RSP Permian Inc., a Dallas-based independent oil and natural gas company specializing in the exploration and development of West Texas’ Permian Basin, has raised $390 million after completing an initial public offering of 20 million shares at $19.50 per share, the company announced Thursday.
At its IPO price, RSP Permian has a market value of $1.41 billion.
RSP Permian sold roughly 9.2 million shares, while selling stockholders sold approximately 10.8 million. The selling stockholders will provide a 30-day option to underwriters to buy up to 3 million additional shares to cover any excess demand. The stock began trading on the New York Stock Exchange this morning under the ticker symbol ‘RSPP’ at $20.50 per share—a 5.13 percent increase from the IPO price.
With the funds raised by this IPO, RSP Permian plans to use its net proceeds of approximately $166 million to repay its term loan, make cash payments to certain existing investors, pay cash bonuses to certain employees in connection with the completion of the IPO, reduce outstanding borrowings under its revolving credit facility, and fund a portion of its capital expenditure plan. RSP Permian does not plan to retain any of the proceeds from the sale of shares of its common stock by its selling stockholders. Representatives of Barclays PLC, JPMorgan Chase & Co., Tudor, Pickering Holt & Co., Raymond James, RBC Capital Markets, and UBS Investment Bank managed the offering.
Natural Gas Partners LLC, an Irving-based private equity fund and a key backer of RSP Permian, sold shares in the IPO to cut its stake in the company from 45 percent to roughly 26 percent. NGP currently manages about $10.5 billion in funds that it invests in oil and gas production, oilfield service, and power companies.
