DALLAS, March 17, 2015 /PRNewswire/ -- RSP Permian, Inc.
("RSP" or the "Company") (NYSE: RSPP) today announced financial and
operating results for the quarter and year ended December 31, 2014. In addition, the Company
filed its Annual Report on Form 10-K for the year ended
December 31, 2014 (the "Form 10-K")
with the Securities and Exchange Commission ("SEC") and posted an
updated investor 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, 2013, and
adjusted to eliminate certain non-recurring expenses associated
with the IPO, as further described in the Form 10-K. Unless
otherwise indicated, information presented in this release is on a
pro forma basis.
Highlights
- 4Q14 production increased by 106% to 16.1 MBoe/d as compared to
4Q13 and increased by 44% as compared to 3Q14
- 4Q14 adjusted EBITDAX increased by 65% to $66.6 million as compared to 4Q13 and increased
by 22% as compared to 3Q14
- 4Q14 net income of $57.7 million,
or $0.74 per diluted share. Net
income includes a $70.1 million
non-cash gain on derivatives and a $4.3
million non-cash impairment on oil and gas properties.
Adjusted net income, which does not include these items, was
$15.7 million, or $0.20 per diluted share
- Successful horizontal and vertical drilling program in multiple
formations led to a 97% increase in proved reserves to 106.4 MMBoe
(39% proved developed) at year end 2014
- Replaced 1,406% of 2014 production, drilling F&D cost of
$10.59 per Boe
- Only 5% of RSP's horizontal locations are booked as PUDs
- Increased horizontal inventory in Spraberry zones based on 10
locations across a section
- Since IPO, total horizontal and vertical inventory has
increased by more than 50% to 3,270 gross locations as a result of
acquisitions and increased downspacing
- Completed 10 operated horizontal wells (3 Middle Spraberry, 4
Lower Spraberry, 1 Wolfcamp A, 2 Wolfcamp B) and 16 operated
vertical wells during 4Q14
- Johnson Ranch 1018 (Wolfcamp A/B
Pilot), 7,250' laterals, produced at average 30-day IPs of 900
Boe/d with the WC-B well flowing naturally
- Spanish Trail 218 (Middle Spraberry, Lower Spraberry), 9,950'
laterals, produced at average 30-day IPs of 1,192 Boe/d
- First three well pad at Spanish Trail, Spanish Trail 4817
(Middle Spraberry, Lower Spraberry, Wolfcamp B), 7,400' laterals
produced at average 30-day IPs of 964 Boe/d
- Maintained a strong year-end balance sheet with $556 million of liquidity and 1.7x net
debt/EBITDAX ratio
Steve Gray, Chief Executive
Officer, stated, "I am pleased to report exceptional results in our
first year as a public company. We exceeded our growth
expectations due to strong execution from our operations team and
our continued success in multiple horizontal zones on our
properties. Despite the current low oil price environment, we are
generating attractive rates of return on our drilling opportunities
with our low cost structure and highly productive wells and expect
to continue to grow. We are managing our operations so that
we maintain our balance sheet and liquidity in a strong position
for future growth and acquisition opportunities and we will
continue to make adjustments to our plans in response to prevailing
industry conditions as necessary."
Summary Financial Results
|
RSP Permian,
Inc.
Pro
Forma
|
|
Three Months
Ended
December
31,
|
Year Ended
December 31,
|
|
2014
|
2013
|
2014
|
2013
|
|
(In thousands,
except for per share data)
|
|
|
|
|
|
Total
Revenues
|
$79,458
|
$53,815
|
$286,909
|
$196,706
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX
(1)
|
$66,579
|
$40,346
|
$222,552
|
$151,707
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net Income
(1)
|
$15,683
|
$12,438
|
$70,600
|
$38,286
|
Adjusted Net
Income per Common Share - Diluted
|
$0.20
|
$0.17
|
$0.94
|
$0.53
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$57,738
|
$14,102
|
$116,121
|
$40,838
|
Net Income per
Common Share - Diluted
|
$0.74
|
$0.19
|
$1.55
|
$0.56
|
|
|
|
|
|
(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,
2014, total revenues, excluding the revenue impact from
realized derivative instruments, were $79.5
million, an increase of 48% over the prior year quarter of
$53.8 million. Adjusted EBITDAX
for the fourth quarter was $66.6
million, an increase of 65% over the prior year quarter of
$40.3 million. Adjusted net
income for the fourth quarter was $15.7
million, or $0.20 per diluted
share, a 26% increase over the prior year quarter of $12.4 million. Adjusted net income,
excluded a gain on unrealized derivative instruments of
$70.1 million and an impairment on
oil and gas properties of $4.3
million.
