COST: 9.5 $B
VOLUMES: 55.5
ACRES: 92000
COST: 2.4 $B
VOLUMES: 15 MBOE/d
ACRES: 41000 Acres
SAN DIEGO, March 28, 2018 /PRNewswire/ -- Shareholder rights law firm Johnson & Fistel, LLP has launched an investigation into whether the board members of RSP Permian, Inc. (NYSE: RSPP) ("RSP") breached their fiduciary duties in connection with the proposed sale of the Company to Concho Resources Inc. ("Concho Resources").
Additional Information:
RSP Permian, Inc., is an independent oil and natural gas company, engaging in the acquisition, exploration, exploitation, development, and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas.
On March 28, 2018, RSP announced it had signed a definitive merger agreement with Concho Resources Under the terms of the definitive merger agreement, shareholders of RSP will receive 0.320 shares of Concho common stock in exchange for each share of RSP common stock, representing consideration to each RSP shareholder of $50.24 per share based on the closing price of Concho Resources common stock on March 27, 2018.
The investigation concerns whether RSP's board failed to satisfy their duties to the Company's shareholders, including whether the board adequately pursued alternatives to the acquisition and whether the board obtained the best price possible for the Company's shares of common stock.
Nationally recognized Johnson Fistel is investigating whether the proposed deal represents adequate consideration, especially given that one Wall Street analyst has a $69 price target on the stock.
If you are a shareholder of RSP and believe the proposed buyout price is too low or you're interested in learning more about the investigation or your legal rights and remedies, please contact lead analyst Jim Baker (jimb@johnsonfistel.com) at 619-814-4471. If emailing, please include a phone number.
About Johnson Fistel, LLP:
Johnson Fistel, LLP is a nationally recognized shareholder rights law firm with offices in California, New York and Georgia. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits. For more information about the firm and its attorneys, please visit http://www.johnsonfistel.com. Attorney advertising. Past results do not guarantee future outcomes.
Contact:
Johnson Fistel, LLP
Jim Baker, 619-814-4471
jimb@johnsonfistel.com
SOURCE Johnson Fistel, LLP
DALLAS, Nov. 6, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today reported financial and operating results for the quarter ended September 30, 2017. In addition, the Company filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission (the "SEC") and posted a presentation that supplements the information in this release to its website at www.rsppermian.com.
Third Quarter 2017 Highlights
(1) Borrowing base redetermination closed subsequent to 3Q17
(2) Net royalty acre defined as one surface acre leased at a 1/8th royalty
Well Results
Midland Basin
Delaware Basin
Steve Gray, Chief Executive Officer of RSP, commented, "After closing our $2.4 billion acquisition of Silver Hill, 2017 has been all about execution. I am pleased to report that our build out of infrastructure in the Delaware Basin has been completed on time and on budget, and we remain on track to deliver on our 2017 guidance. Our well results in both the Midland and Delaware Basins are outperforming our expectations. As a result, we've slowed down our completion pace in order to minimize our outspend while at the same time reaffirmed our production guidance for the year."
Mr. Gray continued, "RSP is well positioned to accelerate our production and cash flow growth next year and to further enhance our capital efficiency as we work off our backlog of uncompleted wells. Our inventory of high-return, horizontal prospects located in multiple stacked zones in the core of the Midland and Delaware Basins, coupled with our low cost operations, provide us with decades of strong, profitable growth and will enable us to fund our drilling program out of operating cash flow before the end of next year at today's oil prices."
Operational Results
Three Months Ended September 30, | |||||||
2017 |
2016 | ||||||
Production data: |
|||||||
Oil (MBbls) |
3,808 |
1,989 |
|||||
Natural gas (MMcf) |
4,339 |
1,720 |
|||||
NGLs (MBbls) |
890 |
462 |
|||||
Total (MBoe) |
5,422 |
2,738 |
|||||
Average net daily production (Boe/d) |
58,932 |
29,761 |
|||||
Average prices before effects of hedges (1) (2): |
|||||||
Oil (per Bbl) |
$ |
45.85 |
$ |
42.60 |
|||
Natural gas (per Mcf) |
2.23 |
2.27 |
|||||
NGLs (per Bbl) |
19.52 |
10.82 |
|||||
Total (per Boe) |
$ |
37.19 |
$ |
34.19 |
|||
Average realized prices after effects of hedges (1) (2): |
|||||||
Oil (per Bbl) |
$ |
45.16 |
$ |
41.46 |
|||
Natural gas (per Mcf) |
2.24 |
2.27 |
|||||
NGLs (per Bbl) |
19.52 |
10.82 |
|||||
Total (per Boe) |
$ |
36.72 |
$ |
33.37 |
|||
Average costs (per Boe): |
|||||||
Lease operating expenses (excluding gathering and transportation) |
$ |
5.18 |
$ |
4.67 |
|||
Gathering and transportation |
0.98 |
0.51 |
|||||
Production and ad valorem taxes |
2.45 |
2.14 |
|||||
Depreciation, depletion and amortization |
13.54 |
18.27 |
|||||
General and administrative - cash component |
1.43 |
2.04 |
|||||
General and administrative - stock comp (3) |
0.81 |
1.20 |
(1) |
Average prices shown in the table reflect prices both before and after the effects of our cash payments/receipts on our commodity derivative transactions. Our calculation of such effects includes realized gains or losses on cash settlements for commodity derivative transactions and an adjustment to reflect premiums incurred previously or upon settlement that are attributable to instruments settled in the period, if applicable. |
(2) |
Average prices for oil are net of transportation costs. Average prices for natural gas do not include transportation costs; instead, transportation costs related to our natural gas production and sales are included in gathering and transportation which is included in lease operating expenses in our consolidated statements of operations. No transportation costs are associated with NGL production and sales. |
(3) |
Represents compensation expense related to restricted stock awards and performance share awards granted as part of the Company's ongoing compensation and retention programs. |
Production volumes for the quarter ended September 30, 2017 averaged 58,932 Boe/d, or a total of 5,422 MBoe, an increase of 98% over prior year's third quarter of 29,761 Boe/d. Production for the third quarter of 2017 was comprised of 71% crude oil, 13% natural gas and 16% NGLs. RSP's average realized oil price for the third quarter of 2017, before the effects of hedges, was $45.85 per barrel, a negative $2.35 differential compared to average NYMEX WTI pricing of $48.20 per barrel for the same period, or 95% of NYMEX WTI pricing. RSP's average realized natural gas price for the third quarter of 2017, before the effects of hedges, was $2.23 per Mcf, a negative $0.76 differential compared to average NYMEX Henry Hub pricing of $2.99 per MMBtu for the same period, or 75% of NYMEX Henry Hub pricing. RSP's average realized NGL price for the third quarter of 2017, before the effects of hedges, was $19.52 per Bbl, or 40% of NYMEX WTI pricing for the same time period. RSP's average realized commodity price per barrel of oil equivalent for the third quarter of 2017, before the effects of hedges, was $37.19. Per unit cash operating expenses excluding interest expense but including lease operating expense, gathering and transportation expense, production and ad valorem taxes and recurring cash general and administrative expenses were $10.04 per Boe.
Operational Update
The Company operated four horizontal rigs in the Midland Basin and three horizontal rigs in the Delaware Basin throughout the third quarter 2017. RSP utilized two full-time completion crews during the third quarter. RSP drilled 26 operated horizontal wells and completed 22 operated horizontal wells (Midland: seven Lower Spraberry, seven Wolfcamp A, three Wolfcamp B, one Middle Spraberry; Delaware: two Wolfcamp A, one Wolfcamp B, one Third Bone Spring). The Company began the quarter with 22 operated horizontal drilled but uncompleted wells ("DUCs") and exited the quarter with a total of 26 operated horizontal DUCs.
Financial Results
(In thousands, except per share data) | ||||||||||
Three Months Ended | ||||||||||
September 30, |
June 30, | |||||||||
2017 |
2016 |
2017 | ||||||||
Total Revenues |
$ |
201,654 |
$ |
93,621 |
$ |
183,100 |
||||
Net Cash from Derivative Instruments |
(2,567) |
(2,258) |
(716) |
|||||||
Adjusted Total Revenues |
199,087 |
91,363 |
182,384 |
|||||||
Net Income |
$ |
21,326 |
$ |
985 |
$ |
31,090 |
||||
Net Income per Common Share - Diluted |
0.14 |
0.01 |
0.20 |
|||||||
Adjusted Net Income (Loss)(1) |
$ |
28,187 |
$ |
(764) |
$ |
26,048 |
||||
Adjusted Net Income (Loss) per Common Share - Diluted |
0.18 |
(0.01) |
0.17 |
|||||||
Adjusted EBITDAX(1) |
$ |
144,662 |
$ |
65,732 |
$ |
135,450 |
(1) |
Adjusted EBITDAX and Adjusted Net Income (loss) are non-GAAP financial measures. For a definition of Adjusted EBITDAX and Adjusted Net Income (loss) and a reconciliation of Adjusted EBITDAX and Adjusted Net Income (loss) to Net Income, see "Use of Non-GAAP financial measures" and our quarterly statements of operations at the end of this release. |
For the quarter ended September 30, 2017, total revenues, excluding the revenue impact from realized derivative instruments, were $201.7 million, a 115% increase over the prior year quarter of $93.6 million. Adjusted total revenues, including the net cash from derivative instruments, were $199.1 million, a 118% increase from the prior year quarter of $91.4 million. Net income for the third quarter of 2017 was $21.3 million, or $0.14 per diluted share, while net income for the prior year quarter was $1.0 million, or $0.01 per diluted share. Adjusted net income for the third quarter of 2017 was $28.2 million, or $0.18 per diluted share, compared to an Adjusted net loss for the prior year quarter of negative $0.8 million or negative $0.01 per diluted share. Adjusted EBITDAX was $144.7 million, a 120% increase from the prior year quarter of $65.7 million.
Capital Expenditures
RSP's development capital expenditures, which includes our investment in drilling and completing wells, infrastructure, capitalized workovers, and other, but excludes the cost of acquisitions, for the quarter ended September 30, 2017 totaled $191.6 million ($168.9 million of drilling and completion and $22.7 million of infrastructure and other). Of the development capital, approximately $16.5 million, or 9%, was spent on non-operated properties.
Additionally, during the third quarter of 2017 the Company acquired $234.4 million of oil and gas properties.
Liquidity
As of September 30, 2017, the Company had $46.5 million of cash and $345 million of borrowings outstanding on its revolving credit facility, which had a $1.1 billion borrowing base and a $900 million Company-elected commitment. Effective October 19, 2017, the Company increased the borrowing base under its revolving credit facility to $1.5 billion, from $1.1 billion and reduced the interest rate on outstanding borrowings' pricing grid. The Company maintained its elected commitment amount of $900 million.
Hedging
The summary below includes all hedges in place for the remainder of 2017 and for 2018, as of November 6, 2017.
Crude Oil Hedges | ||||||||||||||||||||
(Bbl, $/Bbl) |
Q4 2017 |
Q1 2018 |
Q2 2018 |
Q3 2018 |
Q4 2018 | |||||||||||||||
Three-Way Collars(1) |
552,000 |
2,219,000 |
1,941,000 |
1,319,000 |
1,227,000 |
|||||||||||||||
Ceiling |
$ |
54.10 |
$ |
58.81 |
$ |
59.07 |
$ |
60.56 |
$ |
60.96 |
||||||||||
Floor |
$ |
45.00 |
$ |
46.96 |
$ |
47.11 |
$ |
47.79 |
$ |
48.00 |
||||||||||
Short Put |
$ |
35.00 |
$ |
36.96 |
$ |
37.11 |
$ |
37.79 |
$ |
38.00 |
||||||||||
Costless Collars(1) |
1,150,000 |
571,000 |
516,000 |
890,000 |
736,000 |
|||||||||||||||
Ceiling |
$ |
60.05 |
$ |
60.19 |
$ |
60.20 |
$ |
60.14 |
$ |
60.16 |
||||||||||
Floor |
$ |
45.00 |
$ |
45.00 |
$ |
45.00 |
$ |
45.00 |
$ |
45.00 |
||||||||||
Deferred Premium Puts(1) |
920,000 |
|||||||||||||||||||
Floor |
$ |
48.50 |
||||||||||||||||||
Deferred Premium(2) |
$ |
(4.00) |
||||||||||||||||||
Swaps(1) |
552,000 |
|||||||||||||||||||
Swap |
$ |
48.95 |
||||||||||||||||||
Total Hedge Volumes |
3,174,000 |
2,790,000 |
2,457,000 |
2,209,000 |
1,963,000 |
|||||||||||||||
Weighted Average Floor(3) |
$ |
45.54 |
$ |
46.56 |
$ |
46.67 |
$ |
46.67 |
$ |
46.87 |
||||||||||
Mid-Cush Differential Swaps(4) |
1,104,000 |
1,800,000 |
1,820,000 |
1,840,000 |
1,840,000 |
|||||||||||||||
Swap |
$ |
(0.63) |
$ |
(0.62) |
$ |
(0.62) |
$ |
(0.62) |
$ |
(0.62) |
(1) |
The crude oil derivative contracts are settled based on the arithmetic average of the closing settlement price for the front month contract NYMEX price of West Texas Intermediate Light Sweet Crude during the relevant period. |
(2) |
The deferred premium is not paid until expiration date, aligning cash inflows and outflows with the settlement of the derivative contract. |
(3) |
Weighted average floor assumes the long put in three-way collars and put spreads and reflects the impact of premiums paid. |
(4) |
The Mid-Cush swap contracts are settled based on the difference in the arithmetic average during the calculation period of WTI MIDLAND ARGUS and WTI ARGUS prices in the Argus Americas Crude publication for the relevant period. |
Natural Gas Hedges | ||||
(MMBtu, $/MMBtu) |
Q4 2017 | |||
Costless Collars(1) |
2,545,000 |
|||
Ceiling |
$ |
3.86 |
||
Floor |
$ |
3.00 |
(1) |
The natural gas derivative contracts are settled based on the last trading day's closing price for the front month contract relevant to each period. |
2017 Annual Guidance
Nine months |
2017 Guidance |
||||
Completions |
|||||
Operated Gross Horizontal Completions |
54 |
70 - 74(1) |
|||
Operated Average Working Interest |
91% |
92%(1) |
|||
Midland Basin Average Lateral Length |
~8,300' |
~8,500' |
|||
Delaware Basin Average Lateral Length |
~5,600' |
~6,250' |
|||
Production |
|||||
Average Daily Production (Boe/d) |
52,864 |
53,000 - 57,000 |
|||
% Oil |
72% |
71% - 73% |
|||
% Natural Gas |
12% |
11% - 13% |
|||
% NGLs |
16% |
15% - 17% |
|||
Development Capital Expenditures ($ in MM) |
|||||
Drilling and Completion (D&C) |
$448.1 |
$575 - $625 |
|||
Infrastructure, Capitalized Workovers & Other |
$38.7 |
$50 - $75 |
|||
Total Development Capital Expenditures |
$486.8 |
$625 - $700 |
|||
% Midland Basin |
66% |
60% - 70% |
|||
% Delaware Basin |
34% |
30% - 40% |
|||
% Non-Operated |
10% |
8% - 12% |
|||
Income Statement ($/Boe) |
|||||
Lease operating expenses (including workovers) |
$5.09 |
$4.50 - $5.50 |
|||
Gathering and transportation |
$0.99 |
$1.10 - $1.40 |
|||
Exploration expenses |
$0.48 |
$0.40 - $0.60 |
|||
General and administrative - cash component |
$1.62 |
$1.25 - $1.75 |
|||
General and administrative - stock comp |
$0.88 |
$0.70 - $0.90 |
|||
Depreciation, depletion, and amortization |
$14.03 |
$14.00 - $16.00 |
|||
Production and ad valorem taxes (% of oil and gas revenues) |
5.9% |
6.0% - 8.0% |
(1) |
Represents update to 2017 guidance. |
Third Quarter 2017 Earnings Release and Conference Call
RSP will host a conference call for investors at 10:00 AM Central Time on Tuesday, November 7, 2017, to discuss third quarter 2017 results. Hosting the call will be Steve Gray, Chief Executive Officer, Scott McNeill, Chief Financial Officer, Zane Arrott, Chief Operating Officer and other members of RSP's management team.
The call may be accessed live over the telephone by dialing (877) 705-6003, or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13672586. The replay will be available until November 21, 2017. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto RSP's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available for approximately 30 days following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of RSP's acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
Statements of Operations
(In thousands, except per share data) | |||||||||||
Three Months Ended September 30, |
Three Months | ||||||||||
2017 |
2016 |
2017 | |||||||||
Revenues |
|||||||||||
Oil sales |
$ |
174,624 |
$ |
84,722 |
$ |
160,395 |
|||||
Natural gas sales |
9,661 |
3,901 |
9,859 |
||||||||
NGL sales |
17,369 |
4,998 |
12,846 |
||||||||
Total revenues |
201,654 |
93,621 |
183,100 |
||||||||
Operating expenses |
|||||||||||
Lease operating expenses |
33,385 |
14,174 |
28,892 |
||||||||
Production and ad valorem taxes |
13,281 |
5,872 |
10,142 |
||||||||
Depreciation, depletion, and amortization |
73,408 |
50,022 |
68,104 |
||||||||
Asset retirement obligation accretion |
151 |
118 |
150 |
||||||||
Impairments |
705 |
971 |
5,312 |
||||||||
Exploration expenses |
1,497 |
359 |
2,869 |
||||||||
General and administrative expenses |
12,120 |
8,857 |
12,343 |
||||||||
Acquisition costs |
30 |
— |
401 |
||||||||
Total operating expenses |
134,577 |
80,373 |
128,213 |
||||||||
Operating income |
67,077 |
13,248 |
54,887 |
||||||||
Other income (expense) |
|||||||||||
Other income, net |
1,106 |
310 |
589 |
||||||||
Net gain (loss) on derivative instruments |
(21,626) |
(2,934) |
12,194 |
||||||||
Interest expense |
(21,553) |
(13,146) |
(19,508) |
||||||||
Total other expense |
(42,073) |
(15,770) |
(6,725) |
||||||||
Income (loss) before income taxes |
25,004 |
(2,522) |
48,162 |
||||||||
Income tax (expense) benefit |
(3,678) |
3,507 |
(17,072) |
||||||||
Net income |
$ |
21,326 |
$ |
985 |
$ |
31,090 |
|||||
Net income per common share - Basic |
$ |
0.14 |
$ |
0.01 |
$ |
0.20 |
|||||
Net income per common share - Diluted |
$ |
0.14 |
$ |
0.01 |
$ |
0.20 |
|||||
Weighted Average Common Shares Outstanding |
|||||||||||
Basic |
156,864 |
100,234 |
156,856 |
||||||||
Diluted |
157,837 |
100,234 |
157,827 |
Summary Balance Sheet
(In thousands) | |||||||
September 30, 2017 |
December 31, 2016 | ||||||
Cash and cash equivalents |
$ |
46,474 |
$ |
690,776 |
|||
Other current assets |
122,316 |
85,486 |
|||||
Total current assets |
168,790 |
776,262 |
|||||
Property, plant and equipment, net |
6,010,234 |
4,129,635 |
|||||
Other long-term assets |
57,811 |
90,530 |
|||||
Total assets |
$ |
6,236,835 |
$ |
4,996,427 |
|||
Current liabilities |
200,263 |
108,269 |
|||||
Long-term debt |
1,478,500 |
1,132,275 |
|||||
Other long-term liabilities |
380,888 |
338,571 |
|||||
Total stockholders' equity |
4,177,184 |
3,417,312 |
|||||
Total liabilities and stockholders' equity |
$ |
6,236,835 |
$ |
4,996,427 |
Use of Non-GAAP Financial Measures
We define Adjusted EBITDAX as oil and gas revenues including net cash receipts (payments) on settled derivative instruments and premiums paid on put options that settled during the period, less lease operating expenses, production and ad valorem taxes, and general and administrative expenses excluding stock based compensation. Adjusted Net Income deducts from Adjusted EBITDAX depreciation, depletion, and amortization, accretion on asset retirement obligations, exploration expenses, interest expense, stock-based compensation, acquisition costs and adjusted income tax expense.
Management believes Adjusted EBITDAX and Adjusted Net Income are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDAX and Adjusted Net Income because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX and Adjusted Net Income should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX and Adjusted Net Income are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our computations of Adjusted EBITDAX and Adjusted Net Income may not be comparable to other similarly titled measures of other companies.
The following tables include a reconciliation of the non-GAAP financial measures of Adjusted EBITDAX and Adjusted Net Income to the GAAP financial measure of net income.
Reconciliation of Net Income to Adjusted EBITDAX
(In thousands) | |||||||||||
Three Months Ended September 30, |
Three Months | ||||||||||
2017 |
2016 |
2017 | |||||||||
Net income |
$ |
21,326 |
$ |
985 |
$ |
31,090 |
|||||
Interest expense |
21,553 |
13,146 |
19,508 |
||||||||
Income tax expense (benefit) |
3,678 |
(3,507) |
17,072 |
||||||||
Depreciation, depletion, and amortization |
73,408 |
50,022 |
68,104 |
||||||||
Asset retirement obligation accretion |
151 |
118 |
150 |
||||||||
Exploration expenses |
1,497 |
359 |
2,869 |
||||||||
Acquisition costs |
30 |
— |
401 |
||||||||
Impairment of unproved properties |
705 |
971 |
5,312 |
||||||||
(Gain) loss on derivative instruments |
21,626 |
2,934 |
(12,194) |
||||||||
Net settled derivative instruments |
(2,567) |
(2,258) |
(716) |
||||||||
Stock-based compensation |
4,361 |
3,272 |
4,443 |
||||||||
Other income, net |
(1,106) |
(310) |
(589) |
||||||||
Adjusted EBITDAX |
$ |
144,662 |
$ |
65,732 |
$ |
135,450 |
Reconciliation of Net Income to Adjusted Net Income (Loss)
(In thousands) | |||||||||||
Three Months Ended September 30, |
Three Months | ||||||||||
2017 |
2016 |
2017 | |||||||||
Net income |
$ |
21,326 |
$ |
985 |
$ |
31,090 |
|||||
Acquisition costs |
30 |
— |
401 |
||||||||
Impairment of unproved properties |
705 |
971 |
5,312 |
||||||||
(Gain) loss on derivative instruments |
21,626 |
2,934 |
(12,194) |
||||||||
Net settled derivative instruments |
(2,567) |
(2,258) |
(716) |
||||||||
Other income, net |
(1,106) |
(310) |
(589) |
||||||||
Income tax expense (benefit) for above items |
(11,827) |
(3,086) |
2,744 |
||||||||
Adjusted Net Income (Loss) |
$ |
28,187 |
$ |
(764) |
$ |
26,048 |
View original content with multimedia:http://www.prnewswire.com/news-releases/rsp-permian-inc-announces-third-quarter-2017-financial-and-operating-results-300550355.html
SOURCE RSP Permian, Inc.
DALLAS, Oct. 17, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced that it will release its third quarter 2017 financial and operating results after the New York Stock Exchange closes on Monday, November 6, 2017. In connection with the release, RSP will host a conference call and webcast for investors on Tuesday, November 7, 2017 at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss the Company's results. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer, Scott McNeill, Chief Financial Officer and Alyssa Stephens, Director of Investor Relations.
The call can be accessed live over the telephone by dialing (877) 705-6003 or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13672586. The replay will be available until November 21, 2017.
Interested parties may also listen to a simultaneous internet webcast of the conference call by logging onto RSP Permian's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available for approximately 30 days following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
View original content with multimedia:http://www.prnewswire.com/news-releases/rsp-permian-inc-announces-timing-of-third-quarter-2017-financial-and-operational-results-and-conference-call-300538474.html
SOURCE RSP Permian, Inc.
DALLAS, Aug. 7, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today reported financial and operating results for the quarter ended June 30, 2017. In addition, the Company filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission (the "SEC") and posted a presentation that supplements the information in this release to its website at www.rsppermian.com.
Second Quarter 2017 and Recent Highlights
(1) |
Net royalty acre defined as one surface acre leased at a 1/8th royalty |
(2) |
Borrowings as of end of second quarter are prior to funding remaining $203 million of recently closed acquisitions |
Recent Well Results
Steve Gray, Chief Executive Officer of RSP, commented, "We delivered another strong quarter, increasing our production 20% compared to last quarter and lowering our cash operating costs on a per unit basis. Over the past four quarters we have more than doubled our production volumes and generated positive net income with average realized oil prices less than $50 per barrel over that time period, demonstrating the quality of our assets and our ability to deliver profitable growth in a lower oil price environment.
"I am also pleased to report that our infrastructure projects are on schedule and we will begin growing our production volumes in the Delaware Basin in the second half of the year. Our Delaware Basin wells continue to exceed our acquisition estimates and we expect to complete wells in five distinct zones during the second half of this year. In the Midland Basin, we continue to achieve outstanding and consistent results in several zones across our acreage position.
"We recently closed several acquisitions of acreage and mineral interests located in the heart of our Delaware Basin position. While further blocking up our contiguous acreage position and extending the average lateral length of our inventory, these acquisitions do not require any additional staffing or infrastructure as they are located in areas we have already scheduled to drill. The leasehold acquisitions increase our working interest in 14 sections to a majority working interest position and the mineral interests provide immediate uplift to our returns without any incremental capital requirements or production-related expenses on wells drilled in those areas."
Mr. Gray continued, "As we consider our operating strategy and plans going into next year, we will look to closely balance our capital spending with our cash flow generation while remaining flexible to adjust our activity levels to market conditions. Because of our strong well performance and operating efficiency, we have the capability to continue to grow our annual production volumes on a double-digit basis within cash flow at oil prices below $50 per barrel."
Operational Results
Three Months Ended June 30, | |||||||
2017 |
2016 | ||||||
Production data: |
|||||||
Oil (MBbls) |
3,527 |
1,760 |
|||||
Natural gas (MMcf) |
3,651 |
1,725 |
|||||
NGLs (MBbls) |
809 |
355 |
|||||
Total (MBoe) |
4,945 |
2,403 |
|||||
Average net daily production (Boe/d) |
54,341 |
26,407 |
|||||
Average prices before effects of hedges (1) (2): |
|||||||
Oil (per Bbl) |
$ |
45.48 |
$ |
42.50 |
|||
Natural gas (per Mcf) |
2.70 |
1.47 |
|||||
NGLs (per Bbl) |
15.88 |
11.69 |
|||||
Total (per Boe) |
$ |
37.03 |
$ |
33.91 |
|||
Average realized prices after effects of hedges (1) (2): |
|||||||
Oil (per Bbl) |
$ |
45.27 |
$ |
43.05 |
|||
Natural gas (per Mcf) |
2.70 |
1.47 |
|||||
NGLs (per Bbl) |
15.88 |
11.69 |
|||||
Total (per Boe) |
$ |
36.88 |
$ |
34.32 |
|||
Average costs (per Boe): |
|||||||
Lease operating expenses (excluding gathering and transportation) |
$ |
4.72 |
$ |
5.37 |
|||
Gathering and transportation |
1.12 |
0.49 |
|||||
Production and ad valorem taxes |
2.05 |
2.06 |
|||||
Depreciation, depletion and amortization |
13.77 |
19.68 |
|||||
General and administrative - recurring cash component |
1.60 |
2.06 |
|||||
General and administrative - recurring stock comp (3) |
0.90 |
1.46 |
|||||
General and administrative - non-recurring stock comp (4) |
— |
0.28 |
(1) |
Average prices shown in the table reflect prices both before and after the effects of our cash payments/receipts on our commodity derivative transactions. Our calculation of such effects includes realized gains or losses on cash settlements for commodity derivative transactions and an adjustment to reflect premiums incurred previously or upon settlement that are attributable to instruments settled in the period, if applicable. |
(2) |
Average prices for oil are net of transportation costs. Average prices for natural gas do not include transportation costs; instead, transportation costs related to our natural gas production and sales are included in gathering and transportation which is included in lease operating expenses in our consolidated statements of operations. No transportation costs are associated with NGL production and sales. |
(3) |
Represents compensation expense related to restricted stock awards and performance share awards granted as part of the Company's ongoing compensation and retention programs. |
(4) |
Non-recurring stock comp in 2016 was a one-time compensation charge associated with the retirement of an officer of the Company. |
Production volumes for the quarter ended June 30, 2017 averaged 54,341 Boe/d, or a total of 4,945 MBoe, an increase of 106% over prior year's second quarter of 26,407 Boe/d. Production for the second quarter of 2017 was comprised of 72% crude oil, 12% natural gas and 16% NGLs. RSP's average realized oil price for the second quarter of 2017, before the effects of hedges, was $45.48 per barrel, a negative $2.80 differential compared to average NYMEX WTI pricing of $48.28 per barrel for the same period, or 94% of NYMEX WTI pricing. RSP's average realized natural gas price for the second quarter of 2017, before the effects of hedges, was $2.70 per Mcf, a negative $0.49 differential compared to average NYMEX Henry Hub pricing of $3.19 per MMBtu for the same period, or 85% of NYMEX Henry Hub pricing. RSP's average realized NGL price for the second quarter of 2017, before the effects of hedges, was $15.88 per Bbl, or 33% of NYMEX WTI pricing for the same time period. RSP's average realized commodity price per barrel of oil equivalent for the second quarter of 2017, before the effects of hedges, was $37.03. Per unit cash operating expenses excluding interest expense but including lease operating expense, gathering and transportation expense, production and ad valorem taxes and recurring cash general and administrative expenses were $9.49 per Boe.
