Noble Energy Inc. (NBL)

[Timothy Smith]

$NBL (+5%) and APC (-1%) execute on mutually beneficial
acreage swap in the Wattenberg. NBL and APC reported
and closed an acreage exchange where each gave the other
50,000 net acres, providing significant acreage consolidation.

I believe the transaction will ultimately allow for more and
longer laterals, with heightened drilling optionality. Other
synergies could lead to reduced costs during broad-scale
development.

In closing, NBL received $105MM net cash from
APC and APC retained its benefit from Land Grant mineral
ownership on ~21k net acres that it conveyed; APC’s
production increases 8 MBoe/d (NBL down 8 MBoe/d). NBL
and APC are two of our top picks and we like them following a
potentially weaker 3Q, into YE13 and 2014.