RSPP Rsp Permian, Inc. (delisted)

DALLAS, May 13, 2014 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (NYSE: RSPP) today announced financial and operating results for the quarter ended March 31, 2014.

Unless otherwise indicated, information presented in this release is on a pro forma basis, giving effect to the completion of the corporate reorganization and acquisitions in connection with the Company's initial public offering (the "IPO") and adjusted to eliminate non-recurring items associated with the IPO.  The Company's Form 10-Q that will be filed with the Securities and Exchange Commission (the "SEC") will include the combined results of RSP Permian, L.L.C. and Rising Star Energy Development Co., the Company's historical accounting predecessor, in addition to the actual and pro forma results.

Highlights

• Successful completion of the Company's IPO, issuing 23 million shares at $19.50 per share for gross proceeds of $449 million.
• Average production of 9,339 Boe/d in the first quarter of 2014, a 63% increase over the first quarter of 2013 average production of 5,713 Boe/d and a 19% increase over the fourth quarter of 2013 average production of 7,837 Boe/d.
• Net income of $14.7 million, or $0.20 per diluted share.  Net income includes a $3.8 million non-cash loss on derivatives and other income. Our adjusted net income, which does not include these items, was $17.0 million, or $0.23 per diluted share.
• Adjusted EBITDAX of $48.7 million in the first quarter of 2014; a 21% increase from $40.3 million in the fourth quarter of 2013.
• Added fourth operated horizontal rig and second operated vertical rig; all operated horizontal rigs are drilling stacked-laterals from multi-well pads.
• Drilled first operated Wolfcamp A well, Cross Bar Ranch 1717H (WA), on a dual-well pad with another completion in the Wolfcamp B without communication between the A and B zones.  The wells are in early flowback with the pad currently producing over 1,700 Boe/d.
• Drilled first operated long Middle Spraberry well, Johnson Ranch 912MS, RSP's third horizontal Middle Spraberry well, producing at a peak 30-day IP rate of 751 Boe/d.
• As previously announced, acquired an additional 5,316 net acres prospective for horizontal development located in Martin, Glasscock and Dawson counties for an aggregate purchase price of approximately $79 million.

"Our strong operating performance and growth in the first quarter was highlighted by putting on three dual well/dual zone completions on production.  Our horizontal drilling operations have moved to full implementation of multi-well/multi-zone pad development which we believe will lead to efficient development of our oil and gas resource base.  We are particularly encouraged about the continued success of our Spraberry horizontal program where our early results in the Lower Spraberry indicate economic returns as strong as our Wolfcamp B wells," stated Steve Gray, Chief Executive Officer of RSP. "RSP is off to a great start in 2014, and we continue to look at acquisition opportunities where we can use our horizontal expertise to generate attractive rates of returns." 

Recent Horizontal Wells and Current Activity Update

During the first quarter of 2014, RSP drilled 16 horizontal wells (seven operated) and completed 10 horizontal wells (six operated).  The Company is currently in the drilling or completion phase on 10 operated horizontal wells in five different horizontal zones: one Middle Spraberry, four Lower Spraberry, one Wolfcamp A, three Wolfcamp B, and one Wolfcamp D.  The Company's operated horizontal rigs are operating in Midland County (two rigs), Andrews County (one rig), and Dawson County (one rig).  The Company's two operated vertical rigs are both operating in Midland County.  The Company expects to operate four horizontal rigs and two vertical rigs for the remainder of 2014.

The following table presents a summary of all recent operated horizontal wells drilled with more than one month of production history:

Quarterly Operational Results

Production volumes for the quarter ended March 31, 2014 averaged 9,339 Boe/d or a total of 841 MBoe.  Production for the first quarter of 2014 was comprised of 71% crude oil, 17% NGLs, and 12% natural gas.  Our average realized oil, natural gas, and NGL prices were $94.21/Bbl, $3.86/Mcf, and $30.82/Bbl, respectively.  Per unit cash expenses (including lease operating, production and ad valorem taxes, and general and administrative) were $16.60 per Boe.  For the quarter, Adjusted EBITDAX was $48.7 million and adjusted net income totaled $17.0 million or $0.23 per diluted share.

Capital Expenditures

Liquidity Update

The Company retired all of its outstanding debt with a portion of its proceeds from the IPO. Since the IPO, the Company has drawn on its revolving credit facility to fund its drilling and for acquisitions.  As of March 31, 2014, the Company had borrowed $110 million on its revolving credit facility which has a $300 million borrowing base, and had $99 million of debt, net of cash, outstanding, leaving the Company approximately $200 million of liquidity under its revolving credit facility. 

Hedging Update

The Company hedged approximately 60% of remaining 2014 expected oil production at an average floor of approximately $88 / bbl and approximately 60% of remaining 2014 natural gas production at a floor of $4.00/MMBtu.

Our open positions as of March 31, 2014 were as follows:

Subsequent to March 31, 2014 we entered into the following oil and natural gas commodity hedges:

Earnings Conference Call
On May 13, 2014, at 10:00 a.m. Central Time, RSP will discuss its first quarter 2014 results.  Hosting the call will be Steven 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 13581256.  The replay will be available until May 27, 2014.  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 Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, 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 it allows 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.

SOURCE RSP Permian, Inc.