RSP Permian Inc. (NYSE: RSPP) has recently closed acquisitions of, or entered into definitive agreements to acquire, mostly contiguous, bolt-on properties in existing core operating areas in the Midland Basin for an aggregate purchase price of $274 million.
Approximately $65 million of the acquisitions have already been completed and funded through a combination of cash on hand and a $50 million borrowing under RSP Permian's $500 million revolving credit facility. The remaining acquisitions are expected to close by Aug. 15.
RSP has also offered to purchase other working interest partners in the properties that could increase the aggregate purchase price of the acquisitions by approximately 10-15%. The company expects to finance the purchase price of the remainder of the acquisitions with borrowings under its current revolving credit facility, or, to the extent the company deems market conditions favorable, the proceeds of one or more capital markets transactions.
RSP is in preliminary discussions with its lenders under its credit facility and expects to receive a 20% increase in its borrowing base substantially concurrent with the closing of these transactions, although the increase is not dependent on the closing of the acquisitions.