RSP Permian announces $2.4B acquisition of Silver Hill Energy Partners
RSP Permian announced it has entered into definitive agreements to acquire Silver Hill Energy Partners and Silver Hill E&P II for $1.25B of cash and 31M shares of RSP common stock in aggregate, implying a total purchase price of approximately $2.4B. Silver Hill is comprised of two privately held entities controlled by affiliates of Kayne Anderson Capital Advisors and Ridgemont Equity Partners that collectively own ~68,000 gross / ~41,000 net acres in northeast Loving and northwest Winkler Counties, Texas with ~15 MBoe/d of current net production from 58 producing wells and ~3,200 gross / ~1,950 net total undeveloped locations. While both transactions will have an effective date of November 1, 2016, the two transactions will close separately. SHEP I is expected to close in the fourth quarter of 2016, with Silver Hill receiving approximately $604M of cash and 15M RSP Shares. SHEP II is expected to close in the first quarter of 2017, with Silver Hill receiving approximately $646M of cash and 16M RSP Shares. Both transactions are subject to certain closing conditions, customary purchase price adjustments, and regulatory and third party approvals. Upon closing of SHEP II, Kayne Anderson, Ridgemont and other Silver Hill shareholders are expected to collectively own approximately 20% of RSP's outstanding shares pro forma for the issuance to Silver Hill and the concurrent equity offering that will fund a portion of the consideration for the acquisition. In addition, RSP expects to add Kyle D. Miller, CEO of Silver Hill, to RSP's Board of Directors upon closing SHEP II.