Rosetta Merger Rosetta Merger

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Rosetta Merger

3.Rosetta Merger

On July 20, 2015, stockholders of Rosetta Resources Inc. (Rosetta) approved the merger of Rosetta into a subsidiary of Noble Energy (Rosetta Merger). This transaction adds two premier onshore US shale plays to our portfolio: the Eagle Ford Shale and Permian Basin. Rosetta's liquids-rich asset base includes approximately 50,000 net acres in the Eagle Ford Shale and 54,000 net acres in the Permian (45,000 acres in the Delaware Basin and 9,000 acres in the Midland Basin).

The merger was effected through the issuance of approximately 41 million shares of Noble common stock in exchange for all outstanding shares of Rosetta using a ratio of 0.542 of a share of Noble common stock for each share of Rosetta common stock. The closing price of our stock on the New York Stock Exchange was $36.97 on July 20, 2015.

In addition to proved and unproved properties, we acquired commodity derivative assets and assumed Rosetta's outstanding debt. The results of Rosetta’s operations will be included in our consolidated statements of operations beginning July 21, 2015.

The transaction will be accounted for as a business combination, using the acquisition method. Certain data necessary to complete the purchase price allocation is not yet available, and includes, but is not limited to, final reserve reports and operating information for the properties acquired, valuation of pre-acquisition contingencies, final tax returns that provide the underlying tax bases of Rosetta's assets and liabilities, and final appraisals of assets acquired and liabilities assumed. We expect to complete the purchase price allocation during the 12-month period following the acquisition date, during which time the allocation, including any goodwill, will be revised if necessary.

Rosetta Commodity Derivative Instruments

In connection with the Rosetta Merger, our subsidiary, NBL Texas, LLC, assumed the rights and obligations of Rosetta's commodity derivative instruments. NBL Texas, LLC currently holds the following commodity derivative instruments:

Crude Oil Derivative Instruments

				Swaps		Collars
Settlement Period	Type of Contract	Index (1)	Bbls Per Day	Weighted Average Fixed Price		Weighted Average  Short Put  Price		Weighted Average Floor Price		Weighted Average  Ceiling Price
Instruments Entered Into as of July 20, 2015
2015	Two-Way Collars	–	8,000	$	—	$	—	$	55.00	$	84.80
2015	Swaps	–	12,000	89.81		—		—		—
2016	Swaps	–	6,000	90.28		—		—		—

⁽¹⁾ Includes a combination of NYMEX WTI and Argus LLS indices.

Natural Gas Derivative Instruments

				Swaps		Collars
Settlement Period	Type of Contract	Index (1)	MMBtu Per Day	Weighted Average Fixed Price		Weighted Average  Short Put  Price		Weighted Average Floor Price		Weighted Average  Ceiling Price
Instruments Entered Into as of July 20, 2015
2015	Swaps	–	50,000	$	4.13	$	—	$	—	$	—
2015	Two-Way Collars	–	50,000	—		—		3.60		5.04
2016	Swaps	–	30,000	4.04		—		—		—
2016	Two-Way Collars	–	30,000	—		—		3.50		5.60

⁽¹⁾ Includes a combination of HSC (Houston Ship Channel) and TENNZ0 (Tennessee Zone 0) indices.

NGL Derivative Instruments

				Swaps		Collars
Settlement Period	Type of Contract	Index	Bbls Per Day	Weighted Average Fixed Price		Weighted Average  Short Put  Price		Weighted Average Floor Price		Weighted Average  Ceiling Price
Instruments Entered Into as of July 20, 2015
2015	Swaps	NGL-Ethane	2,476	$	11.18	$	—	$	—	$	—
2015	Swaps	NGL-Propane	1,750	43.35		—		—		—
2015	Swaps	NGL-Isobutane	617	53.05		—		—		—
2015	Swaps	NGL-Normal Butane	579	52.53		—		—		—
2015	Swaps	NGL-Pentanes Plus	579	77.72		—		—		—

Rosetta Debt

In connection with the Rosetta Merger, we assumed the following outstanding debt:

	July 20, 2015
(millions, except percentages)	Debt		Interest Rate
Credit Facility, due April 12, 2018	$	70	—	%
5.625% Senior Notes, due May 1, 2021	700		5.625	%
5.875% Senior Notes, due June 1, 2022	600		5.875	%
5.875% Senior Notes, due June 1, 2024	500		5.875	%
Total	$	1,870

On July 21, 2015, we repaid the $70 million of outstanding borrowings under the Rosetta revolving credit facility.

All outstanding senior notes assumed pay interest semi-annually. On June 29, 2015, we filed a prospectus offering to exchange any and all outstanding Rosetta senior notes for Noble senior notes with the same terms. The offer to exchange expired on July 27, 2015. Approximately 99.4% of the outstanding Rosetta senior notes were tendered for exchange. Approximately $11 million aggregate principal amount of the Rosetta senior notes remained outstanding across the three series. Due to the small outstanding principal amount remaining, we called the remaining outstanding Rosetta Notes for redemption in accordance with the terms of the respective indentures governing the Rosetta notes.