INVESTOR PRESENTATION September 2016 Parsley Energy Overview - PowerPoint PPT Presentation

INVESTOR PRESENTATION September 2016

Parsley Energy Overview Premier Acreage Position (2) Investment Summary  Leading growt h profile  Robust ret urns  S t rat egic acquirer  S t rong financial posit ion  Abundant upside 2Q16 Highlights  Net product ion up 23% Q/ Q and 60% Y/ Y Market Snapshot  Net oil product ion up 25% Q/ Q and 82% Y/ Y NYSE Symbol: PE  Market Cap: $7,088 MM (1) Adj ust ed EBITDAX up 48% Q/ Q and 52% Y/ Y Net Debt: $691 MM (2)  Enterprise Value: $7,779 MM D&C cost s down 8% Q/ Q and 26% Y/ Y Share Count: 207 MM (3)  Midland Basin Net Leasehold Acreage: 90,306 (2) LOE per Boe down 17% Q/ Q and 52% Y/ Y Delaware Basin Net Leasehold Acreage: 42,485 (2)  Cash G&A per Boe down 32% Q/ Q and 28% Y/ Y 2Q16 Production: 35.7 MBoe/d (1) Based on 8/30/2016 closing price; (2) As of end 2Q16 pro forma for closing of S. Delaware minerals acquisition on 7/14/2016 and acquisition and equity and debt offerings closed 8/19/2016; (3) As of end of 2Q16 pro forma for equity offering closed 8/19/2016 2

Ongoing Production Momentum  In August, raised midpoint of full-year 2016 production guidance by 4,000 Boe/d  New guidance implies 68% year-over-year production growth at the midpoint, with oil production up 90% year-over-year  compound quarterly production growth rate over nine quarters as a public company (1) 16% 16 40 Updated 2016E Production (36.0-38.0 MBoe/d) 35.7 14 35 Previous 2016E Production (31.5-34.5 MBoe/d) 12 30 29.1 25.2 Net Production (MBoe/d) 10 25 22.2 21.6 Rig Count 18.9 8 20 18.2 15.3 14.0 6 15 9.2 4 10 2 5 0 0 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 Horizontal Rigs Vertical Rigs Quarterly Net Production (MBoe/ d) (1) Parsley completed its initial public offering on May 29, 2014 3

Operating Cost Compression Operating Costs ($/Boe) $17.71 -40% Y/Y $16.24 $2.68 $1.75 $13.08 $11.88 $1.58 $5.91 $10.62 $6.86 $1.90 $1.97 $6.25 $4.41 $4.28 $9.12 $7.63 $5.57 $5.25 $4.37 2Q15 3Q15 4Q15 1Q16 2Q16 LOE Cash G&A Production & Ad Valorem Taxes Updated Unit Cost Guidance ($/Boe)  LOE per Boe down for 5 consecutive quarters LOE Cash G&A $5.50 - $6.50 $4.75 - $5.75  Cash G&A per Boe down 32% quarter-over- $4.50 – $5.25 $4.50 - $5.00 quarter  Lowered 2016 LOE and cash G&A guidance ranges in August 2016E 2016E 2016E 2016E (Previous) (Updated) (Previous) (Updated) 4

Favorable Development Cost Trends Midland Basin Drilling & Completion Costs ($MM) (1)  Continuing to drive down Midland Basin $6.5 $6.0 D&C costs $5.5 $5.2 $4.8  S ubstantial portion of cost savings attributable to streamlined drilling and completion processes 2Q15 3Q15 4Q15 1Q16 2Q16 Southern Delaware Cost Compression Southern Delaware Drilling & Drilling Time Reduction  Rapid rate of change in Completions Costs ($MM) (1) 8,000 S . Delaware well costs $8.0 Measured Depth (ft) 10,000  Cycle times compressing 12,000 $5.7 14,000 16,000  Expect convergence 18,000 toward Midland D&C costs 20,000 0 5 10 15 20 25 30 Drilling Days 1st Well Current Costs 1st Well 2nd Well 3rd Well (1) Normalized for 7,000’ completed lateral 5

Glasscock County Acquisition Overview $400 MM acquisition includes:  9,140 mostly contiguous net leasehold acres in Glasscock County  240 gross horizontal drilling locations in primary target intervals (Lower S praberry, Wolfcamp A, and Wolfcamp B), with average lateral length of ~7,500’  Mineral and overriding royalty interests translating to ~5% average increase in net revenue interest (“ NRI” )  Estimated net production of 270 Boe/ d at acquisition announcement on August 15, 2016  5 saltwater disposal wells S cheduled to close on or before Oct 4, 2016 6

