RSP Permian (RSPP)

[dan_s]

John White at Roth Capital just sent out an updated report on RSPP. His valuation is now $64.50, compared to my valuation of $60.00.

John's comments below:

2017 Guidance: There is, in our view, plenty of upside for more sequential production growth in 2017. The midpoint of the 2017 oil and gas production guidance is 55,000 BOE per day, in line with our 2017 estimate of 55,300 BOE per day. Reaching this figure is an approximate 22% increase over the actual 1Q 2017 production figure of 45,189 BOE per day.

EOG Resources (EOG-NC) reported 1Q 2017 results on 5/8/2017 and we took notice of the recent well results in the Northern Delaware Basin, in particular Whirling Wind wells. EOG stated these wells are a record for Permian Basin horizontal well results. The Whirling Wind is a 4 well Wolfcamp package located in southern Lea County New Mexico, and these wells were completed with average IP-30’s of 5,060 BOE per day for each well.

We knew these wells were in close proximity to RSP Permian’s (RSPP-Buy) acreage in northern Loving County but we wanted to find out just how close the RSPP acreage is to the recent EOG wells. We contacted RSPP and we were informed that at their nearest point these wells are 4 to 5 miles from the RSPP lease line.

In our view, these recent EOG wells are strong derivative data points pointing to potentially strong future results for RSPP’s Northern Delaware Basin acreage.

[dan_s]

DALLAS, May 18, 2017 /PRNewswire/ -- RSP Permian, Inc. ("RSP" or the "Company") (RSPP) today announced the pricing of an underwritten public offering of 15,000,000 shares of its common stock for expected gross proceeds of approximately $585,000,000 before underwriting discounts and commissions and estimated offering expenses. The shares of common stock are being sold by Silver Hill Energy Partners Holdings, LLC and Silver Hill Energy Partners II, LLC (collectively, the "Selling Stockholders"). The Selling Stockholders have granted the underwriter a 30-day option to purchase up to an additional 2,250,000 shares of the Company's common stock. The Company will not receive any proceeds from the offering. The offering is expected to close on May 24, 2017, subject to customary closing conditions.

Since this common stock offering is not dilutive, it does not lower my valuation of RSPP ($60/share). - Dan

BofA Merrill Lynch is acting as sole book-running manager for the offering. The underwriter may offer the shares of common stock from time to time for sale in one or more transactions on the NYSE, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices.

The offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (the "SEC") on March 17, 2015. The offering may be made only by means of a prospectus supplement and the accompanying prospectus, copies of which may be obtained by sending a request to:

BofA Merrill Lynch
Attention: Prospectus Department
200 North College Street, 3rd Floor
Charlotte, NC 28255-0001
Email: dg.prospectus_requests@baml.com

You may also access the prospectus supplement and the accompanying prospectus for free by visiting the SEC's website at www.sec.gov.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.