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Year End 2016 Update – RSP Permian Inc.

RSP Permian Inc. · Feb 27, 2017 · 37 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Year End 2016 Update – RSP Permian Inc. – slide 1
    YEAR-END 2016 UPDATE February 27, 2017
  2. Year End 2016 Update – RSP Permian Inc. – slide 2
    RSP PERMIAN INVESTMENT HIGHLIGHTS Focused asset base with balanced exposure to the core of the Midland and Delaware Prime Permian Basins. Blocky, contiguous acreage footprint enabling peer leading efficiencies and long Position…
  3. Year End 2016 Update – RSP Permian Inc. – slide 3
    2016 ACHIEVEMENTS Expanded Core Permian Position Entry into Delaware Basin with 2.4B acquisition of Silver Hill Energy Partners(1) Blocked up core Midland leasehold position with 69MM in acquisitions Increased drilling inventory by…
  4. Year End 2016 Update – RSP Permian Inc. – slide 4
    RSP PERMIAN OVERVIEW RSP OVERVIEW CONTIGUOUS ACREAGE POSITION IN CORE OF PERMIAN BASIN(1) 160,000 gross / 100,000 net acres across highly contiguous acreage blocks in the core of the Midland and Delaware Basins(1) 5,900 gross…
  5. Year End 2016 Update – RSP Permian Inc. – slide 5
    STRONG TRACK RECORD OF GROWTH ANNUAL PRODUCTION GROWTH (MBOE/D) ANNUAL RESERVE GROWTH (MMBOE) 57 (1) SHEP II 283 (1) SHEP I 53 Midland Basin 237 202 159 29 21 106 12 54 7 (1) 2013 2014 2015 2016 2017E…
  6. Year End 2016 Update – RSP Permian Inc. – slide 6
    DURABLE MARGINS THROUGHOUT THE COMMODITY PRICE CYCLE Achieved most efficient quarter to date in Q4 2016, with cash operating costs of 9.11/Boe and cash margin of 76%(1) Experienced Permian operations team Highly contiguous acreage…
  7. Year End 2016 Update – RSP Permian Inc. – slide 7
    SUPERIOR CAPITAL EFFICIENCY DRILLBIT F&D (EXCL. PRICE REVISIONS)(1) TOP DRILLING TARGETS SINGLE WELL IRR Lateral Reservoir IRR 55 Length 10.13 Glasscock Upper Wolfcamp 7,500+ Wolfcamp A 7,500+ 7.49 70% Lower Wolfcamp A 4,500+…
  8. Year End 2016 Update – RSP Permian Inc. – slide 8
    4Q16 AND FY16 DRILLING & COMPLETION ACTIVITY OVERVIEW ACTIVITY OVERVIEW MIDLAND OPERATED HZ D&C SUMMARY During 2016, RSP drilled 46 and completed 53 operated 44 52 HZ wells During 4Q16, RSP drilled 13 and completed 14 operated HZ…
  9. Year End 2016 Update – RSP Permian Inc. – slide 9
    4Q16 AND FY16 FINANCIAL RESULTS Production growth and cost structure improvements helped support cash flow during oil price downturn 40% production growth YOY with 25% less development capex 4Q16 development capex 50% above 4Q15,…
  10. Year End 2016 Update – RSP Permian Inc. – slide 10
    STRONG FINANCIAL POSITION WITH AMPLE LIQUIDITY Entered into amended and restated credit facility with 950MM CAPITALIZATION TABLE borrowing base, 900MM elected commitment and 2.5B maximum lender commitments ( in millions) 12/31/2016…
  11. Year End 2016 Update – RSP Permian Inc. – slide 11
    FULL YEAR 2017 GUIDANCE FULL YEAR 2017 GUIDANCE SUMMARY COMMENTARY 2017 Guidance Range 5 operated rigs currently (4 Midland, 1 Delaware), 1 Delaware rig Production added upon close of SHEP II Avg. Daily Production (Boe/d) 53,000 -…
  12. Year End 2016 Update – RSP Permian Inc. – slide 12
    RSP STRATEGY: RATE-OF-RETURN DRIVEN GROWTH Emphasis on high rate of return vs. achieving growth objective During 2015 2016 oil price downturn RSP slowed drilling and opportunistically made acquisitions Operated rigs dropped from 5 in…
