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Rosehill Acquires Pecos County Acreage for $78 Million

Announced Date
October 31,2017
Deal Value  $mm
78
Net Acres
4,565
Transaction Type
Property
Buyer
Rosehill Resources Inc.
Seller
Not Disclosed
Price Per BOE $
40,000
Source Documents:
   Source Link
   Source Link
Location
Region
Permian - Delaware Basin

Country
United States

State
Texas

County
Pecos

Play
Delaware Basin


Production & Reserves
Production
40 Boe/d


Deal Metrics
$/Daily BOE
1,950,000

$/Acre
16,648.41

Transaction Details: 

[Summary: Rosehill Resources has agreed to acquire 4,565 undeveloped acres in Pecos county for a purchase price of $78 million.  The property is currently producing some 40 boe/d.  The company has identified that the property contains some 325 locations.

The deal closed on December 14, 2017.

J.A. (Alan) Townsend, Rosehill’s President and Chief Executive Officer, commented, “We believe this acquisition demonstrates our continued commitment to grow our strong acreage position in the rapidly evolving Delaware Basin. We are excited to acquire an attractive acreage position in Pecos County at less than $500,000 per drilling location. We are confident in our operational capabilities, which will help us to maximize value and generate sustainable growth. We believe this acquisition is accretive to Rosehill and the full cycle economics will compete favorably with other parts of the Delaware Basin.”

Townsend added, “This deal provides meaningful growth to our portfolio by more than doubling our acreage and drilling locations. We are very encouraged by offset operator results and our geological assessment indicates an anomalously thick Wolfcamp A/B interval with reservoir properties analogous to the Reeves County Core. There is potential across multiple stacked zones. We believe there is tremendous value in our Delaware Basin assets and we are very excited about this opportunity to add substantial value for our shareholders.” ]

 

ORIGINAL RELEASE

Rosehill Resources Inc. (“Rosehill” or the “Company”) (NASDAQ:ROSE)(NASDAQ:ROSEW)(NASDAQ:ROSEU) today announced that it has agreed to acquire up to 9,100 net undeveloped acres and certain producing oil and gas properties in the Southern Delaware Basin. The agreement remains subject to customary closing conditions and purchase price adjustments.

Acquisition Highlights:

Purchase price of $77.6 million for the initial identified 4,565 net acres, which includes producing properties with limited production of 40 Boepd; subject to certain conditions, Rosehill may acquire up to an additional 4,535 net acres at the same price per net acre
Increases horizontal drilling potential by over 325 gross locations with opportunities in multiple Wolfcamp A, Wolfcamp B and Bone Spring benches; additional upside potential from deeper Wolfcamp horizons
Expands Rosehill’s Delaware Basin position with up to 9,100 largely contiguous net acres in northwestern Pecos County with surrounding operators including Diamondback Energy, Inc., Jagged Peak Energy Inc., and Parsley Energy, Inc.
High average working interest of 86% with all acreage held by production or by lease term through at least 2020
Contiguous acreage position enables 7,500 to 10,000 foot laterals, which can significantly improve well economics
Establishes second core operating area in the Delaware Basin

J.A. (Alan) Townsend, Rosehill’s President and Chief Executive Officer, commented, “We believe this acquisition demonstrates our continued commitment to grow our strong acreage position in the rapidly evolving Delaware Basin. We are excited to acquire an attractive acreage position in Pecos County at less than $500,000 per drilling location. We are confident in our operational capabilities, which will help us to maximize value and generate sustainable growth. We believe this acquisition is accretive to Rosehill and the full cycle economics will compete favorably with other parts of the Delaware Basin.”

Townsend added, “This deal provides meaningful growth to our portfolio by more than doubling our acreage and drilling locations. We are very encouraged by offset operator results and our geological assessment indicates an anomalously thick Wolfcamp A/B interval with reservoir properties analogous to the Reeves County Core. There is potential across multiple stacked zones. We believe there is tremendous value in our Delaware Basin assets and we are very excited about this opportunity to add substantial value for our shareholders.”

Financing and Other

The Company intends to finance the acquisition with preferred equity, debt or a combination thereof, and is currently evaluating several potential sources of financing. This acquisition is expected to close in the fourth quarter of 2017 at which time the Company intends to provide more details on the acquisition and its impacts on Rosehill.

A presentation updated with additional details regarding the acquisition are available on the Company’s website www.rosehillresources.com in the news and media section.

About Rosehill Resources Inc.

Rosehill Resources Inc. is an oil and gas exploration company with producing assets in Texas and New Mexico with its investment activity focused on the Delaware Basin portion of the Permian Basin. The Company’s strategy for growth includes the organic development of its core acreage position in Loving County, Texas as well as focused acquisitions in the Delaware Basin.

Permian - Delaware Basin Deal Activity In Last 12 Months



Related Permian - Delaware Basin Region's Deals



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Oct-04-2017 Lilis Energy Inc.  Not Disclosed 45.6 Texas  E&P Details
Sep-28-2017 ExxonMobil  Not Disclosed 500   E&P Details
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Price History



Date Deal Headline Price$/acre
Dec-11-2017 Oasis Enters the Permian; Acquires Encap-backed Forge Energy for $946 Million $946.00  Million $46,601
Sep-28-2017 Exxon Adds 22,000 Acres to Permian Portfolio $500.00  Million $22,727
Aug-07-2017 RSP Permian Bolt-On Delaware Acreage For $230 Million $228.00  Million $38,000

Related Rosehill Resources Inc. Deals



Announced DateBuyerSellerDeal Value($mm)LocationCategoryDetails
Nov-03-2017 Not Disclosed  Rosehill Resources Inc.  7.1 Texas  E&P Details
Dec-20-2016 KLR Energy Acquisition Corp.,Rosehill Resources Inc.  Tema Oil & Gas Company  Texas  E&P Details