2Q 2017 FINANCIAL & OPERATING RESULTS August 7, 2017 - PowerPoint PPT Presentation

2Q 2017 FINANCIAL & OPERATING RESULTS August 7, 2017

FORWARD-LOOKING STATEMENTS Certain statements and information in this presentation may constitute “forward - looking statements” within the meaning of the Pr ivate Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “foresee,” “should,” “would,” “could” or other similar expressions are intended to identify forward-looking statements, which are generally not historical in nature. These forward- looking statements are based on our current expectations and beliefs concerning future developments and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Our forward-looking statements involve significant risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and our present expectations or projections. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the volatility of commodity prices, product supply and demand, competition, access to and cost of capital, uncertainties about estimates of reserves and resource potential and the ability to add proved reserves in the future, the ability to assimilate acquisitions into our operations, the assumptions underlying production forecasts, our hedging strategy and results, the quality of technical data, environmental and weather risks, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, the costs and results of drilling and operations, the availability of equipment, services, resources and personnel required for RSP’s operating activities, access to and availability of transportation, processing and refining facilities, the financial strength of counterparties to RSP’s credit facility and derivative contracts and the purchasers of RSP’s production and third parties providing services to RSP, acts of war or terrorism and the fact that our capital program may exceed budgeted amounts. For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the United States Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Existing and prospective investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise. 2

2Q RESULTS AND 2H UPDATE 1. 2Q highlights 2. Infrastructure update 3. A&D update 4. Hedge Profile 5. Outlook for 2H17 and beyond 6. 2Q financial update 7. 2Q operational update 8. Appendix 3

2Q HIGHLIGHTS 2Q17 vs. 1Q17 LOE/BOE Production Cash G&A/BOE EBITDAX 20% ↑ 13% ↓ 16% ↓ 9% ↑ Excluding G&T 7% ↓ Including G&T Strong second quarter results attributable to organic growth in the Midland Basin, full contribution of Delaware Basin acquisition volumes and operational improvements in both basins Positive net income with average realized oil price less than $50 per barrel over past four quarters, underscoring RSP’s ability to deliver profitable growth in lower oil price environment Execution of Delaware Basin infrastructure build-out on schedule, 3 rd Delaware rig added during 2Q and 2017 Delaware wells performing materially better than 2015/2016 vintage wells More than tripled water disposal capacity, with over 120,000 BWPD of capacity expected by mid-August LOE expected to trend further down in 2H17 with decreasing trucked water volumes Targa gas gathering and processing plant additions on schedule, addressing previous system limitations Acquired bolt-on assets in the Delaware Basin, bolstering highly attractive footprint for $228 MM (1) Acquired mineral interests underlying RSP acreage position (~4,500 net royalty acres (2) ) Acquired working interests in the heart of RSP’s acreage position and added offset acreage (~6,000 net leasehold acres) Enhanced hedge profile Opportunistically added hedges in recent crude rally to protect $45+ floor in 4Q17 and 2018 (3) (1) Transactions closed in July, subsequent to 2Q17. (2) Net royalty acre defined as one surface acre leased at a 1/8th royalty. (3) Closed subsequent to 2Q17. 4

DELAWARE BASIN WATER INFRASTRUCTURE UPDATE Salt Water Disposal DELAWARE WATER DISPOSAL SYSTEM RSP owns 8 operated SWD wells with ~120,000 BWPD capacity expected as of mid-August 2017 Newly drilled wells permitted up to Gathering system 25,000 BWPD each SWD well ~100-mile network of water gathering pipelines Significant exclusive surface-use agreements Nearly all disposed water currently piped to RSP-owned disposal wells Currently injecting ~60,000 BWPD, leaving ample capacity for growth Fresh Water Sourcing Currently buying water from commercially available sources Finalizing long-term water sourcing agreement and designing a water distribution system that will service RSP’s entire asset base Estimate in-service in first half of 2018, resulting in D&C cost savings and secure source for future development 5

