Current RSPP Stock Info

RSP snags 15 MBOEPD of Permian Basin production
RSP Permian (ticker: RSPP) today announced it has entered into definitive agreements to acquire Silver Hill Energy Partners, LLC ("SHEP I") and Silver Hill E&P II, LLC ("SHEP II," and together with SHEP I, "Silver Hill") for $1.25 billion of cash and 31.0 million shares of RSP common stock in aggregate, implying a total purchase price of approximately $2.4 billion.

Silver Hill is comprised of two privately held entities controlled by affiliates of Kayne Anderson Capital Advisors and Ridgem...

Analyst Commentary

Capital One Securities
• RSP Permian is significantly growing its Permian footprint with its entry into the Delaware Basin by agreeing to acquire privately held Silver Hill Energy Partners for $2.4B ($1.25B cash + 31MM RSPP shares). The price tag is consistent with the >$2B valuation that has been kicked around in recent media reports. The deal includes ~41K net acres and ~15 Mboe/d of current production located primarily in Loving and Winkler Counties.
• Deal price works out to ~$41K/acre adj for the production (69% oil, 86% liquids), which is above recent Delaware deals priced in the $20K - $26K/acre range after adjusting for production

Baird
RSP Permian, Inc. (RSPP) reports $2.4B acquisition of Delaware-focused Silver Hill Energy Partners; prices upsized
$875MM share common offering. RSP Permian, Inc. (RSPP) will make this purchase with a combination of $1.25B in cash
and 31.0MM shares of RSP shared. Backed by Kayne Anderson and Ridgemont, Silver Hill holds approximately 41,000 net
acres in Loving and Winkler counties, TX (implied unadjusted purchase price of $58,537 per acre) and 1,950 net undeveloped
locations (implied unadjusted purchase price of $1.2MM per location). To help fund the cash portion of the deal, RSP sold
22.0MM shares of common stock overnight, upsized 10% from the originally announced 20.0MM share size, at $39.75/share,
a 4.8% discount to last night’s closing price of $41.75. RSP also pre-announced 3Q16 production of 29.7 Mboe/d, 4.2% above
the 28.5 Mboe/d consensus and up 13% sequentially

Stifel
After market close, RSP Permian (RSPP, NC) announced that it is acquiring Silver Hill Energy Partners, LLC (private) and
its 41M net acres in the Delaware Basin for $2.4B (Figure 1). Assuming $35M/Boe/d for 15MBoe/d of production, the
implied purchase price of ~$45M/acre for the Delaware Basin properties is higher than recent transactions in the basin
including $8M/acre for 186M net acres paid by EOG on 9/6/16, $22M/acre by PDCE for 57M net acres on 8/23/16,
$27M/acre by FANG for 19M net acres on 7/13/16, and $15M/acre by CXO for 12M net acres on 1/18/16. RSPP cited the
unique contiguous acreage position controlled by Silver Hill, its 7 potential pay zones, EURs of ~1,000 MBoe, and 1,950
net locations as highlights of the acquisition.
While Silver Hill was widely expected to fetch $2B or more, the acquisition underscores RSPP's confidence in the
company's largely undeveloped oil resource in multiple zones including the Upper and Lower Wolfcamp A, 3rd Bone
Spring, Avalon Shale, and Brushy Canyon.

KLR Group
RSPP plans to scale its rig count from three currently (legacy assets) to eight by year-end ’17 (4 in Delaware and 4 in Midland). Adjusting for the acquisition, our preliminary production outlook for '17 moves from ~34.8 MBoepd to ~52.5 MBoepd (company guide of 52-56 MBoepd) and we now anticipate RSPP spends ~$560 million (guide of $520-$560 million) on D&C capex.  


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