Noble Energy, Inc. (NYSE:NBL) executed a definitive agreement to acquire Clayton Williams Energy, Inc. (NYSE:CWEI) (CWEI) from the funds managed by Ares Management, L.P. (NYSE:ARES) and other shareholders for $2.5 billion on January 13, 2017. Noble Energy and CWEI signed a confidentiality agreement on December 21, 2016. Under the terms of the agreement, each common stockholder and warrant holder of CWEI will receive at their election, one of (i) 3.7222 Noble Energy Common Shares (the “share consideration”); (ii)(A) $34.75 in cash and (B) 2.7874 Noble Energy Common Shares (the “mixed consideration”); or (iii) $138.39 in cash (the “cash consideration”). At the effective time, each share of preferred stock of CWEI will be converted into the right to receive cash in an amount equal to $1, each option to purchase CWEI common shares will vest and be exchanged for the number of Noble Energy common shares and the restricted CWEI common shares (“CWEI Restricted Share”) will be converted into a number of restricted Noble Energy common shares equal to the number of CWEI Restricted Shares multiplied by the share consideration. The consideration is subject to proration so that the aggregate consideration paid in respect of all CWEI common shares and CWEI warrants consists of 75% Noble Energy common shares and 25% cash. While the aggregate amount of cash of $665 million and stock of 55 million shares of Noble Energy in the transaction will not change, on an individual basis, shareholders will be able to elect to receive cash or stock, subject to proration. Following completion of the transaction, shareholders of CWEI are expected to own approximately 11% of the outstanding shares of Noble Energy. Noble Energy intends to fund the cash portion of the acquisition through a draw on its revolving credit facility of $4 billion. CWEI will operate as a wholly owned subsidiary of Noble Energy. In the event of termination, CWEI will be liable to pay a termination fee of $87 million.

Some of the 197 of Clayton employees who work in the field are expected to remain employed, but some of those jobs likely will be cut. Noble will shutter the Clayton Williams' office at 6 Desta Drive by the end of year 2017. Clayton office is expected to close on or within two weeks of December 31, 2017. The transaction is subject to customary regulatory approvals, HSR Act approval, registration statement effectiveness, approval by the holders of a majority of Clayton Williams Energy common stock in a special meeting to be held on April 24, 2017, exercise of appraisal rights does not exceed 10% of the outstanding CWEI common shares, listing of new shares and certain other conditions. The transaction has been unanimously approved by the Boards of Directors of Noble Energy and CWEI. As of February 6, 2017, FTC granted the early termination notice. Ares Management, L.P. entered into a support agreement to vote in favor of the transaction. Transaction is expected to close April 25, 2017. The transaction is expected to be accretive to Noble Energy's earnings and cash flow beginning in 2018.

Petrie Partners Securities acted as financial advisor to Noble Energy. Frank E. Bayouth, Brian Krause, David Rievman and Eric C. Otness of Skadden, Arps, Slate, Meagher & Flom acted as legal advisors to Noble Energy. Shaun Finnie of Evercore Group, LLC acted as financial advisor and Michael Dillard and John Greer, David Stott, Emily Korinek, Sean Ehni, Corey Allen, Madeleine Neet, Alice Parker, Michelle Synhorst, Adam Kestenbaum, Marysia Mullen, Tim Fenn, Pardis Zomorodi, Bryant Lee, Joel Mack, Alicia Handy, Mandy Reeves and Sydney Smith of Latham & Watkins acted as legal advisors to CWEI. Brian Haufrect of Goldman, Sachs & Co. acted as financial advisor and provided fairness opinion to CWEI. Morrow Sodali Global LLC acted as information agent for CWEI and Wells Fargo Shareowner Services acted as transfer agent, exchange agent and registrar for Noble Energy. Goldman Sachs & Co was paid an advisory fee of $14 million and Morrow Sodali Global was paid an advisory fee of $0.01 million. Cleary Gottlieb, Steen & Hamilton LLP acted as legal advisor to Goldman Sachs & Co. LLC, financial advisor to NBL Permian LLC. Phc Corporate advised Clayton Williams Energy, Inc. on its sale to Noble Energy, Inc. W. James McAnelly III, Scott C. Sanders, Matt Paulson, Emily E. Leitch, Robert S. Nichols, D. Kirk Morgan II, Sean Gorman, Mark Lewis, Molly E. Butkus, Lucas L. Tanner, Kate Barrington McGregor, Jonathan L. Seliger, John L. Stavinoha III, Richard W. Chen, Jackie Zhong, Andrew W. Monk, Michael Weller, Casey Ragan, Elizabeth Eoff, Paul McBride and Caitlyn Dockendorf of Bracewell LLP acted as legal advisor to Noble Energy Inc.