  13. Year End 2016 Update – RSP Permian Inc. – slide 13
    DRILLING & COMPLETION EFFICIENCY IMPROVEMENTS RSP drilling HZ wells in less than half the time as HZ wells drilled in 2013 RSP is completing over 7 stages per day (sand pounds/day increased 15% over 2015) Opportunities for additional…
  14. Year End 2016 Update – RSP Permian Inc. – slide 14
    MIDLAND BASIN UPDATE
  15. Year End 2016 Update – RSP Permian Inc. – slide 15
    MIDLAND BASIN ACTIVITY UPDATE Strong well results confirming enhanced completion design and asset quality WELL RESULT UPDATE (TWO-WELL PADS) MIDLAND BASIN ACTIVITY Lateral Compl. Length IP30 Well Name Date Formation (Feet)…
  16. Year End 2016 Update – RSP Permian Inc. – slide 16
    JOHNSON RANCH LOWER SPRABERRY DOWNSPACING PILOT In 4Q16, RSP completed 4 additional LS wells in the Johnson Ranch spacing pilot with the latest generation frac design Of the 4 new wells, 1 was drilled at an equivalent of 10…
  17. Year End 2016 Update – RSP Permian Inc. – slide 17
    MIDLAND BASIN WELL PERFORMANCE Substantial year over year well productivity MIDLAND BASIN WELL PERFORMANCE BY VINTAGE improvement since commencing horizontal drilling in 2012 300 2016 performance 13% above 2014 & 2015 avg. despite…
  18. Year End 2016 Update – RSP Permian Inc. – slide 18
    SIGNIFICANT REDUCTION IN TIME TO WELL PAYOUT At 55/bbl flat, and using conservative capex and well performance assumptions, 155MBo approximates well payout To date, over 55% of wells completed in 2015 have reached payout in less than…
  19. Year End 2016 Update – RSP Permian Inc. – slide 19
    MIDLAND BASIN TYPE CURVE INCREASES RSP increased average type curve for aggregate Midland Basin position Adjusted IP and initial decline / slope of RSP type curves to match early time outperformance Type curves prepared by RSP third…
  20. Year End 2016 Update – RSP Permian Inc. – slide 20
    EARLY PRODUCTION HAS GREATEST INFLUENCE ON WELL VALUE ILLUSTRATION: TERMINAL DECLINE IMPACT ON EUR / NPV ILLUSTRATION: B-FACTOR IMPACT ON EUR 700 8 800 85% 15% 600 6 700 VALUE VALUE 35% Net Present Value (MM) 4 600 diff…
  21. Year End 2016 Update – RSP Permian Inc. – slide 21
    MIDLAND BASIN WELL COST UPDATE CURRENT MIDLAND DC&E COST (8,500 LATERAL) HISTORICAL WELL COST PER LATERAL FOOT (OP. WELLS)(1) 1,500 Current DC&E: 6.2MM 1,232 1,250 9% 1,086 Increased R&D Spending 1,000 933 828 44% 775…
  22. Year End 2016 Update – RSP Permian Inc. – slide 22
    MIDLAND BASIN INVENTORY Numerous spacing pilots ongoing CURRENT SPACING ASSUMPTIONS Base Spacing Upside Spacing Base Spacing assumptions updated Formation Avg. Wells/Section Wells/Section Optimal well placement will evolve with more…
  23. Year End 2016 Update – RSP Permian Inc. – slide 23
    DELAWARE BASIN UPDATE
  24. Year End 2016 Update – RSP Permian Inc. – slide 24
    DELAWARE BASIN INITIATIVES Blocking Up Acreage Position Initiating acreage trades with offset operators to enhance operations and drill longer laterals Recently completed trade increased lateral length of 4 drilling units in Loving…
  25. Year End 2016 Update – RSP Permian Inc. – slide 25
