Clayton Williams Energy Acquisition

3 Months Ended

Mar. 31, 2017

Business Combinations [Abstract]

Clayton Williams Energy Acquisition

Clayton Williams Energy Acquisition

In January 2017, we announced the acquisition (Clayton Williams Energy Acquisition) of Clayton Williams Energy, Inc. (Clayton Williams Energy) which was approved by Clayton Williams Energy stockholders on April 24, 2017. On April 24, 2017, subsequent to first quarter 2017, we completed the acquisition which increases our Southern Delaware position to approximately 118,000 net acres.

The acquisition was effected through the issuance of approximately 55 million shares of Noble Energy common stock with a fair value of approximately $1.9 billion, and cash consideration of $665 million, for total consideration of approximately $2.6 billion, in exchange for all outstanding shares of Clayton Williams Energy, including options, restricted stock awards and warrants. The closing price of our stock on the New York Stock Exchange was $34.17 on April 24, 2017. In connection with the transaction, we borrowed $1.3 billion under our Revolving Credit Facility (defined below) to fund the cash portion of the acquisition consideration, redeem outstanding debt, pay associated make-whole premiums and pay related fees and expenses. The results of Clayton Williams Energy's operations will be included in our consolidated statements of operations beginning April 24, 2017.

We will account for the transaction 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 basis of Clayton Williams Energy'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.