For the year ended December 31,
2014, total revenues, excluding the revenue impact from
realized derivatives, were $286.9
million, an increase of 46% over the prior year of
$196.7 million. Adjusted
EBITDAX for the year was $222.6
million, an increase of 47% over the prior year of
$151.7 million. Adjusted net
income for the year was $70.6
million, or $0.94 per diluted
share, an increase of 84% over the prior year of $38.3 million. Adjusted net income excluded
a gain on unrealized derivative instruments of $75.5 million and an impairment on oil and gas
properties of $4.3 million.
Operational Update
During the fourth quarter of 2014, RSP operated four horizontal
rigs, drilled eleven operated horizontal wells and completed ten
operated horizontal wells. RSP completed three wells
targeting the Middle Spraberry, four wells targeting the Lower
Spraberry, one well targeting the Wolfcamp A and two wells
targeting the Wolfcamp B. All ten 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 ten non-operated horizontal wells and
completed eleven non-operated horizontal wells during the
quarter. For the year, RSP drilled 41 operated horizontal
wells and completed 33 operated horizontal wells. On a
non-operated basis, RSP participated in the drilling of 36
horizontal wells and in the completion of 33 horizontal wells.
In our vertical drilling program, RSP operated three vertical
rigs for the majority of the quarter and drilled 17 operated
vertical wells and completed 16 operated vertical wells. In
addition, on a non-operated basis, RSP participated in the drilling
of four vertical wells and in the completion of two vertical
wells. For the year, RSP drilled 47 operated vertical wells
and completed 40 operated vertical wells. RSP participated as
a non-operator in the drilling of 25 vertical wells and in the
completion of 22 vertical wells.
Due to the rapid and significant decline of oil prices in the
fourth quarter and the likely realization of future service cost
reductions, RSP elected to defer completion activities on its
operated vertical wells and several operated horizontal wells
during the quarter. At year-end, RSP had ten operated
horizontal wells and nine operated vertical wells awaiting
completion activities. In addition, four horizontal wells and
two vertical wells were in process of drilling and one horizontal
well was undergoing completion activities.
|
|
2014
Wells
|
|
|
Drilled
|
Completed
|
|
|
|
|
Operated
Wells
|
|
|
Horizontal
|
41
|
33
|
Vertical
|
|
47
|
40
|
|
|
|
|
Non-Operated
Wells
|
|
|
Horizontal
|
36
|
33
|
Vertical
|
|
25
|
22
|
At the beginning of 2015, the Company added a newly-built
horizontal rig, bringing RSP's total operated horizontal rig count
to five. Recently, the Company released a horizontal rig and
a vertical rig, bringing the current number of operated horizontal
rigs to four and vertical rigs to one. RSP intends to release
another horizontal rig and its remaining vertical rig by the end of
the second quarter. For the second half of 2015, RSP expects
to operate three horizontal rigs and no vertical rigs. As the
operator of approximately 95% of its net acreage, RSP maintains the
ability to increase or reduce capital spending in 2015 depending on
prevailing commodity prices and service costs.
RSP's average forecasted rigs per month during 2015:
|
Jan
|
Feb
|
March
|
April
|
May
|
June
|
July
|
Aug
|
Sept
|
Oct
|
Nov
|
Dec
|
Horizontal
|
5
|
4
|
4
|
4
|
4
|
4
|
3
|
3*
|
3*
|
3*
|
3*
|
3*
|
Vertical
|
2
|
2
|
1.5
|
1
|
0.5
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
*Option to drop to two horizontal rigs
Quarterly Operational Results
|
RSP Permian,
Inc.
