DALLAS, May 12, 2015 /PRNewswire/ -- RSP Permian, Inc.
("RSP" or the "Company") (NYSE: RSPP) today announced financial and
operating results for the quarter ended March 31, 2015. In addition, the Company
filed its Quarterly Report on Form 10-Q for the quarter ended
March 31, 2015 with the Securities
and Exchange Commission (the "SEC") and posted an updated quarterly
presentation on its website at www.rsppermian.com.
Certain information presented in this release is on a pro forma
basis, giving effect to the corporate reorganization and
acquisitions effected in connection with the Company's initial
public offering (the "IPO") completed on January 23, 2014, as if such transactions
occurred on January 1, 2014, and
adjusted to eliminate certain non-recurring expenses associated
with the IPO, as further described in the Company's Annual Report
on Form 10-K for the year ended December 31,
2014 (the "Form 10-K").
First Quarter 2015 Highlights
- Production increased by 86% to 15.9 MBoe/d as compared to
1Q14
- Exit production rate was 17.7 MBoe/d, a 11% increase over 1Q15
average
- Adjusted EBITDAX increased by 45% to $59.8 million as compared to 1Q14
- Net loss of $1.0 million, or
($0.01) per diluted share. Includes a
$17.1 million non-cash loss on
derivatives. Adjusted net income, which does not include that item,
was $10.0 million, or $0.13 per diluted share
- Completed eight operated horizontal wells (two Middle
Spraberry, four Lower Spraberry, two Wolfcamp B) and three operated
vertical wells
- Update on our previously released Spanish Trail 4817 three well
pad, (Middle Spraberry, Lower Spraberry, Wolfcamp B), 7,400'
laterals, generated peak average 30-day IPs of 1,143 Boe/d
- Cross Bar Ranch 3025 two well pad (Middle Spraberry, Lower
Spraberry), 9,400' laterals, average 30-day IPs of 1,128 Boe/d
- Cross Bar Ranch 1811 two well pad (Middle Spraberry, Lower
Spraberry), 7,350' laterals, average 30-day IPs of 834 Boe/d, with
rates continuing to increase
- Began completion operations on remaining 8 of 10 horizontal
wells drilled in Johnson Ranch Wolfcamp A/B pilot across a 960 acre
production unit
- Cash operating expenses decreased by 11% to $14.65 per Boe as compared to 1Q14
- Completed follow-on equity offering, selling 5.0 million
primary shares, resulting in approximately $127.9 million of net proceeds to the Company. In
April 2015, the underwriter fully
exercised its option to purchase an additional 0.75 million shares
which provided additional proceeds of $19.2
million to RSP.
- Maintained a strong balance sheet with a 1.6x net debt/EBITDAX
ratio and over $600 million of
liquidity, including $500 million on
an undrawn borrowing base. Effective May 1,
2015, the lenders under our revolving credit facility
reaffirmed our $500 million borrowing
base.
Steve Gray, Chief Executive
Officer, commented, "In the fourth quarter of last year and
continuing into the first quarter, we decided to defer many of our
well completions to allow oilfield service costs to adjust to a
lower oil price environment. After well costs decreased from
peak levels we experienced in the fourth quarter of last year, we
resumed our completion operations late in the first quarter and
brought on several prolific horizontal wells, which pushed our
production exit rate in the quarter close to 18,000 Boe/d and it
has continued to increase. We expect to complete the
remainder of our inventoried wells fairly evenly over the course of
the year, enabling us to continue our considerable growth in 2015
as outlined in our previously released guidance. We are pleased
with our recent strong well results and the returns we are
generating at current oil prices, reduced service costs, and
increased drilling and completion efficiencies. If these
conditions are maintained, we anticipate accelerating our drilling
plans in the second half of 2015 from our currently planned
activity levels."
