Houston-based Nobel Energy, Inc. (NYSE: NBL) announced Monday it is acquiring Houston-based Rosetta Resources Inc. (NASDAQ: ROSE) in a deal worth $3.9 billion total.
The agreement consists of Nobel Energy receiving all Rosetta’s common stock valued at $2.1 billion and assuming the company’s net debt of $1.8 billion as of March, 2015.
Dave Stover, Noble’s Chairman, CEO, and President stated, “I am excited to announce this strategic transaction which adds two exceptional and material areas to our global portfolio.”
Rosetta is an independent exploration and production firm engaged in acquisition and development of unconventional resource plays across the US.
The transaction provides Noble with access to shale plays such as the Eagle Ford and Permian Basin, two of the largest in the US.
“The combination with Noble Energy brings together two complementary companies with a deep and diverse portfolio of assets in key unconventional resource basins,” according to Jim Craddock, Rosetta’s Chairman, CEO, and President.
The merger is a great move for the already cash-strapped Rosetta Resources, which has plenty of shale play assets for Noble. The firm now acquires approximately 50,000 net acres in the Eagle Ford Shale and 56,000 net acres in the Permian Basin from the deal. According to Noble, it provides a net unrisked resource of approximately one billion barrels of oil equivalent.
More than 60 percent of Rosetta’s production and proved reserves are liquids according to the earnings statement. The company produced 66 thousand barrels of oil equivalent per day for the first quarter of the year.
Both boards unanimously approved the agreement but is subject to the approval of Rosetta shareholders and regulatory conditions. The deal is projected to close in the third quarter of the year.
If approved, the Rosetta shareholders will receive 0.542 a share of Noble common stock for each share of Rosetta common stock held.
Additionally, the deal represents a 28 percent premium to the average price of Rosetta stock over the last 30 days. According to the terms, Rosetta shareholders are expected to own 9.6 percent of the outstanding shares of Noble Energy.
Nobel Energy is an independent energy company engaged in worldwide oil and gas exploration and production including the US, Gulf of Mexico, Eastern Mediterranean, and West Africa.