    DELAWARE BASIN ACTIVITY UDPATE Substantial stacked resource potential with 7 currently producing zones and strong recent results across 5 highlighted below ROBUST WELL RESULTS DESPITE SHORTER LATERALS AND RESTRICTIVE CHOKES(1)…
  26. Year End 2016 Update – RSP Permian Inc. – slide 26
    DELAWARE BASIN WORKOVER CASE STUDY RSP recently directed workovers of several wells with excellent results Wells have been online 170 200 days total and current rates are substantially above IPs Installed ESP in Brunson 1111H 8,000…
  27. Year End 2016 Update – RSP Permian Inc. – slide 27
    DELAWARE BASIN WELL PERFORMANCE Substantial year over year well productivity improvement DELAWARE BASIN WELL PERFORMANCE BY VINTAGE on the Silver Hill properties Improvements in drilling and completion techniques 300 Switch in primary…
  28. Year End 2016 Update – RSP Permian Inc. – slide 28
    DELAWARE CRUDE OIL GATHERING AND TRANSPORTATION OVERVIEW Crude oil gathering provided by DELAWARE CRUDE OIL INFRASTRUCTURE Outrigger (Targa) Targa (NYSE: TRGP), one of the largest midstream providers in North America, acquiring…
  29. Year End 2016 Update – RSP Permian Inc. – slide 29
    DELAWARE GAS GATHERING AND TRANSPORTATION OVERVIEW Gas gathering provided by Outrigger DELAWARE GAS GATHERING SYSTEM (Targa) Processing provided by Outrigger (Targa) and Energy Transfer Gathering system 70 MMcf/d cryogenic processing…
  30. Year End 2016 Update – RSP Permian Inc. – slide 30
    DELAWARE WATER INFRASTRUCTURE OVERVIEW Recently acquired water gathering and DELAWARE WATER DISPOSAL SYSTEM disposal infrastructure assets that serviced Silver Hill Post acquisition RSP controls: Gathering system 4 operated SWD wells…
  31. Year End 2016 Update – RSP Permian Inc. – slide 31
    RSP PERMIAN INVESTMENT HIGHLIGHTS Prime Permian Position Strong Growth Profile Superior Execution Focus on Capital Efficiency Technical Leader Oil-Weighted Production and Reserve Base Experienced Permian Team 32
  32. Year End 2016 Update – RSP Permian Inc. – slide 32
    DELIVERING VALUE HIGH QUALITY FOCUS ON RETURNS ASSETS & EXECUTION STRONG FINANCIAL EXPERIENCED POSITION MANAGEMENT 33
  33. Year End 2016 Update – RSP Permian Inc. – slide 33
    APPENDIX
  34. Year End 2016 Update – RSP Permian Inc. – slide 34
    INCREASING HEDGE PROFILE RSP opportunistically layers on hedges to protect returns and support planned capital expenditures HEDGE CONTRACT DETAIL Crude Oil (Bbl, /Bbl) 1Q17 2Q17 3Q17 4Q17 2017 2018 Three-Way Collars (1) 675,000…
  35. Year End 2016 Update – RSP Permian Inc. – slide 35
    EXECUTING BOLT-ON ACQUISITIONS IN CORE MIDLAND During 2016, RSP acquired 69 million of bolt-on oil and gas properties: 2,800 net acres located in core Midland, Martin, and Glasscock Counties 7 million of acquisitions in 4Q16 LOCATOR…
  36. Year End 2016 Update – RSP Permian Inc. – slide 36
    RSP PERMIAN 3RD PARTY 1MMBOE EUR WELLS Stars represent areas where AREAS WITH 3RD PARTY PROJECTED EUR OVER 1MMBOE Netherland Sewell & Associates, Inc. projected at least one producing well DELAWARE BASIN to have an EUR over 1MMBOE WC XY…
  37. Year End 2016 Update – RSP Permian Inc. – slide 37
    ADJUSTED EBITDAX AND ADJUSTED NET INCOME RECONCILIATION Reconciliation of Net Income (Loss) to Adjusted EBITDAX (in thousands) Three Months Ended December 31, Twelve Months Ended December 31, 2016 2015 2016 2015 Net Income (Loss)…

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