Noble Energy has signed a definitive agreement to acquire Clayton Williams Energy by purchasing all of the outstanding common stock for $2.7bn in a cash and stock deal.
The boards of directors of both companies have unanimously approved the transaction.
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Noble Energy chairman, president and CEO David L. Stover said: “We have been very disciplined in assessing expansion opportunities in the Delaware Basin and are extremely pleased to have reached this agreement with Clayton Williams Energy.
“This transaction brings all the key elements we value: excellent rock quality, a large contiguous acreage position adjacent to our own and robust midstream opportunities, reinforcing the Delaware Basin as a long-term value and growth driver for Noble Energy.
“This combination creates the industry's second largest Southern Delaware Basin acreage position and provides more than 4,200 drilling locations on approximately 120,000 net acres, with more than two billion barrels of oil equivalent in net unrisked resource.
“In addition to the benefits driven by larger scale, the midstream assets and planned buildout provide significant synergies and substantial dropdown potential in association with our ownership in Noble Midstream Partners.”
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By GlobalDataUnder the transaction, Noble Energy will acquire 71,000 net acres in the core of the Southern Delaware Basin in Reeves and Ward counties, Texas, located adjacent to its properties.
Additionally, it will acquire 100,000 net acres in other areas of the Permian Basin.
Clayton Williams Energy chairman and CEO Clayton W. Williams, Jr. said: “I am very proud of the company we have built over the past 25 years and I am pleased that Noble Energy will be leading the development of our properties going forward.
“Noble Energy's long track record of operational excellence and value creation, as well as its reputation as a tremendous corporate citizen, make it the ideal partner for us. We look forward to being shareholders of Noble Energy and benefiting from its world class asset portfolio.”
Within the acquisition, 2,400 Delaware Basin gross drilling locations were identified that target the Upper and Lower Wolfcamp A zones in addition to the Wolfcamp B and C.
Noble Energy intends to increase production from the acquired assets from ten million barrels of oil equivalent per day (mboe/d) currently (70% oil) to approximately 60mboe/d by 2020.
Petrie Partners Securities acted as the financial advisor, while Skadden, Arps, Slate, Meagher & Flom acted as legal advisor to Noble Energy during the transaction.
