Noble Energy acquires Clayton Williams in US$3.2 billion deal

On 16 January 2017, Noble Energy announced plans to buy Clayton Williams for US$3.2 bn (including roughly $500m debt). Noble will gain core acreage in Reeves County, Texas, as well as acreage in the Central Basin Platform and the eastern Midland Basin. The acquired southern Delaware position has nearly 71,000 net acres prospective for the Wolfcamp and Bone Spring. Noble will be targeting the Wolfcamp A (Upper and Lower), Wolfcamp B and Wolfcamp C benches. The acreage has additional upside in the Avalon, 1st, 2nd and 3rd Bone Spring benches. After adjusting for Noble's valuation of US$600m for Clayton Williams' midstream assets, the consideration paid for the upstream assets is around US$2.6bn. This equates to nearly US$31,700/net acre, assuming US$35,000/flowing boe for Clayton Williams' current production of around 10,000 boe/d. The $/acre figure paid by Noble falls within the range of recent prices paid. Our valuation also places the deal in-line with recent transactions.