The company may have acreage that can host more than 1,100 horizontals.

Dallas-based RSP Permian Inc. plans to IPO in the coming months on NYSE as RSPP, expecting to raise up to $400 million for it and selling shareholders, including its private-equity backer, Natural Gas Partners LP, which holds more than 90% interest in the E&P.

The Permian Basin-focused producer was co-founded in 2010 by Mike Grimm, chairman and co-founder of NGP-backed Rising Star Energy LLC, and Steven Gray, chief executive officer, who sold his NGP-backed Pecos Production Co. in 2005 to Chesapeake Energy Corp.

Starting at the time with 15,800 net acres and production of some 1,500 barrels of oil equivalent (BOE) a day from 107 Permian wells, the company now holds 42,428 gross (33,933 net) acres, according to its S-1 filing with the SEC. Reserves proved to date are 52.2 million BOE of which 62% is oil; 21%, natural gas liquids; the balance, associated gas. Production in June was 8,286 BOE a day.

The leasehold is entirely in the Midland sub-basin and 95% operated. It estimates its acreage can host 1,169 horizontal wells and 807 verticals, producing from five zones.

Stacking horizontals in the five zones, the company has 140,435 effective net horizontal acres, primarily in Midland, Martin and Dawson counties, it adds. Targets are Middle Spraberry shale (33,359 net acres; 278 drilling locations), Lower Spraberry shale (33,933 net; 277 locations), Wolfcamp A shale (19,892 net; 176 locations), Wolfcamp B shale (27,984 net; 237 locations) and Wolfcamp D aka “Cline” shale (25,267 net; 201 locations).

It had two rigs at work on horizontals and one on verticals this fall.

Since founded in 2010, RSP Permian has participated in more than 300 vertical Wolfberry wells—more than 180 of these as operator. In 2012, it shifted to horizontals in its leasehold, participating in 32 and operating 14. It reports that one of these may have been the first in the Midland sub-basin to make a horizontal in Middle Spraberry and it was among the first to make a horizontal in Wolfcamp B there. It may have also been the first to make a horizontal in Lower Spraberry in the entire Permian Basin, it adds.

Upon closing, Midland, Texas-based Collins & Wallace Holdings LLC will receive shares of RSP in trade for working interest in a portion of RSP’s leasehold that RSP bought in September from Summit Petroleum LLC and EGL Resources Inc. Also in trade for shares, it will acquire working interest in its leasehold from Rising Star Energy Development Co. LLC and repurchase 25% interest from Actoil LLC.

Long-time basin operators Ted Collins and Mike Wallace will join the RSP board upon the IPO.

Proceeds net to RSP will be used to pay a $70-million, 6.5%, term loan and to reduce its $27-million bank debt, it reports. Underwriters are Barclays Capital Inc. and Tudor, Pickering, Holt & Co. Securities Inc.

The Permian Basin has already produced 29 billion barrels of oil and 75 trillion cubic feet of gas, primarily from vertical wells, since its bounty was discovered in the early 20th century by farmers and ranchers who were attempting to make water wells.

In 2013, it was producing more than 900,000 barrels of oil a day.

–Nissa Darbonne, Editor-at-Large, Oil and Gas Investor,, Oil and Gas Investor This Week, A&D Watch,, Contact Nissa at