RSPP is the newest member of our Sweet 16
Posted: Mon Aug 15, 2016 9:10 am
RSP Permian (RSPP): Comments below from John White at Roth Capital dated 8-15-2016.
Our net asset value and target price are based on proved and probable reserves, financial position, and historical and expected drilling and completion results. RSPP continues to push overall production higher and also reports newer wells in the recent expansion into Glasscock County continue to outperform expectations. As such, we are moving our price target from $36 to $44.
RSPP’s actual 2Q oil and gas production of 26,407 BOE per day beat consensus and ROTH estimates by 3%. More importantly, in our view, RSPP is raising full year 2016 production guidance by 10%, to a range of 26,500 to 28,500 BOE per day. Further, RSPP’s recently completed Glasscock county wells are outperforming previously published type curves.
Capex was also materially increased to $285 million to $315 million from $200 million to $260 million, as RSPP now plans to complete 52-56 Hz wells, up 8-16 wells from previous guidance of 36-48, while ending the year with only
8-12 wells waiting on completion (WOC) vs. 13-25 previously. Management expects the incremental capex and activity to be back-end loaded, with the impact largely on 2017 production.
RSPP reported in line EPS with the consensus and ROTH EPS estimates, reporting an adjusted EPS of $(0.04), versus the consensus of $(0.03) and the ROTH estimate of $(0.02). EPS was adjusted for an impairment charge against oil and gas properties and non-cash losses on derivatives. RSPP narrowly missed the consensus and ROTH CFPS, reporting $0.40, against the consensus and the ROTH estimate of $0.43. RSPP beat on EBITDA, reporting $58.5 million, beating the consensus estimate of $53.3 million and the ROTH estimate of $53.6 million.
Our net asset value and target price are based on proved and probable reserves, financial position, and historical and expected drilling and completion results. RSPP continues to push overall production higher and also reports newer wells in the recent expansion into Glasscock County continue to outperform expectations. As such, we are moving our price target from $36 to $44.
RSPP’s actual 2Q oil and gas production of 26,407 BOE per day beat consensus and ROTH estimates by 3%. More importantly, in our view, RSPP is raising full year 2016 production guidance by 10%, to a range of 26,500 to 28,500 BOE per day. Further, RSPP’s recently completed Glasscock county wells are outperforming previously published type curves.
Capex was also materially increased to $285 million to $315 million from $200 million to $260 million, as RSPP now plans to complete 52-56 Hz wells, up 8-16 wells from previous guidance of 36-48, while ending the year with only
8-12 wells waiting on completion (WOC) vs. 13-25 previously. Management expects the incremental capex and activity to be back-end loaded, with the impact largely on 2017 production.
RSPP reported in line EPS with the consensus and ROTH EPS estimates, reporting an adjusted EPS of $(0.04), versus the consensus of $(0.03) and the ROTH estimate of $(0.02). EPS was adjusted for an impairment charge against oil and gas properties and non-cash losses on derivatives. RSPP narrowly missed the consensus and ROTH CFPS, reporting $0.40, against the consensus and the ROTH estimate of $0.43. RSPP beat on EBITDA, reporting $58.5 million, beating the consensus estimate of $53.3 million and the ROTH estimate of $53.6 million.