Noble Energy Inc. (NYSE: NBL) has closed on an acreage exchange with Anadarko Petroleum Corp. (NYSE: APC) in the greater Wattenberg area of northern Colorado. Each party contributed approximately 50,000 net acres to the exchange. The effective date of the transaction was Jan. 1, 2013.
Noble Energy was reimbursed $202 million for capital spent to drill and complete wells on the conveyed acreage. This was partially offset by other adjustments in determining the $105 million of cash that the company received at closing. The exchange will lower net production from recent levels by approximately 8,000 barrels oil equivalent per day, almost entirely related to the recently drilled wells. This short-term reduction in production is anticipated to be quickly offset with operational efficiencies and cost savings. For 2014, the company's Denver-Julesburg Basin volumes are still expected to grow at a rate of at least 20 percent.
Analysts from Wunderlich Securities commented, “Noble Energy (NBL) is a first-class operator, in our view. The company is actively drilling wells in four frontier plays, providing multiple catalysts. NBL has a great footprint in two of the most profitable resource plays in the US: the Niobrara and the Marcellus. With gas prices strengthening, the Marcellus is looking better. The Wattenberg continues to be one of the most prolific and profitable plays in the US. The company’s land swap with Anadarko Petroleum (APC-NR) makes a lot of sense, and we are expecting a more aggressive drilling program in the next five years. We are raising our price target from $72 to $84 to reflect better valuation for the Marcellus gas and a more bullish view of the Wattenberg. We reiterate our Buy rating on NBL.