Looking to expand its portfolio of Permian sub-basin targets, Dallas-based RSP Permian Inc. said this week that it has completed the first part of its previously announced acquisitions of Silver Hill Energy Partners, LLC (“SHEP I”) and Silver Hill E&P II, LLC (“SHEP II).

The West Texas pure-play closed the acquisition of SHEP I for an aggregate price of $604 million of cash and 15 million shares of RSP common stock, and expects to close the acquisition of SHEP II in 1Q2017 for a price of $646 million and 16 million shares of RSP common stock, following a shareholder vote to approve the issuance of shares.

Prior to the deal, RSP Permian had been strictly a Permian Midland sub-basin player. The Silver Hill acquisitions add a significant Delaware Basin position. SHEP I and SHEP II collectively own approximately 68,000 gross, 41,000 net acres in northeast Loving and northwest Winkler Counties, TX, and at the time of the acquisition announcement had approximately 15 MBoe/d of net production (69% oil) from 58 wells (49 horizontals) producing from seven horizontal zones.

According to estimates by energy analysts, RSP paid around $46,000-47,000/acre for the leasehold.

RSP has bolted on several properties across its core holdings over the past two years. In July 2014, it paid $259 million to acquire 6,652 net acres in the Midland. Last year, another $274 million was paid for 5,704 net acres. And a year ago, RSP paid an estimated $137 million for 4,100 net acres, a leasehold that at the time was producing 1,900 boe/d net.

Duringa 3Q2016 earnings call earlier this month, RSP Permian CEO Steven Gray said the Silver Hill footprint is “highly contiguous and well-suited for long lateral development,” with seven zones currently producing. He added that the asset is significantly de-risked.

Looking to bring the company’s operating experience in the Midland over to the new Delaware acreage, Gray envisions over the “next six months or so” focusing attention on building out infrastructure to accommodate a more full-scale development program of the acreage.

“As we begin constructing enhancements to our infrastructure, we anticipate accelerating the pace on our Midland Basin properties by adding an additional rig and keeping the existing two horizontal rigs in place in the Delaware,” Gray said during the earnings call. “We will then accelerate on the Delaware properties towards the second half of 2017. As we approach the end of 2017, we expect a balanced rig program between the Midland and Delaware basins.”

RSP Permian in 3Q2016 saw production increase 24% year/year to 29,800 boe/d, which also represented a 13% sequential increase. The E&P has upped the midpoint of its 2016 production guidance by 5% to 28,500-29,500 boe/d based on increased well productivity. The third quarter production mix was 73% oil, 10% natural gas and 17% NGLs.