The deal will give Noble entry into the Eagle Ford Shale field and the oil and gas region of Permian Basin in Texas.
Noble will acquire Rosetta in an all-stock transaction, the Houston, Texas-based companies said in a statement today. Noble will also assume Rosetta’s $1.8 billion in net debt.
Rosetta’s shareholders will receive 0.542 of a Noble share for each Rosetta share they hold. They will own roughly 9.6 percent of Noble shares following the deal.
The per-share offer is valued at $26.62, a 38 percent premium to the target’s closing price on Friday.
Shares of Rosetta jumped 28.4 percent to $24.82 at 10:02 a.m. in New York, while shares of Noble slumped 5.2 percent to $46.50.
It is the first deal that involves a sizable U.S. energy producer following the downturn in oil prices. It could help accelerate a wave of mergers and acquisitions that many in the industry have been expecting.
The company said it had identified more than 1,800 drilling locations across Rosetta's liquids-rich assets, consisting of 50,000 net acres in the Eagle Ford shale and 56,000 net acres in the Permian.
The assets have the potential to produce about 1 billion barrels of oil equivalent, Noble said.
“The Eagle Ford and the Permian are premier unconventional resource plays, two of the most economic in the U.S., which will expand our resource base and development inventory and further diversify our portfolio,” Noble’s chief executive officer Dave Stover said in a statement.
Rosetta was spun off from Calpine Corp., a major electricity producer, in July 2005 and began trading on the Nasdaq seven months later.
Rosetta faced headwinds going into the deal, including a loss of $539.7 million in net income last quarter. Its shares have fallen by more than half in the past year as crude oil prices slumped. Noble declined by 31 percent.