Jack Newell
Jack Newell is chairman and CEO, Dover Partners, Inc., Dayton, Ohio, which manages $100 million. Dover-Partners.com
This week’s Stock of the Week is a very efficient player in a sector that’s been under pressure.
RSP Permian Inc. (RSPP) is an oil and natural-gas company operating mostly in the Permian Basin in West Texas.
Although the company was founded in 2010, its founders and managers have average industry experience of 30 years apiece—which has helped RSP become a super-efficient producer through the type of horizontal drilling that is now needed to extract oil from fields such as the Permian Basin. Management has kept extraction costs so tightly under control that they have actually dropped 40% in the past two years.
Although no one knows where oil prices will go in the short term, RSP can remain profitable even if the cost per barrel falls significantly from current levels in the $60 range. And RSP will likely benefit from continued improvements in equipment and in the efficiency of fracking technology. Revenue was $803.7 million last year. It will likely be $1.23 billion this year and $1.59 billion in 2019.
Fiscal year: December. Earnings per share: 2019 est./$3…2018 est./$2.27…2017/$1.50.
Jack Newell is chairman and CEO, Dover Partners, Inc., Dayton, Ohio, which manages $100 million. Dover-Partners.com
