(Bloomberg) — Pioneer Natural Resources Co. Chief Executive Officer Scott Sheffield is capping a storied career — defined by a decades-long bet on shale that bucked the oil industry’s conventional wisdom — with a massive payout.
The 71-year-old Sheffield, who has led Pioneer for more than 20 years, is in line to receive at least $151 million in mostly stock — and potentially more — from the sale to Exxon Mobil Corp. announced Wednesday, according to Pioneer’s 2023 proxy filing. That’s a payout that might have stunned Sheffield when he started in the industry as a young roughneck drilling vertical wells in the Permian Basin in 1979.
After moving from the field to the office, Sheffield rose to become president of Pioneer’s predecessor company in the 1980s. From that perch, he snapped up drilling rights in west Texas from Mobil Corp., Exxon Corp. and other major companies, eliciting yawns from Wall Street and energy experts who proclaimed the Permian Basin was past its oil-producing prime.
The data Sheffield’s team collected then — as well as the 1997 merger that created Pioneer — helped transform the company from a minor driller with a $2.5 billion market capitalization into a key architect of the US shale boom. By the time Exxon Mobil agreed to buy Pioneer for about $60 billion, Pioneer had become the largest independent oil producer in the western hemisphere’s most prolific shale field.
Sheffield’s fortune had risen with the company’s, with the executive selling about $117.5 million worth of shares during his tenure.
The deal announced Wednesday — Exxon’s largest since it merged with Mobil in 1999 — is one Sheffield himself saw coming.
“At some point in the next several years, the majors may reach out,” Sheffield said in April 2019 at a conference in New York. “They’re drilling their inventory faster than the independents, and so they are going to run out a lot faster.”
Under Sheffield, Pioneer’s geologists and engineers discovered that multiple layers of shale in the Permian Basin of west Texas and New Mexico held billions more barrels of crude than had been previously known, and plenty could be reached using new sideways drilling techniques. He transformed the company’s portfolio of far-flung domestic and international fields to focus almost exclusively on the Permian. Pioneer now pumps the equivalent of more than 600,000 barrels of oil daily from Permian wells.
Sheffield has estimated the Permian shales could hold as much as 75 billion barrels of crude, second only to Saudi Arabia’s enormous Ghawar field.
A Texas native and son of a petroleum engineer, Sheffield attended high school in Iran — where he played quarterback on the football team — while his father was on assignment for Arco. He went on study engineering at the University of Texas.
Once Sheffield amassed the drilling rights abandoned by international companies in the 1980s and 1990s, he later became one of the leading voices in the oil lobby that persuaded the US government to lift a four-decade ban on most domestic crude exports in 2015.
In 2016, he retired for the first time, only to return three years later. He went on to expand Pioneer’s Permian holdings with the purchase of Parsley Energy, founded by his son, and private equity-backed Double Eagle in 2021.
Sheffield’s more than two decades at the helm of Pioneer marks one of the longest public CEO tenures in the US oil industry. Only Hess Corp.’s John Hess has reigned longer, with almost 30 years on the job.
Sheffield had been scheduled to retire as Pioneer’s CEO at the end of this year and confirmed that on Wednesday. Once the deal closes, however, Sheffield will join Exxon’s board.
—With assistance from Kevin Crowley and Joe Carroll.