Noble Energy to buy Clayton Williams for $2.7 billion

Noble Energy has agreed to purchase West Texas oil producer Clayton Williams Energy for $2.7 billion in cash and stock, the company said Monday.

It’s part of the Houston oil producer’s efforts to expand its operation in the Delaware Basin in West Texas.

Noble expects to close the deal for Midland, Texas-based Clayton Williams in the second quarter. The combined companies should have the second-largest acreage foothold in the southern part of the region, Noble chief executive David Stover said in a written statement.

Noble’s acreage in the Delaware Basin will nearly triple to more than 120,000 net acres, with 4,200 possible drilling locations and estimated resources of 2 billion barrels of oil equivalent. As part of the transaction, it’s also acquiring another 100,000 net acres elsewhere in the surrounding Permian Basin.

The price tag for the deal, Noble said, is a 34 percent premium for Clayton Williams shareholders, as of its Jan. 13 closing price. The Houston company is also acquiring $500 million in net debt.

Noble believes it could boost oil and gas production from the acquired assets from the current 10,000 barrels of oil equivalent to 60,000 barrels a day in 2020. It plans to add two rigs in the Southern Delaware Basin this year, bringing the number of active rigs there to six by the end of the year.