Noble Energy Inc. (NYSE: NBL) signed a definitive agreement with SRC Energy Inc. (AMEX: SRCI) to divest about 30,200 net acres from the company’s noncore Denver-Julesburg (D-J) Basin position in Weld County, Colo., the companies said Nov. 8.

SRC agreed to pay $608 million to expand its core Greeley Crescent development area. The deal includes average production of 4,100 barrels of oil equivalent per day (boe/d) and 600 drilling locations. Multiple development pads are already under permit and much of the acreage is HBP, SRC said.

Noble and SRC said the transaction is structured in two parts. SRC will pay $568 million cash for acreage and nonoperated production with closing expected by the end of 2017. Separately, SRC will acquire operated, producing properties from Noble with closing sometime in mid-2018 for about $40 million.

Combined with SRC’s existing acreage, the company will hold about 90,000 net acres with more than 1,700 gross well locations. The deal also boosts SRC’s leasehold by 50% and its drillable locations by 55%.

Noble’s D-J Basin position will shrink by about 8% to 335,000 net acres.

About half of the acreage is located in Noble’s Greeley Crescent area and the remainder is in the Bronco area. Gary W. Willingham, Noble Energy's executive vice president for operations said the acreage represents an acceleration of value since Noble was unlikely to develop it for a “number of years.”

“Our D-J Basin activities, both now and for several years to come, will remain focused on the northern and eastern parts of the basin,” he said. “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.”

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

SRC, formerly known as Synergy Resources Corp., said it intends to finance the purchase price of the acquisition with proceeds from financing transactions and current liquidity. The company subsequently announced on Nov. 8 that it will conduct a private offering of $550 million in senior unsecured notes.

Lynn A. Peterson, SRC chairman and CEO, said the acquisition solidifies the company as a leading D-J Basin operator “with a deep inventory of efficient, high return development opportunities combined with a conservative balance sheet.”

“We will begin working on our expanded position immediately with planning, permitting and infrastructure buildout,” he said. “As substantially all of the acreage is held by production, we will take a measured approach before adding additional capital.”

The transaction has an effective date of Nov. 1.

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

Darren Barbee can be reached at