The boards of Noble Energy Inc., Houston, and Clayton Williams Energy Inc., Midland, Tex., have unanimously approved a definitive agreement under which Noble Energy will pay $2.7 billion in cash and stock to acquire Clayton Williams.
The combined company, said Noble Energy Chairman, Pres., and Chief Executive Officer David L. Stover, will create the industry’s second-largest Southern Delaware basin acreage position and provide more than 4,200 drilling locations on 120,000 net acres, with more than 2 billion boe in net unrisked resource.
“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,” Stover said.
Other deal highlights include:
• 71,000 highly contiguous net acres in the core of the Southern Delaware basin in Reeves and Ward counties in Texas, directly adjacent to Noble Energy’s existing 47,200 net acres. In addition, there are an additional 100,000 net acres in other areas of the Permian basin.
• 80% average working interest in the Southern Delaware position, with more than 95% of the acreage operated.
• 2,400 Delaware basin gross drilling locations identified, targeting the Upper and Lower Wolfcamp A zones, along with the Wolfcamp B and C. The average lateral length of the future locations is 8,000 ft.
• Total estimated net unrisked resource potential on the acreage of over 1 billion boe in the Wolfcamp zones, with significant upside potential in other zones.
• Existing midstream Delaware basin assets include more than 300 miles of oil, natural gas, and produced water gathering pipelines (more than 100 miles for each product).
Closing is expected in this year’s second quarter and is subject to customary regulatory approvals, approval by the holders of a majority of Clayton Williams common stock, and certain other conditions.