Pro
Forma
|
|
Three Months
Ended
|
|
December 31,
2014
|
|
December 31,
2013
|
Production
data:
|
|
|
|
Oil
(MBbls)
|
1,080
|
|
516
|
Natural gas
(MMcf)
|
939
|
|
574
|
NGLs
(MBbls)
|
248
|
|
109
|
Total
(MBoe)
|
1,485
|
|
721
|
Average net daily
production (Boe/d)
|
16,141
|
|
7,837
|
Average prices
before effects of hedges (1) (2):
|
|
|
|
Oil (per
Bbl)
|
$66.34
|
|
$94.38
|
Natural gas (per
Mcf)
|
3.14
|
|
3.38
|
NGLs (per
Bbl)
|
19.60
|
|
28.94
|
Total (per
Boe)
|
$53.51
|
|
$74.64
|
Average realized
prices after effects of hedges (1) (2):
|
|
|
Oil (per
Bbl)
|
$74.97
|
|
$93.89
|
Natural gas (per
Mcf)
|
3.20
|
|
3.38
|
NGLs (per
Bbl)
|
19.60
|
|
28.94
|
Total (per
Boe)
|
$59.82
|
|
$74.24
|
Average costs (per
Boe):
|
|
|
|
Lease operating
expenses (excluding gathering and transportation)
|
$7.01
|
|
$8.30
|
Gathering and
transportation
|
0.54
|
|
0.44
|
Production and ad
valorem taxes
|
3.22
|
|
6.31
|
Depreciation,
depletion and amortization
|
20.71
|
|
22.44
|
General and
administrative – cash component (3)
|
4.21
|
|
1.60
|
General and
administrative – recurring stock comp (4)
|
0.58
|
|
-
|
(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)
|
Expenses related to
being a public company and increased personnel costs, including
performance based compensation, increased 2014 general and
administrative – cash component per Boe as compared to 2013 which
did not have these same costs.
|
(4)
|
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 December 31, 2014 averaged 16,141 Boe/d or a
total of 1,485 MBoe, an increase of 106% over prior year's fourth
quarter of 7,837 Boe/d. Production for the fourth quarter of
2014 was comprised of 73% crude oil, 17% NGLs and 10% natural
gas. RSP's average realized commodity price for the fourth
quarter of 2014, before the effects of hedges, was $53.51. RSP's average realized oil price for the
fourth quarter of 2014, before the effects of hedges, was
$66.34, a negative $6.81 differential compared to NYMEX WTI pricing
for the same period, or 91% of NYMEX WTI pricing. RSP's average
realized natural gas price for the fourth quarter of 2014, before
the effects of hedges, was $3.14, a
negative $0.69 differential compared
to NYMEX Henry Hub pricing for the same period, or 82% 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 general and
administrative expenses were $14.98
per Boe, a decrease of 10% over prior year's comparable
quarter. The prior year quarter did not include incremental
general and administrative expenses that we would have incurred as
a public company. Excluding general and administrative
expenses from this calculation, RSP's cash operating expenses, on a
per Boe basis, decreased 28% over the prior year quarter on a
comparable basis.
Year-end Operational Results
|
RSP Permian,
Inc.
Pro
Forma
|
|
Year
Ended
|
|
December 31,
2014
|
|
December 31,
2013
|
Production
data:
|
|
|
|
Oil
(MBbls)
|
3,099
|
|
1,867
|
Natural gas
(MMcf)
|
3,023
|
|
2,287
|
NGLs
(MBbls)
|
729
|
|
414
|
Total
(MBoe)
|
4,332
|
|
2,662
|
Average Net Daily
Production (Boe/d)
|
11,868
|
|
7,293
|
Average prices
before effects of hedges (1) (2):
|
|
|
|
Oil (per
Bbl)
|
$83.20
|
|
$95.01
|
Natural gas (per
Mcf)
|
3.56
|
|
3.34
|
NGLs (per
Bbl)
|
25.13
|
|
28.16
|
Total (per
Boe)
|
$66.23
|
|
$73.89
|
Average realized
prices after effects of hedges (1) (2):
|
|
|
Oil (per
Bbl)
|
$85.08
|
|
$94.79
|
Natural gas (per
Mcf)
|
3.60
|
|
3.34
|
NGLs (per
Bbl)
|
25.13
|
|
28.16
|
Total (per
Boe)
|
$67.60
|
|
$73.73
|
Average costs (per
Boe):
|
|
|
|
Lease operating
expenses (excluding gathering and transportation)
|
$7.52
|
|
$7.92
|
Gathering and
transportation
|
0.65
|
|
0.60
|
Production and ad
valorem taxes
|
4.62
|
|
4.97
|
Depreciation,
depletion and amortization
|
21.12
|
|
30.24
|
General and
administrative – cash component (3)
|
3.44
|
|
1.40
|
General and
administrative – recurring stock comp (4)
|
0.63
|
|
-
|
(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)
|
Expenses related to
being a public company and increased personnel costs, including
performance based compensation, increased 2014 general and
administrative – cash component per Boe as compared to 2013 which
did not have these same costs.
