Noble Energy Inc. agreed to buy smaller rival Rosetta Resources Inc. for $2.1 billion in a stock transaction. The two companies, both of Houston, said the merger marked Noble's entry into the South Texas Eagle Ford and also the Permian basin.
Rosetta's shareholders will receive 0.542 of a Noble share for each Rosetta share they hold. They will own roughly 9.6% of Noble shares following the transaction. In addition, Noble will assume Rosetta's $1.8 billion in net debt. Rosetta reported a first-quarter loss of $539.7 million. Closing was expected in the third quarter.
"The Eagle Ford and the Permian are premier unconventional resource plays, two of the most economic in the US, which will expand our resource base and development inventory and further diversify our portfolio," Noble Chief Executive Officer Dave Stover said.
Rosetta, spun off from Calpine Corp. in July 2005, originally operated in other parts of South Texas, California, the Rocky Mountains, and the Gulf of Mexico before focusing on the Eagle Ford and Permian.
Currently, Rosetta's liquids-rich asset base includes 50,000 net acres in the Eagle Ford and 56,000 net acres in the Permian basin, of which 46,000 acres are in the Delaware basin and the rest are in the Midland basin.
Noble has identified more than 1,800 gross horizontal drilling locations, and 600 of those are in the Eagle Ford.
The Permian features 1,200 locations, of which about 700 are in the Wolfcamp A interval, with the rest split among Bone Springs and other Wolfcamp zones.
Noble already operates in the Marcellus region of Pennsylvania and West Virginia, and the Denver-Julesburg basin of Colorado.
