Noble Energy buys into Eagle Ford, Permian with Rosetta Resources acquisition

Noble Energy and Rosetta Resources have announced a definitive merger agreement whereby Noble Energy will acquire all of the common stock of Rosetta in an all-stock transaction valued at $2.1 billion, plus the assumption of Rosetta's net debt of $1.8 billion.

Rosetta's liquids-rich asset base includes approximately 50,000 net acres in the Eagle Ford shale and 56,000 net acres in the Permian (46,000 acres in the Delaware basin and 10,000 acres in the Midland basin). Noble Energy has identified in excess of 1,800 gross horizontal drilling locations for development, providing net unrisked resource potential of approximately 1 Bboe.

Rosetta's assets produced 66,000 boed in the first quarter of 2015, and year-end 2014 proved reserves were 282 MMboe. More than 60% of Rosetta's current production and proved reserves are liquids. Noble Energy anticipates a compounded annual production growth rate from these assets over the next several years of approximately 15%, generating positive free cash flow on an annual basis.

Dave Stover, Noble Energy'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. The Eagle Ford and the Permian are premier unconventional resource plays, two of the most economic in the U.S., which will expand our resource base and development inventory and further diversify our portfolio.”

Under the definitive agreement, Rosetta shareholders will receive 0.542 of a share of Noble Energy common stock for each share of Rosetta common stock held. Based on the Noble Energy closing price on May 8, 2015, the transaction has an implied value to Rosetta shareholders of $26.62 per share, representing a 28% premium to the average price of Rosetta stock over the last 30 trading days. Following the transaction, shareholders of Rosetta are expected to own 9.6% of the outstanding shares of Noble Energy.

The boards of directors of both companies have unanimously approved the terms of the agreement, and Rosetta's board has recommended that its shareholders approve the transaction. Completion of the transaction is subject to the approval of the Rosetta shareholders and certain regulatory approvals and customary conditions. The transaction is expected to close in the third quarter of 2015.

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