Concho to acquire RSP Permian in basin’s “biggest transaction ever”
In a transaction that Investor’s Business Daily called “the biggest ever in the Permian Basin,” Midland-based Concho Resources said this week it will acquire Dallas-based RSP Permian in a $9.5 billion all-stock transaction. The deal will create the Permian Basin’s largest crude oil and natural gas producer from unconventional shale. Tim Leach, Concho CEO, told reporters in a conference call Wednesday, “As companies get to this point and look at their assets and their activity, the efficiency you can gain by a bigger balance sheet and a bigger program is really what’s driving this.”
The Wall Street Journal said the deal “could herald the start of a consolidation push in America’s most active shale-drilling region.”
The deal will add 92,000 net acres to Concho’s existing acreage in the Permian to bring its total net acres to 640,000. The combined company will run the largest drilling program in the Permian Basin with 27 rigs. In 2017Q4 production on RSP assets totaled about 55,500 boed on a two-stream basis (80 percent oil, 20 percent natural gas) and 62,400 boed on a three-stream basis (71 percent oil, 17 percent NGLs, 12 percent natural gas). The transaction adds 2.2 billion boe of resource potential (two-thirds in premium resource, Concho said). The deal includes RSP debt and is expected to close in 2018Q3.
Expect Concho to buy up some other exploration companies in Reeves
and Culberson counties....they would like to eclipse Apache, Noble-Permian, Primexx, and Oxy in these counties.
And don't forget Clayton Williams landmen buying everything they can in
Culberson county. Drilling is about to go crazy in these two counties.
ol' Lawrence in Verhalen