Operational Update
The Company operated four horizontal rigs in the Midland Basin during the second quarter 2017. In the Delaware Basin, the Company operated two horizontal rigs during the entire second quarter and added a third horizontal rig in May 2017. RSP utilized one full-time completion crew during the second quarter in the Midland Basin and a nearly full-time crew in the Delaware Basin. RSP drilled 22 operated horizontal wells and completed 18 operated horizontal wells (Midland: two Lower Spraberry, five Wolfcamp A, three Wolfcamp B; Delaware: six Wolfcamp A, one Wolfcamp XY, one Second Bone Spring). The Company began the quarter with 18 operated horizontal drilled but uncompleted wells ("DUCs") and exited the quarter with a total of 22 operated horizontal DUCs.
Financial Results
(In thousands, except per share data) | |||||||||
Three Months Ended | |||||||||
June 30, |
March 31, | ||||||||
2017 |
2016 |
2017 | |||||||
Total Revenues |
$ |
183,100 |
$ |
81,485 |
$ |
169,931 |
|||
Net Cash from Derivative Instruments |
(716) |
974 |
(2,812) |
||||||
Adjusted Total Revenues |
182,384 |
82,459 |
167,119 |
||||||
Net Income (Loss) |
$ |
31,090 |
$ |
(9,801) |
$ |
38,934 |
|||
Net Income (Loss) per Common Share - Diluted |
0.20 |
(0.10) |
0.26 |
||||||
Adjusted Net Income (Loss)(1) |
$ |
26,048 |
$ |
(3,758) |
$ |
24,212 |
|||
Adjusted Net Income (Loss) per Common Share - Diluted |
0.17 |
(0.04) |
0.16 |
||||||
Adjusted EBITDAX(1) |
$ |
135,450 |
$ |
58,453 |
$ |
124,451 |
(1) |
Adjusted EBITDAX and Adjusted Net Income (loss) are non-GAAP financial measures. For a definition of Adjusted EBITDAX and Adjusted Net Income (loss) and a reconciliation of Adjusted EBITDAX and Adjusted Net Income (loss) to Net Income (loss), see "Use of Non-GAAP financial measures" and our quarterly statements of operations at the end of this release. |
For the quarter ended June 30, 2017, total revenues, excluding the revenue impact from realized derivative instruments, were $183.1 million, a 125% increase over the prior year quarter of $81.5 million. Adjusted total revenues, including the net cash from derivative instruments, were $182.4 million, a 121% increase from the prior year quarter of $82.5 million. Net income for the second quarter of 2017 was $31.1 million, or $0.20 per diluted share, while net loss for the prior year quarter was $9.8 million, or negative $0.10 per diluted share. Adjusted net income for the second quarter of 2017 was $26.0 million, or $0.17 per diluted share, compared to an Adjusted net loss for the prior year quarter of negative $3.8 million or negative $0.04 per diluted share. Adjusted EBITDAX was $135.5 million, a 132% increase from the prior year quarter of $58.5 million.
Capital Expenditures
RSP's development capital expenditures, which includes our investment in drilling and completing wells, infrastructure, capitalized workovers, and other, but excludes the cost of acquisitions, for the quarter ended June 30, 2017 totaled $179.6 million ($168.7 million of drilling and completion and $10.9 million of infrastructure and other). Of the development capital, approximately $21.4 million, or 12%, was spent on non-operated properties.
Additionally, during the second quarter of 2017 the Company acquired $15.5 million of oil and gas properties.
Liquidity
As of June 30, 2017, the Company had $33.8 million of cash and $58.0 million of borrowings outstanding on its revolving credit facility, which has a $1.1 billion borrowing base and a $900 million Company-elected commitment.
Hedging
The summary below includes all hedges in place for the second half of 2017 and for 2018, as of August 7, 2017.
Crude Oil Hedges | ||||||||||||||||||||||||
(Bbl, $/Bbl) |
Q3 2017 |
Q4 2017 |
Q1 2018 |
Q2 2018 |
Q3 2018 |
Q4 2018 | ||||||||||||||||||
Three-Way Collars(1) |
552,000 |
2,219,000 |
1,941,000 |
1,319,000 |
1,227,000 |
|||||||||||||||||||
Ceiling |
$ |
54.10 |
$ |
58.81 |
$ |
59.07 |
$ |
60.56 |
$ |
60.96 |
||||||||||||||
Floor |
$ |
45.00 |
$ |
46.96 |
$ |
47.11 |
$ |
47.79 |
$ |
48.00 |
||||||||||||||
Short Put |
$ |
35.00 |
$ |
36.96 |
$ |
37.11 |
$ |
37.79 |
$ |
38.00 |
||||||||||||||
Costless Collars(1) |
1,150,000 |
1,150,000 |
||||||||||||||||||||||
Ceiling |
$ |
60.05 |
$ |
60.05 |
||||||||||||||||||||
Floor |
$ |
45.00 |
$ |
45.00 |
||||||||||||||||||||
Deferred Premium Puts(1) |
920,000 |
920,000 |
||||||||||||||||||||||
Floor |
$ |
48.50 |
$ |
48.50 |
||||||||||||||||||||
Deferred Premium(2) |
$ |
(4.00) |
$ |
(4.00) |
||||||||||||||||||||
Swaps(1) |
552,000 |
|||||||||||||||||||||||
Swap |
$ |
48.95 |
||||||||||||||||||||||
Total Hedge Volumes |
2,070,000 |
3,174,000 |
2,219,000 |
1,941,000 |
1,319,000 |
1,227,000 |
||||||||||||||||||
Weighted Average Floor(3) |
$ |
44.78 |
$ |
45.54 |
$ |
46.96 |
$ |
47.11 |
$ |
47.79 |
$ |
48.00 |
||||||||||||
Mid-Cush Differential Swaps(4) |
920,000 |
276,000 |
||||||||||||||||||||||
Swap |
$ |
(0.38) |
$ |
(0.50) |
(1) |
The crude oil derivative contracts are settled based on the arithmetic average of the closing settlement price for the front month contract NYMEX price of West Texas Intermediate Light Sweet Crude. |
(2) |
The deferred premium is not paid until expiration date, aligning cash inflows and outflows with the settlement of the derivative contract. |
(3) |
Weighted average floor assumes the long put in three-way collars and put spreads and reflects the impact of premiums paid. |
(4) |
The Mid-Cush swap contracts are settled based on the difference in the arithmetic average during the calculation period of WTI MIDLAND ARGUS and WTI ARGUS prices in the Argus Americas Crude publication for the relevant period. |
Natural Gas Hedges | ||||||||
(MMBtu, $/MMBtu) |
Q3 2017 |
Q4 2017 | ||||||
Costless Collars(1) |
2,422,000 |
2,545,000 |
||||||
Ceiling |
$ |
3.86 |
$ |
3.86 |
||||
Floor |
$ |
3.00 |
$ |
3.00 |
(1) |
The natural gas derivative contracts are settled based on the last trading day's closing price for the front month contract relevant to each period. |
2017 Annual Guidance
1H17 Actuals |
2017 Guidance |
||||
Completions |
|||||
Operated Gross Horizontal Completions |
32 |
80 - 85(1) |
|||
Operated Average Working Interest |
89% |
88% |
|||
Midland Basin Average Lateral Length |
~8,300' |
~8,500' |
|||
Delaware Basin Average Lateral Length |
~5,700' |
~6,250' |
|||
Production |
|||||
Average Daily Production (Boe/d) |
49,779 |
53,000 - 57,000 |
|||
% Oil |
73% |
71% - 73% |
|||
% Natural Gas |
12% |
11% - 13% |
|||
% NGLs |
15% |
15% - 17% |
|||
Development Capital Expenditures ($ in MM) |
|||||
Drilling and Completion (D&C) |
$279.2 |
$575 - $625 |
|||
Infrastructure, Capitalized Workovers & Other |
$16.0 |
$50 - $75 |
|||
Total Development Capital Expenditures |
$295.2 |
$625 - $700 |
|||
% Midland Basin |
69% |
60% - 70% |
|||
% Delaware Basin |
31% |
30% - 40% |
|||
% Non-Operated |
12% |
8% - 12%(1) |
|||
Income Statement ($/Boe) |
|||||
Lease operating expenses (including workovers) |
$5.03 |
$4.50 - $5.50 |
|||
Gathering and transportation |
$1.00 |
$1.10 - $1.40 |
|||
Exploration expenses |
$0.60 |
$0.40 - $0.60 |
|||
General and administrative - recurring cash component |
$1.74 |
$1.25 - $1.75 |
|||
General and administrative - recurring stock comp |
$0.93 |
$0.70 - $0.90 |
|||
Depreciation, depletion, and amortization |
$14.33 |
$14.00 - $16.00 |
|||
Production and ad valorem taxes (% of oil and gas revenues) |
5.6% |
6.0% - 8.0% |
(1) |
Represents updated 2017 guidance range. |
Second Quarter 2017 Earnings Release and Conference Call
RSP will host a conference call for investors at 1:00 PM Central Time on Tuesday, August 8, 2017, to discuss second quarter 2017 results. Hosting the call will be Steve Gray, Chief Executive Officer, Scott McNeill, Chief Financial Officer, Zane Arrott, Chief Operating Officer and other members of RSP's management team.
The call may be accessed live over the telephone by dialing (877) 705-6003, or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13667248. The replay will be available until August 22, 2017. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto RSP's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available for approximately 30 days following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
Statements of Operations | |||||||||||
(In thousands, except per share data) | |||||||||||
Three Months Ended June 30, |
Three Months | ||||||||||
2017 |
2016 |
2017 | |||||||||
Revenues |
|||||||||||
Oil sales |
$ |
160,395 |
$ |
74,799 |
$ |
151,637 |
|||||
Natural gas sales |
9,859 |
2,537 |
7,378 |
||||||||
NGL sales |
12,846 |
4,149 |
10,916 |
||||||||
Total revenues |
183,100 |
81,485 |
169,931 |
||||||||
Operating expenses |
|||||||||||
Lease operating expenses |
28,892 |
14,094 |
25,411 |
||||||||
Production and ad valorem taxes |
10,142 |
4,960 |
9,469 |
||||||||
Depreciation, depletion, and amortization |
68,104 |
47,296 |
61,040 |
||||||||
Asset retirement obligation accretion |
150 |
123 |
153 |
||||||||
Impairments |
5,312 |
3,177 |
125 |
||||||||
Exploration expenses |
2,869 |
405 |
2,580 |
||||||||
General and administrative expenses |
12,343 |
9,135 |
11,712 |
||||||||
Acquisition costs |
401 |
— |
4,052 |
||||||||
Total operating expenses |
128,213 |
79,190 |
114,542 |
||||||||
Operating income |
54,887 |
2,295 |
55,389 |
||||||||
Other income (expense) |
|||||||||||
Other income, net |
589 |
104 |
720 |
||||||||
Net gain (loss) on derivative instruments |
12,194 |
(3,684) |
17,121 |
||||||||
Interest expense |
(19,508) |
(12,954) |
(19,224) |
||||||||
Total other expense |
(6,725) |
(16,534) |
(1,383) |
||||||||
Income (loss) before income taxes |
48,162 |
(14,239) |
54,006 |
||||||||
Income tax (expense) benefit |
(17,072) |
4,438 |
(15,072) |
||||||||
Net income (loss) |
$ |
31,090 |
$ |
(9,801) |
$ |
38,934 |
|||||
Net income (loss) per common share - Basic |
$ |
0.20 |
$ |
(0.10) |
$ |
0.27 |
|||||
Net income (loss) per common share - Diluted |
$ |
0.20 |
$ |
(0.10) |
$ |
0.26 |
|||||
Weighted Average Common Shares Outstanding |
|||||||||||
Basic |
156,856 |
100,189 |
146,054 |
||||||||
Diluted |
157,827 |
100,189 |
147,005 |
Summary Balance Sheet | |||||||
(In thousands) | |||||||
June 30, 2017 |
December 31, 2016 | ||||||
Cash and cash equivalents |
$ |
33,775 |
$ |
690,776 |
|||
Other current assets |
95,377 |
85,486 |
|||||
Total current assets |
129,152 |
776,262 |
|||||
Property, plant and equipment, net |
5,657,788 |
4,129,635 |
|||||
Other long-term assets |
72,133 |
90,530 |
|||||
Total assets |
$ |
5,859,073 |
$ |
4,996,427 |
|||
Current liabilities |
138,949 |
108,269 |
|||||
Long-term debt |
1,190,965 |
1,132,275 |
|||||
Other long-term liabilities |
377,612 |
338,571 |
|||||
Total stockholders' equity |
4,151,547 |
3,417,312 |
|||||
Total liabilities and stockholders' equity |
$ |
5,859,073 |
$ |
4,996,427 |
Use of Non-GAAP Financial Measures
We define Adjusted EBITDAX as oil and gas revenues including net cash receipts (payments) on settled derivative instruments and premiums paid on put options that settled during the period, less lease operating expenses, production and ad valorem taxes, and general and administrative expenses excluding stock based compensation. Adjusted Net Income deducts from Adjusted EBITDAX depreciation, depletion, and amortization, accretion on asset retirement obligations, exploration expenses, interest expense, stock-based compensation, acquisition costs and adjusted income tax expense.
Management believes Adjusted EBITDAX and Adjusted Net Income are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDAX and Adjusted Net Income because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX and Adjusted Net Income should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX and Adjusted Net Income are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our computations of Adjusted EBITDAX and Adjusted Net Income may not be comparable to other similarly titled measures of other companies.
The following tables include a reconciliation of the non-GAAP financial measures of Adjusted EBITDAX and Adjusted Net Income to the GAAP financial measure of net income.
Reconciliation of Net Income (Loss) to Adjusted EBITDAX | |||||||||||
(In thousands) | |||||||||||
Three Months Ended June 30, |
Three Months | ||||||||||
2017 |
2016 |
2017 | |||||||||
Net income (loss) |
$ |
31,090 |
$ |
(9,801) |
$ |
38,934 |
|||||
Interest expense |
19,508 |
12,954 |
19,224 |
||||||||
Income tax expense (benefit) |
17,072 |
(4,438) |
15,072 |
||||||||
Depreciation, depletion, and amortization |
68,104 |
47,296 |
61,040 |
||||||||
Asset retirement obligation accretion |
150 |
123 |
153 |
||||||||
Exploration expenses |
2,869 |
405 |
2,580 |
||||||||
Acquisition costs |
401 |
— |
4,052 |
||||||||
Impairment of unproved properties |
5,312 |
3,177 |
125 |
||||||||
(Gain) loss on derivative instruments |
(12,194) |
3,684 |
(17,121) |
||||||||
Net settled derivative instruments |
(716) |
974 |
(2,812) |
||||||||
Stock-based compensation |
4,443 |
4,183 |
3,924 |
||||||||
Other income, net |
(589) |
(104) |
(720) |
||||||||
Adjusted EBITDAX |
$ |
135,450 |
$ |
58,453 |
$ |
124,451 |
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) | |||||||||||
(In thousands) | |||||||||||
Three Months Ended June 30, |
Three Months | ||||||||||
2017 |
2016 |
2017 | |||||||||
Net income (loss) |
$ |
31,090 |
$ |
(9,801) |
$ |
38,934 |
|||||
Acquisition costs |
401 |
— |
4,052 |
||||||||
Impairment of unproved properties |
5,312 |
3,177 |
125 |
||||||||
(Gain) loss on derivative instruments |
(12,194) |
3,684 |
(17,121) |
||||||||
Net settled derivative instruments |
(716) |
974 |
(2,812) |
||||||||
Stock-based compensation - non-recurring |
— |
682 |
— |
||||||||
Other income, net |
(589) |
(104) |
(720) |
||||||||
Income tax expense (benefit) for above items |
2,744 |
(2,370) |
1,754 |
||||||||
Adjusted Net Income (Loss) |
$ |
26,048 |
$ |
(3,758) |
$ |
24,212 |
View original content:http://www.prnewswire.com/news-releases/rsp-permian-inc-announces-second-quarter-2017-financial-and-operating-results-300500575.html
SOURCE RSP Permian, Inc.
DALLAS, July 19, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced that it will release its second quarter 2017 financial and operating results after the New York Stock Exchange closes on Monday, August 7, 2017. In connection with the release, RSP will host a conference call and webcast for investors on Tuesday, August 8, 2017 at 1:00 p.m. Central Time (2:00 p.m. Eastern Time) to discuss the Company's results. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer, Scott McNeill, Chief Financial Officer and Alyssa Stephens, Director of Investor Relations.
The call can be accessed live over the telephone by dialing (877) 705-6003 or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13667248. The replay will be available until August 22, 2017.
Interested parties may also listen to a simultaneous internet webcast of the conference call by logging onto RSP Permian's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available for approximately 30 days following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
View original content with multimedia:http://www.prnewswire.com/news-releases/rsp-permian-inc-announces-timing-of-second-quarter-2017-financial-and-operational-results-and-conference-call-300490947.html
SOURCE RSP Permian, Inc.
DALLAS, May 24, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) announced today that Uma L. Datla has joined the Company as Chief Accounting Officer. In her role, Ms. Datla will be responsible for all aspects of RSP's accounting functions, including financial reporting, internal controls, and operations. She will report directly to the Company's Chief Financial Officer, Scott McNeill.
With nearly 12 years of accounting experience, Ms. Datla had most recently served as Chief Accounting Officer of publicly-listed Approach Resources Inc., a Permian Basin focused oil and natural gas exploration and production company based in Fort Worth, Texas. Prior to serving as Chief Accounting Officer, Ms. Datla served as Director of Financial Reporting at Approach. Ms. Datla served in various positions of progressive responsibility with Ernst & Young LLP and was a Manager prior to leaving to join Approach in August 2013. Ms. Datla is a Certified Public Accountant and received a Masters of Professional Accounting from the University of Texas at Arlington in 2005 and a Bachelors in Science and Technology Development from Birla Institute of Technology and Science in 2000.
RSP also announced today that James Schnoebelen has joined the Company as Chief Information Officer. Mr. Schnoebelen will be responsible for all aspects of RSP's information technology practices and systems. He will report directly to Jim Mutrie, the Company's General Counsel and Corporate Secretary.
Mr. Schnoebelen most recently served as Vice President of Security Services at SpearTip, a cyber security and counterintelligence company. Mr. Schnoebelen has an extensive background in system security architecture and administrative design, web application testing, database structure, Incident Response Digital Forensics and malware analysis. Mr. Schnoebelen received a Bachelor of Science in Business Administration in Information Technology Management from St. Louis University and holds multiple industry certifications.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of the Company's acreage is located on large, contiguous acreage blocks in the core of the Midland Basin and Delaware Basin, both sub-basins of the Permian Basin. The Midland Basin properties are primarily in the adjacent counties of Midland, Martin, Andrews, Ector and Glasscock. The Delaware Basin properties are in the adjacent counties of Loving and Winkler. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP."
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on RSP's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Report on Form 10-K, which can be obtained free of charge on the SEC's web site located at www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
SOURCE RSP Permian, Inc.
DALLAS, May 2, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today reported financial and operating results for the quarter ended March 31, 2017. In addition, the Company filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission (the "SEC") and posted a presentation that supplements the information in this release to its website at www.rsppermian.com.
First Quarter 2017 Highlights
Recent Well Results
Steve Gray, Chief Executive Officer, commented, "I'm pleased to report solid quarterly results, particularly given we only recently closed SHEP II and assumed full operational control over our Delaware Basin assets. The second quarter will include the full contribution of these assets to our operating and financial results. Our operations team has made significant progress enhancing efficiency and coordinating infrastructure additions on the Delaware assets to accommodate higher activity levels during the second half of this year. We have accelerated the build-out of infrastructure projects in the second quarter on these properties and we anticipate adding a third horizontal rig in the Delaware Basin in May, bringing our total operated rig count to seven."
Mr. Gray continued, "We recently placed our first RSP-drilled and completed Delaware Basin horizontal well on production, which achieved a strong initial rate. This well, along with recent non-operated and offset wells, highlight the robust potential of our Delaware properties. We also reported an excellent result from the furthest west Wolfcamp A well drilled on our Midland Basin properties to date, in an area where we did not previously hold Wolfcamp wells in our drilling inventory. Although recent market attention has been focused on our newly acquired Delaware assets, the strong and consistent well results from our Midland Basin portfolio continue to generate attractive rates of return and capital efficient growth at current commodity prices."
Operational Results
Three Months Ended March 31, | |||||||
2017 |
2016 | ||||||
Production data: |
|||||||
Oil (MBbls) |
3,032 |
1,703 |
|||||
Natural gas (MMcf) |
2,926 |
1,465 |
|||||
NGLs (MBbls) |
547 |
293 |
|||||
Total (MBoe) |
4,067 |
2,240 |
|||||
Average net daily production (Boe/d) |
45,189 |
24,615 |
|||||
Average prices before effects of hedges (1) (2): |
|||||||
Oil (per Bbl) |
$ |
50.01 |
$ |
30.35 |
|||
Natural gas (per Mcf) |
2.52 |
1.64 |
|||||
NGLs (per Bbl) |
19.96 |
5.88 |
|||||
Total (per Boe) |
$ |
41.78 |
$ |
24.92 |
|||
Average realized prices after effects of hedges (1) (2): |
|||||||
Oil (per Bbl) |
$ |
49.02 |
$ |
31.50 |
|||
Natural gas (per Mcf) |
2.59 |
1.64 |
|||||
NGLs (per Bbl) |
19.96 |
5.88 |
|||||
Total (per Boe) |
$ |
41.09 |
$ |
25.79 |
|||
Average costs (per Boe): |
|||||||
Lease operating expenses (excluding gathering and transportation) |
$ |
5.40 |
$ |
5.54 |
|||
Gathering and transportation |
0.85 |
0.31 |
|||||
Production and ad valorem taxes |
2.33 |
1.85 |
|||||
Depreciation, depletion and amortization |
15.01 |
19.89 |
|||||
General and administrative - recurring cash component |
1.91 |
2.19 |
|||||
General and administrative - recurring stock comp (3) |
0.96 |
1.38 |
(1) |
Average prices shown in the table reflect prices both before and after the effects of our cash payments/receipts on our commodity derivative transactions. Our calculation of such effects includes realized gains or losses on cash settlements for commodity derivative transactions and an adjustment to reflect premiums incurred previously or upon settlement that are attributable to instruments settled in the period, if applicable. |
(2) |
Average prices for oil are net of transportation costs. Average prices for natural gas do not include transportation costs; instead, transportation costs related to our natural gas production and sales are included in gathering and transportation which is included in lease operating expenses in our consolidated statements of operations. No transportation costs are associated with NGL production and sales. |
(3) |
Represents compensation expense related to restricted stock awards and performance share awards granted as part of the Company's ongoing compensation and retention programs. |
Production volumes for the quarter ended March 31, 2017 averaged 45,189 Boe/d, or a total of 4,067 MBoe, an increase of 84% over prior year's first quarter of 24,615 Boe/d. Production for the first quarter of 2017 was comprised of 75% crude oil, 12% natural gas and 13% NGLs. RSP's average realized oil price for the first quarter of 2017, before the effects of hedges, was $50.01 per barrel, a negative $1.90 differential compared to average NYMEX WTI pricing of $51.91 per barrel for the same period, or 96% of NYMEX WTI pricing. RSP's average realized natural gas price for the first quarter of 2017, before the effects of hedges, was $2.52 per Mcf, a negative $0.80 differential compared to average NYMEX Henry Hub pricing of $3.32 per MMBtu for the same period, or 76% of NYMEX Henry Hub pricing. RSP's average realized NGL price for the first quarter of 2017, before the effects of hedges, was $19.96 per Bbl, or 38% of NYMEX WTI pricing for the same time period. RSP's average realized commodity price per barrel of oil equivalent for the first quarter of 2017, before the effects of hedges, was $41.78. Per unit cash operating expenses excluding interest expense but including lease operating expense, gathering and transportation expense, production and ad valorem taxes and recurring cash general and administrative expenses were $10.49 per Boe.
Operational Update
The Company operated four horizontal rigs in the Midland Basin during the majority of the first quarter of 2017, adding a fourth rig in January. In the Delaware Basin, the Company added a second horizontal rig upon closing the SHEP II acquisition on March 1, 2017. RSP utilized one full-time completion crew during the first quarter in the Midland Basin and a part-time crew in the Delaware Basin. RSP drilled 21 operated horizontal wells and completed 14 operated horizontal wells (Midland: two Lower Spraberry, five Wolfcamp A, five Wolfcamp B; Delaware: one Wolfcamp A, one Wolfcamp XY). The Company began the quarter with 11 operated horizontal drilled but uncompleted wells ("DUCs") and exited the quarter with a total of 18 operated horizontal DUCs.
Financial Results
Three Months Ended |
||||||||||
March 31, |
December 31, |
|||||||||
2017 |
2016 |
2016 |
||||||||
(In thousands, except for per share data) | ||||||||||
Total Revenues |
$ |
169,931 |
$ |
55,815 |
$ |
122.934 |
||||
Net Cash from Derivative Instruments |
(2,812) |
1,950 |
(2,398) |
|||||||
Adjusted Total Revenues |
167,119 |
57,765 |
120,536 |
|||||||
Net Income (Loss) |
$ |
38,934 |
$ |
(17,416) |
$ |
1,381 |
||||
Net Income (Loss) per Common Share - Diluted |
0.26 |
(0.17) |
0.01 |
|||||||
Adjusted Net Income (Loss) (1) |
$ |
24,212 |
$ |
(16,231) |
$ |
13,395 |
||||
Adjusted Net Income (Loss) per Common Share - Diluted |
0.16 |
(0.16) |
0.10 |
|||||||
Adjusted EBITDAX (1) |
$ |
124,451 |
$ |
35,610 |
$ |
90,529 |
(1) |
Adjusted EBITDAX and Adjusted Net Income are non-GAAP financial measures. For a definition of Adjusted EBITDAX and Adjusted Net Income and a reconciliation of Adjusted EBITDAX and Adjusted Net Income to Net Income, see "Use of Non-GAAP financial measures" and our quarterly statements of operations at the end of this release. |
For the quarter ended March 31, 2017, total revenues, excluding the revenue impact from realized derivative instruments, were $169.9 million, a 204% increase over the prior year quarter of $55.8 million. Adjusted total revenues, including the net cash from derivative instruments, were $167.1 million, a 189% increase from the prior year quarter of $57.8 million. Net income for the first quarter of 2017 was $38.9 million, or $0.26 per diluted share, while net loss for the prior year quarter was $17.4 million, or negative $0.17 per diluted share. Adjusted net income for the first quarter of 2017 was $24.2 million, or $0.16 per diluted share, compared to an Adjusted net loss for the prior year quarter of $16.2 million or negative $0.16 per diluted share. Adjusted EBITDAX was $124.5 million, a 249% increase from the prior year quarter of $35.6 million.