Glasscock Acquisition Detail – Royalty Interests (1)  Mineral and overriding royalty Illustrative Rate of Return Uplift (2) interests increase NRI by 140% approximately 5% on average 120% 100%  Higher NRI translates to higher ) ROR (% 80% returns and NPV 60% 40%  At strip prices: S t rip Prices 20%  ROR increases by ~10% 0%  NPV increases by ~$0.8 MM $40 $45 $50 $55 $60 Oil Price Illustrative Net Present Value Uplift (2) $10 $8 NPV ($MM) $6 $4 S t rip Prices $2 $0 $40 $45 $50 $55 $60 Oil Price (1) Assumptions relating to well results and costs are not to be representative of the results we will achieve and may differ materially therefrom; (2) NYMEX WTI and Henry Hub strip prices as of 7/21/2016; NGL price: 40% of WTI; $3/Mcf gas for flat pricing scenarios; Based on the Company’s 1 MMBoe EUR type curve for 7,000’ completed lateral; $4.8MM D&C; 90% WI (reflecting average acquired WI); NRI’s shown are 8/8 th ’s; $7,500/month fixed LOE; $2.00/BO variable LOE; Estimated ROR and NPV are pre-tax and unhedged 7

Glasscock Acquisition - Favorable Geologic Attributes Wolfcamp Drill Depth Wolfcamp Thickness Geothermal Gradient Degrees Fahrenheit per 1,000’ Depth Thickness Sweet Spot Drill Depth Sweet Spot Temperature Sweet Spot Degrees Fahrenheit per 1000’ Depth Acquired Acreage Acquired acreage has comparable depth, thickness, and thermal maturity to Parsley’s high-quality Upton and Reagan core acreage 8

Compelling Acquisitions Year-to-Date  Acquired ~42,000 net leasehold acres in 1H16 for ~$17,000 per acre (1)  Also acquired more than 5,000 net royalty acres  Large, distributed acreage position supports future growth potential Year-to-Date Acquisition Summary Net Leasehold Net Royalty Estimated Acquired Purchase Price Acreage Acreage Production (Boe/d) (2) ($MM) Midland Basin 23,953 516 ~2,400 $774 S outhern Delaware 17,726 4,847 ~1,480 $440 TOTAL 41,679 5,363 ~3,880 $1,214 (1) Adjusted for estimated PDP value but not for acquired wells in various stages of drilling and completion; (2) Estimated production at time of purchase agreement 9

Mineral and Surface Rights Enhance Asset Value  Mineral rights acquisition closed in July 2016  Average NRI increases from 75% to 92.5% on affected acreage  Running one rig for one year, higher NRI adds ~400 MBoe and ~$16 MM cash flow (1) with no additional cost  Acquired surface rights on ~24,000 acres  Estimate savings of at least $200 M per well on water sourcing and disposal  Additional savings on pads, batteries, roads, rights-of-way, and other surface damages (1) Cash flow estimate based on NYMEX WTI and Henry Hub strip prices as of 7/21/2016 using NSAI-estimated average EUR for potential horizontal wells on Parsley acreage in S. Del. Basin 10

Favorable Initial Results on Acquired Reeves County Acreage Southern Delaware Well Results  First Parsley-completed well on recently 150 acquired acreage in Reeves County on pace Cumulative Production (MBoe) (1) with strong Trees Ranch wells at the 60-day 125 mark 100 75  S trong offset Wolfcamp A wells suggest 50 abundant resource potential on and around acquired acreage 25 0 30 60 90 120 Days of Production Trees Ranch Wells Ranger C4-7-4309H Strong Wolfcamp A Offsets in Reeves County (2) Well Name Operator Peak Month IP Lateral (Boe/d) (3) Length 1 Caribou 10-1H Patriot 1,433 4,787’ 1 4 2 2 W State 1202H Concho 1,835 5,990’ 3 3 W State 1204H Concho 1,925 5,730’ Whiskey River 4 Jagged Peak 1,381 9,663’ 0927-7-1H (1) Normalized to 7,000’ completed lateral and for downtime of 24 hours or more; (2) Production results for selected wells not intended to be representative of potential production from wells we intend to drill in target acreage or of any particular location in such acreage; (3) Source: IHS or company data 11

Attractive Well Economics across Acreage Portfolio Wolfcamp Returns (1)  First-rate productivity and low costs yield attractive 140% economics in both the 120% Midland and S outhern ) Rate of Return (% 100% Delaware Basins 80% 60% 40% S t rip Prices  Mineral rights produce 20% significant uplift in already 0% $40 $45 $50 $55 $60 compelling returns and NPV Oil Price Wolfcamp NPV (1) $16 $14 $12 NPV ($MM) $10 $8 $6 $4 S t rip Prices $2 $0 $40 $45 $50 $55 $60 Oil Price (1) NYMEX WTI and Henry Hub strip prices as of 7/21/2016; NGL price: 40% of WTI; $3/Mcf gas for flat pricing scenarios; Midland Basin: based on 1 MMBoe EUR type curve for 7,000’ completed lateral; $4.8MM D&C; 100% WI, 75% NRI; $7,500/month fixed LOE; $2.00/BO variable LOE; Southern Delaware: based on NSAI ~880 MBoe EUR type curve for 7,000’ completed lateral; $5.7MM D&C; 100% WI; $7,500/month fixed LOE; $2.00/BO variable LOE; Estimated ROR and NPV are pre-tax and unhedged 12