Matt Zborowski, Technology Writer | 28 March 2018
Journal of Petroleum Technology
Concho Resources has agreed to acquire RSP Permian in an all-stock deal valued at $9.5 billion including $1.5 billion in RSP debt. The move is expected to make Concho the Permian Basin’s most-active driller and its largest oil and gas producer from unconventional shale, the operators said in a joint release.
The combined company will hold some 640,000 net acres in the basin and operate a 27-rig program, with fourth-quarter 2017 production of 267,000 BOE/D. RSP is providing Concho some 92,000 net acres, split almost evenly between the Midland and Delaware Basins, along with seven active drilling rigs. Its fourth-quarter 2017 production was 56,000 BOE/D, of which 80% was oil and 20% was gas. Once the deal is complete, Concho will have 26,000 gross locations and a net resources of 12.2 billion BOE.
Tim Leach, Concho’s chairman and chief executive officer, said RSP’s assets “seamlessly fold into our drilling program” and “enhance our scale advantage” in Permian. Efficiencies are expected through large-scale, multi-well projects that provide costs savings through batch drilling and completions and maximize recoveries by reducing “parent-child” infill locations. Concho expects a present value of corporate and operational synergies from the deal of more than $2 billion, which includes asset optimization, directing capital to high-return manufacturing-style projects, and shared infrastructure. Read more…