RSP Permian acquires Silver Hill for $2.4 billion


via Jon Prior, Dallas Business Journal

Dallas energy giant RSP Permian (NYSE: RSPP) has acquired oil and gas firm Silver Hill with properties in the Permian basin for an estimated $2.4 billion, the companies announced Thursday.

RSP will pay $1.25 billion in cash with the rest in the form of 31 million shares in RSP common stock – about 20 percent of outstanding shares. The eventual purchase price will depend on an average share price as of Oct. 12.

Silver Hill was a privately held oil and gas company broken into two parts: Silver Hill Energy Partners and Silver Hill E&P II. They are controlled by affiliates of Kayne Anderson Capital Advisors and Ridgemont Equity Partners. They owned about 41,000 net acres in northeast Loving and northwest Winkler counties in Texas.

RSP estimates that the deal will push production to between 52,000 and 56,000 barrels of oil per day from about 35,000 currently.

The deal for Silver Hill will close in the fourth quarter for $604 million cash and 15 million RSP shares. The deal for Silver Hill II will close early next year for $646 million cash and 16 million RSP shares.

RSP expects to finance the cash portion of the deal through equity or debt offerings.

Silver Hill CEO Kyle Miller is expected to join RSP’s board of directors.

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