Capital Expenditures
RSP's development capital expenditures, which includes our investment in drilling and completing wells, infrastructure, capitalized workovers, and other, but excludes the cost of acquisitions, for the quarter ended March 31, 2017 totaled $115.6 million ($110.5 million of drilling and completion and $5.1 million of infrastructure and other). Of the development capital, approximately $11.6 million, or 10%, was spent on non-operated properties.
Additionally, during the first quarter of 2017 the Company acquired $16.5 million of oil and gas properties, exclusive of the SHEP II acquisition, along with $18.8 million of water infrastructure assets which service the Delaware Basin properties.
Liquidity
As of March 31 2017, the Company had $54.3 million of cash and no borrowings outstanding on its revolving credit facility, which has a $1.1 billion borrowing base and a $900 million Company-elected commitment.
Hedging
The summary below includes all hedges in place for the remainder of 2017 and for 2018, as of May 2, 2017.
(Bbl, $/Bbl) |
Q2 2017 |
Q3 2017 |
Q4 2017 |
2018 | ||||||||||||
Three-Way Collars(1) |
3,160,000 |
|||||||||||||||
Ceiling |
$ |
65.06 |
||||||||||||||
Floor |
$ |
50.00 |
||||||||||||||
Short Put |
$ |
40.00 |
||||||||||||||
Costless Collars(1) |
1,137,500 |
1,150,000 |
1,150,000 |
|||||||||||||
Ceiling |
$ |
60.05 |
$ |
60.05 |
$ |
60.05 |
||||||||||
Floor |
$ |
45.00 |
$ |
45.00 |
$ |
45.00 |
||||||||||
Deferred Premium Puts(1) |
910,000 |
920,000 |
920,000 |
|||||||||||||
Floor |
$ |
48.50 |
$ |
48.50 |
$ |
48.50 |
||||||||||
Deferred Premium(2) |
$ |
(4.00) |
$ |
(4.00) |
$ |
(4.00) |
||||||||||
Total Hedge Volumes |
2,047,500 |
2,070,000 |
2,070,000 |
3,160,000 |
||||||||||||
Weighted Average Floor(3) |
44.78 |
44.78 |
44.78 |
$ |
50.00 |
|||||||||||
Mid-Cush Differential Swaps: |
2,548,000 |
920,000 |
276,000 |
|||||||||||||
Swap(4) |
$ |
(0.11) |
$ |
(0.38) |
$ |
(0.50) |
(1) |
The crude oil derivative contracts are settled based on the arithmetic average of the closing settlement price for the front month contract NYMEX price of West Texas Intermediate Light Sweet Crude. |
(2) |
The deferred premium is not paid until expiration date, aligning cash inflows and outflows with the settlement of the derivative contract. |
(3) |
Weighted average floor assumes the long put in three way collars and put spreads and reflects the impact of premiums paid |
(4) |
The Mid-Cush swap contracts are settled based on the difference in the arithmetic average during the calculation period of WTI MIDLAND ARGUS and WTI ARGUS prices in the Argus Americas Crude publication for the relevant period. |
Natural Gas Hedges | ||||||||||||
(MMBtu, $/MMBtu) |
Q2 2017 |
Q3 2017 |
Q4 2017 | |||||||||
Costless Collars(1) |
2,366,000 |
2,422,000 |
2,545,000 |
|||||||||
Ceiling |
$ |
3.86 |
$ |
3.86 |
$ |
3.86 |
||||||
Floor |
$ |
3.00 |
$ |
3.00 |
$ |
3.00 |
(1) |
The natural gas derivative contracts are settled based on the last trading day's closing price for the front month contract relevant to each period. |
2017 Annual Guidance
First Quarter 2017 |
2017 Guidance |
||||
Completions |
|||||
Operated Gross Horizontal Completions |
14 |
85 - 95 |
|||
Operated Average Working Interest |
83% |
88% |
|||
Midland Basin Average Lateral Length |
~8,200' |
~8,500' |
|||
Delaware Basin Average Lateral Length |
~6,700' |
~6,250' |
|||
Production |
|||||
Average Daily Production (Boe/d) |
45,189 |
53,000 - 57,000 |
|||
% Oil |
75% |
71% - 73% |
|||
% Natural Gas |
12% |
11% - 13% |
|||
% NGLs |
13% |
15% - 17% |
|||
Development Capital Expenditures ($ in MM) |
|||||
Drilling and Completion (D&C) |
$110.5 |
$575 - $625 |
|||
Infrastructure, Capitalized Workovers & Other |
$5.1 |
$50 - $75 |
|||
Total Development Capital Expenditures |
$115.6 |
$625 - $700 |
|||
% Midland Basin |
80% |
60% - 70% |
|||
% Delaware Basin |
20% |
30% - 40% |
|||
% Non-Operated |
10% |
5% - 10% |
|||
Income Statement ($/Boe) |
|||||
Lease operating expenses (including workovers) |
$5.40 |
$4.50 - $5.50 |
|||
Gathering and transportation |
$0.85 |
$1.10 - $1.40 |
|||
Exploration expenses |
$0.63 |
$0.40 - $0.60 |
|||
General and administrative - recurring cash component |
$1.91 |
$1.25 - $1.75 |
|||
General and administrative - recurring stock comp |
$0.96 |
$0.70 - $0.90 |
|||
Depreciation, depletion, and amortization |
$15.01 |
$14.00 - $16.00 |
|||
Production and ad valorem taxes (% of oil and gas revenues) |
5.6% |
6.0% - 8.0% |
First Quarter 2017 Earnings Release and Conference Call
RSP will host a conference call for investors at 1:00 PM Central Time on Wednesday, May 3, 2017, to discuss first quarter 2017 results. Hosting the call will be Steve Gray, Chief Executive Officer, Scott McNeill, Chief Financial Officer and other members of RSP's management team.
The call may be accessed live over the telephone by dialing (877) 705-6003, or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13659950. The replay will be available until May 17, 2017. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto RSP's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
Statements of Operations | |||||||||||
(In thousands, except per share data) | |||||||||||
Three Months |
Three Months | ||||||||||
2017 |
2016 |
2016 | |||||||||
Revenues: |
|||||||||||
Oil sales |
$ |
151,637 |
$ |
51,690 |
$ |
110,376 |
|||||
Natural gas sales |
7,378 |
2,403 |
5,103 |
||||||||
NGL sales |
10,916 |
1,722 |
7,455 |
||||||||
Total revenues |
169,931 |
55,815 |
122,934 |
||||||||
Operating expenses: |
|||||||||||
Lease operating expenses |
$ |
25,411 |
$ |
13,091 |
$ |
16,419 |
|||||
Production and ad valorem taxes |
9,469 |
4,153 |
6,630 |
||||||||
Depreciation, depletion, and amortization |
61,040 |
44,558 |
52,484 |
||||||||
Asset retirement obligation accretion |
153 |
113 |
118 |
||||||||
Impairments |
125 |
173 |
579 |
||||||||
Exploration |
2,580 |
64 |
265 |
||||||||
General and administrative expenses |
11,712 |
8,005 |
10,173 |
||||||||
Acquisition Costs |
4,052 |
— |
6,374 |
||||||||
Total operating expenses |
$ |
114,542 |
$ |
70,157 |
$ |
93.042 |
|||||
Operating income (loss) |
$ |
55,389 |
$ |
(14,342) |
$ |
29,892 |
|||||
Other income (expense) |
|||||||||||
Other income, net |
$ |
720 |
$ |
173 |
$ |
1,246 |
|||||
Net gain (loss) on derivative instruments |
17,121 |
396 |
(17,538) |
||||||||
Interest expense |
(19,224) |
(12,941) |
(13,683) |
||||||||
Total other income (expense) |
(1,383) |
(12,372) |
(29,975) |
||||||||
Income (loss) before income taxes |
54,006 |
(26,714) |
(83) |
||||||||
Income tax benefit (expense) |
(15,072) |
9,298 |
1,464 |
||||||||
Net income (loss) |
$ |
38,934 |
$ |
(17,416) |
$ |
1,381 |
|||||
Net income (loss) per common share - Basic |
$ |
0.27 |
$ |
(0.17) |
$ |
0.01 |
|||||
Net income (loss) per common share - Diluted |
$ |
0.26 |
$ |
(0.17) |
$ |
0.01 |
|||||
Weighted Average Common Shares Outstanding: |
|||||||||||
Basic |
146,054 |
100,060 |
128,811 |
||||||||
Diluted |
147,005 |
100,060 |
128,811 |
Summary Balance Sheet | |||||||||||
(In thousands) | |||||||||||
March 31, 2017 |
December 31, 2016 | ||||||||||
Cash and cash equivalents |
$ |
54,260 |
$ |
690,776 | |||||||
Other current assets |
91,817 |
85,486 | |||||||||
Total current assets |
146,077 |
776,262 | |||||||||
Property, plant and equipment, net |
5,529,103 |
4,129,635 | |||||||||
Other long-term assets |
50,694 |
90,530 | |||||||||
Total assets |
$ |
5,725,874 |
$ |
4,996,427 | |||||||
Current liabilities |
113,169 |
108,269 | |||||||||
Long-term debt |
1,132,358 |
1,132,275 | |||||||||
Other long-term liabilities |
363,920 |
338,571 | |||||||||
Total stockholders' equity |
4,116,427 |
3,417,312 | |||||||||
Total liabilities and stockholders' equity |
$ |
5,725,874 |
$ |
4,996,427 | |||||||
Use of Non-GAAP Financial Measures
We define Adjusted EBITDAX as oil and gas revenues including net cash receipts (payments) on settled derivative instruments and premiums paid on put options that settled during the period, less lease operating expenses, production and ad valorem taxes, and general and administrative expenses excluding stock based compensation. Adjusted Net Income deducts from Adjusted EBITDAX depreciation, depletion, and amortization, accretion on asset retirement obligations, exploration expenses, interest expense, stock-based compensation, acquisition costs and adjusted income tax expense.
Management believes Adjusted EBITDAX and Adjusted Net Income are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDAX and Adjusted Net Income because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX and Adjusted Net Income should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX and Adjusted Net Income are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our computations of Adjusted EBITDAX and Adjusted Net Income may not be comparable to other similarly titled measures of other companies.
The following tables include a reconciliation of the non-GAAP financial measures of Adjusted EBITDAX and Adjusted Net Income to the GAAP financial measure of net income.
Reconciliation of Net Income (Loss) to Adjusted EBITDAX | |||||||||||
(In thousands) | |||||||||||
Three Months Ended |
Three Months Ended | ||||||||||
2017 |
2016 |
2016 | |||||||||
Net income (loss) |
38,934 |
(17,416) |
$ |
1,381 |
|||||||
Interest expense |
19,224 |
12,941 |
13,683 |
||||||||
Income tax expense (benefit) |
15,072 |
(9,298) |
(1,464) |
||||||||
Depreciation, depletion, and amortization |
61,040 |
44,558 |
52,484 |
||||||||
Asset retirement obligation accretion |
153 |
113 |
118 |
||||||||
Exploration |
2,580 |
64 |
265 |
||||||||
Acquisition Costs |
4,052 |
— |
6,374 |
||||||||
Impairments |
125 |
173 |
579 |
||||||||
Loss (gain) on derivative instruments |
(17,121) |
(396) |
17,538 |
||||||||
Net Settled Derivative Instruments |
(2,812) |
1,950 |
(2,398) |
||||||||
Stock-based compensation, net |
3,924 |
3,094 |
3,215 |
||||||||
Other income, net |
(720) |
(173) |
(1,246) |
||||||||
Adjusted EBITDAX |
$ |
124,451 |
$ |
35,610 |
$ |
90,529 |
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) | |||||||||||
(In thousands) | |||||||||||
Three Months Ended |
Three Months Ended | ||||||||||
2017 |
2016 |
2016 | |||||||||
Net income (loss) |
$ |
38,934 |
$ |
(17,416) |
$ |
1,381 |
|||||
Acquisition Costs |
4,052 |
— |
6,374 |
||||||||
Impairments |
125 |
173 |
579 |
||||||||
Loss (gain) on derivative instruments |
(17,121) |
(396) |
17,538 |
||||||||
Net Settled Derivative Instruments |
(2,812) |
1,950 |
(2,398) |
||||||||
Other income, net |
(720) |
(173) |
(1,246) |
||||||||
Income tax benefit (expense) for above items |
1,754 |
(369) |
(8,833) |
||||||||
Adjusted Net Income (Loss) |
$ |
24,212 |
$ |
(16,231) |
$ |
13,395 |
SOURCE RSP Permian, Inc.
DALLAS, April 20, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced that it will release its first quarter 2017 financial and operating results after the New York Stock Exchange closes on Tuesday, May 2, 2017. In connection with the release, RSP will host a conference call and webcast for investors on Wednesday, May 3, 2017 at 1:00 p.m. Central Time (2:00 p.m. Eastern Time) to discuss the Company's results. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer, Scott McNeill, Chief Financial Officer and Alyssa Stephens, Director of Investor Relations.
The call can be accessed live over the telephone by dialing (877) 705-6003 or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13659950. The replay will be available until May 17, 2017.
Interested parties may also listen to a simultaneous internet webcast of the conference call by logging onto RSP Permian's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available for approximately 30 days following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
SOURCE RSP Permian, Inc.
DALLAS, March 1, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) has completed the second part of its previously announced acquisitions of Silver Hill Energy Partners, LLC ("SHEP I") and Silver Hill E&P II, LLC ("SHEP II," and together with SHEP I, "Silver Hill"). The Company closed the acquisition of SHEP II for an aggregate purchase price of approximately $646 million of cash and 16 million shares of RSP common stock, subject to certain customary post-closing adjustments. As previously announced, on February 24, 2017, RSP stockholders overwhelmingly approved the issuance of the approximately 16 million shares of RSP common stock as partial consideration for the acquisition of SHEP II.
RSP closed the acquisition of SHEP I on November 28, 2016 for a purchase price of approximately $604 million of cash and approximately 15 million shares of RSP common stock. Silver Hill owns approximately 68,000 gross, 41,000 net acres in northeast Loving and northwest Winkler Counties, Texas, and at the time of the acquisition announcement had approximately 15 MBoe/d of net production (69% oil, 86% liquids) from 58 wells (49 horizontals) producing from seven horizontal zones.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland Basin and Delaware Basin, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on the Company. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that management anticipates.
The Company's forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from the Company's historical experience and present expectations or projections. Furthermore, we may not be able to recognize the expected benefits from the Silver Hill transactions (including our expectations for production growth). Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Report on Form 10-K and any subsequent Quarterly Report on Form 10-Q, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov.
Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements and there can be no assurances that the actual results or developments anticipated by us will be realized, or even if realized, that they will have the expected consequences to or effects on us, our business or operations. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.
SOURCE RSP Permian, Inc.
DALLAS, Feb. 27, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today reported financial and operating results for the quarter and year ended December 31, 2016, year-end 2016 proved reserves, 2017 guidance and 2018 and 2019 production outlook. In addition, the Company filed its Annual Report on Form 10-K for the year ended December 31, 2016 with the Securities and Exchange Commission (the "SEC") and posted an updated presentation on its website at www.rsppermian.com.
Highlights for the Fourth Quarter and Full Year 2016:
Recent Midland Basin Well Results
2017 Guidance and 2018 and 2019 Production Outlook
Steve Gray, Chief Executive Officer, commented, "I am pleased to report our fourth quarter and full year results, highlighted by annual production growth of nearly 40% with 25% less in capital expenditures as compared to last year. Importantly, we continued to operate efficiently with strong cash margins and record low drill-bit finding and development costs. During the year, we reduced our activity levels in response to depressed oil prices early in the year and remained patient on M&A opportunities until we identified high quality properties that would compete for capital in our existing portfolio. With our recent entry into the Delaware Basin through our $2.4 billion acquisition of Silver Hill, we believe we have assembled one of the most focused and highest returning asset bases in the Permian Basin, solidifying our ability to achieve outstanding growth and strong operating and capital efficiency for years to come."
Mr. Gray continued, "I am also pleased to announce that our shareholders have overwhelmingly approved our issuance of RSP common stock to partially fund the SHEP II transaction which we expect to close Wednesday. We have already begun to integrate the Silver Hill assets into our inventory and are working towards achieving efficient, multi-zone horizontal development on the acquired properties. In addition, we recently acquired the underlying water disposal infrastructure supporting our operations in the Delaware. We are currently expanding these facilities and developing new facilities to support our growing operations and lower our operating costs. We are also working diligently with our various midstream partners and expect to be in position to ramp our drilling program beginning in the second half of 2017. Recent strong well results, which span five horizontal zones on the properties, highlight the attractive return profile in multiple stacked horizontal zones on our Delaware acreage position."
(1) Includes SHEP II. Pro forma proved reserves prepared by Netherland Sewell & Associates, Inc. (NSAI).
(2) See "Drill-Bit F&D and Reserve Replacement Ratios" below for calculations.
Operational Results | |||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Production data: |
|||||||||||||||
Oil (MBbls) |
2,337 |
1,683 |
7,790 |
5,805 |
|||||||||||
Natural gas (MMcf) |
2,278 |
1,554 |
7,188 |
4,991 |
|||||||||||
NGLs (MBbls) |
576 |
289 |
1,685 |
1,045 |
|||||||||||
Total (MBoe) |
3,293 |
2,231 |
10,673 |
7,682 |
|||||||||||
Average net daily production (Boe/d) |
35,793 |
24,250 |
29,161 |
21,047 |
|||||||||||
Average prices before effects of hedges (1) (2): |
|||||||||||||||
Oil (per Bbl) |
$ |
47.23 |
$ |
40.00 |
$ |
41.28 |
$ |
45.36 |
|||||||
Natural gas (per Mcf) |
2.24 |
1.91 |
1.94 |
2.11 |
|||||||||||
NGLs (per Bbl) |
12.94 |
11.13 |
10.87 |
9.75 |
|||||||||||
Total (per Boe) |
$ |
37.33 |
$ |
32.95 |
$ |
33.15 |
$ |
36.97 |
|||||||
Average realized prices after effects of hedges (1) (2): |
|||||||||||||||
Oil (per Bbl) |
$ |
46.20 |
$ |
53.74 |
$ |
41.06 |
$ |
61.22 |
|||||||
Natural gas (per Mcf) |
2.24 |
1.91 |
1.94 |
2.11 |
|||||||||||
NGLs (per Bbl) |
12.94 |
11.13 |
10.87 |
9.75 |
|||||||||||
Total (per Boe) |
$ |
36.60 |
$ |
43.31 |
$ |
32.99 |
$ |
48.96 |
|||||||
Average costs (per Boe): |
|||||||||||||||
Lease operating expenses (excluding gathering and transportation) |
$ |
4.41 |
$ |
4.76 |
$ |
4.93 |
$ |
6.46 |
|||||||
Gathering and transportation |
0.57 |
0.42 |
0.48 |
0.46 |
|||||||||||
Production and ad valorem taxes |
2.01 |
2.56 |
2.03 |
2.60 |
|||||||||||
Depreciation, depletion and amortization |
15.94 |
17.88 |
18.21 |
20.05 |
|||||||||||
General and administrative - recurring cash component |
2.11 |
2.24 |
2.10 |
2.33 |
|||||||||||
General and administrative - recurring stock comp (3) |
0.98 |
0.93 |
1.23 |
1.03 |
|||||||||||
General and administrative - non-recurring stock comp (4) |
— |
0.15 |
0.06 |
0.19 |
(1) |
Average prices shown in the table reflect prices both before and after the effects of our cash payments/receipts on our commodity derivative transactions. Our calculation of such effects includes realized gains or losses on cash settlements for commodity derivative transactions and an adjustment to reflect premiums incurred previously or upon settlement that are attributable to instruments settled in the period, if applicable. |
(2) |
Average prices for oil are net of transportation costs. Average prices for natural gas do not include transportation costs; instead, transportation costs related to our natural gas production and sales are included in gathering and transportation which is included in lease operating expenses in our consolidated statements of operations. No transportation costs are associated with NGL production and sales. |
(3) |
Represents compensation expense related to restricted stock awards and performance share awards granted as part of the Company's ongoing compensation and retention programs. |
(4) |
Non-recurring stock comp in 2015 includes compensation expense related to the successful completion of the Company's initial public offering and related expenses associated with one-time restricted stock awards. The non-recurring 2016 amount is a compensation charge associated with the retirement of an officer of the Company. |
Production volumes for the quarter ended December 31, 2016 averaged 35,793 Boe/d or a total of 3,293 MBoe, an increase of 48% over prior year's fourth quarter of 24,250 Boe/d. Production for the fourth quarter of 2016 was comprised of 71% crude oil, 12% natural gas and 17% NGLs. RSP's average realized commodity price per barrel of oil equivalent for the fourth quarter of 2016, before the effects of hedges, was $37.33. RSP's average realized oil price for the fourth quarter of 2016, before the effects of hedges, was $47.23 per barrel, a negative $2.06 differential compared to average NYMEX WTI pricing of $49.29 per barrel for the same period, or 96% of NYMEX WTI pricing. RSP's average realized natural gas price for the fourth quarter of 2016, before the effects of hedges, was $2.24 per Mcf, a negative $0.74 differential compared to average NYMEX Henry Hub pricing of $2.98 per MMBtu for the same period, or 75% of NYMEX Henry Hub pricing. RSP's average realized NGL price for the fourth quarter of 2016, before the effects of hedges, was $12.94 per Bbl, or 26% of NYMEX WTI pricing for the same time period. Per unit cash operating expenses excluding interest expense but including lease operating expense, gathering and transportation expense, production and ad valorem taxes and recurring cash general and administrative expenses were $9.11 per Boe, an 9% decrease from prior year's comparable quarter.
Production volumes for the year ended December 31, 2016 averaged 29,161 Boe/d or a total of 10,673 MBoe, an increase of 39% over prior year's total of 21,047 Boe/d. Production for 2016 was comprised of 73% crude oil, 11% natural gas and 16% NGLs. RSP's average realized commodity price per barrel of oil equivalent for 2016, before the effects of hedges, was $33.15. RSP's average realized oil price for 2016, before the effects of hedges, was $41.28 per barrel, a negative $2.04 differential compared to average NYMEX WTI pricing of $43.32 per barrel for the same period, or 95% of NYMEX WTI pricing. RSP's average realized natural gas price for 2016, before the effects of hedges, was $1.94 per Mcf, a negative $0.52 differential compared to average NYMEX Henry Hub pricing of $2.46 per MMBtu for the same period, or 79% of NYMEX Henry Hub pricing. RSP's average realized NGL price for 2016, before the effects of hedges, was $10.87 per Bbl, or 25% of NYMEX WTI pricing for the same time period. Per unit cash operating expenses excluding interest expense but including lease operating expense, gathering and transportation expense, production and ad valorem taxes and recurring cash general and administrative expenses were $9.54 per Boe, a 19% decrease from prior year's comparable total.
Operational Update
The Company operated three horizontal rigs in the Midland Basin during the fourth quarter, and upon closing the acquisition of SHEP I, operated one rig in the Delaware Basin during December. RSP utilized one full-time completion crew during the fourth quarter in the Midland Basin and a part-time crew in the Delaware Basin during December. RSP drilled 13 operated horizontal wells and completed 14 operated horizontal wells (seven Lower Spraberry, three Wolfcamp A, three Wolfcamp B and one Avalon) and two operated vertical wells during the fourth quarter. The Company began the quarter with 12 operated horizontal drilled but uncompleted wells ("DUCs") and exited the quarter with a total of 11 operated horizontal DUCs. During 2016, RSP drilled 46 and completed 53 operated horizontal wells (one Middle Spraberry, 35 Lower Spraberry, eight Wolfcamp A, eight Wolfcamp B and one Avalon) and drilled four and completed six operated vertical wells.
4Q16 Wells |
2016 Wells |
|||||||||||||||
Drilled |
Completed |
Drilled but |
Drilled |
Completed |
||||||||||||
Operated Wells |
||||||||||||||||
Horizontal |
13 |
14 |
11 |
46 |
53 |
|||||||||||
Vertical |
— |
2 |
— |
4 |
6 |
|||||||||||
Total Operated |
13 |
16 |
11 |
50 |
59 |
|||||||||||
Non-Operated Wells |
||||||||||||||||
Horizontal |
6 |
13 |
11 |
35 |
37 |
|||||||||||
Vertical |
— |
— |
— |
1 |
1 |
|||||||||||
Total Non-Operated |
6 |
13 |
11 |
36 |
38 |
|||||||||||
Total Wells |
||||||||||||||||
Horizontal |
19 |
27 |
22 |
81 |
90 |
|||||||||||
Vertical |
— |
2 |
— |
5 |
7 |
|||||||||||
Total Wells |
19 |
29 |
22 |
86 |
97 |
Financial Results | |||||||||||||
(In thousands, except per share data) | |||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||
December 31, |
December 31, | ||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||
Total Revenues |
$ |
122,934 |
$ |
73,508 |
$ |
353,857 |
$ |
283,992 |
|||||
Net Cash from Derivative Instruments |
(2,398) |
23,122 |
(1,732) |
92,118 |
|||||||||
Adjusted Total Revenues |
120,536 |
96,630 |
352,125 |
376,110 |
|||||||||
Net Income (Loss) |
$ |
1,381 |
$ |
(20,751) |
$ |
(24,851) |
$ |
(18,254) |
|||||
Net Income (Loss) per Common Share - Diluted |
0.01 |
(0.21) |
(0.23) |
(0.21) |
|||||||||
Adjusted Net Income (Loss) (1) |
13,395 |
12,074 |
(7,358) |
48,630 |
|||||||||
Adjusted Net Income (Loss) per Common Share - Diluted |
0.10 |
0.12 |
(0.07) |
0.56 |
|||||||||
Adjusted EBITDAX (1) |
$ |
90,529 |
$ |
74,367 |
$ |
250,326 |
$ |
285,058 |
(1) |
Adjusted EBITDAX and Adjusted Net Income are non-GAAP financial measures. For a definition of Adjusted EBITDAX and Adjusted Net Income and a reconciliation of Adjusted EBITDAX and Adjusted Net Income to Net Income, see "Use of Non-GAAP financial measures" and our quarterly statements of operations at the end of this release. |
For the quarter ended December 31, 2016, total revenues, excluding the revenue impact from realized derivative instruments, were $122.9 million, a 67% increase over the prior year quarter of $73.5 million. Adjusted total revenues, including the net cash from derivative instruments, were $120.5 million, an increase of 25% over the prior year quarter of $96.6 million. Net income for the fourth quarter of 2016 was $1.4 million, or approximately one cent per diluted share, while net loss for the fourth quarter of 2015 was $20.8 million, or negative $0.21 per diluted share. Adjusted net income for the quarter was $13.4 million, or $0.10 per diluted share, compared with adjusted net income for the prior year quarter of $12.1 million or $0.12 per diluted share. Adjusted EBITDAX for the quarter ended was $90.5 million, an increase of 22% over the prior year quarter of $74.4 million.
For the year ended December 31, 2016, total revenues, excluding the revenue impact from realized derivative instruments, were $353.9 million, a 25% increase over the prior year of $284.0 million. Adjusted total revenues, including the net cash from derivative instruments, were $352.1 million, an decrease of 6% from the prior year of $376.1 million. Net loss for the year ended 2016 was $24.9 million, or negative $0.23 per diluted share, while net loss for the year ended 2015 was $18.3 million, or negative 0.21 per diluted share. Adjusted net loss for the year ended 2016 was $7.4 million, or negative $0.07 per diluted share, compared with adjusted net income for the prior year of $48.6 million or $0.56 per diluted share. Adjusted EBITDAX for the year ended 2016 was $250.3 million, a decrease of 12% from the prior year ended 2015 of $285.1 million.
Proved Reserves Summary
RSP's proved reserves summary as of December 31, 2016 and pro forma proved reserved summary as of December 31, 2016 were prepared by Netherland, Sewell & Associates, Inc.