Summary Financial
Results
|
|
Actual
Three Months
Ended
March
31,
|
Pro
Forma
Three
Months
Ended
March
31,
|
|
2015
|
2014
|
2014
|
|
(In thousands,
except for per share data)
|
|
|
|
|
Total
Revenues
|
$51,375
|
$57,758
|
$62,744
|
Net Cash from
Derivative Instruments
|
29,471
|
(606)
|
(606)
|
Adjusted Total
Revenues
|
$80,846
|
$57,152
|
$62,138
|
|
|
|
|
Adjusted EBITDAX
(1)
|
$59,809
|
$41,212
|
$48,483
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(1)
|
$10,030
|
$6,283
|
$16,813
|
Adjusted Net
Income per Common Share - Diluted
|
$0.13
|
$0.10
|
$0.23
|
|
|
|
|
Net Income
(loss)
|
$(1,024)
|
$(127,530)
|
$14,741
|
Net Income
(loss) per Common Share - Diluted
|
$(0.01)
|
$(2.03)
|
$0.20
|
|
|
|
|
|
|
(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 March 31,
2015, total revenues, excluding the revenue impact from
realized derivative instruments, were $51.4
million, a decrease of 11% over the prior year quarter of
$57.8 million. Adjusted total
revenues, including the net cash from derivative instruments, was
$80.8 million, an increase of 41%
over the prior year quarter of $57.2
million. Adjusted EBITDAX for the first quarter was
$59.8 million, an increase of 45%
over the prior year quarter of $41.2
million. Adjusted net income for the first quarter was
$10.0 million, or $0.13 per diluted share, a 60% increase over the
prior year quarter of $6.3
million. Adjusted net income for the first quarter of
2015 and 2014 excluded an unrealized loss on derivative instruments
of $17.1 million and $3.5 million, respectively.
Operational Update
At the beginning of 2015, the Company added a newly-built
horizontal rig, bringing RSP's total operated horizontal rig count
to five. During the quarter, the Company released one
horizontal rig and one vertical rig, bringing the quarter end
number of operated rigs to four horizontal rigs and one vertical
rig. RSP released the remaining vertical rig early in the
second quarter. For the second half of 2015, RSP has budgeted to
operate three horizontal rigs and no vertical rigs. However,
the Company is currently evaluating the potential to maintain a
four horizontal rig program for the remainder of 2015.
During the first quarter of 2015, RSP drilled 14 operated
horizontal wells and completed 8 operated horizontal wells.
RSP completed two wells targeting the Middle Spraberry, four wells
targeting the Lower Spraberry, and two wells targeting the Wolfcamp
B. All 8 operated completions were in our Focus Area, defined
as the adjacent counties of Midland, Martin, Andrews, Ector and Glasscock. In addition, RSP
participated in drilling 10 non-operated horizontal wells and
completed 11 non-operated horizontal wells during the quarter.
In our vertical drilling program, RSP operated two vertical rigs
for the majority of the quarter and drilled nine operated vertical
wells and completed three operated vertical wells. On a
non-operated basis, RSP participated in the drilling of one
vertical well and in the completion of two vertical wells.
At quarter-end, RSP had 16 operated horizontal wells and 15
operated vertical wells awaiting completion activities and 9
non-operated horizontal wells awaiting completion activities.
|
|
1Q15
Wells
|
|
|
|
Drilled
|
Completed
|
Waiting On
Completion
|
|
|
|
|
|
Operated
Wells
|
|
|
|
Horizontal
|
14
|
8
|
16
|
Vertical
|
|
9
|
3
|
15
|
|
|
|
|
|
Non-Operated
Wells
|
|
|
|
Horizontal
|
10
|
11
|
9
|
Vertical
|
|
1
|
2
|
-
|
|
|
|
|
|
RSP's budgeted
rigs per quarter for remainder of 2015:
|
|
|
2Q15
|
3Q15
|
4Q15
|
Horizontal
|
4
|
3*
|
3*
|
Vertical
|
-
|
-
|
-
|
|
*RSP is evaluating
the decision to maintain four horizontal rigs running for the
remainder of 2015.
