KLR Group Raises Price Target on RSP Permian (RSPP) Following Delaware Acquisition

October 18, 2016 8:06 AM EDT
Get Alerts RSPP Hot Sheet
Price: $41.51 -0.1%

Rating Summary:
    26 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 14 | Down: 19 | New: 11
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KLR Group reiterated a Buy rating on RSP Permian, Inc. (NYSE: RSPP), and raised the price target to $55.00 (from $52.00), following the company's Delaware acquisition. The transaction adds ~41k net acres in the Delaware Basin to RSPP’s portfolio and ~15 MBoepd (~69% oil) of production. To fund the cash portion of the acquisition, RSPP priced ~25.3 mm shares at $39.75 for total gross proceeds of ~$1.01 bn.

Analyst Gail Nicholson commented, "We are increasing our target price $3 to $55 per share following the transformative Delaware Basin acquisition, the associated acceleration of our '17 forward rig tempo, and an ~10% improvement in capital productivity (legacy assets continue to outperform, 3Q/16 volumes ~4% better than our expectation) partly offset by the equity issuance. RSPP is acquiring Silver Hill Energy Partners for ~$2.4 bn consisting of ~$1.25 bn in cash and ~31 mm shares of RSP common stock. To fund the cash portion of the acquisition, RSPP priced ~25.3 mm shares (includes over allotment) at $39.75 for total gross proceeds of ~$1.01 bn. Including the shares issued to Silver Hill, RSPP shares outstanding increased ~55%."

For an analyst ratings summary and ratings history on RSP Permian, Inc. click here. For more ratings news on RSP Permian, Inc. click here.

Shares of RSP Permian, Inc. closed at $42.11 yesterday.

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