Our December 31, 2016 proved reserves summary included reserves from the SHEP I acquisition that closed on November 28, 2016 and totaled 236.9 MMBoe. Pro forma for the SHEP II acquisition, which is expected to close on March 1, 2017, our total proved reserves as of December 31, 2016 were 283.3 MMBoe. The Company removed its remaining economic reserves associated with vertical proved undeveloped locations from its proved reserve base due to the superior economics of horizontal drilling locations which are expected to be drilled in front of the vertical locations over the next five years. This resulted in a 23.4 MMBoe downward revision to proved reserves offset by positive revisions from horizontal wells that are performing above previous estimates, resulting in total downward revisions of previous estimates of 17.8 MMBoe.
The following table presents the Company's estimated net proved oil and natural gas reserves as of December 31, 2016 (excluding SHEP II acquisition) and net proved oil and natural gas reserves as of December 31, 2015, and in each case, prepared in accordance with the rules and regulations of the SEC.
Oil (MBbls) |
Natural Gas (MMcf) |
NGLs (MBbls) |
Total (MBoe) | ||||||||
Proved developed and undeveloped reserves: |
|||||||||||
As of December 31, 2015 |
111,135 |
133,507 |
25,787 |
159,173 |
|||||||
Revisions of previous estimates |
(14,115) |
(30,284) |
1,412 |
(17,750) |
|||||||
Extensions, discoveries and other additions |
46,017 |
45,541 |
11,631 |
65,238 |
|||||||
Purchases of minerals in place |
29,481 |
35,210 |
5,551 |
40,900 |
|||||||
Production |
(7,790) |
(7,188) |
(1,685) |
(10,673) |
|||||||
As of December 31, 2016 |
164,728 |
176,786 |
42,696 |
236,888 |
The following table presents the Company's estimated net proved oil and natural gas reserves as of December 31, 2016, 2015 and 2014, as well as our pro forma net proved oil and natural gas reserves as of December 31, 2016, after giving effect to the SHEP II acquisition as if it had occurred before December 31, 2016.
Pro Forma |
2016 |
2015 |
2014 | |||||||||
Proved developed reserves: |
||||||||||||
Oil (MBbls) |
75,341 |
65,025 |
44,128 |
27,716 |
||||||||
Natural gas (MMcf) |
86,475 |
76,255 |
56,640 |
35,921 |
||||||||
NGLs (MBbls) |
20,864 |
18,759 |
11,020 |
8,221 |
||||||||
Total (MBoe) |
110,617 |
96,493 |
64,588 |
41,924 |
||||||||
Proved undeveloped reserves: |
||||||||||||
Oil (MBbls) |
123,601 |
99,703 |
67,007 |
41,557 |
||||||||
Natural gas (MMcf) |
122,959 |
100,531 |
76,867 |
56,501 |
||||||||
NGLs (MBbls) |
28,575 |
23,937 |
14,767 |
13,518 |
||||||||
Total (MBoe) |
172,669 |
140,395 |
94,585 |
64,492 |
||||||||
Total proved reserves: |
||||||||||||
Oil (MBbls) |
198,942 |
164,728 |
111,135 |
69,273 |
||||||||
Natural gas (MMcf) |
209,434 |
176,786 |
133,507 |
92,422 |
||||||||
NGLs (MBbls) |
49,439 |
42,696 |
25,787 |
21,739 |
||||||||
Total (MBoe) |
283,286 |
236,888 |
159,173 |
106,416 |
Capital Expenditures
RSP's development capital expenditures, which includes our investment in drilling and completing wells, infrastructure, capitalized workovers, and other, but excludes acquisitions, for the year ended December 31, 2016 totaled $294 million ($275 million of drilling and completion and $19 million of infrastructure and other). The Company spent approximately $57 million, or 19% of development capital, on non-operated properties. Additionally, during 2016 the Company closed approximately $69 million of acquisitions and additions to leasehold in the Midland Basin and closed the SHEP I acquisition for approximately 15 million shares of RSP stock and $604 million in cash.
Capital Markets Transactions and Amended and Restated Credit Agreement
On October 13, 2016, the Company priced an underwritten public offering of 25.3 million shares of RSP common stock, including the exercise of the underwriters' option to purchase additional shares, raising approximately $1.0 billion in net proceeds. On December 12, 2016, RSP priced $450 million aggregate principal amount of 5.25% senior unsecured notes due 2025 at par. RSP used a portion of the net proceeds raised in these offerings to fund the cash portion of the SHEP I acquisition and will use the balance of the proceeds to fund the cash portion of the SHEP II acquisition.
On December 20, 2016, RSP announced it entered into an amended and restated credit agreement with respect to the Company's senior secured revolving credit facility. The amended and restated credit agreement extended the maturity date of the facility until December 19, 2021, increased the borrowing base under the facility to $950 million and increased the maximum commitments of the lenders from $1.0 billion to $2.5 billion. The $950 million borrowing base only reflected the reserve growth from the Company's Midland Basin assets and the previously closed SHEP I acquisition. Upon closing the SHEP II acquisition, RSP's borrowing base will automatically increase to $1.1 billion. RSP elected an aggregate commitment amount of $900 million under the facility and will leave this amount unchanged upon the closing of SHEP II.
As of December 31, 2016, the Company had no borrowings outstanding on its revolving credit facility and had $691 million of cash on hand. Pro forma for closing the acquisition of SHEP II, as of December 31, 2016, the Company had $109 million of cash and no borrowings outstanding on its revolving credit facility, which has a $1.1 billion borrowing base and a $900 million Company elected commitment.
Hedging
The summary below includes all hedges in place for the full year 2017 and 2018, as of February 27, 2017.
Crude Oil Hedges | ||||||||||||||||||||
(Bbl, $/Bbl) |
Q1 2017 |
Q2 2017 |
Q3 2017 |
Q4 2017 |
2018 | |||||||||||||||
Three-Way Collars(1) |
675,000 |
3,160,000 |
||||||||||||||||||
Ceiling |
$ |
54.25 |
$ |
65.06 |
||||||||||||||||
Floor |
$ |
45.00 |
$ |
50.00 |
||||||||||||||||
Short Put |
$ |
35.00 |
$ |
40.00 |
||||||||||||||||
Costless Collars(1) |
450,000 |
1,137,500 |
1,150,000 |
1,150,000 |
||||||||||||||||
Ceiling |
$ |
59.75 |
$ |
60.05 |
$ |
60.05 |
$ |
60.05 |
||||||||||||
Floor |
$ |
45.00 |
$ |
45.00 |
$ |
45.00 |
$ |
45.00 |
||||||||||||
Deferred Premium Puts(1) |
910,000 |
920,000 |
920,000 |
|||||||||||||||||
Floor |
$48.50 |
$48.50 |
$48.50 |
|||||||||||||||||
Deferred Premium(2) |
($4.00) |
($4.00) |
($4.00) |
|||||||||||||||||
Deferred Premium Put Spreads(1) |
675,000 |
|||||||||||||||||||
Floor |
$45.00 |
|||||||||||||||||||
Short Put |
$35.00 |
|||||||||||||||||||
Deferred Premium(2) |
($2.32) |
|||||||||||||||||||
Total Hedge Volumes |
1,800,000 |
2,047,500 |
2,070,000 |
2,070,000 |
3,160,000 |
|||||||||||||||
Weighted Average Floor(3) |
$ |
44.13 |
$ |
44.78 |
$ |
44.78 |
$ |
44.78 |
$ |
50.00 |
||||||||||
Mid-Cush Differential Swaps: |
1,881,000 |
2,548,000 |
920,000 |
276,000 |
||||||||||||||||
Swap(4) |
$ |
(0.14) |
$ |
(0.11) |
$ |
(0.38) |
$ |
(0.50) |
(1) |
The crude oil derivative contracts are settled based on the arithmetic average of the closing settlement price for the front month contract NYMEX price of West Texas Intermediate Light Sweet Crude. |
(2) |
The deferred premium is not paid until expiration date, aligning cash inflows and outflows with the settlement of the derivative contract. |
(3) |
Weighted average floor assumes the long put in three way collars and put spreads and reflects the impact of premiums paid |
(4) |
The Mid-Cush swap contracts are settled based on the difference in the arithmetic average during the calculation period of WTI MIDLAND ARGUS and WTI ARGUS prices in the Argus Americas Crude publication for the relevant period. |
Natural Gas Hedges | ||||||||||||||||
(MMBtu, $/MMBtu) |
Q1 2017 |
Q2 2017 |
Q3 2017 |
Q4 2017 | ||||||||||||
Costless Collars(1) |
1,955,000 |
2,366,000 |
2,422,000 |
2,545,000 |
||||||||||||
Ceiling |
$ |
3.83 |
$ |
3.86 |
$ |
3.86 |
$ |
3.86 |
||||||||
Floor |
$ |
3.00 |
$ |
3.00 |
$ |
3.00 |
$ |
3.00 |
(1) |
The natural gas derivative contracts are settled based on the last trading day's closing price for the front month contract relevant to each period. |
2017 Annual Guidance
RSP's operating plan is expected to build momentum in the back half of 2017. After growing production an estimated 82% - 95% in 2017, both organically and with the production volumes associated with the Silver Hill acquisition, the Company anticipates it will deliver annual production growth in excess of 30% in both 2018 and 2019 while being cash flow neutral beginning in 2018 at a $55 oil price.
As a result of the staggered closing of the Silver Hill transactions and the anticipated rig additions during the year, the investment of capital expenditures is expected to be approximately 60 - 70% in the Midland Basin and 30 - 40% in the Delaware Basin for a total developmental capital budget of $625 million to $700 million.
The Company recently deployed a fourth operated rig on its Midland Basin properties earlier than anticipated in mid-January and plans to operate at least four rigs on its Midland assets for the balance of the year. RSP is currently operating one rig on its Delaware properties and will have a second operated rig working upon closing SHEP II. RSP anticipates adding a third operated rig on its Delaware properties after enhancing infrastructure to enable more efficient horizontal development. Additionally, RSP anticipates adding an additional operated rig during the fourth quarter and at that time will have a total of eight operated rigs.
The following table summarizes the Company's guidance for 2017.
2017 Guidance |
|||
Completions |
|||
Operated Gross Horizontal Completions |
85 - 95 |
||
Operated Average Working Interest |
88% |
||
Midland Basin Average Lateral Length |
~8,500' |
||
Delaware Basin Average Lateral Length |
~6,250' |
||
Production |
|||
Average Daily Production (Boe/d) |
53,000 - 57,000 |
||
% Oil |
71% - 73% |
||
% Natural Gas |
11% - 13% |
||
% NGLs |
15% - 17% |
||
Development Capital Expenditures ($ in MM) |
|||
Drilling and Completion (D&C) |
$575 - $625 |
||
Infrastructure, Capitalized Workovers & Other |
$50 - $75 |
||
Total Development Capital Expenditures |
$625 - $700 |
||
% Midland Basin |
60% - 70% |
||
% Delaware Basin |
30% - 40% |
||
% Non-Operated |
5% - 10% |
||
Income Statement ($/Boe) |
|||
Lease operating expenses (including workovers) |
$4.50 - $5.50 |
||
Gathering and transportation |
$1.10 - $1.40 |
||
Exploration expenses |
$0.40 - $0.60 |
||
General and administrative - cash component |
$1.25 - $1.75 |
||
General and administrative - recurring stock comp |
$0.70 - $0.90 |
||
Depreciation, depletion, and amortization ($/Boe) |
$14.00 - $16.00 |
||
Production and ad valorem taxes (% of oil and gas revenues) |
6.0% - 8.0% |
Conference Call
RSP will host a conference call for investors at 1:00 PM Central Time on Tuesday, February 28, 2017, to discuss fourth quarter and full-year 2016 results. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer and Scott McNeill, Chief Financial Officer.
The call may be accessed live over the telephone by dialing (877) 705-6003, or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13654848. The replay will be available until March 14, 2017. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto RSP's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
Statements of Operations | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Revenues: |
|||||||||||||||
Oil sales |
$ |
110,376 |
$ |
67,318 |
$ |
321,588 |
$ |
263,286 |
|||||||
Natural gas sales |
5,103 |
2,973 |
13,945 |
10,517 |
|||||||||||
NGL sales |
7,455 |
3,217 |
18,324 |
10,189 |
|||||||||||
Total revenues |
122,934 |
73,508 |
353,857 |
283,992 |
|||||||||||
Operating expenses: |
|||||||||||||||
Lease operating expenses |
$ |
16,419 |
$ |
11,546 |
$ |
57,778 |
53,124 |
||||||||
Production and ad valorem taxes |
6,630 |
5,722 |
21,615 |
19,995 |
|||||||||||
Depreciation, depletion, and amortization |
52,484 |
39,887 |
194,360 |
154,039 |
|||||||||||
Asset retirement obligation accretion |
118 |
84 |
472 |
336 |
|||||||||||
Impairments |
579 |
30,031 |
4,901 |
34,269 |
|||||||||||
Exploration |
265 |
96 |
1,093 |
2,380 |
|||||||||||
General and administrative expenses |
10,173 |
7,404 |
36,170 |
27,317 |
|||||||||||
Acquisition Costs |
6,374 |
— |
6,374 |
— |
|||||||||||
Total operating expenses |
93,042 |
94,770 |
322,763 |
291,460 |
|||||||||||
Loss on sale of assets |
$ |
— |
$ |
302 |
$ |
— |
$ |
306 |
|||||||
Operating income (loss) |
$ |
29,892 |
$ |
(21,564) |
$ |
31,094 |
$ |
(7,774) |
|||||||
Other income (expense) |
|||||||||||||||
Other income, net |
$ |
1,246 |
$ |
242 |
$ |
1,833 |
469 |
||||||||
Net gain (loss) on derivative instruments |
(17,538) |
3,439 |
(23,760) |
20,906 |
|||||||||||
Interest expense |
(13,683) |
(13,175) |
(52,724) |
(43,538) |
|||||||||||
Total other income (expense) |
(29,975) |
(9,494) |
(74,651) |
(22,163) |
|||||||||||
Income (loss) before income taxes |
(83) |
(31,058) |
(43,557) |
(29,937) |
|||||||||||
Income tax benefit (expense) |
1,464 |
10,307 |
18,706 |
$ |
11,683 |
||||||||||
Net income (loss) |
$ |
1,381 |
$ |
(20,751) |
$ |
(24,851) |
$ |
(18,254) |
|||||||
Net income (loss) per common share - Basic |
$ |
0.01 |
$ |
(0.21) |
$ |
(0.23) |
$ |
(0.21) |
|||||||
Net income (loss) per common share - Diluted |
$ |
0.01 |
$ |
(0.21) |
$ |
(0.23) |
$ |
(0.21) |
|||||||
Weighted Average Common Shares Outstanding: |
|||||||||||||||
Basic |
128,811 |
98,556 |
107,324 |
86,770 |
|||||||||||
Diluted |
128,811 |
98,556 |
107,324 |
86,770 |
Summary Balance Sheet | |||||||
(In thousands) | |||||||
December 31, 2016 |
December 31, 2015 | ||||||
Cash and cash equivalents |
$ |
690,776 |
$ |
142,741 |
|||
Other current assets |
85,486 |
44,799 |
|||||
Total current assets |
776,262 |
187,540 |
|||||
Property, plant and equipment, net |
4,129,635 |
2,758,630 |
|||||
Other long-term assets |
90,530 |
21,263 |
|||||
Total assets |
$ |
4,996,427 |
$ |
2,967,433 |
|||
Current liabilities |
108,269 |
77,402 |
|||||
Long-term debt |
1,132,275 |
686,512 |
|||||
Other long-term liabilities |
339,155 |
344,935 |
|||||
Total stockholders' equity |
3,416,728 |
1,858,584 |
|||||
Total liabilities and stockholders' equity |
$ |
4,996,427 |
$ |
2,967,433 |
Drill-Bit F&D Costs and Reserve Replacement Ratios | |||||
2016 | |||||
Production (MBoe) |
(A) |
10,673 |
|||
Proved Reserves (MBoe) |
|||||
Non-price revisions (1) |
(B) |
(15,619) |
|||
Purchases |
40,900 |
||||
Extensions and discoveries |
(C) |
65,238 |
|||
Total additions |
(D) |
90,519 |
|||
Non-Price Revision Detail (MBoe) |
|||||
Revisions from vertical PUD write off |
(V) |
(23,359) |
|||
Other non-price revisions |
(N) |
7,740 |
|||
Total non-price revisions |
(B) |
(15,619) |
|||
Costs Incurred (thousands) |
|||||
Property acquisition costs |
|||||
Proved |
$ |
210,977 |
|||
Unproved |
1,063,109 |
||||
Exploration |
(E) |
1,811 |
|||
Development |
(F) |
293,833 |
|||
Total costs incurred |
(G) |
$ |
1,569,730 |
||
Drill-bit F&D ($/Boe) |
(E+F) / (B+C) |
$5.96 |
|||
Drill-bit F&D excluding vertical PUD write off ($/Boe) |
(E+F) / (B+C-V) |
$4.05 |
|||
All sources F&D ($/Boe) |
(G) / (D) |
$17.34 |
|||
Reserve replacement ratio |
(D) / (A) |
848% |
|||
Organic reserve replacement ratio |
(C+N) / (A) |
684% |
(1) |
Total negative revisions for 2016 were 17,750 MBoe, including negative non-price related revisions of 15,619 MBoe and negative price related revisions of 2,131 MBoe. |
Use of Non-GAAP Financial Measures
We define Adjusted EBITDAX as oil and gas revenues including net cash receipts (payments) on settled derivative instruments and premiums paid on put options that settled during the period, less lease operating expenses, production and ad valorem taxes, and general and administrative expenses excluding stock based compensation. Adjusted Net Income deducts from Adjusted EBITDAX depreciation, depletion, and amortization, accretion on asset retirement obligations, exploration expenses, interest expense, stock-based compensation, acquisition costs and adjusted income tax expense.
Management believes Adjusted EBITDAX and Adjusted Net Income are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDAX and Adjusted Net Income because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX and Adjusted Net Income should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX and Adjusted Net Income are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our computations of Adjusted EBITDAX and Adjusted Net Income may not be comparable to other similarly titled measures of other companies.
The following tables include a reconciliation of the non-GAAP financial measures of Adjusted EBITDAX and Adjusted Net Income to the GAAP financial measure of net income.
Reconciliation of Net Income (Loss) to Adjusted EBITDAX | |||||||||||||||
(In thousands) | |||||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Net income (loss) |
$ |
1,381 |
$ |
(20,751) |
$ |
(24,851) |
$ |
(18,254) |
|||||||
Interest expense |
13,683 |
13,175 |
52,724 |
43,538 |
|||||||||||
Income tax expense (benefit) |
(1,464) |
(10,307) |
(18,706) |
(11,683) |
|||||||||||
Depreciation, depletion, and amortization |
52,484 |
39,887 |
194,360 |
154,039 |
|||||||||||
Asset retirement obligation accretion |
118 |
84 |
472 |
336 |
|||||||||||
Exploration |
265 |
96 |
1,093 |
2,380 |
|||||||||||
Acquisition Costs |
6,374 |
— |
6,374 |
— |
|||||||||||
Impairments |
579 |
30,031 |
4,901 |
34,269 |
|||||||||||
Loss (gain) on derivative instruments |
17,538 |
(3,439) |
23,760 |
(20,906) |
|||||||||||
Net Settled Derivative Instruments |
(2,398) |
23,122 |
(1,732) |
92,118 |
|||||||||||
Stock-based compensation, net |
3,215 |
2,409 |
13,764 |
9,384 |
|||||||||||
Other income, net |
(1,246) |
(242) |
(1,833) |
(469) |
|||||||||||
Loss (gain) on sale of assets |
— |
302 |
— |
306 |
|||||||||||
Adjusted EBITDAX |
$ |
90,529 |
$ |
74,367 |
$ |
250,326 |
$ |
285,058 |
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) | |||||||||||||||
(In thousands) | |||||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||||
2016 |
2015 |
2016 |
2015 | ||||||||||||
Net income (loss) |
$ |
1,381 |
$ |
(20,751) |
$ |
(24,851) |
$ |
(18,254) |
|||||||
Acquisition Costs |
6,374 |
— |
6,374 |
— |
|||||||||||
Impairments |
579 |
30,031 |
4,901 |
34,269 |
|||||||||||
Loss (gain) on derivative instruments |
17,538 |
(3,439) |
23,760 |
(20,906) |
|||||||||||
Net Settled Derivative Instruments |
(2,398) |
23,122 |
(1,732) |
92,118 |
|||||||||||
Stock-based compensation - non-recurring |
— |
— |
682 |
— |
|||||||||||
Other income, net |
(1,246) |
(242) |
(1,833) |
(469) |
|||||||||||
Loss (gain) on sale of assets |
— |
302 |
— |
306 |
|||||||||||
Income tax benefit (expense) for above items |
(8,833) |
(16,949) |
(14,659) |
(38,434) |
|||||||||||
Adjusted Net Income (Loss) |
$ |
13,395 |
$ |
12,074 |
$ |
(7,358) |
$ |
48,630 |
SOURCE RSP Permian, Inc.
DALLAS, Feb. 27, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or "Company) (NYSE: RSPP) today announced that its stockholders approved the issuance of approximately 16 million shares of RSP common stock as partial consideration for RSP's acquisition of Silver Hill E&P II, LLC ("SHEP II"). As previously announced, affiliates of SHEP II will also receive approximately $646 million upon the closing of the SHEP II transactions. At the Company's special stockholder meeting held on February 24, 2017, approximately 83.5% of the outstanding shares of RSP common stock were voted and of those who voted, approximately 99.9% voted in favor of the issuance of RSP common stock to acquire SHEP II.
With receipt of the stockholder's approval of the issuance of RSP common stock, the SHEP II transactions are expected to close on March 1, 2017.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of RSP's acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on the Company. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that management anticipates.
The Company's forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from the Company's historical experience and present expectations or projections. Furthermore, we may not be able to close the SHEP II transactions and we may not be able to recognize the expected benefits from the SHEP II transactions (including our expectations for production growth). Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Report on Form 10-K and any subsequent Quarterly Report on Form 10-Q, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov.
Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements and there can be no assurances that the actual results or developments anticipated by us will be realized, or even if realized, that they will have the expected consequences to or effects on us, our business or operations. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.
SOURCE RSP Permian, Inc.
DALLAS, Feb. 1, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced that it will release its fourth quarter and full-year 2016 financial and operating results after the New York Stock Exchange closes on Monday, February 27, 2017. In connection with the release, RSP will host a conference call and webcast for investors on Tuesday, February 28, 2017 at 1:00 pm. Central Time (2:00 p.m. Eastern Time) to discuss the Company's results. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer, Scott McNeill, Chief Financial Officer and Alyssa Stephens, Director of Investor Relations.
The call can be accessed live over the telephone by dialing (877) 705-6003 or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13654848. The replay will be available until March 14, 2017.
Interested parties may also listen to a simultaneous internet webcast of the conference call by logging onto RSP Permian's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available for approximately 30 days following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
SOURCE RSP Permian, Inc.
DALLAS, Jan. 27, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) announced that it has established a record date of January 19, 2017 and a meeting date of February 24, 2017 for a special meeting of its stockholders to be held at 8:00 a.m., local time, at 3141 Hood Street, Suite 700, Dallas, Texas 75219. At the special meeting, RSP stockholders will vote on a proposal to approve the issuance of 16,019,638 shares of RSP common stock to Silver Hill Energy Partners II, LLC (the "SHEP II Seller"), as partial consideration for RSP's acquisition of Silver Hill E&P II, LLC ("SHEP II"), pursuant to and subject to adjustments provided in the Membership Interest Purchase and Sale Agreement dated as of October 13, 2016, by and among the Company, RSP Permian, L.L.C., a wholly owned subsidiary of the Company, the SHEP II Seller and SHEP II.
RSP also announced that it has filed a definitive proxy statement with the Securities and Exchange Commission (the "SEC") on January 26, 2017 for the special meeting. Except for the RSP shares held by Silver Hill Energy Partners Holdings, LLC, holders of record of RSP shares as of the close of business on January 19, 2017 will be entitled to receive notice of the special meeting and to vote at the special meeting. RSP commenced mailing the definitive proxy statement and other related proxy materials on January 26, 2017 to RSP stockholders.
Subject to satisfaction of the closing conditions, the parties currently expect to close the transaction on March 1, 2017. Upon closing of the transaction, SHEP II will become an indirect wholly owned subsidiary of RSP.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of RSP's acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Report on Form 10-K for 2015, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
SOURCE RSP Permian, Inc.
DALLAS, Dec. 20, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced it has entered into an amended and restated credit agreement with respect to the senior secured revolving credit facility (the "Facility") of RSP Permian, L.L.C. ("RSP LLC"). The amended and restated credit agreement extends the maturity date of the Facility until December 19, 2021, increases the borrowing base under the Facility to $950 million and increases the maximum commitments of the lenders from $1.0 billion to $2.5 billion. The $950 million borrowing base only reflects the reserve growth from the Company's Midland Basin assets and the recently closed first-half of the Silver Hill acquisition. In addition, the amended and restated credit agreement provides RSP LLC the ability, subject to certain conditions, to elect the amount of the aggregate commitments under the Facility up to the amount of the borrowing base then in effect. RSP LLC has initially elected an aggregate commitment amount of $900 million. The bank syndicate, co-arranged by JPMorgan Chase Bank, N.A. and Comerica Bank, was expanded from 11 participating banks to 21 participating banks.
Changes in key financial covenants include:
Steve Gray, Chief Executive Officer of RSP, commented, "We are pleased to announce the successful closing of our amended and restated credit facility, which resulted in a substantial increase to our borrowing base. We appreciate the strong support from both our longstanding and new commercial banking relationships. This expanded facility will increase our financial flexibility and support our plan to accelerate our pace of development in 2017."
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on the Company. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that management anticipates.
SOURCE RSP Permian, Inc.
DALLAS, Dec. 12, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) announced today the pricing of its private placement to eligible purchasers under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the "Securities Act"), of $450 million aggregate principal amount of 5.25% senior unsecured notes due 2025 (the "Notes") at par. This represents an increase of $100 million over the aggregate principal amount previously announced. The private placement is expected to close on December 27, 2016, subject to market and other customary closing conditions.
The Company intends to use the net proceeds of approximately $443.9 million to partially fund its proposed acquisition of Silver Hill E&P II, LLC ("SHEP II"), pursuant to the Membership Interest Purchase and Sale Agreement dated October 13, 2016, by and among the Company, RSP Permian, L.L.C., a wholly owned subsidiary of the Company, SHEP II and Silver Hill Energy Partners II, LLC, the parent entity of SHEP II. The Notes will be guaranteed on a senior unsecured basis by two of the Company's existing subsidiaries, RSP Permian, L.L.C. and Silver Hill Energy Partners, LLC, and certain future subsidiaries.
The securities to be sold have not been registered under the Securities Act or any state securities laws, and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Notes are expected to be eligible for trading by qualified institutional buyers in the United States under Rule 144A under the Securities Act and outside the United States pursuant to Regulation S under the Securities Act.
This press release is being issued pursuant to Rule 135c under the Securities Act and is neither an offer to sell nor a solicitation of an offer to buy the Notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the Notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of RSP's acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Report on Form 10-K for 2015, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
SOURCE RSP Permian, Inc.
DALLAS, Dec. 12, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) announced today that, subject to market conditions, it intends to offer $350 million aggregate principal amount of senior unsecured notes due 2025 in a private placement to eligible purchasers under Rule 144A and Regulation S of the Securities Act of 1933, as amended (the "Securities Act").
The Company intends to use the net proceeds of the offering to partially fund its proposed acquisition of Silver Hill E&P II, LLC ("SHEP II"), pursuant to the Membership Interest Purchase and Sale Agreement dated October 13, 2016, by and among the Company, RSP Permian, L.L.C., a wholly owned subsidiary of the Company, SHEP II and Silver Hill Energy Partners II, LLC, the parent entity of SHEP II.