DELAWARE BASIN GAS GATHERING AND TRANSPORTATION UPDATE Gas gathering provided by Targa DELAWARE GAS GATHERING SYSTEM (NYSE: TRGP) Processing provided by Targa and Gathering system Energy Transfer Partners Gas Plant Targa’s Loving plant: ~60 MMcf/d Compressor cryogenic processing plant on RSP acreage position Targa connecting Loving plant to their Delaware Basin system Targa’s new Wildcat plant: ~250 MMcf/d Loving Plant cryogenic processing plant, in service ~2Q 2018 Targa expanding field compression and looping gathering lines ahead of RSP development plans Wildcat Plant 6

ACQUISITIONS & DIVESTITURES UPDATE Acquired leasehold and mineral interests in the Delaware LOCATOR MAP OF 2Q17 ACQUISITIONS & TRADES Basin Total aggregate purchase price of $228 MM, closed 3Q ~6,000 net leasehold acres and 4,500 net royalty acres (1) ~500 Boe/d of production Accretive bolt-ons to existing footprint, augment working interest (WI) and extend lateral length of near-term drilling locations Converted ~14 sections from minority to majority WI Mineral interest acquisition increases net revenue interest (NRI) and enhances drilling economics, increasing rate of return on each dollar of capital spent MINERAL INTEREST ACQUISITION: ILLUSTRATIVE UPLIFT TO ECONOMICS Impact of 3% incremental NRI on single well economics + 10-15% + 5% RSP Existing Acreage Additional WI / NRI Acquired Net Boe IRR / NPV New WI / NRI Acquired Note: Pro forma for acquisitions closed in July 2017. (1) Net royalty acre defined as one surface acre leased at a 1/8th royalty. 7

HEDGE PROFILE RSP continuing to protect $45+ floor into 4Q17 and 2018 Opportunistically added ~12 MBo/d and ~10 MBo/d, respectively, in recent crude rally HEDGE CONTRACT DETAIL 3Q17 – 4Q17 Crude Oil (Bbl, $/Bbl) 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 2018 Three-Way Collars (1) 552,000 552,000 2,219,000 1,941,000 1,319,000 1,227,000 6,706,000 Ceiling $54.10 $54.10 $58.81 $59.07 $60.56 $60.96 $59.62 Floor $45.00 $45.00 $46.96 $47.11 $47.79 $48.00 $47.36 Short Put $35.00 $35.00 $36.96 $37.11 $37.79 $38.00 $37.36 Costless Collars (1) 1,150,000 1,150,000 2,300,000 Ceiling $60.05 $60.05 $60.05 Floor $45.00 $45.00 $45.00 Deferred Premium Puts (1) 920,000 920,000 1,840,000 Floor $48.50 $48.50 $48.50 Deferred Premium (2) ($4.00) ($4.00) ($4.00) Swaps (1) 552,000 552,000 Swap Price $48.95 $48.95 Total Hedge 2,070,000 3,174,000 5,244,000 2,219,000 1,941,000 1,319,000 1,227,000 6,706,000 Weighted Average Floor (3) $44.78 $45.54 $45.24 $46.96 $47.11 $47.79 $48.00 $47.36 % Hedged on Midpoint Oil Volume Guidance (4) 66% Mid-Cush Differential Swaps (5) 920,000 276,000 1,196,000 Weighted Average Swap ($0.38) ($0.50) ($0.41) 3Q17 – 4Q17 Natural Gas (MMBtu, $/MMBtu) 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 2018 Costless Collars (6) 2,422,000 2,545,000 4,967,000 Ceiling $3.86 $3.86 $3.86 Floor $3.00 $3.00 $3.00 ___________________________ (1) The crude oil derivative contracts are settled based on the arithmetic average of the closing settlement price for the front month contract NYMEX price of West Texas Intermediate Light Sweet Crude. (2) The deferred premium is not paid until expiration date, aligning cash inflows and outflows with the settlement of the derivative contract. (3) Weighted average floor assumes the long put in three way collars and put spreads and reflects the impact of premiums paid. (4) Utilizing 2017 midpoint oil volume guidance. (5) The Mid-Cush oil derivative contracts are settled based on the arithmetic average of the Argus daily price for WTI Midland and the arithmetic average of the Argus daily price for WTI Formula Basis. (6) The natural gas derivative contracts are settled based on the last trading day’s closing price for the front month contract r elevant to each period. 8