Noble Energy Inc. (NBL) said Tuesday that it will buy substantially all of the Rocky Mountains oil and gas assets of Petro-Canada Resources Inc. and Suncor Energy America Inc., a unit of Suncor Energy Inc. (SU,SU.TO) for $494 million. The acquisition is expected to close late in the first quarter of 2010.
Noble Energy estimates total proved reserves to be 53 million barrels of oil equivalent or MMBoe, 45% of which are liquids and 80% within the liquid-rich Wattenberg field, the company's largest onshore U.S. asset. Total net risked resources are estimated at 103 MMBoe. The purchase includes 340 thousand total net acres, nearly 200 thousand of which are located in the Greater DJ Basin. The DJ Basin is a geologic structural basin centered in eastern Colorado in the U.S., but extending into southeast Wyoming, western Nebraska, and western Kansas. It underlies the Denver-Aurora Metropolitan Area on the eastern side of the Rocky Mountains. The Wattenberg Field, one of the largest natural gas deposits in the U.S., is a basin-centered gas field just north of the Denver metropolitan area. Noble operates primarily in the Rocky Mountains, Mid-Continent, and deepwater Gulf of Mexico areas in the U.S., with key international operations offshore Israel, UK and West Africa.
The company said that the acquisition will add about ten thousand barrels of oil equivalent per day or Mboe/d, or 46 million cubic feet of natural gas, and 2,500 barrels of liquids to the company's daily production base. Including activity on acreage outside Wattenberg, Noble Energy expects to grow net production from the assets to approximately 20 MBoe/d by 2012, with a focus on increasing liquids contribution.
Noble Energy said it has identified several thousand projects associated with the assets being acquired, including over 2,000 Codell/Niobrara drilling locations in Wattenberg. The company plans to add two rigs to its Wattenberg program in 2010 as a result of the transaction, thus increasing its operated drilling activity in the field to eight rigs. David Stover, President and COO of Noble Energy, said, "The addition of complimentary drilling locations and opportunities in Wattenberg allows Noble Energy to continue to strengthen this core area. We now control a leasehold position of over 530 thousand net acres in the central DJ Basin with net production approaching 52 thousand barrels equivalent per day. Utilizing our technical and operational expertise, we now have an even larger platform from which to unlock further potential in the Wattenberg field and the overall basin."
Noble Energy expects the funding for the acquisition to be provided through its existing credit facility.
Suncor, which completed its merger with Petro-Canada in August 2009, said in November that it plans to divest a number of non-core assets. At that time, the company noted that the proposed divestments include certain natural gas assets in Western Canada and the United States Rockies, all Trinidad and Tobago assets and certain non-core North Sea assets. NBL closed Monday's regular trading on the NYSE at $73.22, up $2.00 on a volume of 1.11 million shares. The stock has been trading in a range of $40.33-$74.09 in the past 52 weeks.
SU closed Monday's trading at $36.76, up $1.45 on a volume of 5.52 million shares. In the past 52 weeks, the stock has been trading in a range of $16.95-$39.62.
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