Noble Energy signs agreement to divest 30,200 'non-core' acres in DJ basin

HOUSTON -- Noble Energy, Inc. has announced that it has signed a definitive agreement with SRC Energy Inc. to divest approximately 30,200 net acres from the company's non-core DJ basin position in Weld County, Colo.

Included with the acreage sold is approximately 4,100 boed. The total value of the transaction is $608 million. The transaction, effective as of Nov. 1 is anticipated to close on two separate dates, with acreage and non-operated production included in the initial closing by the end of 2017, followed by a second closing for operated producing properties by mid-2018. The closings are subject to customary terms and conditions, with the initial closing representing over 90% of the total transaction value.

Gary W. Willingham, Noble Energy's executive V.P. of operations commented, "This sale of acreage in our Greeley Crescent and Bronco development areas represents an acceleration of value as it was not likely to be developed by us for a number of years. Our DJ basin activities, both now and for several years to come, will remain focused on the northern and eastern parts of the basin. This is where we have a deep inventory of long lateral drilling opportunities in an oilier part of the basin and where our infrastructure provides a competitive advantage. Proceeds from this transaction continue to highlight a strong market valuation for our DJ basin position and will be prioritized to further strengthen our investment-grade balance sheet."

Approximately 50% of the acreage is located in the company's Greeley Crescent area and the remainder is in the Bronco area. 

Noble Midstream Partners LP maintains the acreage dedication for in-basin oil gathering, produced water gathering and fresh water delivery.

Non-operated production associated with the transaction totals approximately 2,500 boed. Operated production, assumed at the time of the second closing, is estimated to be 1,600 boed. The commodity mix of the production divested is 20% oil, 30% natural gas liquids, and 50% natural gas.  The acreage and production divested represent approximately eight percent and four percent, respectively, of the Company's totals in the DJ Basin.  Post transaction close, Noble Energy's DJ basin position will be approximately 335,000 net acres.

Tudor, Pickering, Holt & Co. acted as the lead financial advisor, and Bracewell LLP acted as outside legal advisor to Noble Energy on the transaction.