|
(4)
|
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 year ended December 31, 2014 averaged 11,868 Boe/d or a
total of 4,332 MBoe, an increase of 63% over last year of 7,293
Boe/d. Production for 2014 was comprised of 72% crude oil,
17% NGLs and 11% natural gas. RSP's average realized
commodity price for the year, before the effects of hedges, was
$66.23. RSP's average realized
oil price for the year ended December 31,
2014, before the effects of hedges, was $83.20, a negative $9.80 differential compared to NYMEX WTI pricing
for the same period, or 89% of NYMEX WTI pricing. RSP's average
realized natural gas price for the year ended December 31, 2014, before the effects of hedges,
was $3.56, a negative $0.70 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 expenses
but including lease operating, gathering and transportation,
production and ad valorem taxes and general and administrative
expenses were $16.23 per Boe, an
increase of 9% over prior year. The prior year did not
include incremental general and administrative expenses that we
would have incurred as a public company. Excluding general
and administrative expenses from this calculation, our cash
operating expenses, on a per Boe basis, decreased 5% over the prior
year on a comparable basis.
Proved Reserves Summary
RSP's total proved reserves at December
31, 2014, as evaluated by Netherland, Sewell, &
Associates, Inc., our independent petroleum engineers, increased
97% over the prior year to 106.4 MMBoe. Oil reserves totaled
69.3 MMBbls and combined with NGLs of 21.7 MMBbls equaled 85% of
total proved reserves with natural gas of 92.4 MMcf making up the
remaining 15% of total proved reserves. Proved developed
reserves were 41.9 MMBoe or 39% of total proved reserves.
The following table presents our estimated net proved oil and
natural gas reserves as of December 31,
2014 and our estimated pro forma net proved oil and natural
gas reserves as of December 31, 2013
and in each case, prepared in accordance with the rules and
regulations of the SEC.
|
|
Year Ended
December 31, 2014
|
|
|
|
Natural Gas
(MMcf)
|
|
Oil
(MBbls)
|
|
NGLs
(MBbls)
|
|
Total
(Mboe)
|
|
|
|
|
|
|
|
|
|
Proved reserves as of
December 31, 2013
|
|
52,673
|
|
34,932
|
|
10,172
|
|
53,883
|
|
|
|
|
|
|
|
|
|
Revisions of previous estimates
|
|
(5,477)
|
|
223
|
|
2,219
|
|
1,529
|
Extensions, discoveries and other additions
|
|
25,229
|
|
30,023
|
|
5,897
|
|
40,125
|
Purchases of minerals in place
|
|
23,020
|
|
7,194
|
|
4,180
|
|
15,211
|
Production
|
|
(3,023)
|
|
(3,099)
|
|
(729)
|
|
(4,332)
|
|
|
|
|
|
|
|
|
|
Proved reserves as of
December 31, 2014
|
|
92,422
|
|
69,273
|
|
21,739
|
|
106,416
|
|
|
|
|
|
|
|
|
|
|
RSP's acquisitions and drilling program added 60.9 MMBoe in
2014, replacing 1,406% of 2014 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 $10.59 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 costs incurred for the year ended December 31, 2014 totaled approximately
$846 million which included
approximately $442 million of
drilling and completion, $42 million
of infrastructure and other, and approximately $362 million of acquisitions and additions to
leasehold. Of the total capital spent, approximately
$55 million was on non-operated
properties and approximately $62
million was on drilling wells the Company expects to
complete in 2015. See "Drill-Bit F&D and Reserve
Replacement Ratio" below for our pro forma costs incurred
summary.
