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Noble Energy to buy rival Clayton Williams Energy for US$2.7b
[BENGALURU] Oil producer Noble Energy Inc said on Monday it would buy smaller rival Clayton Williams Energy Inc for about US$2.7 billion in a cash-and-stock deal to enhance its presence in the Permian Basin, the top US oil field.
Noble Energy said the deal includes 71,000 net acres in the core of the Southern Delaware Basin in Reeves and Ward counties in Texas, which are a part of the larger Permian Basin.
The Permian basin has seen a slew of land acquisitions as producers scramble to gain or expand positions in the oil field, where drilling costs are low, in preparation for recovering oil prices.
Under the deal's terms, Clayton Williams shareholders would receive 2.7874 shares of Noble Energy common stock and US$34.75 in cash for each share of common stock held.
The value of the transaction, based on Noble Energy's closing stock price as of Jan 13, is about US$139 per Clayton Williams Energy share, or US$3.2 billion in aggregate, including the assumption of about US$500 million in net debt, the company said.
Noble Energy said it would fund the cash portion of the acquisition through a draw on its revolving credit facility, which stood untouched at US$4 billion at the end of 2016.
It also said it expects to raise proceeds in excess of US$1 billion in 2017 through ongoing portfolio management.
Noble Energy said the number of rigs on the new acreage is planned to accelerate to three by the end of this year, from one currently.