Skip to Content
US Videos

A Lean, Low-Cost Oil Producer

RSP Permian is our top pick in the upstream E&P segment, and we expect it to see substantial growth next year.


Dave Meats: RSP Permian continues to trade at a steep discount to our fair value estimate, and is our top pick in the upstream E&P segment. The firm is one of the lowest-cost oil producers in our coverage. The organization is very lean, with operating expenses per barrel at the bottom of the peer group range. It has also shaved off more than 40% from its capital cost per well since the end of 2014, despite adopting more expensive enhanced completions during this period.

The firm's Midland Basin acreage is ideally located in the core of the play, supporting robust initial production rates and moderate declines. Early indications are that its recently purchased Delaware Basin property offers very strong drilling economics as well. The first in-house well on that acreage targeted the lower Wolfcamp A interval, and delivered a 30-day initial production rate of 273 barrels a day per thousand lateral feet. If widely repeatable, this result could indicate that management's initial recovery estimate of 900-1,200 thousand barrels per well is too conservative.

Dave Meats does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.