RSP Permian Q3 2016 Results Forward-Looking Statements Certain - PowerPoint PPT Presentation

RSP Permian Q3 2016 Results

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. 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 to complete RSP’s operating activities, access to and availability of transportation, proces sing and refining facilities, the financial strength of counterparties to the Company’s credit facility and derivative contracts and the purchasers of RSP’s pr oduction and third parties providing services to RSP and acts of war or terrorism. 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 Commisson (SEC), including our Annual Reports 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

RSP Permian Overview (NYSE: RSPP)  Large, contiguous acreage blocks in the core of the Contiguous Acreage Position in Core of Permian Basin Midland and Delaware Basins (1)  Midland: ~60,700 net surface acres and ~270,000 net “effective horizontal acres” (2)  ~96% operated  Delaware: ~41,000 net surface acres and ~250,000 net effective horizontal acres  ~80% operated  Current run rate production of ~50 MBoe/d  ~5,800 horizontal locations in inventory with significant upside  Efficient operator – focused on execution  Leading F&D costs, reserve replacement ratios and operating costs Delaware Basin  Drilled wells in five different horizontal benches in Acquisition (1) Midland Basin ~41,000 net acres Midland Basin ~60,700 net acres ~3,200 gross locations ~2,600 gross locations Q3 2016 Key Statistics in focus area  Market Capitalization (10/31/16): $4.6 billion  3Q16 Average Production: 29.8 MBoe/d  YE 2015 Proved Reserves: 159.2 MMBoe  Net Debt / TTM EBITDAX (3)(4) : 3.0x  Liquidity as of 9/30/16: $587 million ___________________________ (1) Silver Hill acquisition pending, expected close in Q4 2016 and Q1 2017. (2) Combined horizontal acreage position that Management believes is prospective for hydrocarbon production across each target horizontal zone. (3) Please see reconciliation of Adjusted EBITDAX in Appendix. (4) Based on Q3 2016 net debt and TTM Adjusted EBITDAX. 3

3Q16 Update  Average daily production of 29.8 MBoe/d (73% oil, 17% NGLs, 10% Natural Gas), up 13% from 2Q16 and 24% over 3Q15  Financial Results Adjusted EBITDAX of $65.7MM (up 12% from 2Q16), with $73.2MM of 3Q16 development Capex  Net income of $1.0MM, or $0.01 per share; adjusted net loss of ($0.8)MM, or ($0.01) per share  Cash operating expenses of $9.36/Boe, 11% lower than 3Q15, and 6% lower than 2Q16  Added third Hz rig in September; utilized one full time completion crew and one spot crew for 2 completions  Completed 17 operated Hz wells, 1 operated Vt well and 13 non-op Hz wells 3Q Operational Began quarter with 19 operated Hz DUCs (1) (24 non-op DUCs) and finished with 12 operated Hz DUCs (18  Activity non-op Hz DUCs)  Entering into 6 month contract for 4th Hz rig in Midland Basin, expected to arrive in January 2017  Announced acquisition of Silver Hill for approximately $2.4 billion Silver Hill  Consideration includes $1.25 billion in cash and 31.0 million shares of RSP common stock Acquisition  On October 19, 2016, completed underwritten public offering of 25.3MM shares of common stock for total net proceeds of approximately $1.0 billion  $587MM of liquidity at 9/30 with $22MM in cash and $35MM drawn on $600MM revolver ($1MM LC) Liquidity /  53 % of 4Q’16E oil production hedged at a weighted average floor price of $43.49/ Bbl (2) Hedging  56% of 2017E oil production hedged at a weighted average floor price of $44.63/Bbl (2) Increased 2016  Expected full-year production range increased to 28.5 - 29.5 MBoe/d Guidance and  Development capital expenditure budget narrowed to $295 - $315 million Provided 2017  Preliminary full-year 2017 production range of 52 - 56 MBoe/d with development capex of $570 - $630MM Outlook ___________________________ (1) DUC is a drilled but uncompleted well. (2) Percent hedged based on corporate midpoint oil guidance, which includes Delaware Basin projected volumes. 4

Silver Hill Acquisition Overview Silver Hill Acquisition Highlights Wolfcamp Structure Map (Subsea Depths)  Highly contiguous operated position in the core of the Delaware Basin  ~68,000 gross / ~41,000 net acres  ~80% operated with over 80% working interest in operated properties (acreage held by one operated rig) Gaines  Conducive to efficient long lateral development  Meaningful current production base of ~15 MBoe/d Lea Eddy  69% oil and 86% liquids Andrews  2 operated horizontal rigs currently running  49 producing Hz wells and 9 producing Vt wells  Over 4,500 ft. of stacked pay with 7 producing, horizontal NEW MEXICO zones TEXAS  ~250,000 net effective horizontal acres Loving Winkler  Includes the Wolfcamp B, Lower and Upper (XY) Wolfcamp A, 3 rd Bone Spring, 2 nd Bone Spring, 1 st Bone Culberson Spring and Avalon Ward  Key offset operators include EOG, Anadarko, Shell, Matador and Devon, among others Reeves  Decades of highly economic horizontal drilling inventory  ~3,200 gross / ~1,950 net drilling locations, largely SILVER HILL ACREAGE operated WOLFCAMP STRUCTURE (TVDSS) CONTOUR INTERVAL = 500 Pecos  Accretive to cash flow, production and NAV at current strip 2500 2000 1500 1000 500 0 -500 -1000 -1500 -2000 -2500 -3000 -3500 -4000 -4500 -5000 -5500 -6000 -6500 -7000 -7500 -8000 -8500 prices 5

RSP is a Selective Acquirer: Why Silver Hill? RSP has taken a measured approach to acquisitions – successfully growing asset base without sacrificing quality Silver Hill Meets All Key Acquisition Criteria  Rock Quality: Silver Hill located in the deepest, thickest over-pressured portion of the Delaware Basin characterized by low GOR  Drives higher IPs, EURs and economics as well as higher density development across multiple zones Inventory includes horizontal wells with EURs of ~1.0 MMBoe and single well IRRs over 70% (1) at current strip pricing   Delineated: high number of producing, de-risked zones  Horizontals producing in 7 zones, including multiple Wolfcamp and Bone Spring targets as well as Avalon  Affords meaningful long-term scale and enhanced NAV  Contiguous: blocky acreage position  Allows for efficient development with enhanced economics from the use of long-laterals  Scale: meaningful existing base of production and cash flow  15 MBoe/d (69% oil, 86% liquids) as of October 2016  Significantly larger production base than the majority of recently evaluated opportunities ___________________________ (1) Based on Management estimates. 6

Strategic Combination Substantially Increases Scale Gross Horizontal Drilling Locations Net Surface Acreage Current Production (MBoe/d) (1) +123% +68% +43% ~101,700 ~50 ~5,800 ~35 ~60,700 ~2,600 RSP PF RSP RSP PF RSP RSP PF RSP Net Horizontal Drilling Locations Net Effective Horizontal Acreage Current Rigs Running +115% +95% +67% ~3,650 ~512,000 5 3 ~1,700 ~262,000 RSP PF RSP RSP PF RSP RSP PF RSP ___________________________ (1) Represents RSP current 3-week run-rate production and Silver Hill production as of October 2016. 7