he's a sharp guy.
ReplyDeleteThere was a half hour plenary video at CERAWEEK 2017 with the two Sheffields called generational perspectives on the prolific Permian, led by Dan Yergin. Video was free and public, but seems to have been taken down now (I guess just from being old).
I still get a kick out of the WSJ's assertion the Sheffields (or the Permian) had plans to take on OPEC for market share. As I said: I thought I was inappropriately exuberant about shale. Pretty funny.
DeleteAn old story on the family connections:
ReplyDeletehttps://www.ogj.com/general-interest/article/17288184/ceraweek-permian-persistence-no-debt-keys-to-sheffields-success
"Lessons passed down from Permian pioneer Joe M. Parsley to his son-in-law Scott Sheffield and then to Scott's son Bryan Sheffield hold true for any US onshore operator outside of their lineage."
When I get caught up, I'll take a look at that. Thank you.
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