Liquidity Update
As of December 31, 2014, the
Company had no borrowings on its revolving credit facility, which
has a $500 million borrowing base,
and had $56 million of cash on hand,
for total liquidity available of $556
million. In conjunction with our closing of our
acquisitions in Glasscock County
in 3Q14, lenders in the Company's revolving credit facility
increased our borrowing base to $500
million from $375 million,
increased aggregate commitments to $1.0
billion from $500 million, and
extended the maturity date two years to August 2019. On
September 26, 2014, RSP issued
$500 million of 6.625% senior
unsecured notes due 2022. The net proceeds were used to repay
amounts drawn under our revolving credit facility and the balance
for general corporate purposes.
Updated 2015 Guidance
RSP expects to complete 40 - 50 gross operated horizontal wells
in 2015 in our Focus Area targeting primarily the Lower Spraberry,
Wolfcamp A and Wolfcamp B, the Company's highest return horizontal
zones. In addition, the Company expects to complete approximately
20 gross operated vertical wells during the year. The Board
of Directors approved a $400 - $450
million capital budget for 2015, of which RSP expects to
spend $380 - 420 million on drilling
and completion activities and $20 - 30
million on infrastructure and other. The Company believes
that non-operated capital expenditures in 2015 will represent
approximately 15% of total capital expenditures.
|
|
2014
|
|
2015
|
|
|
Pro
Forma
|
|
Guidance
|
|
|
|
|
|
Production
(Boe/d)
|
|
11,868
|
|
17,500
-18,500
|
% Oil
|
|
72%
|
|
71% - 73%
|
% Natural
Gas
|
|
11%
|
|
10% - 12%
|
% NGLs
|
|
17%
|
|
16% - 18%
|
|
|
|
|
|
Operating
Costs
|
|
|
|
|
Lease operating
expenses (including workovers) ($/Boe)
|
|
$7.52
|
|
$6.75 -
$7.75
|
Gathering and
transportation ($/Boe)
|
|
$0.65
|
|
$0.55 -
$0.75
|
Production and ad
valorem taxes (% of oil and gas revenues)
|
|
7.0%
|
|
6.8% -
7.2%
|
Depreciation,
depletion, and amortization ($/Boe)
|
|
$21.12
|
|
$20.00 -
$24.00
|
Exploration expenses
($/Boe)
|
|
$0.89
|
|
$0.35 -
$0.40
|
|
|
|
|
|
G&A
expenses
|
|
|
|
|
General and administrative –
cash component ($/Boe)
|
|
$3.44
|
|
$2.25 -
$2.75
|
General and administrative –
recurring stock comp ($/Boe)
|
|
$0.63
|
|
$1.45 -
$1.55
|
General and administrative –
IPO stock comp ($/Boe) (1)
|
|
$4.04
|
|
$0.22 -
$0.24
|
(1)
|
G&A – IPO stock
comp is excluded from our pro forma amounts presented elsewhere as
it relates to one-time (non-recurring) awards associated with the
successful completion of the IPO. In 2014, IPO stock comp
consisted of two components. One component represented
restricted stock awarded to certain employees as a result of a
successful IPO. These one-time awards vest over time for
retention purposes. The other component of IPO stock comp in
2014 was non-cash compensation expense associated with incentive
units owned by certain members of management and this expense was
fully recognized in 2014. These incentive unit awards served
as a mechanism to allocate shares between management and an
affiliate of Natural Gas Partners, RSP's private equity sponsor,
based on certain return thresholds being achieved. The shares
allocated by the incentive units were owned by RSP Permian Holdco
L.L.C., an entity owned by management and an affiliate of Natural
Gas Partners. The stock issued to certain members of
management and the expense recognized in the Company's consolidated
statement of operations as a result of these incentive units
resulted in no dilution to public stockholders, was a non-cash
expense, and increased paid in capital. The expense
associated with the incentive units constituted 84% of general and
administrative - IPO stock comp.
|
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 2,457,000 barrels of oil production
at a blended floor of $86.72.
