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RSP Permian Q4 earnings released Tuesday were better than expected with revenue and production soaring. $RSPP is seen as a 'pure Permian play' with 'Silver Hill' in the oil-weighted area of the Delaware Basin portion of the Permian. Production for the fourth quarter jumped 74% to 62,400 barrels of oil per day.

RSP Permian

The Permian has been the epicenter of low-cost production during the crude price fall.  

Earnings

Adjusted EPS of 32 cents on revenue rising 103% to $249 million. EPS came in at expected at 32 cents and revenue higher then the expected $247 million.

Reaction: RSP Permian NYSE: $RSPP

After-hours $35.82 - 2.4%

Outlook

  • Full-year oil production rising 30%-41% over 2017's levels to 72,000-78,000 barrels per day
  • Research and development capital expenditures of $815 million-$895 million.
  • $RSPP sees at least a 30% production growth increase in 2019 and 2020 and "substantial free cash flow" if oil stays at $50 per barrel.

RSPP Key Plays

Midland Basin

  • The Keystone 1007 Wolfcamp A well (9,800') 
  • The Spanish Trail 347 02 Wolfcamp A well (6,500') 

Delaware Basin

  • The Rudd Draw 29 03 01H Third Bone Spring well (4,440') 
  • The Ludeman A 603 Wolfcamp B well (4,830') 
  • The Ludeman D 2105H Delaware Basin Lower Wolfcamp A well (4,750') 
  • The Rudd Draw 26-21 01H Delaware Basin Wolfcamp XY well (6,700') 

Liquidity

About RSP Permian

RSP Permian, Inc. is an independent oil and natural gas company, focuses on the acquisition, exploration, development and production of unconventional oil and associated liquids-rich natural gas reserves in the Permian Basin of west Texas. RSP Permian acquired 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 in aggregate, implying a total purchase price of approximately $2.4 billion.

Silver Hill is comprised of two privately held entities controlled by affiliates of Kayne Anderson Capital Advisors and Ridgemont Equity Partners that collectively own approximately 68,000 gross /41,000 net acres in northeast Loving and northwest Winkler Counties, Texas with roughly 15 MBOEPD of current net production from 58 producing wells (49 horizontals) and about 3,200 gross /1,950 net total undeveloped locations.

RSP Permian acquisition map of Silver Hill

Prior to Silver Hill

Delaware 'Silver Hill' 41,000 net acres Transaction highlights

The acquisition created substantial scale with combined current production of approximately 50 MBOEPD, over 100,000 net surface acres, over 500,000 net effective horizontal acres and over 3,600 net drilling locations with substantial additional upside from tighter spacing assumptions.

  • - Unique acquisition of a highly contiguous acreage position in the core of the Delaware Basin that has approximately 68,000 gross / 41,000 net surface acres located in Loving and Winkler counties
  • - Acreage located in the thickest, deepest part of the Delaware Basin, which is significantly over-pressured
  • - Blocked up acreage configuration conducive for longer laterals and efficient development ~250,000 net effective horizontal acres across 7 horizontal pay zones
  • - Significant operational control with over 80% of acreage operated - Average working interest in operated properties of approximately 83%
  • - One operated rig holds acreage position - Offset operators include EOG, Anadarko, Shell, Matador and Devon
  • - Meaningful and growing production base with current net production of approximately 15.0 MBOEPD (69% oil, 86% liquids) and two operated horizontal rigs currently drilling on acreage position
  • - Deep inventory of attractive horizontal drilling locations across multiple horizontal stacked pay zones, including the Wolfcamp B, upper and lower Wolfcamp A, 3rd Bone Spring, 2nd Bone Spring, Avalon, and Brushy Canyon EURs of ~1.0 MMBOE common across acreage position based on management’s estimates ~3,200 gross / ~1,950 net locations with average lateral length of approximately 6,300′

Source: RSP Permian

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