RSP Permian (RSPP) To Snap Up Silver Hill Energy For $2.4B
Zacks Investment Research | Oct 13, 2016 10:15PM ET
Upstream energy player, RSP Permian, Inc. (NYSE:RSPP) recently announced its decision to acquire Silver Hill Energy Partners. The transaction value has been estimated at roughly $2.4 billion that includes both cash and stocks. The move reflects RSP Permian’s intention to expand its resources in the Permian Basin in Texas.
Silver Hill Energy has controlling interest in 68,000 gross (41,000 net) acres within the Delaware basin that contributes to about 15,000 net barrels of oil equivalent every day (BOE/D). RSP Permian already operates huge acreages in the Midland Basin that cover almost 63,000 net acres of land. The acquisition will now give the company access to 3,200 gross undeveloped areas in the Delaware. Silver Hill Energy also owns 58 producing wells, of which 49 are horizontal.
The Permian Basin acreage is one of the cheapest for developing U.S’s onshore oil fields. Hence, RSP Permian’s decision to acquire more properties in the region is undoubtedly a prudent one. According to media reports, this deal will likely boost production of RSP Permian by almost 50%. Hence, the transaction will help RSP Permian to generate significant cash flows for shareholders in the long run.
Silver Hill Energy operates through two entities – Silver Hill Energy Partners LLC and Silver Hill E&P II LLC. The transaction for Silver Hill Energy Partners LLC will likely close by the fourth quarter of 2016, while the buyout of Silver Hill E&P II LLC is anticipated to be completed by the first quarter of 2017.
RSP Permian is not the only energy player focusing more on Permian Basin. Other major players that intend to accelerate drilling activities in the area include Chevron Corporation (NYSE:CVX) , EOG Resources, Inc. (NYSE:EOG) and Pioneer Natural Resources Co. (NYSE:PXD) .
RSP PERMIAN INC Price
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.