The securities to be offered have not been registered under the Securities Act or any state securities laws and unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The notes are expected to be eligible for trading by qualified institutional buyers in the United States under Rule 144A under the Securities Act and outside the United States pursuant to Regulation S under the Securities Act.
This press release is being issued pursuant to Rule 135c under the Securities Act, and is neither an offer to sell nor a solicitation of an offer to buy the notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of RSP's acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Report on Form 10-K for 2015, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
SOURCE RSP Permian, Inc.
DALLAS, Nov. 29, 2016 /PRNewswire/ -- RSP Permian, Inc. (RSP or the Company) (NYSE: RSPP) today announced that Steve Gray, Chief Executive Officer and co-founder of RSP, has received the EY (Ernst & Young) Entrepreneur Of The Year® 2016 National Award in the Energy, Cleantech and Natural Resources category.
Mr. Gray commented, "I am truly humbled to receive this award, and do so on behalf of my fellow founding partners and the entire RSP team. This achievement reflects our collective vision and hard work. Together we've grown a $180 million initial investment from Natural Gas Partners to a NYSE-listed, $5+ billion market cap company. We've developed a culture that values innovation and continual improvement, and we'll continue to work to deliver value to our shareholders and community as we develop our world-class assets in the Permian Basin."
Mr. Gray was selected as one of eleven category winners by a panel of independent judges from more than 1,700 applicants nationwide, and the award was presented at EY's Strategic Growth Forum in Palm Springs, California on November 19th.
Now in its 30th year, the award honors entrepreneurs whose ingenuity, spirit of innovation and discipline have propelled their companies' success, invigorated their industries and benefited their communities. The program has honored the inspirational leadership of entrepreneurs such as Howard Schultz of Starbucks Coffee Company, Robert Unanue of Goya Foods and Mindy Grossman of HSN.
To view the full list of this year's winners, please visit:
http://www.ey.com/us/en/about-us/entrepreneurship/entrepreneur-of-the-year.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of RSP's acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
About EY Entrepreneur Of The Year®
EY Entrepreneur Of The Year is the world's most prestigious business award for entrepreneurs. The program makes a difference through the way it encourages entrepreneurial activity among those with potential and recognizes the contribution of people who inspire others with their vision, leadership and achievement. As the first and only truly global award of its kind, Entrepreneur Of The Year celebrates those who are building and leading successful, growing and dynamic businesses, recognizing them through regional, national and global awards programs in more than 145 cities in more than 60 countries.
About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
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SOURCE RSP Permian, Inc.
DALLAS, Nov. 28, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) has completed the first part of its previously announced acquisitions of Silver Hill Energy Partners, LLC ("SHEP I") and Silver Hill E&P II, LLC ("SHEP II," and together with SHEP I, "Silver Hill"). The Company closed the acquisition of SHEP I for an aggregate purchase price of approximately $604 million of cash and 15 million shares of RSP common stock, subject to certain customary post-closing adjustments. RSP anticipates closing the acquisition of SHEP II in the first quarter of 2017 for a purchase price of approximately $646 million of cash and approximately 16 million shares of RSP common stock, following a shareholder vote to approve the issuance of shares. SHEP I and SHEP II collectively own approximately 68,000 gross, 41,000 net acres in northeast Loving and northwest Winkler Counties, Texas, and at the time of the acquisition announcement had approximately 15 MBoe/d of net production (69% oil, 86% liquids) from 58 wells (49 horizontals) producing from seven horizontal zones.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland and Delaware Basins, sub-basins of the Permian Basin. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Important Information for Investors and Stockholders
This communication does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities or a solicitation of any vote or approval.
In connection with the SHEP II transaction, the Company intends to file with the Securities and Exchange Commission (the "SEC") a proxy statement. The Company also plans to file other relevant documents with the SEC regarding the SHEP II transaction. Any definitive proxy statement for the Company (if and when available) will be mailed to the Company's stockholders.
INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT(S) AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE SHEP II TRANSACTION.
Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents containing important information about the Company, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by the Company will be available free of charge on the Company's internet website at http://www.rsppermian.com or by contacting the Company's Investor Relations Department by email at IR@rspermian.com or by phone at 214-252-2790.
The Company and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the SHEP II transaction. Information about the directors and executive officers of the Company is set forth in the Company's proxy statement for its 2016 annual meeting of stockholders, which was filed with the SEC on April 29, 2016. This document can be obtained free of charge from the sources indicated above.
Other information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC when such materials become available. Investors should read the proxy statement carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of this document from the Company using the sources indicated above.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on the Company. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that management anticipates.
The Company's forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from the Company's historical experience and present expectations or projections. Furthermore, we may not be able to close the SHEP II transaction in a timely manner or at all, the ultimate funding sources for the SHEP II transaction may differ from our current expectations, we may not be able to recognize the expected benefits from the SHEP transactions (including our expectations for production growth) and our capital program may exceed budgeted amounts. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Report on Form 10-K and any subsequent Quarterly Report on Form 10-Q, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov.
Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements and there can be no assurances that the actual results or developments anticipated by us will be realized, or even if realized, that they will have the expected consequences to or effects on us, our business or operations. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.
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SOURCE RSP Permian, Inc.
DALLAS, Nov. 1, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today reported financial and operating results for the quarter ended September 30, 2016. In addition, the Company filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission (the "SEC") and posted a presentation that supplements the information in this release to its website at www.rsppermian.com.
Third Quarter 2016 Highlights
Recent Announcements
Steve Gray, Chief Executive Officer, commented, "We're pleased to report another strong quarter highlighted by our sequential double digit production growth and record low cash operating costs per barrel. Our recent horizontal wells appear to confirm the effectiveness of our enhanced completion designs. The excellent well results across our asset base along with our current record production led us to raise our annual production guidance for the second consecutive quarter. As a result of the increased rate of return on our capital, we began accelerating our drilling and completion pace during the third quarter with the addition of a third operated horizontal rig. We expect to add a fourth rig in early 2017." Mr. Gray added, "We are on track to close the first stage of our recently announced acquisition of Silver Hill later this month. We have been working closely with the Silver Hill team to ensure a smooth transition and to make preparations for enhanced infrastructure to accommodate a more robust horizontal development program on our newly acquired Delaware position."
Quarterly Operational Results | |||
Three Months Ended September 30, | |||
2016 |
2015 | ||
Production data: |
|||
Oil (MBbls) |
1,989 |
1,667 | |
Natural gas (MMcf) |
1,720 |
1,448 | |
NGLs (MBbls) |
462 |
300 | |
Total (MBoe) |
2,738 |
2,208 | |
Average net daily production (Boe/d) |
29,761 |
24,000 | |
Average prices before effects of hedges (1) (2): |
|||
Oil (per Bbl) |
$42.60 |
$44.84 | |
Natural gas (per Mcf) |
2.27 |
2.27 | |
NGLs (per Bbl) |
10.82 |
8.72 | |
Total (per Boe) |
$34.19 |
$36.52 | |
Average realized prices after effects of hedges (1) (2): |
|||
Oil (per Bbl) |
$41.46 |
$57.36 | |
Natural gas (per Mcf) |
2.27 |
2.27 | |
NGLs (per Bbl) |
10.82 |
8.72 | |
Total (per Boe) |
$33.37 |
$45.98 | |
Average costs (per Boe): |
|||
Lease operating expenses (excluding gathering and transportation) |
$4.67 |
$6.08 | |
Gathering and transportation |
0.51 |
0.38 | |
Production and ad valorem taxes |
2.14 |
2.12 | |
Depreciation, depletion and amortization |
18.27 |
19.49 | |
General and administrative - recurring cash component |
2.04 |
1.92 | |
General and administrative - recurring stock comp (3) |
1.20 |
0.95 | |
General and administrative - non-recurring stock comp (4) |
— |
0.15 |
(1) |
Average prices shown in the table reflect prices both before and after the effects of our cash payments/receipts on our commodity derivative transactions. Our calculation of such effects includes realized gains or losses on cash settlements for commodity derivative transactions and an adjustment to reflect premiums incurred previously or upon settlement that are attributable to instruments settled in the period, if applicable. |
(2) |
Average prices for oil are net of transportation costs. Average prices for natural gas do not include transportation costs; instead, transportation costs related to our gas production and sales are included in gathering and transportation which is included in lease operating expenses in our consolidated statements of operations. No transportation costs are associated with NGL production and sales. |
(3) |
Represents compensation expense related to restricted stock awards and performance share awards granted as part of the Company's ongoing compensation and retention programs. |
(4) |
Non-recurring stock comp in 2015 includes compensation expense related to the successful completion of the Company's initial public offering and related expenses associated with one-time restricted stock awards. |
Production volumes for the quarter ended September 30, 2016 averaged 29,761 Boe/d or a total of 2,738 MBoe, an increase of 24% over prior year's third quarter of 24,000 Boe/d. Production for the third quarter of 2016 was comprised of 73% crude oil, 10% natural gas and 17% NGLs. RSP's average realized commodity price per barrel of oil equivalent for the third quarter of 2016, before the effects of hedges, was $34.19. RSP's average realized oil price for the third quarter of 2016, before the effects of hedges, was $42.60 per barrel, a negative $2.34 differential compared to average NYMEX WTI pricing of $44.94 per barrel for the same period, or 95% of NYMEX WTI pricing. RSP's average realized natural gas price for the third quarter of 2016, before the effects of hedges, was $2.27 per Mcf, a negative $0.54 differential compared to average NYMEX Henry Hub pricing of $2.81 per MMBtu for the same period, or 81% of NYMEX Henry Hub pricing. RSP's average realized NGL price for the second quarter of 2016, before the effects of hedges, was $10.82 per Bbl, or 24% of NYMEX WTI pricing for the same time period. Per unit cash operating expenses excluding interest expense but including lease operating expense, gathering and transportation expense, production and ad valorem taxes and recurring cash general and administrative expenses were $9.36 per Boe, an 11% decrease from prior year's comparable quarter.
Operational Update
The Company operated three horizontal drilling rigs during the third quarter and one full-time completion crew. RSP drilled 10 operated horizontal wells and completed 17 operated horizontal wells (11 Lower Spraberry, three Wolfcamp A and three Wolfcamp B). The Company began the quarter with 19 operated horizontal drilled but uncompleted wells ("DUCs") and exited the quarter with a total of 12 operated horizontal DUCs. On a non-operated basis, the Company began the quarter with 24 non-operated horizontal DUCs and exited the quarter with a total of 18 non-operated horizontal DUCs.
3Q16 Wells | |||||||||
Drilled |
Completed |
Drilled but | |||||||
Operated Wells |
|||||||||
Horizontal |
10 |
17 |
12 |
||||||
Vertical |
3 |
1 |
2 |
||||||
Total Operated |
13 |
18 |
14 |
||||||
Non-Operated Wells |
|||||||||
Horizontal |
7 |
13 |
18 |
||||||
Vertical |
— |
— |
— |
||||||
Total Non-Operated |
7 |
13 |
18 |
||||||
Total Wells |
|||||||||
Horizontal |
17 |
30 |
30 |
||||||
Vertical |
3 |
1 |
2 |
||||||
Total Wells |
20 |
31 |
32 |
Quarterly Financial Results | ||||||||||
Three Months Ended |
||||||||||
September 30, |
June 30, |
|||||||||
2016 |
2015 |
2016 |
||||||||
(In thousands, except for per share data) | ||||||||||
Total Revenues |
$ |
93,621 |
$ |
80,644 |
$ |
81,485 |
||||
Net Cash from Derivative Instruments |
(2,258) |
20,879 |
974 |
|||||||
Adjusted Total Revenues |
91,363 |
101,523 |
82,459 |
|||||||
Net Income (Loss) |
$ |
985 |
$ |
8,974 |
$ |
(9,801) |
||||
Net Income (Loss) per Common Share - Diluted |
0.01 |
0.10 |
(0.10) |
|||||||
Adjusted Net Income (Loss) (1) |
(764) |
13,473 |
(3,758) |
|||||||
Adjusted Net Income (Loss) per Common Share - Diluted |
(0.01) |
0.15 |
(0.04) |
|||||||
Adjusted EBITDAX (1) |
$ |
65,732 |
$ |
78,329 |
$ |
58,453 |
(1) |
Adjusted EBITDAX and Adjusted Net Income are non-GAAP financial measures. For a definition of Adjusted EBITDAX and Adjusted Net Income and a reconciliation of Adjusted EBITDAX and Adjusted Net Income to Net Income, see "Use of Non-GAAP financial measures" and our quarterly statements of operations at the end of this release. |
For the quarter ended September 30, 2016, total revenues, excluding the revenue impact from realized derivative instruments, were $93.6 million, a 16% increase over the prior year quarter of $80.6 million. Adjusted total revenues, including the net cash from derivative instruments, were $91.4 million, a 10% decrease from the prior year quarter of $101.5 million. Net income for the third quarter of 2016 was $1.0 million, or $0.01 per diluted share, while net income for the prior year quarter was $9.0 million, or $0.10 per diluted share. Adjusted Net Loss for the third quarter of 2016 was ($0.8) million, or ($0.01) per diluted share, compared with Adjusted Net Income for the prior year quarter of $13.5 million or $0.15 per diluted share. Adjusted EBITDAX was $65.7 million, a 16% decrease from the prior year quarter of $78.3 million.
Capital Expenditures
RSP's development capital expenditures, which includes our investment in drilling and completing wells, infrastructure, capitalized workovers, and other, but excludes the cost of acquisitions, for the quarter ended September 30, 2016 totaled $73.2 million ($65.3 million of drilling and completion and $7.9 million of infrastructure and other). Of the development capital, approximately $8.9 million, or 12%, was spent on non-operated properties. Additionally, the Company closed $18.9 million of acquisitions of oil and gas properties in the quarter.
Liquidity
As of September 30, 2016, the Company had $35 million in borrowings outstanding on its revolving credit facility, which has a $600 million borrowing base, and had $22 million of cash on hand, for total liquidity available of $587 million after deducting outstanding letters of credit.
Hedging
RSP recently added costless collars and additional deferred premium puts and put spreads that cover oil production through the end of 2017, along with costless collars covering natural gas production for 2017.
Crude Oil Hedges | ||||||||||
(Bbl, $/Bbl) |
Q4 2016 |
Q1 2017 |
Q2 2017 |
Q3 2017 |
Q4 2017 | |||||
Three-Way Collars(1) |
120,000 |
675,000 |
||||||||
Ceiling |
$74.41 |
$54.25 |
||||||||
Floor |
$55.00 |
$45.00 |
||||||||
Short Put |
$45.00 |
$35.00 |
||||||||
Costless Collars(1) |
450,000 |
1,137,500 |
1,150,000 |
1,150,000 | ||||||
Ceiling |
$59.75 |
$60.05 |
$60.05 |
$60.05 | ||||||
Floor |
$45.00 |
$45.00 |
$45.00 |
$45.00 | ||||||
Deferred Premium Puts(1) |
1,125,000 |
910,000 |
920,000 |
920,000 | ||||||
Floor |
$45.00 |
$48.50 |
$48.50 |
$48.50 | ||||||
Deferred Premium(2) |
($2.74) |
($4.00) |
($4.00) |
($4.00) | ||||||
Deferred Premium Put Spreads(1) |
675,000 |
|||||||||
Floor |
$45.00 |
|||||||||
Short Put |
$35.00 |
|||||||||
Deferred Premium(2) |
($2.32) |
|||||||||
Total Hedge Volumes |
1,245,000 |
1,800,000 |
2,047,500 |
2,070,000 |
2,070,000 | |||||
Weighted Average Floor(3) |
$43.49 |
$44.13 |
$44.78 |
$44.78 |
$44.78 |
(1) |
The crude oil derivative contracts are settled based on the arithmetic average of the closing settlement price for the front month contract NYMEX price of West Texas Intermediate Light Sweet Crude. |
(2) |
The deferred premium is not paid until expiration date, aligning cash inflows and outflows with the settlement of the derivative contract. |
(3) |
Weighted average floor assumes the long put in three way collars and put spreads and reflects the impact of premiums paid. |
Natural Gas Hedges | ||||||||
(MMBtu, $/MMBtu) |
Q1 2017 |
Q2 2017 |
Q3 2017 |
Q4 2017 | ||||
Costless Collars(1) |
900,000 |
910,000 |
920,000 |
920,000 | ||||
Ceiling |
$3.64 |
$3.64 |
$3.64 |
$3.64 | ||||
Floor |
$3.00 |
$3.00 |
$3.00 |
$3.00 |
(1) |
The natural gas derivative contracts are settled based on the last trading day's closing price for the front month contract relevant to each period. |
2016 Annual Guidance Update | ||||||
Nine |
Previous |
Updated | ||||
Actual |
2016 Guidance |
2016 Guidance | ||||
Completions |
||||||
Operated Gross Horizontal Completions |
39 |
52 - 56 |
54 - 58 | |||
Operated Gross Vertical Completions |
4 |
5 |
6 | |||
Production |
||||||
Average Daily Production (Boe/d) |
26,931 |
26,500 - 28,500 |
28,500 - 29,500 | |||
% Oil |
74% |
75% - 76% |
73% - 75% | |||
% Natural Gas |
11% |
10% - 11% |
10% - 11% | |||
% NGLs |
15% |
13% - 14% |
14% - 15% | |||
Development Capital Expenditures ($ in MM) |
||||||
Drilling and Completion (D&C) |
$187.4 |
$270 - $290 |
$280 - $290 | |||
Infrastructure, Capitalized Workovers & Other |
$11.3 |
$15 - $25 |
$15 - $25 | |||
Total Development Capital Expenditures |
$198.7 |
$285 - $315 |
$295 - $315 | |||
% Non-Operated |
16% |
10% - 15% |
10% - 15% | |||
Income Statement ($/Boe) |
||||||
Lease operating expenses (including workovers) |
$5.16 |
$5.00 - $6.00 |
$5.00 - $6.00 | |||
Gathering and transportation |
$0.44 |
$0.45 - $0.50 |
$0.45 - $0.50 | |||
Exploration expenses |
$0.11 |
$0.10 - $0.15 |
$0.10 - $0.15 | |||
General and administrative - cash component |
$2.09 |
$2.00 - $2.25 |
$2.00 - $2.25 | |||
General and administrative - recurring stock comp |
$1.34 |
$1.25 - $1.50 |
$1.25 - $1.50 | |||
Depreciation, depletion, and amortization ($/Boe) |
$19.23 |
$19.00 - $21.00 |
$19.00 - $21.00 | |||
Production and ad valorem taxes (% of oil and gas revenues) |
6.5% |
6.0% - 7.0% |
6.0% - 7.0% |
Third Quarter 2016 Earnings Release and Conference Call
RSP will host a conference call for investors at 1:00 PM Central Time on Wednesday, November 2, 2016, to discuss third quarter 2016 results. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer and Scott McNeill, Chief Financial Officer.
The call may be accessed live over the telephone by dialing (877) 705-6003, or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13648569. The replay will be available until November 16, 2016. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto RSP's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Dawson and Ector. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
Statements of Operations | |||||||||||||
(In thousands, except per share data) | |||||||||||||
Three Months Ended September 30, |
Three Months Ended | ||||||||||||
2016 |
2015 |
2016 |
|||||||||||
Revenues: |
|||||||||||||
Oil sales |
$ |
84,722 |
$ |
74,746 |
$ |
74,799 |
|||||||
Natural gas sales |
3,901 |
3,283 |
2,537 |
||||||||||
NGL sales |
4,998 |
2,615 |
4,149 |
||||||||||
Total revenues |
93,621 |
80,644 |
81,485 |
||||||||||
Operating expenses: |
|||||||||||||
Lease operating expenses |
$ |
14,174 |
$ |
14,274 |
$ |
14,094 |
|||||||
Production and ad valorem taxes |
5,872 |
4,674 |
4,960 |
||||||||||
Depreciation, depletion, and amortization |
50,022 |
43,031 |
47,296 |
||||||||||
Asset retirement obligation accretion |
118 |
84 |
123 |
||||||||||
Impairments |
971 |
4,238 |
3,177 |
||||||||||
Exploration |
359 |
218 |
405 |
||||||||||
General and administrative expenses |
8,857 |
6,678 |
9,135 |
||||||||||
Total operating expenses |
80,373 |
73,197 |
79,190 |
||||||||||
Loss on sale of assets |
$ |
— |
$ |
4 |
$ |
— |
|||||||
Operating income (loss) |
$ |
13,248 |
$ |
7,443 |
$ |
2,295 |
|||||||
Other income (expense) |
|||||||||||||
Other income, net |
$ |
310 |
$ |
66 |
$ |
104 |
|||||||
Net gain (loss) on derivative instruments |
(2,934) |
18,098 |
(3,684) |
||||||||||
Interest expense |
(13,146) |
(11,680) |
(12,954) |
||||||||||
Total other income (expense) |
(15,770) |
6,484 |
(16,534) |
||||||||||
Loss before income taxes |
(2,522) |
13,927 |
(14,239) |
||||||||||
Income tax benefit (expense) |
3,507 |
(4,953) |
4,438 |
||||||||||
Net income (loss) |
$ |
985 |
$ |
8,974 |
$ |
(9,801) |
|||||||
Net income (loss) per common share - Basic |
$ |
0.01 |
$ |
0.10 |
$ |
(0.10) |
|||||||
Net income (loss) per common share - Diluted |
$ |
0.01 |
$ |
0.10 |
$ |
(0.10) |
|||||||
Weighted Average Common Shares Outstanding: |
|||||||||||||
Basic |
100,234 |
87,245 |
100,189 |
||||||||||
Diluted |
100,234 |
87,245 |
100,189 |
Use of Non-GAAP Financial Measures
We define Adjusted EBITDAX as oil and gas revenues including net cash receipts (payments) on settled derivative instruments and premiums paid on put options that settled during the period, less lease operating expenses, production and ad valorem taxes, and general and administrative expenses excluding stock based compensation. Adjusted Net Income deducts from Adjusted EBITDAX depreciation, depletion, and amortization, accretion on asset retirement obligations, exploration expenses, interest expense, stock-based compensation and adjusted income tax expense.
Management believes Adjusted EBITDAX and Adjusted Net Income are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDAX and Adjusted Net Income because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX and Adjusted Net Income should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX and Adjusted Net Income are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our computations of Adjusted EBITDAX and Adjusted Net Income may not be comparable to other similarly titled measures of other companies.
The following tables include a reconciliation of the non-GAAP financial measures of Adjusted EBITDAX and Adjusted Net Income to the GAAP financial measure of net income.
Reconciliation of Net Income (Loss) to Adjusted EBITDAX | |||||||||||||
(In thousands) | |||||||||||||
Three Months Ended September 30, |
Three Months Ended | ||||||||||||
2016 |
2015 |
2016 |
|||||||||||
Net income (loss) |
$ |
985 |
$ |
8,974 |
$ |
(9,801) |
|||||||
Interest expense |
13,146 |
11,680 |
12,954 |
||||||||||
Income tax expense (benefit) |
(3,507) |
4,953 |
(4,438) |
||||||||||
Depreciation, depletion, and amortization |
50,022 |
43,031 |
47,296 |
||||||||||
Asset retirement obligation accretion |
118 |
84 |
123 |
||||||||||
Exploration |
359 |
218 |
405 |
||||||||||
Impairments |
971 |
4,238 |
3,177 |
||||||||||
Loss (gain) on derivative instruments |
2,934 |
(18,098) |
3,684 |
||||||||||
Net cash payments on settled derivative instruments |
(2,258) |
20,879 |
974 |
||||||||||
Stock-based compensation, net |
3,272 |
2,432 |
4,183 |
||||||||||
Other income, net |
(310) |
(66) |
(104) |
||||||||||
Loss (gain) on sale of assets |
— |
4 |
— |
||||||||||
Adjusted EBITDAX |
$ |
65,732 |
$ |
78,329 |
$ |
58,453 |
|||||||
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) | |||||||||||||
(In thousands) | |||||||||||||
Three Months Ended September 30, |
Three Months Ended | ||||||||||||
2016 |
2015 |
2016 |
|||||||||||
Net income (loss) |
$ |
985 |
$ |
8,974 |
$ |
(9,801) |
|||||||
Impairments |
971 |
4,238 |
3,177 |
||||||||||
Loss (gain) on derivative instruments |
2,934 |
(18,098) |
3,684 |
||||||||||
Net cash payments on settled derivative instruments |
(2,258) |
20,879 |
974 |
||||||||||
Stock-based compensation - non-recurring |
— |
— |
682 |
||||||||||
Other income, net |
(310) |
(66) |
(104) |
||||||||||
Loss (gain) on sale of assets |
— |
4 |
— |
||||||||||
Income tax expense (benefit) for above items |
(3,086) |
(2,458) |
(2,370) |
||||||||||
Adjusted Net Income (Loss) |
$ |
(764) |
$ |
13,473 |
$ |
(3,758) |
|||||||
Summary Balance Sheet | ||||||||||
(In thousands) | ||||||||||
September 30, 2016 |
December 31, 2015 |
|||||||||
Cash and cash equivalents |
$ |
22,376 |
$ |
142,741 |
||||||
Other current assets |
62,384 |
44,799 |
||||||||
Total current assets |
84,760 |
187,540 |
||||||||
Property, plant and equipment, net |
2,877,970 |
2,758,630 |
||||||||
Other long-term assets |
12,090 |
21,263 |
||||||||
Total assets |
$ |
2,974,820 |
$ |
2,967,433 |
||||||
Current liabilities |
72,455 |
77,402 |
||||||||
Long-term debt |
722,724 |
686,512 |
||||||||
Other long-term liabilities |
339,455 |
344,935 |
||||||||
Total stockholders' equity |
1,840,186 |
1,858,584 |
||||||||
Total liabilities and stockholders' equity |
$ |
2,974,820 |
$ |
2,967,433 |
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SOURCE RSP Permian, Inc.
DALLAS, Oct. 27, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced that it has changed the time of its conference call on November 2, 2016 to discuss the Company's third quarter 2016 financial and operational results to 1:00 pm Central Time (2:00 p.m. Eastern Time). Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer, and Scott McNeill, Chief Financial Officer.
The call can be accessed live over the telephone by dialing (877) 705-6003 or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13648569. The replay will be available until November 16, 2016.
Interested parties may also listen to a simultaneous internet webcast of the conference call by logging onto RSP Permian's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available for approximately 30 days following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Ector and Dawson. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP". For more information, visit www.rsppermian.com.
Logo - http://photos.prnewswire.com/prnh/20160202/328754LOGO
SOURCE RSP Permian, Inc.
DALLAS, Oct. 21, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced that it will release its third quarter 2016 financial and operating results after the New York Stock Exchange closes on Tuesday, November 1, 2016. In connection with the release, RSP will host a conference call and webcast for investors on Wednesday, November 2, 2016 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) to discuss the Company's results for the quarter. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer and Scott McNeill, Chief Financial Officer.
The call can be accessed live over the telephone by dialing (877) 705-6003 or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13648569. The replay will be available until November 16, 2016.
Interested parties may also listen to a simultaneous internet webcast of the conference call by logging onto RSP Permian's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available for approximately 30 days following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Ector and Dawson. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP". For more information, visit www.rsppermian.com.
Logo - http://photos.prnewswire.com/prnh/20160202/328754LOGO
SOURCE RSP Permian, Inc.
DALLAS, Oct. 13, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced that it has priced an underwritten public offering of 22,000,000 shares of its common stock at $39.75 per share. The offering was upsized to 22,000,000 shares of common stock from the original offering size of 20,000,000 shares of common stock. The Company has granted the underwriters a 30-day option to purchase up to an additional 3,300,000 shares of the Company's common stock. Total gross proceeds (before the underwriters' discounts and commissions and estimated offering expenses) will be approximately $874.5 million to the Company. The offering is expected to close on October 18, 2016, subject to customary closing conditions. The Company intends to use the net proceeds from this offering to fund a portion of the previously announced acquisition of Silver Hill Energy Partners, LLC and Silver Hill E&P II, LLC (the "Acquisition"). The offering is not conditioned on the consummation of the Acquisition, and if the Acquisition does not occur, the net proceeds will be used for general corporate purposes, which may include funding a portion of the Company's 2017 capital budget.