Description &
Production Period
|
|
Volume
(Bbls)
|
|
Weighted
Average
Floor price ($/Bbl) (1)
|
|
Weighted
Average
Ceiling price ($/Bbl) (1)
|
|
Weighted
Average
Swap price ($/Bbl) (1)
|
Crude Oil
Swaps:
|
|
|
|
|
|
|
|
|
January 2015 -
December 2015
|
|
120,000
|
|
--
|
|
--
|
|
$92.60
|
|
|
|
|
|
|
|
|
|
Crude Oil
Collars:
|
|
|
|
|
|
|
|
|
January 2015 -
December 2015
|
|
300,000
|
|
$85.00
|
|
$95.00
|
|
--
|
January 2015 - March
2015
|
|
195,000
|
|
$90.00
|
|
$94.89
|
|
--
|
January 2015 - June
2015
|
|
240,000
|
|
$90.00
|
|
$96.00
|
|
--
|
January 2015 -
December 2015
|
|
1,332,000
|
|
$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.
|
Fourth Quarter and Full-Year 2014 Earnings Release and
Conference Call
RSP will host a conference call for investors at 10:00 a.m. Central Time on Tuesday, March 17, 2015 to discuss fourth quarter
and year-end 2014 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 March 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.
Annual Statements of Operations
(In thousands, except for per share data)
|
|
|
|
|
|
Pro
Forma
|
|
Actual &
Predecessor (1)
|
|
Year Ended
December 31,
|
|
Year Ended
December 31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues:
|
|
|
|
|
|
|
|
Oil
sales
|
$257,830
|
|
$177,415
|
|
$253,371
|
|
$110,345
|
Natural gas
sales
|
10,762
|
|
7,647
|
|
10,572
|
|
5,383
|
NGL
sales
|
18,317
|
|
11,644
|
|
17,982
|
|
7,314
|
|
|
|
|
|
|
|
|
Total revenues
|
$286,909
|
|
$196,706
|
|
$281,925
|
|
$123,042
|
|
|
|
|
|
|
|
|
Net cash from
derivative instruments
|
5,943
|
|
(5,380)
|
|
5,943
|
|
(5,380)
|
|
|
|
|
|
|
|
|
Adjusted Total
Revenues
|
$292,852
|
|
$191,326
|
|
$287,868
|
|
$117,662
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Lease
operating expenses
|
35,398
|
|
22,667
|
|
34,704
|
|
14,113
|
Production and
ad valorem taxes
|
20,009
|
|
13,236
|
|
19,758
|
|
8,326
|
General and
administrative expenses
|
14,893
|
|
3,716
|
|
18,125
|
|
3,852
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
$70,300
|
|
$39,619
|
|
$72,587
|
|
$26,291
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX
(2)
|
$222,552
|
|
$151,707
|
|
$215,281
|
|
$91,371
|
|
|
|
|
|
|
|
|
Depreciation,
depletion, and amortization
|
91,477
|
|
80,487
|
|
87,844
|
|
47,158
|
Asset
retirement obligation accretion
|
151
|
|
199
|
|
142
|
|
121
|
Exploration
|
3,854
|
|
551
|
|
3,854
|
|
551
|
Interest
expense
|
14,031
|
|
10,890
|
|
14,031
|
|
5,216
|
Stock-based
compensation, net
|
2,726
|
|
–
|
|
20,232
|
|
–
|
|
|
|
|
|
|
|
|
Adjusted income
before income taxes
|
$110,313
|
|
$59,580
|
|
$89,178
|
|
$38,325
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense
|
39,713
|
|
21,294
|
|
34,849
|
|
1,334
|
|
|
|
|
|
|
|
|
Adjusted net
income (2)
|
$70,600
|
|
$38,286
|
|
$54,329
|
|
$36,991
|
|
|
|
|
|
|
|
|
Adjusted
net income per common share - Basic
|
$0.94
|
|
$0.53
|
|
$0.75
|
|
N/A
|
Adjusted
net income per common share - Diluted
|
$0.94
|
|
$0.53
|
|
$0.75
|
|
N/A
|
|
|
|
|
|
|
|
|
Other items
included in income before taxes:
|
|
|
|
|
|
|
|
Non-cash gain
on derivatives, net
|
$75,527
|
|
$2,773
|
|
$75,527
|
|
$2,773
|
Impairments
|
(4,344)
|
|
–
|
|
(4,344)
|
|
–
|
Loss on asset
sale
|
(13)
|
|
–
|
|
(13)
|
|
22,700
|
Other
income/(expense)
|
(44)
|
|
1,202
|
|
(44)
|
|
1,202
|
|
|
|
|
|
|
|
|
Income before
income taxes
|
$141,726
|
|
$42,261
|
|
$125,455
|
|
$63,666
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
$25,605
|
|
$1,423
|
|
$122,957
|
|
$928
|
|
|
|
|
|
|
|
|
Net
Income
|
$116,121
|
|
$40,838
|
|
$2,498
|
|
$62,738
|
|
|
|
|
|
|
|
|
Net income
per common share - Basic
|
$1.55
|
|
$0.56
|
|
$0.03
|
|
N/A
|
Net income
per common share - Diluted
|
$1.55
|
|
$0.56
|
|
$0.03
|
|
N/A
|
|
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
74,297
|
|
72,500
|
|
71,898
|
|
N/A
|
Diluted
|
74,297
|
|
72,500
|
|
71,898
|
|
N/A
|
RSP Permian,
Inc.
