Organization and Nature of Operations

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Nature of Operations

ORGANIZATION AND NATURE OF OPERATIONS Parsley Energy, Inc. (either individually or together with its subsidiaries, as the context requires, the “Company”) is an independent oil and natural gas company focused on the acquisition, development, exploration and production of unconventional oil and natural gas properties in the Permian Basin. The Permian Basin is located in west Texas and southeastern New Mexico and is characterized by high oil and liquids-rich natural gas content, multiple vertical and horizontal target horizons, extensive production histories, long-lived reserves and historically high drilling success rates. The Company’s properties are located in two sub areas of the Permian Basin, the Midland Basin and the Delaware Basin, where, given the associated returns, it focuses predominantly on horizontal development drilling.

Recent Events

Depressed Commodity Price Environment

The recent unprecedented decline in crude oil demand caused by the global response to the novel coronavirus 2019 (“COVID-19”), together with recent periods of increased production from foreign oil producers (most notably Saudi Arabia and Russia), has contributed to steep declines in the prices of oil, natural gas and NGLs, negatively impacting oil and natural gas producers located in the United States, including the Company. The commodity price environment is expected to remain depressed as a result of the global oil and natural gas supply and demand imbalance and the potential for a global economic recession. In response to these market dynamics, in addition to other measures, the Company has reduced its capital budget and development activity for the year.

For additional information about the current commodity price environment and its effects on the Company, please see Note 4—Derivative Financial Instruments, Note 16—Disclosures about Fair Value and Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook in this Quarterly Report.

Jagged Peak Acquisition

On January 10, 2020, through a series of transactions, the Company acquired Jagged Peak Energy Inc., a Delaware corporation that previously traded on the New York Stock Exchange under the symbol “JAG” (“Jagged Peak”), pursuant to the Agreement and Plan of Merger, dated as of October 14, 2019, among the Company, Jackal Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company, and Jagged Peak (the “Jagged Peak Acquisition”). As part of the Jagged Peak Acquisition, each eligible share of Jagged Peak common stock was automatically converted into the right to receive 0.447 shares of Class A common stock, par value $0.01 per share, of the Company (“Class A common stock”). As a result, the Company issued or distributed approximately 95.9 million shares of Class A common stock to former Jagged Peak stockholders upon the consummation of the Jagged Peak Acquisition. The Jagged Peak Acquisition is discussed in further detail in Note 6—Acquisitions and Divestitures.