Barclays Capital Inc. and RBC Capital Markets, LLC are acting as lead joint book-running managers for the offering.
The offering is made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (the "SEC") on March 17, 2015. The offering will be made only by means of a prospectus supplement and the accompanying prospectus, copies of which may be obtained by sending a request to:
Barclays Capital Inc.
c/o Broadridge Financial Solutions
1155 Long Island Ave.
Edgewood, New York, 11717
Telephone: 1 (888) 603-5847
Email: Barclaysprospectus@broadridge.com
RBC Capital Markets, LLC
Attn: Equity Syndicate
200 Vesey Street, 8th Floor
New York, New York 10281-8098
Telephone: 877-822-4089
Email: equityprospectus@rbccm.com
This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of RSP's acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Dawson and Ector. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP."
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on RSP's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Report on Form 10-K, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
Logo - http://photos.prnewswire.com/prnh/20160202/328754LOGO
SOURCE RSP Permian, Inc.
DALLAS, Oct. 13, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced the commencement of an underwritten public offering of 20,000,000 shares of its common stock. The Company has granted the underwriters a 30-day option to purchase up to an additional 3,000,000 shares of the Company's common stock. The Company intends to use the net proceeds from this offering to fund a portion of the previously announced acquisition of Silver Hill Energy Partners, LLC and Silver Hill E&P II, LLC (the "Acquisition"). The offering is not conditioned on the consummation of the Acquisition, and if the Acquisition does not occur, the net proceeds will be used for general corporate purposes, which may include funding a portion of the Company's 2017 capital budget.
Barclays Capital Inc. and RBC Capital Markets, LLC are acting as lead joint book-running managers for the offering.
The offering is made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (the "SEC") on March 17, 2015. The offering may be made only by means of a prospectus supplement and the accompanying prospectus, copies of which may be obtained by sending a request to:
Barclays Capital Inc.
c/o Broadridge Financial Solutions
1155 Long Island Ave.
Edgewood, New York, 11717
Telephone: 1 (888) 603-5847
Email: Barclaysprospectus@broadridge.com
RBC Capital Markets, LLC
Attn: Equity Syndicate
200 Vesey Street, 8th Floor
New York, New York 10281-8098
Telephone: 877-822-4089
Email: equityprospectus@rbccm.com
This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of RSP's acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Dawson, and Ector. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP."
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on RSP's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Report on Form 10-K, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
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SOURCE RSP Permian, Inc.
DALLAS, Oct. 13, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced it has entered into definitive agreements to acquire Silver Hill Energy Partners, LLC ("SHEP I") and Silver Hill E&P II, LLC ("SHEP II," and together with SHEP I, "Silver Hill") for $1.25 billion of cash and 31.0 million shares of RSP common stock ("RSP Shares") in aggregate, implying a total purchase price of approximately $2.4 billion (based on the 20-day volume weighted average price of RSP Shares as of October 12, 2016).
Silver Hill is comprised of two privately held entities controlled by affiliates of Kayne Anderson Capital Advisors, LP ("Kayne Anderson") and Ridgemont Equity Partners ("Ridgemont") that collectively own ~68,000 gross / ~41,000 net acres in northeast Loving and northwest Winkler Counties, Texas with ~15 MBoe/d of current net production from 58 producing wells (49 horizontals) and ~3,200 gross / ~1,950 net total undeveloped locations.
While both transactions will have an effective date of November 1, 2016, the two transactions will close separately. SHEP I is expected to close in the fourth quarter of 2016, with Silver Hill receiving approximately $604 million of cash and 15.0 million RSP Shares. SHEP II is expected to close in the first quarter of 2017, with Silver Hill receiving approximately $646 million of cash and 16.0 million RSP Shares. Both transactions are subject to certain closing conditions, customary purchase price adjustments, and regulatory and third party approvals.
Upon closing of SHEP II, Kayne Anderson, Ridgemont and other Silver Hill shareholders are expected to collectively own approximately 20% of RSP's outstanding shares pro forma for the issuance to Silver Hill and the concurrent equity offering that will fund a portion of the consideration for the acquisition. In addition, RSP expects to add Kyle D. Miller, CEO of Silver Hill, to RSP's Board of Directors upon closing SHEP II.
RSP has provided an operational update including (i) 3Q 2016 production, (ii) an increase to 2016 guidance and (iii) preliminary 2017 operating plans and outlook.
Transaction Highlights
Steve Gray, CEO of RSP, stated, "We are extremely pleased to announce a strategic combination with Silver Hill. This transaction creates a compelling growth platform with the highest quality assets in the core of both the Midland and Delaware Basins that each exhibit strong returns and have substantial combined upside. The Silver Hill team has done an incredible job of demonstrating the vast potential of the asset base with strong results across multiple horizontal zones." Mr. Gray continued, "We have been patient in our M&A efforts to ensure that we pursue accretive opportunities for our shareholders that enhance our already deep inventory of high-return horizontal locations. We believe the assets of Silver Hill are located in the best part of the Delaware Basin and will be a perfect complement to our existing asset base. The returns on Silver Hill's horizontal wells compare favorably with our Midland Basin assets and generally rank in the top quartile of our drilling inventory. We also appreciate the confidence the owners of Silver Hill have in the RSP team, taking a significant portion of their consideration in RSP stock. We look forward to our new relationship with Kayne Anderson, Ridgemont and the other Silver Hill owners."
Kyle D. Miller, CEO of Silver Hill, stated, "Silver Hill has assembled one of the largest and most attractive privately-owned acreage positions in the core of the Delaware Basin. This transaction provides our owners with near-term liquidity and continued upside exposure to these premier assets through our significant equity ownership in RSP. We have long-standing relationships with the RSP management team and recognize the significant value they have created for investors through their technical leadership, efficient operations and adherence to a focused strategy. We believe RSP is the perfect fit for Silver Hill given their excellent track record, their superior assets in the Midland Basin and their experienced management team."
Transaction Financing
The Company intends to finance the cash portions of the SHEP I and SHEP II transactions through potential capital market transactions, which may include equity or debt offerings prior to the closing of each transaction. The Company anticipates that the financing transactions will be leverage neutral or result in lower leverage metrics on a forward-looking and pro forma basis.
3rd Quarter 2016 Production Update
RSP's average daily production rate for the third quarter of 2016 was 29,761 Boe/d (approximately 73% oil), a 24% increase over our average daily production rate for the third quarter of 2015 and a 13% sequential quarterly growth rate over our average daily production rate for the second quarter of 2016. Average realized prices (excluding hedges) during Q3 2016 were $42.60 per barrel of oil, $2.27 per Mcf of natural gas and $10.82 per barrel of natural gas liquids.
Increased 2016 Guidance
RSP is increasing its annual 2016 production guidance as a result of continued strong well performance from our existing asset base and as a result of the anticipated closing during the fourth quarter of the SHEP I transaction, which is estimated to be closed on or about November 28, 2016. Due to the short time period we expect to own the SHEP I assets during 2016, the acquired production does not meaningfully impact our increased guidance range. Our current net daily production rate is approximately 35.0 MBoe/d and we estimate that our net daily production will average between 28.5 - 29.5 MBoe/d for the full year 2016, or ~5% above the midpoint of our previous guidance range and 16% above the midpoint of our original 2016 guidance range.
Previous |
Updated | |||
2016 Guidance |
2016 Guidance | |||
Completions |
||||
Operated Gross Horizontal Completions |
52 - 56 |
54 - 58 | ||
Operated Gross Vertical Completions |
5 |
6 | ||
Production |
||||
Average Daily Production (Boe/d) |
26,500 - 28,500 |
28,500 - 29,500 | ||
% Oil |
75% - 76% |
73% - 75% | ||
% Natural Gas |
10% - 11% |
10% - 11% | ||
% NGLs |
13% - 14% |
14% - 15% | ||
Development Capital Expenditures ($ in MM) |
||||
Drilling and Completion (D&C) |
$270 - $290 |
$280 - $290 | ||
Infrastructure, Capitalized Workovers & Other |
$15 - $25 |
$15 - $25 | ||
Total Development Capital Expenditures |
$285 - $315 |
$295 - $315 | ||
% Non-Operated |
10% - 15% |
10% - 15% | ||
Income Statement ($/Boe) |
||||
Lease operating expenses (including workovers) |
$5.00 - $6.00 |
$5.00 - $6.00 | ||
Gathering and transportation |
$0.45 - $0.50 |
$0.45 - $0.50 | ||
Exploration expenses |
$0.10 - $0.15 |
$0.10 - $0.15 | ||
General and administrative - cash component |
$2.00 - $2.25 |
$2.00 - $2.25 | ||
General and administrative - recurring stock comp |
$1.25 - $1.50 |
$1.25 - $1.50 | ||
Depreciation, depletion, and amortization ($/Boe) |
$19.00 - $21.00 |
$19.00 - $21.00 | ||
Production and ad valorem taxes (% of oil and gas revenues) |
6.0% - 7.0% |
6.0% - 7.0% |
2017 Preliminary Outlook
The Company anticipates that the SHEP II transaction will close on or about March 1, 2017, following a shareholder vote to approve the issuance of RSP Shares to fund the transaction.
RSP anticipates adding a fourth operated horizontal rig on our Midland Basin properties and a third operated horizontal rig on the newly-acquired Delaware Basin properties during the second quarter of 2017. In addition, the Company expects to add a fourth operated horizontal rig on the Delaware Basin properties during the fourth quarter of 2017 for a total of eight operated horizontal rigs by the end of 2017 with four operated horizontal rigs running in each area. Our preliminary 2017 drilling and completion budget is expected to be within a range of $520 - $560 million and a total capital expenditure budget, including infrastructure and workovers, is expected to be $570 - $630 million. We estimate our net daily production in 2017 to average in the range of 52.0 - 56.0 MBoe/d (72%-74% oil), or approximately 86% above our revised 2016 mid-point guidance.
Hedging Update
Crude Oil Hedges | ||||||||||
(Bbl, $/Bbl) |
Q4 2016 |
Q1 2017 |
Q2 2017 |
Q3 2017 |
Q4 2017 | |||||
Three-Way Collars(1) |
120,000 |
675,000 |
||||||||
Ceiling |
$74.41 |
$54.25 |
||||||||
Floor |
$55.00 |
$45.00 |
||||||||
Short Put |
$45.00 |
$35.00 |
||||||||
Costless Collars(1) |
450,000 |
1,137,500 |
1,150,000 |
1,150,000 | ||||||
Ceiling |
$59.75 |
$60.05 |
$60.05 |
$60.05 | ||||||
Floor |
$45.00 |
$45.00 |
$45.00 |
$45.00 | ||||||
Deferred Premium Puts(1) |
1,125,000 |
910,000 |
920,000 |
920,000 | ||||||
Floor |
$45.00 |
$48.50 |
$48.50 |
$48.50 | ||||||
Deferred Premium(2) |
($2.74) |
($4.00) |
($4.00) |
($4.00) | ||||||
Deferred Premium Put Spreads(1) |
675,000 |
|||||||||
Floor |
$45.00 |
|||||||||
Short Put |
$35.00 |
|||||||||
Deferred Premium(2) |
($2.32) |
|||||||||
Total Hedge Volumes |
1,245,000 |
1,800,000 |
2,047,500 |
2,070,000 |
2,070,000 | |||||
Weighted Average Floor(3) |
$43.49 |
$44.13 |
$44.78 |
$44.78 |
$44.78 |
(1) |
The crude oil derivative contracts are settled based on the arithmetic average of the closing settlement price for the front month contract NYMEX price of West Texas Intermediate Light Sweet Crude. |
(2) |
The deferred premium is not paid until expiration date, aligning cash inflows and outflows with the settlement of the derivative contract. |
(3) |
Weighted average floor assumes the long put in three way collars and put spreads and reflects the impact of premiums paid. |
Natural Gas Hedges | ||||||||
(MMBtu, $/MMBtu) |
Q1 2017 |
Q2 2017 |
Q3 2017 |
Q4 2017 | ||||
Costless Collars(1) |
900,000 |
910,000 |
920,000 |
920,000 | ||||
Ceiling |
$3.64 |
$3.64 |
$3.64 |
$3.64 | ||||
Floor |
$3.00 |
$3.00 |
$3.00 |
$3.00 |
(1) |
The natural gas derivative contracts are settled based on the last trading day's closing price for the front month contract relevant to each period. |
Advisors
RBC Capital Markets acted as lead M&A advisor to RSP and provided fairness opinions to RSP's Board of Directors on the SHEP I and SHEP II transactions and Barclays Capital Inc. acted as a co-M&A advisor on the transactions. Vinson & Elkins L.L.P. served as legal counsel to RSP. Jefferies LLC acted as financial advisor to Silver Hill and Thompson & Knight LLP and DLA Piper LLP served as legal counsel.
Conference Call
RSP will host a conference call for investors on October 14, 2016 at 9:00 am Central time to discuss these strategic transactions. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer and Scott McNeill, Chief Financial Officer.
The call may be accessed live over the telephone by dialing (877) 705-6003, or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (844) 512-2921, or for international callers (412) 317-6671. The passcode for the replay is 13647806. The replay will be available until October 28, 2016. A simultaneous webcast of the call and slides summarizing the transaction may be accessed at www.rsppermian.com
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of RSP's acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Ector and Dawson. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP."
Important Information for Investors and Stockholders
This communication does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities or a solicitation of any vote or approval. This communication relates to the SHEP transactions.
In connection with the SHEP transactions, the Company intends to file with the Securities and Exchange Commission (the "SEC") a proxy statement. The Company also plans to file other relevant documents with the SEC regarding the proposed transactions. Any definitive proxy statement for the Company (if and when available) will be mailed to the Company's stockholders.
INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT(S) AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE SHEP TRANSACTION.
Investors and security holders will be able to obtain free copies of these documents (if and when available) and other documents containing important information about the Company, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by the Company will be available free of charge on the Company's internet website at http://www.rsppermian.com or by contacting the Company's Investor Relations Department by email at IR@rspermian.com or by phone at 214-252-2790.
The Company and certain of its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the SHEP transactions. Information about the directors and executive officers of the Company is set forth in the Company's proxy statement for its 2016 annual meeting of stockholders, which was filed with the SEC on April 29, 2016. This document can be obtained free of charge from the sources indicated above.
Other information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials to be filed with the SEC when such materials become available. Investors should read the proxy statement carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of this document from the Company using the sources indicated above.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on the Company. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that management anticipates.
The Company's forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from the Company's historical experience and present expectations or projections. Furthermore, we may not be able to close the SHEP transactions in a timely manner or at all, the ultimate funding sources for the SHEP transactions may differ from our current expectations, we may not be able to recognize the expected benefits from the SHEP transactions (including our expectations for production growth) and our capital program may exceed budgeted amounts. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Report on Form 10-K and any subsequent Quarterly Report on Form 10-Q, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov.
Consequently, all of the forward-looking statements made in this news release are qualified by these cautionary statements and there can be no assurances that the actual results or developments anticipated by us will be realized, or even if realized, that they will have the expected consequences to or effects on us, our business or operations. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.
Logo - http://photos.prnewswire.com/prnh/20160202/328754LOGO
SOURCE RSP Permian, Inc.
DALLAS, Aug. 8, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today reported financial and operating results for the quarter ended June 30, 2016 and updated its 2016 annual guidance. In addition, the Company filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 with the Securities and Exchange Commission (the "SEC") and posted a presentation that supplements the information in this release to its website at www.rsppermian.com.
Second Quarter 2016 Highlights
Steve Gray, Chief Executive Officer, stated, "Even with a moderated capex pace in the second quarter, RSP increased production while maintaining a lean cost structure and strong capital efficiency, and we generated more in Adjusted EBITDAX than we spent in development capital. Due to better than expected results and continuing improvement in well productivity, we increased our annual production outlook for 2016 and raised our development capital budget for the remainder of the year. The increased investment during the second half of 2016 will position us for a higher growth profile in 2017. While we have substantial organic growth potential, with a deep inventory of horizontal drilling locations targeting a tremendous resource base, we are focused on generating economic returns over growth and have flexibility to alter our operating plans to match the prevailing commodity price environment."
Quarterly Operational Results | |||
Three Months Ended June 30, | |||
2016 |
2015 | ||
Production data: |
|||
Oil (MBbls) |
1,760 |
1,377 | |
Natural gas (MMcf) |
1,725 |
1,029 | |
NGLs (MBbls) |
355 |
260 | |
Total (MBoe) |
2,403 |
1,809 | |
Average net daily production (Boe/d) |
26,407 |
19,879 | |
Average prices before effects of hedges (1) (2): |
|||
Oil (per Bbl) |
$42.50 |
$53.68 | |
Natural gas (per Mcf) |
1.47 |
1.97 | |
NGLs (per Bbl) |
11.69 |
9.69 | |
Total (per Boe) |
$33.91 |
$43.37 | |
Average realized prices after effects of hedges (1) (2): |
|||
Oil (per Bbl) |
$43.05 |
$67.22 | |
Natural gas (per Mcf) |
1.47 |
1.97 | |
NGLs (per Bbl) |
11.69 |
9.69 | |
Total (per Boe) |
$34.32 |
$53.68 | |
Average costs (per Boe): |
|||
Lease operating expenses (excluding gathering and transportation) |
$5.37 |
$7.63 | |
Gathering and transportation |
0.49 |
0.49 | |
Production and ad valorem taxes |
2.06 |
2.99 | |
Depreciation, depletion and amortization |
19.68 |
21.90 | |
General and administrative - recurring cash component |
2.06 |
2.47 | |
General and administrative - recurring stock comp (3) |
1.46 |
1.14 | |
General and administrative - non-recurring stock comp (4) |
0.28 |
0.19 |
(1) |
Average prices shown in the table reflect prices both before and after the effects of our cash payments/receipts on our commodity derivative transactions. Our calculation of such effects includes realized gains or losses on cash settlements for commodity derivative transactions and an adjustment to reflect premiums incurred previously or upon settlement that are attributable to instruments settled in the period, if applicable. |
(2) |
Average prices for oil are net of transportation costs. Average prices for natural gas do not include transportation costs; instead, transportation costs related to our gas production and sales are included in gathering and transportation which is included in lease operating expenses in our consolidated statements of operations. No transportation costs are associated with NGL production and sales. |
(3) |
Represents compensation expense related to restricted stock awards and performance share awards granted as part of the Company's ongoing compensation and retention programs. |
(4) |
Non-recurring stock comp in 2015 includes compensation expense related to the successful completion of the Company's initial public offering and related expenses associated with one-time restricted stock awards. Non-recurring stock comp in 2016 is a one-time compensation charge associated with the retirement of an officer of the Company. |
Production volumes for the quarter ended June 30, 2016 averaged 26,407 Boe/d or a total of 2,403 MBoe, an increase of 33% over prior year's second quarter of 19,879 Boe/d. Production for the second quarter of 2016 was comprised of 73% crude oil, 12% natural gas and 15% NGLs. RSP's average realized commodity price per barrel of oil equivalents for the second quarter of 2016, before the effects of hedges, was $33.91. RSP's average realized oil price for the second quarter of 2016, before the effects of hedges, was $42.50 per barrel, a negative $3.09 differential compared to average NYMEX WTI pricing of $45.59 per barrel for the same period, or 93% of NYMEX WTI pricing. RSP's average realized natural gas price for the second quarter of 2016, before the effects of hedges, was $1.47 per Mcf, a negative $0.48 differential compared to average NYMEX Henry Hub pricing of $1.95 per MMBtu for the same period, or 75% of NYMEX Henry Hub pricing. RSP's average realized NGL price for the second quarter of 2016, before the effects of hedges, was $11.69 per Bbl, or 26% of NYMEX WTI pricing for the same time period. Per unit cash operating expenses excluding interest expense but including lease operating expense, gathering and transportation expense, production and ad valorem taxes and recurring cash general and administrative expenses were $9.99 per Boe, a 26% decrease from prior year's comparable quarter.
Operational Update
The Company operated two horizontal drilling rigs during the second quarter and one full-time completion crew. RSP drilled 10 operated horizontal wells and completed 11 operated horizontal wells (10 Lower Spraberry and one Wolfcamp A). The Company began the quarter with 20 operated horizontal drilled but uncompleted wells ("DUCs") and exited the quarter with a total of 19 operated horizontal DUCs. On a non-operated basis, the Company began the quarter with 20 non-operated horizontal DUCs and exited the quarter with a total of 24 non-operated horizontal DUCs.
2Q16 Wells | |||||||||
Drilled |
Completed |
Drilled but | |||||||
Operated Wells |
|||||||||
Horizontal |
10 |
11 |
19 | ||||||
Vertical |
— |
1 |
— | ||||||
Total Operated |
10 |
12 |
19 | ||||||
Non-Operated Wells |
|||||||||
Horizontal |
10 |
6 |
24 | ||||||
Vertical |
— |
— |
— | ||||||
Total Non-Operated |
10 |
6 |
24 | ||||||
Total Wells |
|||||||||
Horizontal |
20 |
17 |
43 | ||||||
Vertical |
— |
1 |
— | ||||||
Total Wells |
20 |
18 |
43 |
Two of the drilled operated horizontal wells noted above were included in a second quarter 2016 acquisition, in which the Company purchased these wells after being drilled but prior to completion activities. RSP took over as operator of the properties and commenced completion activities.
Quarterly Financial Results |
||||||||||
Three Months Ended |
||||||||||
June 30, |
March 31, |
|||||||||
2016 |
2015 |
2016 |
||||||||
(In thousands, except for per share data) | ||||||||||
Total Revenues |
$ |
81,485 |
$ |
78,465 |
$ |
55,815 |
||||
Net Cash from Derivative Instruments |
974 |
18,646 |
1,950 |
|||||||
Adjusted Total Revenues |
82,459 |
97,111 |
57,765 |
|||||||
Net Loss |
$ |
(9,801) |
$ |
(5,453) |
$ |
(17,416) |
||||
Net Loss per Common Share - Diluted |
(0.10) |
(0.07) |
(0.17) |
|||||||
Adjusted Net Income (Loss) (1) |
(3,758) |
13,046 |
(16,231) |
|||||||
Adjusted Net Income (Loss) per Common Share - Diluted |
(0.04) |
0.16 |
(0.16) |
|||||||
Adjusted EBITDAX (1) |
$ |
58,453 |
$ |
72,552 |
$ |
35,610 |
(1) |
Adjusted EBITDAX and Adjusted Net Income are non-GAAP financial measures. For a definition of Adjusted EBITDAX and Adjusted Net Income and a reconciliation of Adjusted EBITDAX and Adjusted Net Income to Net Income, see "Use of Non-GAAP financial measures" and our quarterly statements of operations at the end of this release. |
For the quarter ended June 30, 2016, total revenues, excluding the revenue impact from realized derivative instruments, were $81.5 million, a 4% increase over the prior year quarter of $78.5 million. Adjusted total revenues, including the net cash from derivative instruments, were $82.5 million, a 15% decrease from the prior year quarter of $97.1 million. Net loss for the second quarter of 2016 was $9.8 million, or ($0.10) per diluted share, while the net loss for the prior year quarter was $5.5 million, or ($0.07) per diluted share. Adjusted Net Loss for the second quarter of 2016 was $3.8 million, or ($0.04) per diluted share, compared with Adjusted Net Income for the prior year quarter of $13.0 million or $0.16 per diluted share. Adjusted EBITDAX was $58.5 million, a 19% decrease from the prior year quarter of $72.6 million.
Capital Expenditures
RSP's development capital expenditures, which includes our investment in drilling and completing wells, infrastructure, capitalized workovers, and other, but excludes the cost of acquisitions, for the quarter ended June 30, 2016 totaled $57.6 million ($56.5 million of drilling and completion and $1.1 million of infrastructure and other). Of the development capital, approximately $11.2 million, or 19%, was spent on non-operated properties. Additionally, the Company closed $14.4 million of acquisitions of oil and gas properties, bringing total capital expenditures for the quarter to $72.0 million.
Liquidity
As of June 30, 2016, the Company had no borrowings outstanding on its revolving credit facility, which has a $600 million borrowing base, and had $33 million of cash on hand, for total liquidity available of $632 million after deducting outstanding letters of credit.
Hedging
RSP recently added additional deferred premium puts and currently has hedging arrangements that cover 2,775,000 barrels of oil production for the remainder of 2016. As noted in the table below, the Company has outstanding three-way collars covering 240,000 barrels of oil production at a ceiling price of $74.41 per barrel, a floor price of $55.00 per barrel and a short-put price of $45.00 per barrel, and has deferred premium puts covering 2,535,000 barrels of oil production at a floor price of $45.00 per barrel ($42.35 net of deferred premium).
Description & Production Period |
Volume (Bbls) |
Weighted Ceiling price |
Weighted Floor price ($/Bbl) (1) |
Weighted Short-Put ($/Bbl) (1) |
Weighted Deferred ($/Bbl) (2) | |||||
Three Way Collars |
||||||||||
3Q16 |
120,000 |
$74.41 |
$55.00 |
$45.00 |
NA | |||||
4Q16 |
120,000 |
$74.41 |
$55.00 |
$45.00 |
NA | |||||
Deferred Premium Puts |
||||||||||
3Q16 |
1,410,000 |
NA |
$45.00 |
NA |
$(2.59) | |||||
4Q16 |
1,125,000 |
NA |
$45.00 |
NA |
$(2.74) |
(1) |
The crude oil derivative contracts are settled based on the month's average daily NYMEX price of West Texas Intermediate Light Sweet Crude. |
(2) |
The deferred premium is not paid until expiration date, aligning cash inflows and outflows with the settlement of the derivative contract. |
2016 Annual Guidance Update | ||||||
1H 2016 Actual |
Original 2016 Guidance |
Updated 2016 Guidance | ||||
Completions |
||||||
Operated Gross Horizontal Completions |
22 |
36 - 48 |
52 - 56 | |||
Operated Gross Vertical Completions |
3 |
5 |
5 | |||
Production |
||||||
Average Daily Production (Boe/d) |
25,505 |
23,000 - 27,000 |
26,500 - 28,500 | |||
% Oil |
75% |
75% - 76% |
75% - 76% | |||
% Natural Gas |
11% |
10% - 11% |
10% - 11% | |||
% NGLs |
14% |
13% - 14% |
13% - 14% | |||
Development Capital Expenditures ($ in MM) |
||||||
Drilling and Completion (D&C) |
$122.1 |
$185 - $235 |
$270 - $290 | |||
Infrastructure, Capitalized Workovers & Other |
$3.4 |
$15 - $25 |
$15 - $25 | |||
Total Development Capital Expenditures |
$125.5 |
$200 - $260 |
$285 - $315 | |||
% Non-Operated |
18% |
10% |
10% - 15% | |||
Income Statement ($/Boe) |
||||||
Lease operating expenses (including workovers) |
$5.45 |
$5.00 - $6.00 |
$5.00 - $6.00 | |||
Gathering and transportation |
$0.40 |
$0.45 - $0.50 |
$0.45 - $0.50 | |||
Exploration expenses |
$0.10 |
$0.25 - $0.30 |
$0.10 - $0.15 | |||
General and administrative - cash component |
$2.12 |
$2.00 - $2.50 |
$2.00 - $2.25 | |||
General and administrative - recurring stock comp |
$1.42 |
$1.25 - $1.50 |
$1.25 - $1.50 | |||
Depreciation, depletion, and amortization ($/Boe) |
$19.79 |
$18.00 - $20.00 |
$19.00 - $21.00 | |||
Production and ad valorem taxes (% of oil and gas revenues) |
6.6% |
7.0% - 8.0% |
6.0% - 7.0% |
Second Quarter 2016 Earnings Release and Conference Call
RSP will host a conference call for investors at 10:00 AM Central Time on Tuesday, August 9, 2016, to discuss second quarter 2016 results. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer and Scott McNeill, Chief Financial Officer.
