Leadership Message

Leadership Image

Enduring with relevance. During the coronavirus 2019
(COVID-19) pandemic, which caused a sudden and significant decrease in general economic activity and energy demand, Parsley Energy’s mantra has been to “endure with relevance.” This mantra has guided us and helped us to remain resilient in this challenging economic environment.

Reflecting on 2019, we are proud of our many accomplishments: publishing our inaugural Corporate Responsibility Report; reconstituting our Nominating and Governance Committee to include environmental and social oversight; establishing our Safety, Sustainability, and Corporate Responsibility (SSCR) Planning and Disclosure Committee; and finishing the year with strong operating results and well positioned for continued free cash flow generation in 2020.

Our focus on ESG initiatives now applies to an expanded asset base after our acquisition of Jagged Peak Energy in January 2020. This transaction delivered complementary, high margin assets and tangible synergies that we expect will deliver value to our combined shareholder base. Furthermore, we set an aggressive goal to significantly reduce flaring volumes, including on our recently acquired Jagged Peak assets, which were being flared at roughly 20% of gross natural gas produced at the time the acquisition closed, by year-end 2020. We incorporated this flaring goal into our annual bonus metrics, demonstrating our commitment to improving our environmental performance. Following the closing of the transaction, we worked with our midstream providers to implement various infrastructure solutions, and we voluntarily curtailed certain high gas-flaring wells. By April 2020, we had already achieved our goal of flaring less than 2.5% of gross natural gas produced, pushing us to reduce our year-end flaring target to below 2.0%.

In February 2020, I gave the business lunch keynote speech at NAPE, one of the most widely attended conferences in our industry. During my speech, I discussed what our industry needs to do to succeed, and in light of our current economic climate, I believe the Shale New Deal is more relevant than ever. To learn more about the Shale New Deal, click below to watch a recording of my NAPE speech.

Thank you for visiting our newly dedicated Corporate Responsibility webpages and viewing our progress on our most important ESG topics. We welcome your feedback and questions at SSCR@parsleyenergy.com.

Matt Signature

Sincerely,
Matt Gallagher
President and Chief Executive Officer

102-14

Environment

There are five environmental topics that are critical for Parsley to responsibly manage: Climate Change, Emissions, Water, Spills, and Land Management.

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Society

At Parsley, we embrace the communities where we operate and we celebrate the characteristics that make each place unique.

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Workforce

Parsley’s talented employees are the essence of our unique identity and capabilities.

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About this Report 102-49, 102-50, 102-52, 102-53, 102-54

Parsley Energy’s 2019 Corporate Responsibility Report demonstrates our continued commitment to environmental, social, and governance (ESG) disclosure. This report covers 2019 data for all Parsley Energy operations (unless otherwise noted). The report also includes information relating to our response to the COVID-19 pandemic and our acquisition of Jagged Peak Energy Inc., which was completed on January 10, 2020. For more information about Parsley Energy, please visit the About section of our website.

We welcome feedback and questions about this report, which can be directed to David Dell’Osso, Executive Vice President – Chief Operating Officer, and Chair of the Safety, Sustainability, and Corporate Responsibility (SSCR) Planning and Disclosure Committee, at SSCR@parsleyenergy.com. We remain committed to reporting on our corporate responsibility efforts annually.

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Governance

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Stakeholder Engagement
and Materiality

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Information
Technology

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This report references the Sustainability Accounting Standards Board (SASB) Oil & Gas – Exploration & Production Standard, as well as the following Global Reporting Initiative (GRI) Standards, which cover key focus areas discussed in this report:

  • » GRI 102 General Disclosures 2016
  • » GRI 203 Indirect Economic Impacts 2016
  • » GRI 303 Water and Effluents 2018
  • » GRI 304 Biodiversity 2016
  • » GRI 305 Emissions 2016
  • » GRI 306 Effluents and Waste 2016
  • » GRI 307 Environmental Compliance 2016
  • » GRI 401 Employment 2016
  • » GRI 403 Occupational Health and Safety 2018
  • » GRI 404 Training and Education 2016
  • » GRI 413 Local Communities 2016

Parsley at a Glance

Chart 1

27%

27% board diversity based on gender and ethnicity

Chart 2

<1.5 %

<1.5% of the natural gas we produced in the second quarter of 2020 was flared

Chart 3

>92%

>92% of our production flows through facilities with a vapor recovery unit

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~93%

~93% oil on pipe (significantly reducing loading/transportation emissions from truck transport)

Chart 6

~94%

~94% produced water on pipe

815K

815k truck trips avoided in 2019 through the use of produced water pipeline infrastructure

220k

220k truck trips avoided in 2019 through use of oil pipeline infrastructure

14.3%

Reduced our 2019 scope 1 greenhouse gas emissions intensity by 14.3% (compared to 2018).


