A Reuter’s report by Shubhankar Chakravorty announced that Noble Energy Inc said it would acquire Rosetta Resources Inc. for about $2 billion in stock, marking the first significant deal among U.S. shale oil producers following a steep fall in global crude prices.
A nearly 50 percent drop in crude prices since June highs of over $100 per barrel has for months raised expectations for a wave of mergers and acquisitions in the highly-fragmented shale oil industry.
But until now buyers and sellers had been unable to agree on valuations and the outlook for future prices. With the Noble acquisition, a precedent has been set that will clear a path for other companies plotting shale deals, people familiar with the transaction said.
Shares of Rosetta rose 25 percent to $24.23 and shares of Noble fell 7 percent to $45.39 on the New York Stock Exchange.
The deal will give Noble entry into two of the country’s top producing shale fields, the Eagle Ford Shale and Permian Bain in Texas. Noble, which is also drilling for natural gas offshore Israel, is already pumping oil and gas in other fields, including in Colorado.