|
|
Quarterly
Operational Results
|
|
Three Months Ended
March 31,
|
|
2015
|
|
2014
|
Production
data:
|
|
|
|
Oil
(MBbls)
|
1,078
|
|
544
|
Natural gas
(MMcf)
|
960
|
|
573
|
NGLs
(MBbls)
|
197
|
|
133
|
Total
(MBoe)
|
1,435
|
|
772
|
Average net daily
production (Boe/d)
|
15,944
|
|
8,578
|
Average prices
before effects of hedges (1) (2):
|
|
|
|
Oil (per
Bbl)
|
$43.88
|
|
$94.60
|
Natural gas (per
Mcf)
|
2.33
|
|
3.85
|
NGLs (per
Bbl)
|
9.32
|
|
30.79
|
Total (per
Boe)
|
$35.80
|
|
$74.82
|
Average realized
prices after effects of hedges (1) (2):
|
|
|
Oil (per
Bbl)
|
$71.22
|
|
$93.50
|
Natural gas (per
Mcf)
|
2.33
|
|
3.85
|
NGLs (per
Bbl)
|
9.32
|
|
30.79
|
Total (per
Boe)
|
$56.34
|
|
$74.03
|
Average costs (per
Boe):
|
|
|
|
Lease operating
expenses (excluding gathering and transportation)
|
$8.20
|
|
$8.65
|
Gathering and
transportation
|
0.58
|
|
0.49
|
Production and ad
valorem taxes
|
2.92
|
|
5.02
|
Depreciation,
depletion and amortization
|
21.95
|
|
21.19
|
General and
administrative – recurring cash component
|
2.95
|
|
2.29
|
General and
administrative – recurring stock comp (3)
|
1.17
|
|
0.38
|
General and
administrative – IPO stock comp (4)
|
0.32
|
|
15.18
|
General and
administrative – IPO cash bonuses (4)
|
-
|
|
4.19
|
|
|
|
|
(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)
|
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 quarter ended March 31, 2015 averaged 15,944 Boe/d or a total
of 1,435 MBoe, an increase of 86% over prior year's first quarter
of 8,578 Boe/d. Production for the first quarter of 2015 was
comprised of 75% crude oil, 14% NGLs and 11% natural gas.
RSP's average realized commodity price for the first quarter of
2015, before the effects of hedges, was $35.80. RSP's average realized oil price for the
first quarter of 2015, before the effects of hedges, was
$43.88, a negative $4.75 differential compared to NYMEX WTI pricing
for the same period, or 90% of NYMEX WTI pricing. RSP's average
realized natural gas price for the first quarter of 2015, before
the effects of hedges, was $2.33, a
negative $0.66 differential compared
to NYMEX Henry Hub pricing for the same period, or 78% 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
general and administrative expenses were $14.65 per Boe, a decrease of 11% from prior
year's comparable quarter.
Capital Expenditures
RSP's capital expenditures for the quarter ended March 31, 2015 totaled $84.6 million which included approximately
$78.4 million of drilling and
completion and $6.2 million of
infrastructure and other. Of the total capital spent,
approximately $7.4 million was on
non-operated properties.
Liquidity Update
As of March 31, 2015, the Company
had no borrowings on its revolving credit facility, which has a
$500 million borrowing base, and had
$103 million of cash on hand, for
total liquidity available of $603
million.
Hedging
The Company has not entered into any new commodity price hedging
contracts since the third quarter of 2014. For 2015, the
Company has hedges in place for 1,704,000 barrels of oil production
at a blended floor of $86.26.
Description &
Production Period
|
|
Volume
(Bbls)
|
|
Weighted
Average
Floor price ($/Bbl) (1)
|
|
Weighted Average
Ceiling price ($/Bbl) (1)
|
|
Weighted
Average
Swap price ($/Bbl) (1)
|
Crude Oil
Swaps:
|
|
|
|
|
|
|
|
|
April 2015 - December
2015
|
|
90,000
|
|
--
|
|
--
|
|
$92.60
|
|
|
|
|
|
|
|
|
|
Crude Oil
Collars:
|
|
|
|
|
|
|
|
|
April 2015 - December
2015
|
|
225,000
|
|
$85.00
|
|
$95.00
|
|
--
|
April 2015 - June
2015
|
|
120,000
|
|
$90.00
|
|
$96.00
|
|
--
|
April 2015 - December
2015
|
|
999,000
|
|
$85.86
|
|
$94.64
|
|
--
|
April 2015 - June
2015
|
|
90,000
|
|
$85.00
|
|
$93.67
|
|
--
|
July 2015 - September
2015
|
|
90,000
|
|
$85.00
|
|
$92.60
|
|
--
|
October 2015 -
December 2015
|
|
90,000
|
|
$85.00
|
|
$92.33
|
|
--
|
|
|
|
|
(1)
|
The crude oil
derivative contracts are settled based on the month's average daily
NYMEX price of West Texas Intermediate Light Sweet
Crude.
|
|
|
|
First Quarter Earnings Release and Conference Call
RSP will host a conference call for investors at 9:00 a.m. Central Time on Wednesday, May 13, 2015 to discuss first 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 13599596. The
replay will be available until May 31,
2015. 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, Ector
and Glasscock. 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.