Governance 102-16, 102-17, 102-18, 102-19, 102-20, 102-22, 102-23, 102-24, 102-26, 102-27, 102-29

Governance Icon

Parsley Energy is governed by an 11-person Board of Directors, of which nine are independent (including an independent Lead Director). Our Board is comprised of members with diverse backgrounds, skills, and experiences, and the average tenure of our directors (excluding Founder and Executive Chairman Bryan Sheffield) is approximately four years. Four Board committees support corporate oversight: Audit; Compensation; Nominating, Environmental, Social, and Governance; and Reserves. All Board committees are comprised of only independent directors. For more Corporate Governance highlights and information about our Board, please see our latest Proxy Statement.

Our Nominating, Environmental, Social, and Governance (NESG) Committee oversees environmental, climate, safety, social, and other corporate responsibility matters. In 2019, the NESG Committee and management set goals for improving metrics related to water usage and transportation, spills, emissions, occupational health and safety, and other SSCR-related matters. The NESG Committee also actively oversees our efforts to increase visibility of ESG initiatives through public reporting.

Our Safety, Sustainability, and Corporate Responsibility Planning and Disclosure Committee (SSCR Committee) manages Parsley’s daily ESG efforts and disclosures. The SSCR Committee assists Parsley’s senior management and the Board in monitoring SSCR-related trends, issues, and concerns; determines whether the Company has appropriate SSCR policies and management systems; and approves the Company’s public disclosures of important ESG matters. The SSCR Committee meets regularly to provide guidance to senior leadership and reports progress on topics such as safety and environmental performance and community engagement to the Board on a quarterly basis. The SSCR Committee has been successful in raising awareness of ESG issues across Parsley and generating practical ideas to improve our business activities and ESG performance.

Parsley Energy has a strong foundation of ethics and integrity, with a positive reputation that precedes us in our industry and attracts employees to our Company. Laying this foundation are our Employee Handbook and Corporate Code of Business Conduct and Ethics (Code of Conduct). At Parsley, we have an open-door policy and encourage employees to bring any issues or concerns to their supervisor, manager, division head, or a member of the Human Resources Department, without fear of retaliation. We have an independently administered whistleblower hotline and online reporting mechanism for the confidential reporting of complaints. For more details on our approach to upholding ethics and integrity throughout our operations, view our inaugural Corporate Responsibility Report.

Stakeholder Engagement and Materiality 102-40, 102-42, 102-43, 102-44, 102-46, 102-47

Stakeholder Icon

In 2019, Parsley Energy conducted its first materiality assessment, which included desktop research, benchmarking, and engagement with internal and external stakeholders. Collectively, these insights enabled us to determine our most important ESG topics to manage and report on in our inaugural Corporate Responsibility Report. Our senior leadership validated these topics as being relevant for our business today. We remain committed to refreshing our materiality assessment on a regular basis. For more information on our first materiality assessment, please see the Stakeholder Engagement and Materiality section of our inaugural Corporate Responsibility Report.

Information Technology (IT)

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We recognize the data we collect from our operations is a valuable asset, and we can utilize this data to improve our business.

Our Enterprise Prioritization Committee is comprised of members of our senior management team who oversee and steward Parsley’s strategic technology investments. Our IT team is responsible for optimizing the performance of our data infrastructure across our growing network of corporate offices, data centers, field communications, and cloud infrastructure. This infrastructure supports the data analytics capability we need to employ advanced technologies that enhance the efficiency and resiliency of our field operations.

Our Integrated Field Operations Program (IFOP) is a multi-year corporate initiative to continuously improve operations with advanced IT and field capabilities. IFOP capabilities include field surveillance and alarm detections across all major production facilities. Each of our production facilities feature automated systems that continuously collect, analyze, and report real-time operations data including well down hole pressure and temperature, artificial lift equipment metrics, and production facility and electrical distribution system status.

In 2019, we launched the Integrated Operations Center (IOC) with the objective of providing advanced remote control and 24/7 surveillance capabilities across many of our production facilities and wells. Using this technology and its associated data, we can remotely survey our facilities from a central location and improve the maintenance of our equipment by identifying signs of wear or potential malfunctions. When a system interruption occurs, our monitoring software automatically isolates and identifies the problem, including its location, scope, and level of severity. The IOC then leverages the appropriate technology to initiate actions needed to resolve an issue and optimize our response. Other benefits of this technology include:

  • »Mitigating unnecessary physical trips to our facilities—saving time and costs and minimizing employee hours driven.
  • »Helping to prevent equipment failures and minimizing impacts to the surrounding environment.

In alignment with Parsley’s emission reduction efforts, we utilize electronic monitoring of key equipment such as vapor recovery units, lease automated custody transfer (LACT) units, gas compressors, and burner management systems on flares and heater treaters.

We continue to look for ways to expand our virtual capabilities and enhance the mobility of our data. In 2019, we successfully implemented new technology that allows our engineers to remotely monitor drilling operations in real-time and pilot real-time completions capabilities. This new technology improves our ability to efficiently prevent and troubleshoot problems and reduces downtime in our operations.

Additionally, we successfully completed phase 1 of a thermal imaging pilot project to enhance our flare monitoring capabilities. Phase 2 of the project—to connect our remote surveillance directly into our IOC alarm workflows— has been initiated for 14 facilities.