The call may be accessed live over the telephone by dialing (877) 705-6003, or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (877) 870-5176, or for international callers (858) 384-5517. The passcode for the replay is 13638064. The replay will be available until August 23, 2016. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto RSP's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Dawson and Ector. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
Statements of Operations | |||||||||||||
Three Months Ended June 30, |
Three Months Ended | ||||||||||||
2016 |
2015 |
2016 |
|||||||||||
Revenues: |
|||||||||||||
Oil sales |
$ |
74,799 |
$ |
73,917 |
$ |
51,690 |
|||||||
Natural gas sales |
2,537 |
2,028 |
2,403 |
||||||||||
NGL sales |
4,149 |
2,520 |
1,722 |
||||||||||
Total revenues |
81,485 |
78,465 |
55,815 |
||||||||||
Operating expenses: |
|||||||||||||
Lease operating expenses |
$ |
14,094 |
$ |
14,693 |
$ |
13,091 |
|||||||
Production and ad valorem taxes |
4,960 |
5,402 |
4,153 |
||||||||||
Depreciation, depletion, and amortization |
47,296 |
39,620 |
44,558 |
||||||||||
Asset retirement obligation accretion |
123 |
84 |
113 |
||||||||||
Impairments |
3,177 |
— |
173 |
||||||||||
Exploration |
405 |
889 |
64 |
||||||||||
General and administrative expenses |
9,135 |
6,865 |
8,005 |
||||||||||
Total operating expenses |
79,190 |
67,553 |
70,157 |
||||||||||
Operating income (loss) |
$ |
2,295 |
$ |
10,912 |
$ |
(14,342) |
|||||||
Other income (expense) |
|||||||||||||
Other income (loss), net |
$ |
104 |
$ |
(37) |
$ |
173 |
|||||||
Net gain (loss) on derivative instruments |
(3,684) |
(12,962) |
396 |
||||||||||
Interest expense |
(12,954) |
(9,367) |
(12,941) |
||||||||||
Total other income (expense) |
(16,534) |
(22,366) |
(12,372) |
||||||||||
Loss before income taxes |
(14,239) |
(11,454) |
(26,714) |
||||||||||
Income tax benefit |
4,438 |
6,001 |
9,298 |
||||||||||
Net loss |
$ |
(9,801) |
$ |
(5,453) |
$ |
(17,416) |
|||||||
Net loss per common share - Basic |
$ |
(0.10) |
$ |
(0.07) |
$ |
(0.17) |
|||||||
Net loss per common share - Diluted |
$ |
(0.10) |
$ |
(0.07) |
$ |
(0.17) |
|||||||
Weighted Average Common Shares Outstanding: |
|||||||||||||
Basic |
100,189 |
83,088 |
100,060 |
||||||||||
Diluted |
100,189 |
83,088 |
100,060 |
Use of Non-GAAP Financial Measures
We define Adjusted EBITDAX as oil and gas revenues including net cash receipts (payments) on settled derivative instruments and premiums paid on put options that settled during the period, less lease operating expenses, production and ad valorem taxes, and general and administrative expenses excluding stock based compensation. Adjusted Net Income deducts from Adjusted EBITDAX depreciation, depletion, and amortization, accretion on asset retirement obligations, exploration expenses, interest expense, stock-based compensation and adjusted income tax expense. Management believes Adjusted EBITDAX and Adjusted Net Income are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDAX and Adjusted Net Income because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX and Adjusted Net Income should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX and Adjusted Net Income are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our computations of Adjusted EBITDAX and Adjusted Net Income may not be comparable to other similarly titled measures of other companies.
The following tables include a reconciliation of the non-GAAP financial measures of Adjusted EBITDAX and Adjusted Net Income to the GAAP financial measure of net income.
Reconciliation of Adjusted EBITDAX to Net Income | |||||||||||||
Three Months Ended June 30, |
Three Months Ended | ||||||||||||
2016 |
2015 |
2016 |
|||||||||||
Net income (loss) |
$ |
(9,801) |
$ |
(5,453) |
$ |
(17,416) |
|||||||
Interest expense |
12,954 |
9,367 |
12,941 |
||||||||||
Income tax expense (benefit) |
(4,438) |
(6,001) |
(9,298) |
||||||||||
Depreciation, depletion, and amortization |
47,296 |
39,620 |
44,558 |
||||||||||
Asset retirement obligation accretion |
123 |
84 |
113 |
||||||||||
Exploration |
405 |
889 |
64 |
||||||||||
Impairments |
3,177 |
— |
173 |
||||||||||
Loss (gain) on derivative instruments |
3,684 |
12,962 |
(396) |
||||||||||
Net cash payments on settled derivative instruments |
974 |
18,646 |
1,950 |
||||||||||
Stock-based compensation, net |
4,183 |
2,401 |
3,094 |
||||||||||
Other income, net |
(104) |
37 |
(173) |
||||||||||
Adjusted EBITDAX |
$ |
58,453 |
$ |
72,552 |
$ |
35,610 |
|||||||
Reconciliation of Adjusted Net Income to Net Income | |||||||||||||
Three Months Ended June 30, |
Three Months Ended | ||||||||||||
2016 |
2015 |
2016 |
|||||||||||
Net income (loss) |
$ |
(9,801) |
$ |
(5,453) |
$ |
(17,416) |
|||||||
Impairments |
3,177 |
— |
173 |
||||||||||
Loss (gain) on derivative instruments |
3,684 |
12,962 |
(396) |
||||||||||
Net cash payments on settled derivative instruments |
974 |
18,646 |
1,950 |
||||||||||
Stock-based compensation - non-recurring |
682 |
— |
— |
||||||||||
Other income, net |
(104) |
37 |
(173) |
||||||||||
Income tax expense (benefit) for above items |
(2,370) |
(13,146) |
(369) |
||||||||||
Adjusted Net Income (Loss) |
$ |
(3,758) |
$ |
13,046 |
$ |
(16,231) |
|||||||
Summary Balance Sheet | ||||||||||
June 30, 2016 |
December 31, 2015 |
|||||||||
Cash and cash equivalents |
$ |
32,855 |
$ |
142,741 |
||||||
Other current assets |
40,006 |
44,799 |
||||||||
Total current assets |
72,861 |
187,540 |
||||||||
Property, plant and equipment, net |
2,835,851 |
2,758,630 |
||||||||
Other long-term assets |
15,644 |
21,263 |
||||||||
Total assets |
$ |
2,924,356 |
$ |
2,967,433 |
||||||
Current liabilities |
67,917 |
77,402 |
||||||||
Long-term debt |
687,305 |
686,512 |
||||||||
Other long-term liabilities |
333,099 |
344,935 |
||||||||
Total stockholders' equity |
1,836,035 |
1,858,584 |
||||||||
Total liabilities and stockholders' equity |
$ |
2,924,356 |
$ |
2,967,433 |
Logo - http://photos.prnewswire.com/prnh/20160202/328754LOGO
SOURCE RSP Permian, Inc.
DALLAS, July 18, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced that it will release its second quarter 2016 financial and operating results after the New York Stock Exchange closes on Monday, August 8, 2016. In connection with the release, RSP will host a conference call and webcast for investors on Tuesday, August 9, 2016 at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss the Company's results for the quarter. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer and Scott McNeill, Chief Financial Officer.
The call can be accessed live over the telephone by dialing (877) 705-6003 or, for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (877) 870-5176 or, for international callers, (858) 384-5517. The passcode for the replay is 13638064. The replay will be available until August 23, 2016.
Interested parties may also listen to a simultaneous internet webcast of the conference call by logging onto RSP's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available for approximately 30 days following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of RSP's acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Dawson and Ector. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP". For more information, visit www.rsppermian.com.
Logo - http://photos.prnewswire.com/prnh/20160202/328754LOGO
SOURCE RSP Permian, Inc.
DALLAS, May 2, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today reported financial and operating results for the quarter ended March 31, 2016. In addition, the Company filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 with the Securities and Exchange Commission (the "SEC") and posted an updated presentation on its website at www.rsppermian.com.
First Quarter 2016 Highlights
Steve Gray, Chief Executive Officer, stated, "We slightly grew our production from last quarter while reducing our activity levels during a period of low commodity prices. At the same time, we used the low-price environment to test various completion and production designs that will help us optimize future wellbore placement, stimulation techniques and production. We continue to drive our well costs lower and recent results are trending below our previously announced target. If we continue to see strengthening in oil prices, we expect to increase our drilling and completion activity in the back half of the year, which will have a meaningful impact on our operating momentum."
Mr. Gray continued, "We would also like to thank our bank group for unanimously reaffirming our existing $600 million borrowing base under our credit facility and appreciate the confidence they have in RSP's business plan, asset base and management team."
Summary Financial Results (In thousands, except for per share data) | |||||||||||
Three Months Ended | |||||||||||
March 31, |
December 31, | ||||||||||
2016 |
2015 |
2015 | |||||||||
Total Revenues |
$ |
55,815 |
$ |
51,375 |
$ |
73,508 |
|||||
Net Cash from Derivative Instruments |
1,950 |
29,471 |
23,122 |
||||||||
Adjusted Total Revenues |
57,765 |
80,846 |
96,630 |
||||||||
Adjusted EBITDAX (1) |
$ |
35,610 |
$ |
59,809 |
$ |
74,367 |
|||||
Adjusted Net Income (Loss) (1) |
(16,231) |
10,030 |
12,074 |
||||||||
Adjusted Net Income (Loss) per Common Share - Diluted |
(0.16) |
0.13 |
0.12 |
||||||||
Net loss |
$ |
(17,416) |
$ |
(1,024) |
$ |
(20,751) |
|||||
Net loss per Common Share - Diluted |
$ |
(0.17) |
$ |
(0.01) |
$ |
(0.21) |
|||||
(1) |
Adjusted EBITDAX and Adjusted Net Income are non-GAAP financial measures. For a definition of Adjusted EBITDAX and Adjusted Net Income and a reconciliation of Adjusted EBITDAX and Adjusted Net Income to Net Income, see "Use of Non-GAAP financial measures" and our quarterly statements of operations at the end of this release. |
For the quarter ended March 31, 2016, total revenues, excluding the revenue impact from realized derivative instruments, were $55.8 million, a 9% increase over the prior year quarter of $51.4 million. Adjusted total revenues, including the net cash from derivative instruments, were $57.8 million, a decrease of 29% from the prior year quarter of $80.8 million. Adjusted EBITDAX was $35.6 million, a decrease of 40% from the prior year amount of $59.8 million. Adjusted net loss for the quarter ended was $16.2 million, or ($0.16) per diluted share, compared with adjusted net income for the prior year of $10.0 million or $0.13 per diluted share. Net loss for the first quarter of 2016 was $17.4 million, or ($0.17) per diluted share, while the net loss for the first quarter of 2015 was $1.0 million, or ($0.01) per diluted share.
Operational Update
The Company operated three horizontal drilling rigs at the beginning of the first quarter and dropped to two during the quarter. RSP drilled 13 operated horizontal wells and completed 11 operated horizontal wells (one Middle Spraberry, seven Lower Spraberry, one Wolfcamp A and two Wolfcamp B). The Company exited the quarter with a total of 21 operated drilled and uncompleted wells including 20 uncompleted horizontal wells and one uncompleted vertical wells.
1Q16 Wells | |||||||||
Drilled |
Completed |
Drilled but | |||||||
Operated Wells |
|||||||||
Horizontal |
13 |
11 |
20 | ||||||
Vertical |
1 |
2 |
1 | ||||||
Total Operated |
14 |
13 |
21 | ||||||
Non-Operated Wells |
|||||||||
Horizontal |
12 |
5 |
20 | ||||||
Vertical |
1 |
1 |
— | ||||||
Total Non-Operated |
13 |
6 |
20 | ||||||
Total Wells |
|||||||||
Horizontal |
25 |
16 |
40 | ||||||
Vertical |
2 |
3 |
1 | ||||||
Total Wells |
27 |
19 |
41 |
1Q16 Actual to 2016 Annual Guidance Comparison | ||||
1Q16 |
2016 | |||
Actual |
Annual Guidance | |||
Completions |
||||
Operated Horizontal Completions |
11 |
36 - 48 | ||
Operated Vertical Completions |
2 |
5 | ||
Production |
||||
Average Daily Production (Boe/d) |
24,615 |
23,000 - 27,000 | ||
% Oil |
76% |
75% - 76% | ||
% Natural Gas |
11% |
10% - 11% | ||
% NGLs |
13% |
13% - 14% | ||
Capital Expenditures |
||||
Total Capital Expenditures (excluding acquisitions) ($ in MM) |
$68 |
$200 - $260 | ||
Operating Costs |
||||
Lease operating expenses (including workovers) ($/Boe) |
$5.54 |
$5.00 - $6.00 | ||
Gathering and transportation ($/Boe) |
$0.31 |
$0.45 - $0.50 | ||
Exploration expenses ($/Boe) |
$0.03 |
$0.25 - $0.30 | ||
General and administrative - cash component ($/Boe) |
$2.19 |
$2.00 - $2.50 | ||
General and administrative - stock comp ($/Boe) |
$1.38 |
$1.25 - $1.50 | ||
Depreciation, depletion, and amortization ($/Boe) |
$19.89 |
$18.00 - $20.00 | ||
Production and ad valorem taxes (% of oil and gas revenues) |
7.4% |
7.0% - 8.0% |
Quarterly Operational Results | |||
Three Months Ended March 31, | |||
2016 |
2015 | ||
Production data: |
|||
Oil (MBbls) |
1,703 |
1,078 | |
Natural gas (MMcf) |
1,465 |
960 | |
NGLs (MBbls) |
293 |
197 | |
Total (MBoe) |
2,240 |
1,435 | |
Average net daily production (Boe/d) |
24,615 |
15,944 | |
Average prices before effects of hedges (1) (2): |
|||
Oil (per Bbl) |
$30.35 |
$43.88 | |
Natural gas (per Mcf) |
1.64 |
2.33 | |
NGLs (per Bbl) |
5.88 |
9.32 | |
Total (per Boe) |
$24.92 |
$35.80 | |
Average realized prices after effects of hedges (1) (2): |
|||
Oil (per Bbl) |
$31.50 |
$71.22 | |
Natural gas (per Mcf) |
1.64 |
2.33 | |
NGLs (per Bbl) |
5.88 |
9.32 | |
Total (per Boe) |
$25.79 |
$56.34 | |
Average costs (per Boe): |
|||
Lease operating expenses (excluding gathering and transportation) |
$5.54 |
$8.20 | |
Gathering and transportation |
0.31 |
0.58 | |
Production and ad valorem taxes |
1.85 |
2.92 | |
Depreciation, depletion and amortization |
19.89 |
21.95 | |
General and administrative - recurring cash component |
2.19 |
2.95 | |
General and administrative - recurring stock comp (3) |
1.38 |
1.17 | |
General and administrative - IPO stock comp (4) |
— |
0.32 |
(1) |
Average prices shown in the table reflect prices both before and after the effects of our cash payments/receipts on our commodity derivative transactions. Our calculation of such effects includes realized gains or losses on cash settlements for commodity derivative transactions and an adjustment to reflect premiums incurred previously or upon settlement that are attributable to instruments settled in the period, if applicable. |
(2) |
Average prices for oil are net of transportation costs. Average prices for natural gas do not include transportation costs; instead, transportation costs related to our gas production and sales are included in gathering and transportation which is included in lease operating expenses in our consolidated statements of operations. No transportation costs are associated with NGL production and sales. |
(3) |
Represents compensation expense related to restricted stock awards and performance share awards granted as part of the Company's ongoing compensation and retention programs. |
(4) |
Includes compensation expense related to the successful completion of the Company's initial public offering ("IPO"). These costs include expenses related to one-time restricted stock awards. |
Production volumes for the quarter ended March 31, 2016 averaged 24,615 Boe/d or a total of 2,240 MBoe, an increase of 54% over prior year's first quarter of 15,944 Boe/d. Production for the first quarter of 2016 was comprised of 76% crude oil, 11% natural gas and 13% NGLs. RSP's average realized commodity price per barrel of oil equivalents for the first quarter of 2016, before the effects of hedges, was $24.92. RSP's average realized oil price for the first quarter of 2016, before the effects of hedges, was $30.35 per barrel, a negative $3.10 differential compared to average NYMEX WTI pricing of $33.45 per barrel for the same period, or 91% of NYMEX WTI pricing. RSP's average realized natural gas price for the first quarter of 2016, before the effects of hedges, was $1.64 per Mcf, a negative $0.45 differential compared to average NYMEX Henry Hub pricing of $2.09 per MMBtu for the same period, or 78% of NYMEX Henry Hub pricing. RSP's average realized NGL price for the first quarter of 2016, before the effects of hedges, was $5.88 per Bbl, or 18% of NYMEX WTI pricing for the same time period. Per unit cash operating expenses excluding interest expense but including lease operating expense, gathering and transportation, production and ad valorem taxes and recurring cash general and administrative expenses were $9.89 per Boe, a 33% decrease from prior year's comparable quarter and a 1% decrease from the prior quarter.
Capital Expenditures
RSP's capital expenditures, excluding acquisitions, for the quarter ended March 31, 2016 totaled $67.8 million which included approximately $65.5 million of drilling and completion and $2.3 million of infrastructure and other. Of the total capital spent, approximately $11.1 million was on non-operated properties. In addition, the Company closed on $29.1 million of acquisitions of oil and gas properties during the first quarter.
Liquidity Update
As of March 31, 2016, the Company had no borrowings on its revolving credit facility, which has a $600 million borrowing base, and had $74 million of cash on hand, for total liquidity available of $674 million. Effective May 1, 2016, the lenders under our credit facility unanimously reaffirmed our $600 million borrowing base in our semi-annual borrowing base redetermination.
Hedging
RSP recently added deferred premium puts and currently has hedging arrangements that cover 1,260,000 barrels of oil production for the remainder of 2016. As depicted in the table below, the Company has outstanding three-way collars covering 360,000 barrels of oil production at a ceiling price of $74.41, a floor price of $55.00 and a short-put price of $45.00, and has deferred premium puts covering 900,000 barrels of oil production at a floor price of $45.00 ($41.50 net of deferred premium).
Description & Production Period |
Volume (Bbls) |
Weighted Ceiling price |
Weighted Floor price |
Weighted Short-Put ($/Bbl) (1) |
Weighted ($/Bbl) (2) | |||||
Three Way Collars |
||||||||||
2Q16 |
120,000 |
$74.41 |
$55.00 |
$45.00 |
NA | |||||
3Q16 |
120,000 |
$74.41 |
$55.00 |
$45.00 |
NA | |||||
4Q16 |
120,000 |
$74.41 |
$55.00 |
$45.00 |
NA | |||||
Deferred Premium Puts |
||||||||||
3Q16 |
450,000 |
NA |
$45.00 |
NA |
$(3.50) | |||||
4Q16 |
450,000 |
NA |
$45.00 |
NA |
$(3.50) |
(1) |
The crude oil derivative contracts are settled based on the month's average daily NYMEX price of West Texas Intermediate Light Sweet Crude. |
(2) |
The deferred premium is not paid until expiration date, aligning cash inflows and outflows with the settlement of the derivative contract. |
First Quarter 2016 Earnings Release and Conference Call
RSP will host a conference call for investors at 10:00 AM Central Time on Tuesday, May 3, 2016 to discuss first quarter 2016 results. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer and Scott McNeill, Chief Financial Officer.
The call may be accessed live over the telephone by dialing (877) 705-6003, or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (877) 870-5176, or for international callers (858) 384-5517. The passcode for the replay is 13634665. The replay will be available until May 17, 2016. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto RSP's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Dawson and Ector. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
Use of Non-GAAP Financial Measures
We define Adjusted EBITDAX as oil and gas revenues including net cash receipts (payments) on settled derivative instruments and premiums paid on put options that settled during the period, less lease operating expenses, production and ad valorem taxes, and general and administrative expenses excluding stock based compensation. Adjusted net income deducts from Adjusted EBITDAX depreciation, depletion, and amortization, accretion on asset retirement obligations, exploration expenses, interest expense, stock-based compensation and adjusted income tax expense.
Management believes Adjusted EBITDAX and adjusted net income are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDAX and adjusted net income because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX and adjusted net income should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX and adjusted net income are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our computations of Adjusted EBITDAX and adjusted net income may not be comparable to other similarly titled measures of other companies.
The following statements of operations include a reconciliation of the non-GAAP financial measures of Adjusted EBITDAX and adjusted net income to the GAAP financial measure of net income.
Statements of Operations (In thousands, except per share data) | |||||||||||||
Three Months Ended March 31, |
Three Months Ended | ||||||||||||
2016 |
2015 |
2015 |
|||||||||||
Revenues: |
|||||||||||||
Oil sales |
$ |
51,690 |
$ |
47,305 |
$ |
67,318 |
|||||||
Natural gas sales |
2,403 |
2,233 |
2,973 |
||||||||||
NGL sales |
1,722 |
1,837 |
3,217 |
||||||||||
Total revenues |
55,815 |
51,375 |
73,508 |
||||||||||
Net cash from derivative instruments |
1,950 |
29,471 |
23,122 |
||||||||||
Adjusted Total Revenues |
$ |
57,765 |
$ |
80,846 |
$ |
96,630 |
|||||||
Operating expenses: |
|||||||||||||
Lease operating expenses |
13,091 |
12,611 |
11,546 |
||||||||||
Production and ad valorem taxes |
4,153 |
4,197 |
5,722 |
||||||||||
General and administrative expenses |
4,911 |
4,229 |
4,995 |
||||||||||
Total operating costs and expenses |
$ |
22,155 |
$ |
21,037 |
$ |
22,263 |
|||||||
Adjusted EBITDAX (1) |
$ |
35,610 |
$ |
59,809 |
$ |
74,367 |
|||||||
Depreciation, depletion, and amortization |
44,558 |
31,502 |
39,887 |
||||||||||
Asset retirement obligation accretion |
113 |
84 |
84 |
||||||||||
Exploration |
64 |
1,178 |
96 |
||||||||||
Interest expense |
12,941 |
9,316 |
13,175 |
||||||||||
Stock-based compensation, net |
3,094 |
2,142 |
2,409 |
||||||||||
Adjusted income (loss) before income taxes |
$ |
(25,160) |
$ |
15,587 |
$ |
18,716 |
|||||||
Adjusted income tax expense (benefit) |
(8,929) |
5,557 |
6,642 |
||||||||||
Adjusted net income (loss) (1) |
$ |
(16,231) |
$ |
10,030 |
$ |
12,074 |
|||||||
Adjusted net income (loss) per common share - Basic |
$ |
(0.16) |
$ |
0.13 |
$ |
0.12 |
|||||||
Adjusted net income (loss) per common share - Diluted |
$ |
(0.16) |
$ |
0.13 |
$ |
0.12 |
|||||||
Other items included in loss before taxes: |
|||||||||||||
Non-cash loss on derivatives, net |
$ |
(1,554) |
$ |
(17,141) |
$ |
(19,683) |
|||||||
Impairments |
(173) |
— |
(30,031) |
||||||||||
Loss on asset sale |
— |
— |
(302) |
||||||||||
Other income |
173 |
200 |
242 |
||||||||||
Loss before income taxes |
$ |
(17,785) |
$ |
(6,911) |
$ |
(37,700) |
|||||||
Income tax benefit |
$ |
(369) |
$ |
(5,887) |
$ |
(16,949) |
|||||||
Net loss |
$ |
(17,416) |
$ |
(1,024) |
$ |
(20,751) |
|||||||
Net loss per common share - Basic |
$ |
(0.17) |
$ |
(0.01) |
$ |
(0.21) |
|||||||
Net loss per common share - Diluted |
$ |
(0.17) |
$ |
(0.01) |
$ |
(0.21) |
|||||||
Weighted Average Common Shares Outstanding: |
|||||||||||||
Basic |
100,060 |
78,190 |
98,556 |
||||||||||
Diluted |
100,060 |
78,190 |
98,556 |
(1) |
Adjusted EBITDAX and adjusted net income are non-GAAP financial measures. For a definition of Adjusted EBITDAX and adjusted net income, see "Use of Non-GAAP Financial Measures" above. |
Summary Balance Sheet (In thousands) | ||||||||||
March 31, 2016 |
December 31, 2015 |
|||||||||
Cash and cash equivalents |
$ |
73,624 |
$ |
142,741 |
||||||
Other current assets |
35,950 |
44,799 |
||||||||
Total current assets |
109,574 |
187,540 |
||||||||
Property, plant and equipment, net |
2,812,470 |
2,758,630 |
||||||||
Other long-term assets |
20,450 |
21,263 |
||||||||
Total assets |
$ |
2,942,494 |
$ |
2,967,433 |
||||||
Current liabilities |
75,792 |
77,402 |
||||||||
Long-term debt |
686,905 |
686,512 |
||||||||
Other long-term liabilities |
337,116 |
344,935 |
||||||||
Total stockholders' equity |
1,842,681 |
1,858,584 |
||||||||
Total liabilities and stockholders' equity |
$ |
2,942,494 |
$ |
2,967,433 |
Logo - http://photos.prnewswire.com/prnh/20160202/328754LOGO
SOURCE RSP Permian, Inc.
DALLAS, Feb. 24, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today reported financial and operating results for the quarter and year ended December 31, 2015, year-end 2015 proved reserves and 2016 capital plan and guidance. In addition, the Company will file its Annual Report on Form 10-K for the year ended December 31, 2015 with the Securities and Exchange Commission (the "SEC") and posted an updated presentation on its website at www.rsppermian.com.
Highlights
Recent Acquisitions
Steve Gray, Chief Executive Officer, stated, "We increased our production rate slightly in the fourth quarter after growing it over 20% in the third quarter, even though we lost 1.4 MBoe per day of production as a result of a fire at Cross Bar Ranch and winter storms affecting our operations. Despite these interruptions, we achieved our increased production guidance for the year and with our reduced completion pace, we were cash flow neutral in the fourth quarter. I am also pleased to announce that our initial horizontal wells in western Glasscock County are record wells for RSP, generating the highest production rates out of our entire horizontal portfolio and highlighting the resource potential of this new core operating area of RSP. We continue to test new spacing patterns and completion designs so that we can achieve higher recoveries, cost reductions and further expand our horizontal inventory."
Mr. Gray continued, "Although our capital efficiency and cost structure are among the best in the U.S. E&P industry and enable us to generate positive returns at current prices, we have reduced our activity level while prices are depressed and recently dropped to two horizontal rigs. We have budgeted to spend 40% less than we did last year in our drilling program and will fund this amount primarily with operating cash flow and our cash position. If current oil prices continue into next year, we intend to keep our two horizontal rig program and spend less in 2017 while maintaining our production rates and all of our core leasehold positions. We will accelerate activity when pricing improves, but we are well positioned for the current environment with our premier asset base, efficient cost structure and a management team that has navigated market cycles before."
2016 Capital Plan and Guidance
RSP began 2016 with three operated horizontal rigs and recently released one of these rigs. The Company has two operated horizontal rigs under contract for the remainder of 2016 with one contract expiring in January 2017 and the other contract expiring in April 2017. As a result of a reduced completion pace in the fourth quarter of 2015, the Company built an inventory of 18 drilled and uncompleted horizontal wells at year end and 2 drilled and uncompleted vertical wells. The Company intends to complete this inventory along with wells drilled during the year to complete between 36 to 48 gross operated horizontal wells and approximately 5 vertical wells. RSP's capital budget in 2016 is $200 million to $260 million, down 41% compared to the $391 million invested in 2015 (excluding acquisitions), with $185 million to $235 million allocated to drilling and completion activities and $15 million to $25 million allocated to infrastructure and other. The Company expects non-operated capital expenditures in 2016 to represent approximately 10% of total capital expenditures.