RSP Permian,
Inc.
|
Quarterly
Statements of Operations
|
(In thousands,
except for per share data)
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2015
Actual
|
|
2014
Actual
|
|
2014
Pro
Forma
|
Revenues:
|
|
|
|
|
|
Oil
sales
|
$47,305
|
|
$51,471
|
|
$55,930
|
Natural gas
sales
|
2,233
|
|
2,206
|
|
2,397
|
NGL
sales
|
1,837
|
|
4,081
|
|
4,417
|
|
|
|
|
|
|
Total revenues
|
$51,375
|
|
$57,758
|
|
$62,744
|
|
|
|
|
|
|
Net cash from
derivative instruments
|
29,471
|
|
(606)
|
|
(606)
|
|
|
|
|
|
|
Adjusted Total
Revenues
|
$80,846
|
|
$57,152
|
|
$62,138
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
Lease
operating expenses
|
12,611
|
|
7,063
|
|
7,757
|
Production and
ad valorem taxes
|
4,197
|
|
3,876
|
|
4,127
|
General and
administrative expenses
|
4,229
|
|
5,001
|
|
1,771
|
|
|
|
|
|
|
Total operating costs and expenses
|
$21,037
|
|
$15,940
|
|
$13,655
|
|
|
|
|
|
|
Adjusted EBITDAX
(2)
|
$59,809
|
|
$41,212
|
|
$48,483
|
|
|
|
|
|
|
Depreciation,
depletion, and amortization
|
31,502
|
|
16,361
|
|
19,994
|
Asset
retirement obligation accretion
|
84
|
|
29
|
|
38
|
Exploration
|
1,178
|
|
756
|
|
756
|
Interest
expense
|
9,316
|
|
1,131
|
|
1,131
|
Stock-based
compensation, net
|
2,142
|
|
12,015
|
|
294
|
|
|
|
|
|
|
Adjusted income
before income taxes
|
$15,587
|
|
$10,920
|
|
$26,270
|
|
|
|
|
|
|
Adjusted income tax
expense
|
5,557
|
|
4,637
|
|
9,457
|
|
|
|
|
|
|
Adjusted net
income (2)
|
$10,030
|
|
$6,283
|
|
$16,813
|
|
|
|
|
|
|
Adjusted
net income per common share - Basic
|
$0.13
|
|
$0.10
|
|
$0.23
|
Adjusted
net income per common share - Diluted
|
$0.13
|
|
$0.10
|
|
$0.23
|
|
|
|
|
|
|
Other items
included in income before taxes:
|
|
|
|
|
|
Non-cash
(loss) on derivatives, net
|
($17,141)
|
|
($3,547)
|
|
($3,547)
|
Other
income
|
200
|
|
310
|
|
310
|
|
|
|
|
|
|
Income (loss)
before income taxes
|
($6,911)
|
|
$3,046
|
|
$13,576
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
($5,887)
|
|
$130,576
|
|
($1,165)
|
|
|
|
|
|
|
Net Income
(loss)
|
($1,024)
|
|
($127,530)
|
|
$14,741
|
|
|
|
|
|
|
Net income
(loss) per common share - Basic
|
($0.01)
|
|
($2.03)
|
|
$0.20
|
Net income
(loss) per common share - Diluted
|
($0.01)
|
|
($2.03)
|
|
$0.20
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
Basic
|
78,190
|
|
62,904
|
|
72,500
|
Diluted
|
78,190
|
|
62,904
|
|
72,500
|
|
|
|
|
|
|
(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
|
|
|
|
|
|
|
March 31,
2015
|
|
December 31,
2014
|
|
|
(in
thousands)
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$102,782
|
|
$56,292
|
Other current
assets
|
|
102,280
|
|
117,450
|
Total current
assets
|
|
205,062
|
|
173,742
|
Property, plant and
equipment, net
|
|
2,147,765
|
|
2,094,618
|
Other long-term
assets
|
|
28,832
|
|
21,587
|
Total
assets
|
|
$2,381,659
|
|
$2,289,947
|
|
|
|
|
|
Current
liabilities
|
|
90,794
|
|
130,041
|
Long-term
debt
|
|
500,000
|
|
500,000
|
Other long-term
liabilities
|
|
337,829
|
|
334,135
|
Total
stockholders'/members' equity
|
|
1,453,036
|
|
1,325,771
|
Total liabilities and
stockholders'/members' equity
|
|
$2,381,659
|
|
$2,289,947
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/rsp-permian-inc-announces-first-quarter-financial-and-operating-results-300081931.html
SOURCE RSP Permian, Inc.