The Eagle Ford Shale continued to drive results for Houston-based Rosetta Resources Inc. last year, leading the company to record production, reserves and cash flow.

The company ended the year with a fully self-funding Eagle Ford program, said outgoing Rosetta CEO Randy Limbacher. “Rosetta is on track to deliver another year of double-digit production growth. In addition, we continue to advance our efforts to capture new opportunities and further expand our substantial inventory of projects.”

Production during the fourth the quarter averaged a record 44,300 boe/d, an increase of 38% from the same period in 2011 and 20% from the prior quarter. Production for the year averaged an all-time annual record of 37,200 boe/d, up 35% from 2011. The increase for all periods was a result of strong production growth from the Eagle Ford. The company’s 2012 exit rate averaged 47,300 boe/d. Oil and natural gas liquids (NGL) production both reached all-time high levels for the year, increasing 87% and 69% year over year, respectively.

For 2012, revenues were $613.5 million compared to $446.2 million for the same period in 2011. Full-year 2012 revenues including realized derivative activities were $593.8 million in 2012 and $445.0 million in 2011. For the year, 81% of revenue was generated from oil, condensate and NGL sales including the effects of realized derivative instruments, as compared to 63% a year ago.

Since beginning operations in the Eagle Ford area, Rosetta has completed 126 horizontal Eagle Ford wells as of Dec. 31. About 13% of the company’s identified Eagle Ford inventory is drilled and on production. At the end of the year, 32 drilled wells were awaiting completion, 20 of which were drilled during the fourth quarter.

Well performance on the company’s largest Eagle Ford asset at Gates Ranch in Webb County remains “strong” at 55-acre well spacing, Rosetta said. About 332 of the estimated 428 Gates Ranch well locations remain to be completed.

In Dimmit County, four of the 68 planned well locations at Briscoe Ranch are on production and performing as expected. In addition, Rosetta delineated its Lasseter & Eppright acreage, one of three leases in the central area of the county. Drilling activities are also under way on both the Vivion and Light Ranch leases in the area.

Drilling and completion operations continue in the predominantly crude oil-producing Karnes Trough area. On the Dubose lease in Gonzales County, three locations remain to be drilled and five drilled wells are awaiting completion following the addition of three well locations in an acreage trade during the fourth quarter. Ultimately, there will be 10 wells on production after full development of the Dubose lease is completed during the first half of 2013, Rosetta said. On the Klotzman lease, all 15 well locations have been drilled and completed, with seven completions brought on production during the latter part of the fourth quarter.

The company plans to drill 75 to 80 wells and complete 60 to 65 Eagle Ford wells during 2013. The 2013 capital program is expected to range $640-700 million compared to its original $700 million capital budget, reflecting well cost savings of about $1 million per well in most activity areas.

During the fourth quarter, Rosetta (ROSE) successfully drilled its first Pearsall Shale exploratory well on the Tom Hanks lease in LaSalle County. The well is completed and awaiting pipeline connection. In addition, Rosetta acquired 1,711 gross acres in Atascosa County.

“While ROSE has roughly 50,000 net acres within its Eagle Ford footprint that has Pearsall potential, the company is acquiring more land,” noted Wunderlich Securities analyst Irene Haas. “If ROSE is successful in delineating the liquid-rich belt in the Pearsall, development could be easier because of its existing footprint in the Eagle Ford.”

Wunderlich has a “buy” rating on Rosetta shares while Wells Fargo Securities rates them “market perform,” reflecting its view that “upside potential is largely incorporated into current share prices.”

For 2012, Rosetta reported net income of $159.3 million ($3.01/share) versus a net income of $100.5 million ($1.91/share) for 2011. Adjusted net income was $146.7 million ($2.77/share) excluding an unrealized gain on derivative activities of $19.7 million, or $12.6 million after-tax, compared to $1.90/share in 2011. Adjusted net income increased versus 2011 primarily due to increased production and a higher liquids mix.

Limbacher is resigning as its chairman, CEO and president to be succeeded by James Craddock, who has served as Rosetta’s senior vice president of drilling and production operations. Limbacher will stay on with the company until April.