In the 1990s, most of the major oil and gas companies in this country divested domestic assets and moved resources to the international arena, believing that oil fields in the United States were all drilled up. UT PGE alumnus Scott Sheffield was not so sure.
Sheffield (BSPE '75), now CEO and chairman of Pioneer Natural Resources, instead decided to raise capital and invest heavily in the Spraberry/Wolfcamp field in the West Texas Permian Basin. And, due to his prudent foresight, Pioneer is now one of the most active drillers and largest acreage holders in what is considered the most productive domestic oil field.
With support from father-in-law, mentor and fellow alumnus Joe Parsley (BSPE '51), Sheffield spearheaded the merger of Parker & Parsley and MESA, Inc. to create Pioneer in 1997, forming one of the largest independent oil and gas companies in the United States.
A natural leader and big-picture thinker, Sheffield has made Pioneer one of the top oil producers in Texas. With an open and collaborative company culture — carefully cultivated and championed by Sheffield himself — Pioneer has been recognized by The Dallas Morning News as one of the “Top 100 Places to Work” for the past five years.
Becoming a Leader
The son of Hugh D. Sheffield, a petroleum engineer and executive with ARCO, Sheffield grew up in the oil business. He attended high school in Tehran, Iran, where he played quarterback for the football team and was elected senior class president.
When it was time to select a college, Sheffield quickly chose The University of Texas at Austin because of its strong reputation and his family ties in Texas. Here, he enjoyed his small engineering classes, where he developed lasting relationships with peers and professors alike.
“I remember all of my professors — Dr. Folkert Brons in reservoir engineering, Dr. Tony Podio and Dr. Ken Gray in production and drilling — they all exemplified tremendous leadership and did great things for the university,” he said.
Sheffield was an active student. Playing safety on the petroleum engineering intramural flag football team, he learned the value of teamwork and leadership and thrived on the competition. “We had one of the best teams — definitely the best among the engineering departments. We actually got to the finals a couple years in a row,” he said. He maintains friendships with several former team members today.
At Pioneer, Sheffield has continued to foster that team environment.
“I’m extremely proud of having a great company culture,” he said. “We have built an organization that values open communication, teamwork, honesty, integrity and respect for all individuals — from the top all the way down.”
Ever humble, Sheffield sidesteps any credit for his forward-thinking leadership.
“I think there are natural leaders and leaders that learn by experience, and I can’t tell which one I am,” he said. “To me, it’s simple: success starts with your parents, schools and universities teaching you how to do what’s right and how to treat people.”
Learning the Independent Oil Business
After graduating from UT Austin, Sheffield worked as a reservoir engineer for Amoco Corporation, a major oil company that merged with BP in 1998.
“When I graduated, the independents were all very, very small,” Sheffield said. “The major companies drilled most of the oil and gas wells in the U.S., and, therefore, most UT Austin graduates were hired by the majors.”
In 1979, after four years at Amoco, Sheffield joined Parker & Parsley Petroleum Co., an independent company, as the fifth employee and the sole staff engineer. There, he learned how to think as an entrepreneur. “The major companies give you backbone, but the independents teach you all facets of the business,” he said.
One of Sheffield’s mentors, Joe Parsley, formed Parker & Parsley with Howard Parker (B.S. Geology 1949) over a handshake in 1962 at a time when the industry was dominated by wildcatters and businessmen. With their strong combination of technical training in petroleum engineering and geology, Parker and Parsley drilled strategically and built a large base of investors.
With Parsley’s support, Sheffield was able to tackle every part of the independent oil business — from production and drilling to accounting and finance.
“Joe was an invaluable mentor. I learned more in my first year or two at Parker & Parsley than I did during my four years at a major oil company,” Sheffield said. “I also learned Wall Street — how to raise capital and get financing. I basically worked hand-in-hand with Joe from 1975 to 1985, when he retired.”
Discovery in the Spraberry/Wolfcamp Field
Part of a management team of six, Sheffield helped take Parker & Parsley public in 1991 and shifted the company’s focus to land acquisitions.
“The majors decided that the U.S. was drilled up. That’s when we raised and spent a lot of capital to buy the producing assets that the majors held in the Spraberry/Wolfcamp oil field.”
Called the most uneconomical oil field by Time Magazine in 1951, the Spraberry/Wolfcamp region had been largely written off. Decades later, it is now thought to be one of the most productive fields in the world due to new drilling technologies and hydraulic fracturing.
In 1995, the board named Sheffield president of Parker & Parsley, and two years later he led the merger with MESA to form Pioneer. With over 800,000 acres, Pioneer is one of the largest shale acreage holders in the Permian Basin.
“Going after the source rock in shale in both gas and oil has spurred significant job creation, and a very, very low natural gas price has caused the revival of petro-chemical industry along the Gulf Coast,” Sheffield said.
A Family Legacy
Under Sheffield’s guidance, Pioneer led the rise of domestic independents over the last two decades, building on the foundation started by Parker & Parsley’s entrepreneurial venture more than 50 years ago.
Now, Sheffield’s oldest son, Bryan, has turned his focus to the oil and gas industry. After receiving his degree in finance from Southern Methodist University, the younger Sheffield traded interest rates and currency futures, working in Chicago, Australia and Spain before returning to Texas.
Joe Parsley, Bryan’s grandfather, approached him about taking over the operation of more than 100 of the West Texas wells he had retained after the merger.
But first, Bryan wanted to learn the business. His father quickly hired him on at Pioneer and trained him on all aspects of the independent oil business, much like Parsley did for the elder Sheffield 35 years earlier.
After taking over operations of Parsley’s wells in 2006, Bryan assembled a strong organization and created Parsley Energy, Inc., keeping his grandfather’s name. Parsley Energy went public in May 2014, establishing it as a major industry player and making Bryan one of the most successful young executives in the country. His rapid rise showcases yet again his family’s powerful combination of business acumen, foresight and opportunistic decision-making.
Bryan recently moved Parsley Energy’s offices to Austin, in part to take advantage of the exceptionally skilled, high-level workforce coming out of UT Austin.
Advice for Fellow and Future Longhorn Engineers
Scott Sheffield is confident that the nation is experiencing one of the greatest revivals of the oil and gas industry.
To capitalize on the wealth of opportunities, Sheffield encourages fellow UT Austin engineering graduates to gain as much knowledge and experience as possible: “Find the right independent, be patient, and get your training. Learn as much as you can, read as much as you can, study all aspects of the industry and soak it in.”
Sheffield also emphasizes the importance of gaining business skills. “We are seeing a lot of our students get their MBAs after they come to work for Pioneer,” he said. “Everybody is seeing the benefits of getting the accounting and financial expertise that is not always offered in traditional undergraduate engineering degree programs.”
Ultimately, Sheffield attributes his success to his family, mentors and colleagues. “You have to surround yourself with and work with great people,” he said.
Sheffield lives in Irving, Texas, with his wife Kimberley. He has five children — Roseanne, Bryan, Kit, Bonnie and Cassandra. He serves on various industry and education boards, including the National Petroleum Council, America’s Natural Gas Alliance and the Cockrell School’s Engineering Advisory Board.