The first time Matt Galla­gher drove a car, he was 10 years old, out on a lease road. Growing up in Evansville, Ind., he spent much of his childhood “bouncing around shallow oil wells in one way or another” in the Illinois Basin. His grandfather pioneered waterflooding in the Illinois Basin before using his own rigs and drilling his own wells, eventually starting an operating com­pany where Gallagher’s father would later work. Watching his father work drew Gallagher into oil and gas—he “was always solving problems and got to roll up his sleeves and drive big Caterpillars.”

The third-generation petroleum engineer is COO and was recently named president of Parsley Energy Inc., where he takes pride in employees’ hard work ethic and companywide mentality of “What can I do for you?”

Prior to joining Parsley in 2010, Gallagher worked at Pioneer Natural Resources in a variety of engi­neering capacities: Gulf of Mexico Shelf reservoir engineer, Hugoton reservoir engineer and Spra­berry production engineer. He earned his bachelor’s in petroleum engineering from Colorado School of Mines in 2005. Now, Gallagher lives in Austin, Pars­ley’s new company location.

A lifetime fan of boating in any way, shape or form, Gallagher’s enjoying the river. In addition, he’s getting acquainted with the barbecue scene. Franklin Barbecue’s tough to beat, he said, but his go-to is Terry Black’s BBQ on Barton Springs Road.

In an interview with Investor, Gallagher reflected on his role in Parsley’s growth and the operator’s plans moving forward.

Investor What brought you to Parsley?

Gallagher I had actually met Bryan Sheffield, Pars­ley’s founder, when he was doing an internship at Pioneer. When I moved to Midland, he was the only guy I knew. So we went to a few dinners, and he told me about the company he was trying to start. “Yeah, we don’t have an engineer yet, someday we’ll get big enough to where we’ll need one.” And I said, that sounds like a heck of an opportunity and I’d love to be considered. That’s kind of how it started for me. I was the eighth employee. We just grew it from there, kicking and scratching and clawing—now we have 300 employees.

Investor Does Parsley have a positive outlook for oil prices as we approach this recovery?

Gallagher If you look at the OPEC deal, that’s an arbitrary limit. They have the capacity right now to produce more, and they’re choosing to cap their limit—although we do think they’re produc­ing near capacity. So it is a volatile environment where there’s, in the next 12 to 18 months, plenty of oil out there. So we have to be prepared for the downturns. And also with activity coming up, our costs are going to be going up.

Investor What is Parsley’s game-plan?

Gallagher For Parsley particularly, that has been to focus on core rock. If you start with the best rock, you have a little bit more cushion to insulate against these other vari­ables. If we can control everything that we can control, we’ll have a lot more flexibility amongst the volatil­ity and other variables. That’s prob­ably the near term.

Investor And the long term?

Gallagher We are actually worried that long-term, two years out, that there won’t be enough oil because all of these long-term projects got cut. I don’t think anyone in this industry wants to see a spike back to $80, $100 a barrel. It’s just really not good for many economies, so hopefully we can kind of walk that tight rope of the right amount of supply to meet demand over the next three-to-five years.

Investor Going forward, which is Parsley’s primary focus: Delaware or Midland?

Gallagher We’ve got about a 48,000-acre position in the Delaware. We’ve been over there for three years doing all the geoscience on it, taking a measured approach to understanding it, and 2017 is the year we’re really going to get active on it. I think we’re going to increase production fourfold over there. It’s a high-growth asset for us, but the Midland is defi­nitely our bread and butter. So we have tremendous growth out of the Midland Basin; it’s a known quan­tity that’s got very high, prolific returns. There’s probably a little more insulation to service cost inflation in Midland because pressures are lower, for one reason, and second, more infrastructure build­out is needed in Delaware. We’ll probably take a roughly 60:40 approach on our capex going out through the Midland, Delaware. It’s nice kind of having the double barrel shotgun approach on two of the best basins in the country.

Investor What are your thoughts about the industry today?

Gallagher I think in our industry, people don’t talk enough about the good that comes from exploring for oil and gas, especially domestically. I take pride in the domestic shale revolution. We’re not depen­dent on imports from countries that may not share the human rights standards that we have here in the U.S. And on a large scale, if it’s used efficiently, there are a lot of benefits … take agriculture—being able to feed the planet at a 7 billion population. That simply would not be the case if we didn’t have oil and gas producing at the volumes that it is today.

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