Noble plants big stake in Texas with Rosetta deal
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Noble Energy will pay about $2.1 billion for Rosetta Resources in an all-stock deal that gives the oil and gas company access to two massive Texas shale formations.
Assets belonging to Rosetta Resources Inc. include nearly 50,000 net acres in Eagle Ford Shale and another 56,000 acres in Permian Basin. The deal will immediately boost its per-share production and earnings at Noble Energy Inc., the company said Monday.
Industry observers were waiting for consolidation in the energy sector after watching oil prices tumble over the past year.
Companies were cutting production because of falling prices and many see mergers as the best way to grow.
Rosetta Resources, which also is based in Houston, said last week it booked a first-quarter loss of $539.7 million in a performance that missed Wall Street expectations.
Noble Energy reported a loss of $22 million in the quarter.
Yet, crude prices climbed nearly 36 percent since bottoming out below $44 a barrel in March. Gasoline prices, while still comparatively low, jumped 31 percent since hitting a six-year low in January, just as the United States heads into the driving season.
Noble said it identified more than 1,800 gross horizontal drilling locations for development in the acreage controlled by Rosetta Resources.
Noble will pay a portion of its stock valued at $26.62 for each Rosetta share. That’s a 38 percent premium to Rosetta’s closing price Friday of $19.32. It also represents a 28 percent premium to the average price of Rosetta shares over the past 30 trading days.
Aside from the deal price, Noble Energy also will assume Rosetta’s $1.8 billion in net debt.
The boards of directors of both companies approved the deal.
Rosetta shareholders, who would wind up with a nearly 10 percent stake in Noble Energy, still must vote on it. The companies expect the deal to close in the third quarter.
Rosetta shares soared nearly 35 percent, or $6.67, to $26 before markets opened Monday and after the companies announced the deal. The stock slipped about 13 percent this year, as of Friday.