Joe Parsley with Scott Sheffield and Howard Parker
Joe Parsley entered the 1950s oil and gas frontier armed with an engineering degree from The University of Texas at Austin and a network of smart friends. When he retired 30 years later, he left behind a legacy of independent Texas oil companies that are now dominating the industry.
Parsley graduated from UT Austin in 1951 with a degree in petroleum engineering and began his career as a reservoir engineer for Marathon Oil Corporation. After teaming up with geologist Howard Parker (B.S. 1942) on a drilling job for an independent oil company, the two formed Parker & Parsley Petroleum Co. over a handshake in 1962.
Parsley’s entrepreneurial spirit, technical skills and strategic approach ensured that Parker & Parsley capitalized on booms and survived busts. In a merger spearheaded by son-in-law Scott Sheffield after Parsley retired, Parker & Parsley joined with MESA, Inc. in 1997 to become Pioneer Natural Resources, one of the largest independent oil companies in the nation and a top Texas oil producer.
Learn more about Scott Sheffield and his leadership of the independent oil and gas movement.
Parsley’s grandson, Bryan Sheffield, continued the family tradition when he took over operations of 100 wells in the Permian Basin that Parsley retained after the merger. Bryan created Parsley Energy, Inc., keeping his grandfather’s name, and quickly expanded the company, which he took public in May 2014.
The Cockrell School sat down with Parsley to get insight into the early days of Parker & Parsley and learn more about the patriarch of an independent oil and gas empire.
How did you come to study petroleum engineering at UT Austin?
I knew I wanted to be some kind of engineer because I was good at math. I started out as an architectural engineer, but I didn’t really fit there. My dad, who was an entrepreneur, bought a couple of shallow drilling rigs, and, after listening to him talk about drilling wells, I thought it sounded interesting. So, I switched to petroleum engineering. And I liked the oil business. It was fun, except when you drilled a bad well — which of course I never did [laughter]!
How did you get started in the oil business?
As I approached graduation, oil companies started coming down to conduct interviews. I was able to receive an offer for $330 a month, so I sent the company a letter to accept it.
The same day I mailed the letter, I received another offer from Marathon for $349 a month, and I thought, wait a minute, I need that extra $19! So I went down to the little post office, dug through the mail, pulled back my letter and accepted Marathon’s offer.
My training program with Marathon was different. They sent me out in the field as a roustabout. That meant building fences, laying pipelines, painting tanks — doing anything that has to be done to maintain the oil field. After a year, I was transferred to Midland in the reservoir engineering department and eventually became district reservoir engineer.
How was Parker & Parsley founded?
A friend who I met at Marathon connected me with a Houston independent who wanted to open an office in Midland. The man was sending a drilling rig to West Texas and wanted fields for that rig to drill. I told him we needed a geologist and recommended Howard [Parker], so he hired him. Howard’s a good guy, and smart. So the Howard and I went to work for the Houston independent and found some oil for him.
We were rolling pretty well, but then the man from Houston got in trouble. He went broke, and then we stopped getting paychecks. So, Howard and I talked and asked ourselves, do we want to go back working for companies? Or do we want to give it a go?
What do you think made Parker & Parsley successful?
I’ve often thought about how, when Howard and I were first starting out, we had no family money behind us. We had no angel investor behind us. All we had was our UT Austin education and some ideas and friends. Putting that mix together just worked.
At the time, there were lots of wildcatters, but not as many technically trained teams like Howard and me. We knew independent geologists and landmen, and if they had a good idea of a place to drill, we’d drill it for them. So, that was one place where friends came in.
Howard and I — as far as oil people — were conservative. We never had big debts, so when the downturns came, which they did, we were able to survive. In fact, we never laid anyone off. Even during the bad times, we were able to keep the team together and were able to keep raising money to drill with.
When did Scott Sheffield join you at Parker & Parsley?
Scott was the first guy we brought into Parker & Parsley. He was working for Amoco down in Houston, and I could tell he was smart, so I offered him a job.
When we decided to take Parker & Parsley public, Scott took to that quickly and was very involved. He met with investment bankers in New York and was involved with the lawyers and accountants. Scott has a quick mind and can make quick decisions, and good ones. He’s good with employees and really does take care of the employees at Pioneer. That’s always been a priority for him.
How did your grandson Bryan approach you about starting his own business?
It was the other way around, actually. Bryan had been working in finance internationally and then decided to come back to the states. He was in New York looking for a job, so we got together.
I told him that I had some wells I could let him operate, which might give him a foundation so he could hire some people. I asked him if he was interested. He talked to his dad [Scott Sheffield], and Scott told him it was a golden opportunity he should take.
However, Bryan didn’t know much about the oil business, so Scott hired him at Pioneer and let him work with the engineers for a few months, with the geologists for a few months, out in the field for a few months, in accounting — he worked in all the departments that make up an oil company. So when he came out of that training program, he was a good oilman.
Bryan started hiring good people and built a great organization. The timing was good, too, because the Spraberry renaissance was just beginning. Bryan decided he didn’t just want to operate the properties — he wanted to build a company. So he did. And he’s built a good one.
How does it feel to see your own name on the stock exchange?
I think Bryan used my name early on because we had a reputation in Midland with other oilmen and with mineral owners. When acquiring new deals and properties, Bryan liked to let them know that this is the Joe Parsley of the old Parker & Parsley. He and his landman said it has helped them get some deals that they might otherwise not have. We had a decent reputation, so he kept it. And I think he’s proud of it — I’m surprised [laughter]!
It is nice to see Parsley Energy come across the exchange. I’m very proud of Bryan and Scott.
Parsley was named a Distinguished Engineering Graduate in 2003 and maintains close ties to the university. He is a generous contributor to the Friends of Alec annual giving program and funded the Joe M. Parsley Scholarship Fund and the Joe M. Parsley Excellence Fund. Joe has two daughters, four grandchildren and four great-grandchildren. He and his wife Lucy reside in Kemah, Texas.
