Independent oil and gas producer RSP Permian Inc. (NYSE: RSPP) announced on Thursday that it has agreed to acquire two privately held entities that control about 41,000 net acres in the Delaware Basin of the Permian Basin in west Texas. The deal is worth about $2.5 billion, of which RSP will pay $1.25 billion in cash and 31 million shares of common stock.
The sellers are Silver Hill Energy Partners and Silver Hill E&P II, controlled by private equity firms Kayne Anderson Capital Advisors and Ridgemont Equity Partners.
RSP also announced an underwritten offering of 20 million shares of common stock, along with a 3 million-share 30-day option for the underwriters. The share price dipped about 0.3% on the announcement Thursday. The stock traded down about 2.5% in Friday’s premarket session.
Diamondback Energy Inc. (NASDAQ: FANG) was reported to be in negotiations to acquire Silver Hill, but in a preliminary guidance statement earlier this week, CEO Travis Stice acknowledged, “As has been rumored, we were engaged in discussions involving an acquisition but are not actively pursuing further negotiations at this time.” That decision presumably opened the door to RSP.
Current production from the properties total about 15,000 barrels of oil equivalent per day of net production from 58 producing wells. The acreage also includes about 3,200 gross and 1,950 net total undeveloped locations.
RSP will acquire the companies in two separate transactions, the first of which will be Silver Hill Energy Partners, for which RSP will pay about $604 million in cash and 15 million shares of common stock. That deal is expected to close in the fourth quarter of this year.
In the second transaction, for Silver Hill E&P II, RSP will pay approximately $646 million in cash and 16 million shares of common stock. The transaction is expected to close in the first quarter of next year.
With about an hour to go before Friday’s opening bell, RSP stock traded down 2.5% at $40.68 after closing Thursday at $41.75. The stock’s 52-week range is $16.74 to $42.56, and the high was posted Thursday. The consensus 12-month price target on the stock is $44.55 and RSP’s market cap at Thursday’s close was $4.24 billion.
The #1 Thing to Do Before You Claim Social Security (Sponsor)
Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.
A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.
Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
