Dallas-based RSP Permian Inc. is buying Permian Basin acreage and oil/gas producing properties in Glasscock County, TX, in multiple deals worth a combined $259 million in cash.

RSP is picking up 7,680 gross (6,652 net) surface acres or 21,440 gross (19,367 net) effective horizontal acres in Glasscock County, adding another primary operating area in the core of the Northern Midland Basin. The acreage being acquired from multiple sellers has 188 gross (156 net) horizontal drilling locations, 158 gross (132 net) vertical drilling locations on 40-acre spacing, and 158 gross (132 net) vertical drilling locations on 20-acre spacing.

"Our experience and strong relationships in the Permian Basin enabled RSP to successfully negotiate the acquisition of these assets in the core of the Midland Basin from multiple parties," said CEO Steve Gray. "The acquisitions are a significant bolt-on to our existing Glasscock leasehold acreage position, which was acquired in the first quarter of this year, and we expect them to be accretive to cash flow per share and earnings per share as well as net asset value."

The acreage will be 100% RSP-operated upon closing of the transactions, and RSP will have an 87% average working interest.

Aggregate current net production is 1,106 boe/d (74% liquids) with 13 vertical wells drilled to date. Net proved reserves are 22 million boe (9% developed) with more than 125 million boe of resource potential based on internal company estimates.

"The value of these acquisitions was principally in the undeveloped acreage as these assets have multiple horizontal targets and come with ample vertical inventory that will provide years of potential horizontal and vertical growth for the company," Gray said.

Glasscock is among 10 Permian Basin counties that were noted by University of Texas at San Antonio Institute for Economic Development for experiencing significant economic development thanks to oil and gas activities (see Shale Daily, June 18).

The properties being acquired by RSP are currently being developed with one vertical rig. RSP said it will keep this rig drilling during the balance of 2014 and into 2015 and intends to commence a horizontal drilling program in Glasscock in 2015.

The company said the properties are prospective for horizontal drilling in its target horizons, including the Lower Spraberry, Wolfcamp A, Wolfcamp B and Wolfcamp D (Cline) formations. RSP said additional horizontal drilling opportunities in several other stacked pay zones exist on the properties.

Closing of the deals is expected next month. Funding will be with debt with a possible notes issuance to follow.

The "vast majority" of RSP's acreage is on large, contiguous blocks in the core of the Midland Basin, a sub-basin of the Permian Basin, primarily in the adjacent counties of Midland, Martin, Andrews, Glasscock, Dawson and Ector.