Noble Energy acquires Clayton Williams for $2.7 billion

Noble Energy acquires Clayton Williams for $2.7 billion

Oil producer Noble Energy (NYSE:NBL) has announced it will acquire Clayton Williams Energy in a deal worth US$2.7 billion.

The American firm will pick up 71,100 ‘highly contiguous’ net acres in the Southern Delaware Basin in Texas, directly adjacent to Noble’s existing holding, and a further 100,000 in other areas of the Permian Basin.

The acquisition will create the second-largest Southern Delaware shale acreage position in the Permian Basin.

Noble hopes to increase production on the acquired assets from 10 million barrels of oil equivalent per day (MBoe/d) to approximately 60 MBoe/d in 2020.

“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,” said David L. Stover, Noble Energy chairman, president & CEO.

“Following our ramp of activity in 2017, the acquired assets are expected to be self-funding and accretive to Noble Energy’s earnings and cash flow per share beginning next year.  This is an excellent fit for Noble Energy, and we expect the transaction to generate substantial shareholder value.  We look forward to a smooth and seamless integration of Clayton Williams Energy.

“We are rapidly accelerating activity in 2017, starting the year with four rigs operating in the Southern Delaware Basin – three on Noble Energy’s acreage and one on the Clayton Williams Energy position.  A second rig is planned to be added to the new acreage in the second quarter, following closing of the transaction, and a third later in the year, in order to exit 2017 with a combined six rigs running in the Delaware Basin.”

Clayton Williams Energy CEO Clayton W. Williams, Jr. added that his company will be in safe hands with Noble on the basis of its experience and portfolio.

He said: “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.”

The boards of directors of both companies have unanimously approved the acquisition where Noble will reimburse Clayton with stock and cash.