RSP Permian - Update Jan 22

[dan_s]

I just received the following note from John White at Roth Capital:

We have input our higher 2018 WTI crude oil price estimates into our valuation model which results in a NAV of $50.42 per share which we have rounded to $50.50 for our new price target. Our previous price target was $44.00. We have moved our 2018 oil price estimate to be more in line with the recent futures markets. Our 2018 WTI crude price estimate moves from $46.25/bbl to $56.25/bbl. < My valuation of RSPP is $46.50 - Dan.

We have also updated our 4Q 2017 estimates for actual WTI crude oil and Henry Hub natural gas prices. Accordingly our 4Q 2017 estimates for EPS/CFPS/EBITDA move higher from $0.16/$0.80/$148.1 million to $0.35/$1.04/$177.0 million. < This is very close to my Q4 2017 forecast for RSPP - Dan.

The application of our higher 2018 WTI crude oil price estimates increases our 2018 projections of EPS/CFPS/EBITDA from $1.18/$4.06/$747.5 million to $1.97/$5.02/$874.1 million.



Note that John's operating cash flow per share estimate ("CFPS") for 2018 compares to my forecast of $4.62. My forecast models are still based on $50 WTI beyond Q1 2018. All of my valuations for the Sweet 16 will very likely be going up after I see Q4 results and adjust the oil, gas and NGL prices being used in the models.