Quarterly Statements of Operations
(In thousands, except for per share data)
|
|
|
Pro
Forma
|
|
Actual &
Predecessor (1)
|
|
Three Months Ended
December 31,
|
|
Three Months Ended
December 31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Revenues:
|
|
|
|
|
|
|
|
Oil
sales
|
$71,646
|
|
$48,733
|
|
$71,646
|
|
$32,841
|
Natural gas
sales
|
2,951
|
|
1,937
|
|
2,951
|
|
1,421
|
NGL
sales
|
4,861
|
|
3,145
|
|
4,861
|
|
2,117
|
|
|
|
|
|
|
|
|
Total revenues
|
$79,458
|
|
$53,815
|
|
$79,458
|
|
$36,379
|
|
|
|
|
|
|
|
|
Net cash from
derivative instruments
|
9,379
|
|
(1,468)
|
|
9,379
|
|
(1,468)
|
|
|
|
|
|
|
|
|
Adjusted Total
Revenues
|
$88,837
|
|
$52,347
|
|
$88,837
|
|
$34,911
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Lease
operating expenses
|
11,222
|
|
6,298
|
|
11,222
|
|
4,120
|
Production and
ad valorem taxes
|
4,781
|
|
4,546
|
|
4,781
|
|
2,403
|
General and
administrative expenses
|
6,255
|
|
1,157
|
|
6,255
|
|
1,180
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
$22,258
|
|
$12,001
|
|
$22,258
|
|
$7,703
|
|
|
|
|
|
|
|
|
Adjusted EBITDAX
(2)
|
$66,579
|
|
$40,346
|
|
$66,579
|
|
$27,208
|
|
|
|
|
|
|
|
|
Depreciation,
depletion, and amortization
|
30,758
|
|
16,180
|
|
30,758
|
|
6,045
|
Asset
retirement obligation accretion
|
38
|
|
53
|
|
38
|
|
38
|
Exploration
|
899
|
|
74
|
|
899
|
|
74
|
Interest
expense
|
9,517
|
|
4,865
|
|
9,517
|
|
3,446
|
Stock-based
compensation, net
|
862
|
|
–
|
|
4,634
|
|
–
|
|
|
|
|
|
|
|
|
Adjusted income
before income taxes
|
$24,505
|
|
$19,174
|
|
$20,733
|
|
$17,605
|
|
|
|
|
|
|
|
|
Adjusted income tax
expense
|
8,822
|
|
6,736
|
|
8,112
|
|
1,915
|
|
|
|
|
|
|
|
|
Adjusted net
income (2)
|
$15,683
|
|
$12,438
|
|
$12,621
|
|
$15,690
|
|
|
|
|
|
|
|
|
Adjusted
net income per common share - Basic
|
$0.20
|
|
$0.17
|
|
$0.16
|
|
N/A
|
Adjusted
net income per common share - Diluted
|
$0.20
|
|
$0.17
|
|
$0.16
|
|
N/A
|
|
|
|
|
|
|
|
|
Other items
included in income before taxes:
|
|
|
|
|
|
|
|
Non-cash gain
on derivatives, net
|
$70,143
|
|
$2,226
|
|
$70,143
|
|
$2,226
|
Impairments
|
(4,344)
|
|
–
|
|
(4,344)
|
|
–
|
Loss on asset
sale
|
(15)
|
|
–
|
|
(15)
|
|
–
|
Other
income/(expense)
|
(74)
|
|
339
|
|
(74)
|
|
339
|
|
|
|
|
|
|
|
|
Income before
income taxes
|
$81,393
|
|
$15,003
|
|
$78,331
|
|
$18,255
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense (3)
|
$23,655
|
|
$901
|
|
($11,172)
|
|
$279
|
|
|
|
|
|
|
|
|
Net
Income
|
$57,738
|
|
$14,102
|
|
$89,503
|
|
$17,976
|
|
|
|
|
|
|
|
|
Net income
per common share - Basic
|
$0.74
|
|
$0.19
|
|
$1.15
|
|
N/A
|
Net income
per common share - Diluted
|
$0.74
|
|
$0.19
|
|
$1.15
|
|
N/A
|
|
|
|
|
|
|
|
|
Weighted Average
Common Shares Outstanding:
|
|
|
|
|
|
|
|
Basic
|
77,292
|
|
72,500
|
|
77,292
|
|
N/A
|
Diluted
|
77,292
|
|
72,500
|
|
77,292
|
|
N/A
|
(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.
