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Noble Energy to acquire Clayton Williams Energy for $2.7bn

Staff Writer |
Noble Energy will acquire all of the outstanding common stock of Clayton Williams Energy for $2.7 billion in Noble Energy stock and cash.

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Clayton Williams Energy shareholders will receive 2.7874 shares of Noble Energy common stock and $34.75 in cash for each share of common stock held. In the aggregate, this totals 55 million shares of Noble Energy stock and $665 million in cash.

While the aggregate amount of cash and stock in the transaction will not change, on an individual basis shareholders will be able to elect to receive cash or stock, subject to proration.

The value of the transaction, based on Noble Energy’s closing stock price as of January 13, 2017, is approximately $139 per Clayton Williams Energy share, or $3.2 billion in the aggregate, including the assumption of approximately $500 million in net debt.

The per share consideration represents a 21% premium to the average closing share price of Clayton Williams Energy over the past 30 days, and a 34% premium to the price on January 13, 2017, the last day of trading prior to the transaction.

Noble Energy intends to fund the cash portion of the acquisition through a draw on its revolving credit facility. As of the end of 2016, the Company’s $4 billion facility was completely undrawn.

Through ongoing portfolio management / optimization, Noble Energy anticipates the Company will generate in excess of $1 billion in proceeds in 2017.

The Company also anticipates retiring outstanding debt of Clayton Williams Energy assumed as part of the transaction at or following the closing. This, along with general and administrative cost elimination, will result in annual cost synergies to Noble Energy of approximately $75 million.

As part of the Company’s valuation assessment, Noble Energy identified significant value relating to existing production and midstream opportunities.

After adjusting for these items and net debt assumed, the purchase price represents approximately $32,000 per core Southern Delaware acre.

The midstream valuation reflects the planned infrastructure buildout and the value of future cash flows.

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