Oil Action: Noble Energy Buys Clayton Williams for $2.7 Billion

HOUSTON, TX — This is a big deal. Houston-based Noble Energy is spending $2.7 billion to purchase Clayton Williams Energy, a transaction that includes 71,000 contiguous acres in the Southern Delaware Basin of the famed Permian Shale formation.

The assets of the deal include 4,400 drilling locations on 120,000 acres and more than 2 billion barrels of oil equivalent, according to a statement from Noble.

"We have been very disciplined in assessing expansion opportunities in the Delaware Basin and are extremely pleased to have reached this agreement with Clayton Williams Energy," said David L. Stover, Noble chairman, president, and CEO. "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 Basinas a long-term value and growth driver for Noble Energy. "

Shareholders of Clayton Williams (NYSE:CWEI) will receive 2.7874 shares of Noble common stock and $34.75 in cash for each share they hold. The deal totals 55 million shares of Noble stock and $665 million in cash, according to the terms for the deal.

"I am very proud of the company we have built over the past 25 years, and I am pleased that Noble Energy will be leading the development of our properties going forward," said Clayton W. Williams, Jr. chairman and CEO of Clayton Williams, which is based in Midland, Texas. "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."

Noble Energy (NYSE:NBL) was founded more than 80 years ago and employs about 2,500 people.