2015 |
2016 | |||
2015 Actuals and 2016 Guidance |
Actual |
Guidance | ||
Operated Horizontal Completions |
45 |
36 - 48 | ||
Operated Vertical Completions |
19 |
5 | ||
Total Capital Expenditures (excluding acquisitions) ($ in MM) |
$391 |
$200 - $260 | ||
Average Daily Production (Boe/d) |
21,047 |
23,000 - 27,000 | ||
% Oil |
75% |
75% - 76% | ||
% Natural Gas |
11% |
10% - 11% | ||
% NGLs |
14% |
13% - 14% | ||
Operating Costs |
||||
Lease operating expenses (including workovers) ($/Boe) |
$6.46 |
$5.00 - $6.00 | ||
Gathering and transportation ($/Boe) |
$0.46 |
$0.45 - $0.50 | ||
Exploration expenses ($/Boe) |
$0.31 |
$0.25 - $0.30 | ||
General and administrative - cash component ($/Boe) |
$2.33 |
$2.00 - $2.50 | ||
General and administrative - stock comp ($/Boe) |
$1.03 |
$1.25 - $1.50 | ||
Depreciation, depletion, and amortization ($/Boe) |
$20.05 |
$18.00 - $20.00 | ||
Production and ad valorem taxes (% of oil and gas revenues) |
7.0% |
7.0% - 8.0% | ||
Summary Financial Results | |||||||||||||||||||
Three Months Ended December 31, |
Twelve Months Ended December 31, | ||||||||||||||||||
Actual |
Pro Forma |
Actual |
Pro Forma | ||||||||||||||||
2015 |
2014 |
2014 |
2015 |
2014 |
|||||||||||||||
(In thousands, except for per share data) |
|||||||||||||||||||
Total Revenues |
73,508 |
79,458 |
79,458 |
283,992 |
281,925 |
286,909 |
|||||||||||||
Net Cash from Derivative Instruments |
23,122 |
9,379 |
9,379 |
92,118 |
5,943 |
5,943 |
|||||||||||||
Adjusted Total Revenues |
96,630 |
88,837 |
88,837 |
376,110 |
287,868 |
292,852 |
|||||||||||||
Adjusted EBITDAX (1) |
$ |
74,367 |
$ |
66,579 |
$ |
66,579 |
$ |
285,058 |
$ |
215,281 |
$ |
222,552 |
|||||||
Adjusted Net Income (1) |
12,074 |
12,621 |
15,683 |
48,630 |
54,329 |
70,600 |
|||||||||||||
Adjusted Net Income per Common Share - Diluted |
0.12 |
0.16 |
0.20 |
0.56 |
0.75 |
0.94 |
|||||||||||||
Net Income (loss) |
$ |
(20,751) |
$ |
89,503 |
$ |
57,738 |
$ |
(18,254) |
$ |
2,498 |
$ |
116,121 |
|||||||
Net Income (loss) per Common Share - Diluted |
$ |
(0.21) |
$ |
1.15 |
$ |
0.74 |
$ |
(0.21) |
$ |
0.03 |
$ |
1.55 |
|||||||
(1) |
Adjusted EBITDAX and adjusted net income are non-GAAP financial measures. For a definition of Adjusted EBITDAX and adjusted net income and a reconciliation of Adjusted EBITDAX and adjusted net income to net income, see "Use of Non-GAAP financial measures" and our annual and quarterly statements of operations at the end of this release. |
For the quarter ended December 31, 2015, total revenues, excluding the revenue impact from realized derivative instruments, were $73.5 million, a 7% decrease over the prior year quarter of $79.5 million. Adjusted total revenues, including the net cash from derivative instruments, were $96.6 million, an increase of 9% over the prior year quarter of $88.8 million. Adjusted EBITDAX for the quarter ended was $74.4 million, an increase of 12% over the prior year of $66.6 million. Adjusted net income for the quarter ended was $12.1 million, or $0.12 per diluted share, compared with adjusted net income for the prior year of $12.6 million or $0.16 per diluted share. Net loss for the fourth quarter of 2015 was $20.8 million, or ($0.21) per diluted share, while net income for the fourth quarter of 2014 was $89.5 million, or $1.15 per diluted share. Pro forma net income for the fourth quarter of 2014 was $57.7 million, or $0.74 per diluted share.
For the year ended December 31, 2015, total revenues, excluding the revenue impact from realized derivative instruments, were $284.0 million, a 1% increase over the prior year of $281.9 million. Adjusted total revenues, including the net cash from derivative instruments, was $376.1 million, an increase of 31% over the prior year ended 2014 of $287.9 million. Adjusted EBITDAX for the year ended 2015 was $285.1 million, an increase of 32% over the prior year ended 2014 of $215.3 million. Adjusted net income for the year ended 2015 was $48.6 million, or $0.56 per diluted share, a 10% decrease from the prior year ended 2014 of $54.3 million or $0.75 per diluted share. Net loss for the year ended 2015 was $18.3 million, or ($0.21) per diluted share, while net income for the year ended 2014 was $2.5 million, or $0.03 per diluted share. Pro forma net income for the year ended 2015 was $116.1 million, or $1.55 per diluted share.
Operational Update
The Company operated 3 horizontal drilling rigs during the fourth quarter and drilled 10 operated horizontal wells. RSP completed 8 operated horizontal wells (1 Lower Spraberry, 4 Wolfcamp A and 3 Wolfcamp B). The Company exited the year with 20 drilled and uncompleted wells, 18 uncompleted horizontal wells and 2 uncompleted vertical wells. During 2015, RSP completed 45 operated horizontal wells (2 Middle Spraberry, 15 Lower Spraberry, 14 Wolfcamp A and 14 Wolfcamp B) and 19 operated vertical wells in 2015.
4Q15 Wells | ||||||||
Drilled |
Completed |
Waiting On Completion | ||||||
4Q15 Wells | ||||||||
Operated Wells |
||||||||
Horizontal |
10 |
8 |
18 |
|||||
Vertical |
1 |
— |
2 |
|||||
Non-Operated Wells |
||||||||
Horizontal |
15 |
8 |
13 |
|||||
Vertical |
— |
— |
— |
|||||
Full-Year 2015 Wells | ||||||||
Operated Wells |
||||||||
Horizontal |
53 |
45 |
||||||
Vertical |
12 |
19 |
||||||
Non-Operated Wells |
||||||||
Horizontal |
49 |
46 |
||||||
Vertical |
4 |
5 |
Quarterly Operational Results | |||
Three Months Ended December 31, | |||
2015 |
2014 | ||
Production data: |
|||
Oil (MBbls) |
1,683 |
1,080 | |
Natural gas (MMcf) |
1,554 |
939 | |
NGLs (MBbls) |
289 |
248 | |
Total (MBoe) |
2,231 |
1,485 | |
Average net daily production (Boe/d) |
24,250 |
16,141 | |
Average prices before effects of hedges (1) (2): |
|||
Oil (per Bbl) |
$40.00 |
$66.34 | |
Natural gas (per Mcf) |
1.91 |
3.14 | |
NGLs (per Bbl) |
11.13 |
19.60 | |
Total (per Boe) |
$32.95 |
$53.51 | |
Average realized prices after effects of hedges (1) (2): |
|||
Oil (per Bbl) |
$53.74 |
$74.97 | |
Natural gas (per Mcf) |
1.91 |
3.20 | |
NGLs (per Bbl) |
11.13 |
19.60 | |
Total (per Boe) |
$43.31 |
$59.82 | |
Average costs (per Boe): |
|||
Lease operating expenses (excluding gathering and transportation) |
$4.76 |
$7.01 | |
Gathering and transportation |
0.42 |
0.54 | |
Production and ad valorem taxes |
2.56 |
3.22 | |
Depreciation, depletion and amortization |
17.88 |
20.71 | |
General and administrative - recurring cash component |
2.24 |
4.21 | |
General and administrative - recurring stock comp (3) |
0.93 |
0.58 | |
General and administrative - IPO stock comp (4) |
0.15 |
2.54 |
(1) |
Average prices shown in the table reflect prices both before and after the effects of our cash payments/receipts on our commodity derivative transactions. Our calculation of such effects includes realized gains or losses on cash settlements for commodity derivative transactions and an adjustment to reflect premiums incurred previously or upon settlement that are attributable to instruments settled in the period, if applicable. |
(2) |
Average prices for oil are net of transportation costs. Average prices for natural gas do not include transportation costs; instead, transportation costs related to our gas production and sales are included in gathering and transportation which is included in lease operating expenses in our consolidated statements of operations. No transportation costs are associated with NGL production and sales. |
(3) |
Represents compensation expense related to restricted stock awards and performance share awards granted as part of the Company's ongoing compensation and retention programs. |
(4) |
Includes compensation expense related to the successful completion of the Company's initial public offering ("IPO"). These costs include cash bonuses, one-time restricted stock awards, and expense related to performance units. |
Production volumes for the quarter ended December 31, 2015 averaged 24,250 Boe/d or a total of 2,231 MBoe, an increase of 50% over prior year's fourth quarter of 16,141 Boe/d. Production for the fourth quarter of 2015 was comprised of 75% crude oil, 13% NGLs and 12% natural gas. RSP's average realized commodity price per barrel of oil equivalents for the fourth quarter of 2015, before the effects of hedges, was $32.95. RSP's average realized oil price for the fourth quarter of 2015, before the effects of hedges, was $40.00 per barrel, a negative $2.18 differential compared to NYMEX WTI pricing for the same period, or 95% of NYMEX WTI pricing. RSP's average realized natural gas price for the fourth quarter of 2015, before the effects of hedges, was $1.91 per MMBtu, a negative $0.36 differential compared to NYMEX Henry Hub pricing for the same period, or 84% of NYMEX Henry Hub pricing. Per unit cash operating expenses excluding interest expense but including lease operating expense, gathering and transportation, production and ad valorem taxes and recurring cash general and administrative expenses were $9.98 per Boe, a 33% decrease from prior year's comparable quarter and a 5% decrease from the prior quarter.
Year-End Operational Results | |||
Twelve Months Ended December 31, | |||
2015 |
2014 | ||
Production data: |
|||
Oil (MBbls) |
5,805 |
3,049 | |
Natural gas (MMcf) |
4,991 |
2,974 | |
NGLs (MBbls) |
1,045 |
718 | |
Total (MBoe) |
7,682 |
4,263 | |
Average net daily production (Boe/d) |
21,047 |
11,679 | |
Average prices before effects of hedges (1) (2): |
|||
Oil (per Bbl) |
$45.36 |
$83.10 | |
Natural gas (per Mcf) |
2.11 |
3.55 | |
NGLs (per Bbl) |
9.75 |
25.04 | |
Total (per Boe) |
$36.97 |
$66.13 | |
Average realized prices after effects of hedges (1) (2): |
|||
Oil (per Bbl) |
$61.22 |
$85.01 | |
Natural gas (per Mcf) |
2.11 |
3.59 | |
NGLs (per Bbl) |
9.75 |
25.04 | |
Total (per Boe) |
$48.96 |
$67.53 | |
Average costs (per Boe): |
|||
Lease operating expenses (excluding gathering and transportation) |
$6.46 |
$7.49 | |
Gathering and transportation |
0.46 |
0.65 | |
Production and ad valorem taxes |
2.60 |
4.63 | |
Depreciation, depletion and amortization |
20.05 |
20.61 | |
General and administrative - recurring cash component |
2.33 |
4.25 | |
General and administrative - recurring stock comp (3) |
1.03 |
0.64 | |
General and administrative - IPO stock comp (4) |
0.19 |
4.11 |
(1) |
Average prices shown in the table reflect prices both before and after the effects of our cash payments/receipts on our commodity derivative transactions. Our calculation of such effects includes realized gains or losses on cash settlements for commodity derivative transactions and an adjustment to reflect premiums incurred previously or upon settlement that are attributable to instruments settled in the period, if applicable. |
(2) |
Average prices for oil are net of transportation costs. Average prices for natural gas do not include transportation costs; instead, transportation costs related to our gas production and sales are included in gathering and transportation which is included in lease operating expenses in our consolidated statements of operations. No transportation costs are associated with NGL production and sales. |
(3) |
Represents compensation expense related to restricted stock awards and performance share awards granted as part of the Company's ongoing compensation and retention programs. |
(4) |
Includes compensation expense related to the successful completion of the Company's IPO. These costs include cash bonuses, one-time restricted stock awards, and expense related to performance units. |
Production volumes for the year ended December 31, 2015 averaged 21,047 Boe/d or a total of 7,682 MBoe, an increase of 80% over prior year's volume of 11,679 Boe/d. Production for 2015 was comprised of 75% crude oil, 14% NGLs and 11% natural gas. RSP's average realized commodity price per barrel of oil equivalents for 2015, before the effects of hedges, was $36.97. RSP's average realized oil price for 2015, before the effects of hedges, was $45.36 per barrel, a negative $3.44 differential compared to NYMEX WTI pricing for the same period, or 93% of NYMEX WTI pricing. RSP's average realized natural gas price for 2015, before the effects of hedges, was $2.11 per MMBtu, a negative $0.56 differential compared to NYMEX Henry Hub pricing for the same period, or 79% of NYMEX Henry Hub pricing. Per unit cash operating expenses excluding interest expense but including lease operating expense, gathering and transportation, production and ad valorem taxes and recurring cash general and administrative expenses were $11.85 per Boe, a 30% decrease from prior year.
Proved Reserves Summary
RSP's total proved reserves at December 31, 2015, audited by Netherland, Sewell, & Associates, Inc., our independent petroleum engineers, increased 50% over the prior year to 159.2 MMBoe. Oil reserves increased 60% compared to prior year and totaled 111.1 MMBbls and combined with NGLs of 25.8 MMBbls equaled 86% of total proved reserves with natural gas of 133.5 MMcf making up the remaining 14% of total proved reserves. Proved developed reserves increased 54% compared to last year and were 64.6 MMBoe or 41% of total proved reserves.
The following table presents our estimated net proved oil and natural gas reserves as of December 31, 2015 and our net proved oil and natural gas reserves as of December 31, 2014 and in each case, prepared in accordance with the rules and regulations of the SEC.
Natural Gas (MMcf) |
Oil (MBbls) |
NGLs (MBbls) |
MBoe | |||||||||
Proved developed and undeveloped reserves: |
||||||||||||
As of December 31, 2014 |
92,422 |
69,273 |
21,739 |
106,416 |
||||||||
Revisions of previous estimates |
(20,205) |
(12,886) |
(4,251) |
(20,505) |
||||||||
Extensions, discoveries and other additions |
55,313 |
50,375 |
6,971 |
66,565 |
||||||||
Purchases of minerals in place |
10,968 |
10,178 |
2,373 |
14,379 |
||||||||
Production |
(4,991) |
(5,805) |
(1,045) |
(7,682) |
||||||||
As of December 31, 2015 |
133,507 |
111,135 |
25,787 |
159,173 |
||||||||
RSP's acquisitions and drilling program added 66.6 MMBoe in 2015, replacing 1,042% of 2015 production as calculated by the sum of reserve extensions, discoveries, purchases and revisions (excluding price revisions), divided by annual production. The Company's drill-bit F&D costs were $5.77 per BOE calculated as costs incurred for exploration and development divided by the sum of revisions of previous estimates (excluding price revisions), extensions, discoveries and other additions. See "Drill-Bit F&D and Reserve Replacement Ratio" below for the calculations of the reserve replacement ratio and drill-bit F&D costs.
Capital Expenditures
RSP's capital expenditures for the year ended December 31, 2015 totaled $391.0 million which included approximately $354.0 million of drilling and completion and $37.0 million of infrastructure and other. Of the total capital spent, approximately $66.1 million was on non-operated properties and approximately $48.8 million was on drilling wells the Company expects to complete in 2016.
Liquidity Update
As of December 31, 2015, the Company had no borrowings on its revolving credit facility, which has a $600 million borrowing base, and had $142.7 million of cash on hand, for total liquidity available of $742.7 million. Since the end of the third quarter 2015 RSP has acquired $29.4 million of additional interests in the WPR properties and other properties the Company acquired during 2015. Pro forma for these additional acquisitions RSP had $114.1 million of cash at year-end and approximately $714.1 million of total liquidity available.
Hedging
For 2016, the Company has three way collars covering 555,000 barrels of oil production at a blended floor price of $55.00, a blended ceiling price of $74.08, and a short-put price of $45.00.
Description & Production Period |
Volume (Bbls) |
Weighted Average Floor price ($/Bbl) (1) |
Weighted Average Ceiling price ($/Bbl) (1) |
Weighted Average Short-Put price ($/Bbl) (1) | ||||
Crude Oil Collars: |
||||||||
January 2016 - March 2016 |
75,000 |
$55.00 |
$72.00 |
$45.00 | ||||
January 2016 - December 2016 |
480,000 |
$55.00 |
$74.41 |
$45.00 |
(1) |
The crude oil derivative contracts are settled based on the month's average daily NYMEX price of West Texas Intermediate Light Sweet Crude. |
Fourth Quarter and Year-End 2015 Earnings Release and Conference Call
RSP will host a conference call for investors at 12:00 p.m. Central Time on Thursday, February 25, 2016 to discuss fourth quarter 2015 results. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer and Scott McNeill, Chief Financial Officer.
The call may be accessed live over the telephone by dialing (877) 705-6003, or for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (877) 870-5176, or for international callers (858) 384-5517. The passcode for the replay is 13629161. The replay will be available until March 10, 2016. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto RSP's website at www.rsppermian.com in the Investor Relations section. A replay of the webcast will also be available following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Dawson and Ector. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that RSP assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. Forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of RSP. Information concerning these risks and other factors can be found in RSP's filings with the SEC, including its Form 10-K, which can be obtained free of charge on the SEC's web site located at http://www.sec.gov. RSP undertakes no obligation to update or revise any forward-looking statement.
Use of Non-GAAP Financial Measures
We define Adjusted EBITDAX as oil and gas revenues including net cash receipts (payments) on settled derivative instruments and premiums paid on put options that settled during the period, less lease operating expenses, production and ad valorem taxes, and general and administrative expenses excluding stock based compensation. Adjusted net income deducts from Adjusted EBITDAX depreciation, depletion, and amortization, accretion on asset retirement obligations, exploration expenses, interest expense, stock-based compensation and adjusted income tax expense.
Management believes Adjusted EBITDAX and adjusted net income are useful because they allow us to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDAX and adjusted net income because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDAX and adjusted net income should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDAX and adjusted net income are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDAX. Our computations of Adjusted EBITDAX and adjusted net income may not be comparable to other similarly titled measures of other companies.
The following statements of operations include a reconciliation of the non-GAAP financial measures of Adjusted EBITDAX and Adjusted Net Income to the GAAP financial measure of net income.
Three Months Ended December 31, |
Twelve Months Ended December 31, | |||||||||||||||||||||||||||||
2015 Actual |
2014 Actual |
2014 Pro Forma |
2015 Actual |
2014 Actual |
2014 Pro Forma | |||||||||||||||||||||||||
Revenues: |
||||||||||||||||||||||||||||||
Oil sales |
$ |
67,318 |
$ |
71,646 |
$ |
71,646 |
$ |
263,286 |
$ |
253,371 |
$ |
257,830 |
||||||||||||||||||
Natural gas sales |
2,973 |
2,951 |
2,951 |
10,517 |
10,572 |
10,762 |
||||||||||||||||||||||||
NGL sales |
3,217 |
4,861 |
4,861 |
10,189 |
17,982 |
18,317 |
||||||||||||||||||||||||
Total revenues |
73,508 |
79,458 |
79,458 |
283,992 |
281,925 |
286,909 |
||||||||||||||||||||||||
Net cash from derivative instruments |
23,122 |
9,379 |
9,379 |
92,118 |
5,943 |
5,943 |
||||||||||||||||||||||||
Adjusted Total Revenues |
$ |
96,630 |
$ |
88,837 |
$ |
88,837 |
$ |
376,110 |
$ |
287,868 |
$ |
292,852 |
||||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||||||||
Lease operating expenses |
11,546 |
11,222 |
11,222 |
53,124 |
34,704 |
35,398 |
||||||||||||||||||||||||
Production and ad valorem taxes |
5,722 |
4,781 |
4,781 |
19,995 |
19,758 |
20,009 |
||||||||||||||||||||||||
General and administrative expenses |
4,995 |
6,255 |
6,255 |
17,933 |
18,125 |
14,893 |
||||||||||||||||||||||||
Total operating costs and expenses |
$ |
22,263 |
$ |
22,258 |
$ |
22,258 |
$ |
91,052 |
$ |
72,587 |
$ |
70,300 |
||||||||||||||||||
Adjusted EBITDAX (2) |
$ |
74,367 |
$ |
66,579 |
$ |
66,579 |
$ |
285,058 |
$ |
215,281 |
$ |
222,552 |
||||||||||||||||||
Depreciation, depletion, and amortization |
39,887 |
30,758 |
30,758 |
154,039 |
87,844 |
91,477 |
||||||||||||||||||||||||
Asset retirement obligation accretion |
84 |
38 |
38 |
336 |
142 |
151 |
||||||||||||||||||||||||
Exploration |
96 |
899 |
899 |
2,380 |
3,854 |
3,854 |
||||||||||||||||||||||||
Interest expense |
13,175 |
9,517 |
9,517 |
43,538 |
14,031 |
14,031 |
||||||||||||||||||||||||
Stock-based compensation, net |
2,409 |
4,634 |
862 |
9,384 |
20,232 |
2,726 |
||||||||||||||||||||||||
Adjusted income before income taxes |
$ |
18,716 |
$ |
20,733 |
$ |
24,505 |
$ |
75,381 |
$ |
89,178 |
$ |
110,313 |
||||||||||||||||||
Adjusted income tax expense |
6,642 |
8,112 |
8,822 |
26,751 |
34,849 |
39,713 |
||||||||||||||||||||||||
Adjusted net income (2) |
$ |
12,074 |
$ |
12,621 |
$ |
15,683 |
$ |
48,630 |
$ |
54,329 |
$ |
70,600 |
||||||||||||||||||
Adjusted net income per common share - Basic |
$ |
0.12 |
$ |
0.16 |
$ |
0.20 |
$ |
0.56 |
$ |
0.75 |
$ |
0.94 |
||||||||||||||||||
Adjusted net income per common share - Diluted |
$ |
0.12 |
$ |
0.16 |
$ |
0.20 |
$ |
0.56 |
$ |
0.75 |
$ |
0.94 |
||||||||||||||||||
Other items included in income before taxes: |
||||||||||||||||||||||||||||||
Non-cash (loss) on derivatives, net |
$ |
(19,683) |
$ |
70,143 |
$ |
70,143 |
$ |
(71,212) |
$ |
75,527 |
$ |
75,527 |
||||||||||||||||||
Impairments |
(30,031) |
(4,344) |
(4,344) |
(34,269) |
(4,344) |
(4,344) |
||||||||||||||||||||||||
Gain (loss) on asset sale |
(302) |
(15) |
(15) |
(306) |
(13) |
(13) |
||||||||||||||||||||||||
Other income |
242 |
(74) |
(74) |
469 |
(44) |
(44) |
||||||||||||||||||||||||
Income (loss) before income taxes |
$ |
(37,700) |
$ |
78,331 |
$ |
81,393 |
$ |
(56,688) |
$ |
125,455 |
$ |
141,726 |
||||||||||||||||||
Income tax (benefit) expense |
$ |
(16,949) |
$ |
(11,172) |
$ |
23,655 |
$ |
(38,434) |
$ |
122,957 |
$ |
25,605 |
||||||||||||||||||
Net Income (loss) |
$ |
(20,751) |
$ |
89,503 |
$ |
57,738 |
$ |
(18,254) |
$ |
2,498 |
$ |
116,121 |
||||||||||||||||||
Net income (loss) per common share - Basic |
$ |
(0.21) |
$ |
1.15 |
$ |
0.74 |
$ |
(0.21) |
$ |
0.03 |
$ |
1.55 |
||||||||||||||||||
Net income (loss) per common share - Diluted |
$ |
(0.21) |
$ |
1.15 |
$ |
0.74 |
$ |
(0.21) |
$ |
0.03 |
$ |
1.55 |
||||||||||||||||||
Weighted Average Common Shares Outstanding: |
||||||||||||||||||||||||||||||
Basic |
98,556 |
77,292 |
77,292 |
86,770 |
71,898 |
74,297 |
||||||||||||||||||||||||
Diluted |
98,556 |
77,292 |
77,292 |
86,770 |
71,898 |
74,297 |
||||||||||||||||||||||||
(1) |
Information presented in this table reflects actual results of RSP and its predecessor. The IPO and related transactions affect the comparability of each period presented in the table above. 2014 information represents information with respect to RSP's predecessor for the first 22 days of 2014 plus that of RSP for the remainder of the year. |
(2) |
Adjusted EBITDAX and adjusted net income are non-GAAP financial measures. For a definition of Adjusted EBITDAX and adjusted net income, see "Use of Non-GAAP Financial Measures" above. |
Summary Balance Sheet | ||||||||||
December 31, 2015 |
December 31, 2014 |
|||||||||
(in thousands) | ||||||||||
Cash and cash equivalents |
$ |
142,741 |
$ |
56,292 |
||||||
Other current assets |
44,799 |
117,450 |
||||||||
Total current assets |
187,540 |
173,742 |
||||||||
Property, plant and equipment, net |
2,758,630 |
2,094,618 |
||||||||
Other long-term assets |
33,401 |
21,587 |
||||||||
Total assets |
$ |
2,979,571 |
$ |
2,289,947 |
||||||
Current liabilities |
77,402 |
104,252 |
||||||||
Long-term debt |
698,650 |
500,000 |
||||||||
Other long-term liabilities |
344,935 |
359,924 |
||||||||
Total stockholders'/members' equity |
1,858,584 |
1,325,771 |
||||||||
Total liabilities and stockholders'/members' equity |
$ |
2,979,571 |
$ |
2,289,947 |
Drill-Bit F&D and Reserve Replacement Ratio | |||||
2015 | |||||
Production (MBoe) |
(A) |
7,682 |
|||
Proved Reserves (MBoe) |
|||||
Non-price revisions (1) |
(B) |
(863) |
|||
Purchases |
14,379 |
||||
Extensions and discoveries |
(C) |
66,565 |
|||
Total additions |
(D) |
80,081 |
|||
Costs Incurred (thousands) |
|||||
Property acquisition costs |
|||||
Proved |
104,532 |
||||
Unproved |
351,806 |
||||
Exploration |
(E) |
— |
|||
Development |
(F) |
378,910 |
|||
Total costs incurred |
(G) |
$ |
835,248 |
||
Drill-bit F&D ($/Boe) |
(E+F) / (B+C) |
5.77 |
|||
All sources F&D ($/Boe) |
(G) / (D) |
10.43 |
|||
Reserve replacement ratio |
(D) / (A) |
1,042 |
% | ||
(1) |
Total revisions for 2014 were 1,529 MBoe, including 5,582 MBoe non-price related revisions and negative revisions of 4,053 MBoe related to price. |
Logo - http://photos.prnewswire.com/prnh/20160202/328754LOGO
SOURCE RSP Permian, Inc.
DALLAS, Feb. 2, 2016 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced that it will release its fourth quarter and full-year 2015 results after the New York Stock Exchange closes on Wednesday, February 24, 2016. In connection with the earnings release, RSP will host a conference call and webcast for investors on Thursday, February 25, 2016 at 12:00 p.m. Central Time (1:00 p.m. Eastern Time) to discuss the Company's fourth quarter and full-year results. Hosting the call will be Steve Gray, Chief Executive Officer, Zane Arrott, Chief Operating Officer and Scott McNeill, Chief Financial Officer.
The call can be accessed live over the telephone by dialing (877) 705-6003 or, for international callers, (201) 493-6725. A replay will be available shortly after the call and can be accessed by dialing (877) 870-5176 or, for international callers, (858) 384-5517. The passcode for the replay is 13622933. The replay of the call will be available until March 10, 2016.
Interested parties may also listen to a simultaneous internet webcast of the conference call by logging onto RSP Permian's website at www.rsppermian.com in the Investor Relations - Events section. A replay of the webcast will also be available for approximately 30 days following the call.
About RSP Permian, Inc.
RSP is an independent oil and natural gas company focused on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of West Texas. The vast majority of our acreage is located on large, contiguous acreage blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Dawson and Ector. The Company's common stock is traded on the NYSE under the ticker symbol "RSPP." For more information, visit www.rsppermian.com.
Logo - http://photos.prnewswire.com/prnh/20160202/328754LOGO
SOURCE RSP Permian, Inc.
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