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Noble Energy to buy Rosetta Resources for about $2 billion

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(Credit: Reuters) The image is the logo of Rosetta Resources.Rosetta
May 11
8:48 AM 2015

Oil and natural gas producer Noble Energy Inc (NBL.N) said it would acquire Rosetta Resources Inc (ROSE.O) for about $2 billion in stock, highlighting a consolidation being driven by a steep fall in global oil prices.

The deal will give Noble entry into the Eagle Ford Shale field and the oil and gas region of Permian Basin in Texas.

Rosetta shareholders will receive 0.542 Noble Energy shares for each share held, or $26.62 per share, based on Noble's closing price of $49.12 on Friday.

The offer represents a 38 percent premium to Rosetta's Friday close of $19.33. The shares had lost nearly two-thirds of their value since June.

Rosetta shares rose to $25.95 in light premarket trading on Monday.

Noble will also assume Rosetta's net debt of $1.8 billion as of March 31.

The company said it had identified more than 1,800 drilling locations across Rosetta's liquids-rich assets, consisting of 50,000 net acres in the Eagle Ford shale and 56,000 net acres in the Permian.

The assets have the potential to produce about 1 billion barrels of oil equivalent, Noble said.

Noble's deal for Rosetta, expected to close by the third quarter, is the latest acquisition triggered by the steep drop in global oil prices LCOc1 CLc1.

Royal Dutch Shell (RDSa.L) last month agreed to buy BG Group (BG.L) for 47 billion pounds ($70 billion) in the first major energy industry merger in more than a decade.

Smaller companies have followed suit. Spain's Repsol (REP.MC) bought Talisman Energy (TLM.TO), Canada's fifth-largest independent oil producer, for $8.3 billion last December.

Oilfield services providers are also consolidating. Halliburton Co (HAL.N) said in November that it would acquire smaller rival Baker Hughes Inc (BHI.N) for $35 billion.

Petrie Partners Securities LLC served as exclusive financial adviser to Noble Energy, while Skadden, Arps, Slate, Meagher & Flom LLP acted as its legal adviser.

Morgan Stanley acted as exclusive financial adviser to Rosetta and Latham & Watkins LLP was its legal adviser.

Noble's shares had fallen nearly 37 percent since last June.

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