|
(3)
|
Actual &
Predecessor Income tax (benefit) expense for the three months ended
December 31, 2014 reflects a $37 million income tax adjustment to
reduce the initial deferred income tax liability and the
corresponding income tax provision recorded in the first quarter of
2014 upon the completion of the corporate reorganization effected
in connection with the IPO. See the Form 10-K for additional
information regarding this adjustment.
|
Summary Balance Sheet
|
|
Actual &
Predecessor
|
|
|
December 31,
|
|
|
2014
|
|
|
2013
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$56,292
|
|
|
|
$13,234
|
|
Other current
assets
|
|
117,450
|
|
|
33,901
|
|
Total current
assets
|
|
173,742
|
|
|
47,135
|
|
Property, plant and
equipment, net
|
|
2,094,618
|
|
|
516,288
|
|
Other long-term
assets
|
|
21,587
|
|
|
24,232
|
|
Total
assets
|
|
|
$2,289,947
|
|
|
|
$587,655
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
130,041
|
|
|
30,866
|
|
Long-term
debt
|
|
500,000
|
|
|
128,155
|
|
NPI
payable
|
|
—
|
|
|
36,931
|
|
Other long-term
liabilities
|
|
334,135
|
|
|
4,822
|
|
Total
stockholders'/members' equity
|
|
1,325,771
|
|
|
386,881
|
|
Total liabilities and
stockholders'/members' equity
|
|
|
$2,289,947
|
|
|
|
$587,655
|
|
Drill-Bit F&D and Reserve Replacement Ratio
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 Pro
Forma
|
|
|
|
|
|
|
|
Production
(MBoe)
|
|
|
(A)
|
4,332
|
|
|
|
|
|
|
|
Proved Reserves
(MBoe)
|
|
|
|
|
Non-price revisions
(1)
|
|
|
(B)
|
5,582
|
Purchases
|
|
|
|
|
15,211
|
Extensions and
discoveries
|
|
(C)
|
40,125
|
Total
additions
|
|
|
(D)
|
60,918
|
|
|
|
|
|
|
|
Costs Incurred
(thousands)
|
|
|
|
|
Property acquisition
costs
|
|
|
|
Proved
|
|
|
|
|
$209,274
|
Unproved
|
|
|
|
|
152,540
|
Exploration
|
|
|
|
(E)
|
16,762
|
Development
|
|
|
|
(F)
|
467,202
|
Total costs
incurred
|
|
|
(G)
|
$845,778
|
|
|
|
|
|
|
|
Drill-bit F&D
($/Boe)
|
|
|
|
(E+F) /
(B+C)
|
$10.59
|
All sources F&D
($/Boe)
|
|
|
(G) / (D)
|
$13.88
|
Reserve replacement
ratio
|
|
|
(D) / (A)
|
1,406%
|
(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.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/rsp-permian-inc-announces-fourth-quarter-and-year-end-2014-financial-and-operating-results-and-year-end-2014-proved-reserves-300051420.html
SOURCE RSP Permian, Inc.