[Editor's note: An updated version of this story was posted at 2:45 p.m. Jan. 17.]

Noble Energy Inc. (NYSE: NBL) said Jan. 16 it's going all in for the Delaware Basin with the acquisition of Midland, Texas-based Clayton Williams Energy Inc. (NYSE: CWEI).

As part of a definite agreement, Houston-based Noble will acquire all of Clayton Williams' outstanding common stock for roughly 55 million shares of Noble stock and $665 million in cash. Based on Noble's closing stock price as of Jan. 13, the value of the transaction is about $3.2 billion, including the assumption of nearly $500 million in net debt.

The acquisition of Clayton Williams includes 71,000 highly contiguous net acres in the core of the Southern Delaware Basin plus an additional 100,000 net acres in other areas of the Permian. Clayton Williams' Delaware acreage is located in Reeves and Ward counties in West Texas, directly adjacent to Noble's existing 47,200 net acres.

As a result of the combination, Noble will become the second-largest acreage holder in the Delaware Basin with nearly 120,000 net acres in the Delaware core, said David L. Stover, the company's chairman, president and CEO.

"We have been very disciplined in assessing expansion opportunities in the Delaware Basin and are extremely pleased to have reached this agreement with Clayton Williams Energy," Stover said in a statement. "This transaction brings all the key elements we value: excellent rock quality, a large contiguous acreage position adjacent to our own, and robust midstream opportunities, reinforcing the Delaware Basin as a long-term value and growth driver for Noble Energy."

The deal also includes 2,400 Delaware Basin gross drilling locations and more than 1 billion barrels of oil equivalent of total estimated net unrisked resource potential in the Wolfcamp zones. The average lateral length of the future locations is 8,000 feet.

Noble said it expects the transaction to close second-quarter 2017, subject to customary regulatory approvals, approval by the holders of a majority of Clayton Williams' common stock and certain other conditions.

Petrie Partners Securities LLC was exclusive financial adviser to Noble and Skadden, Arps, Slate, Meagher & Flom LLP was its legal adviser. Evercore and Goldman, Sachs & Co. were financial advisers to Clayton Williams Energy and Latham & Watkins LLP was its legal adviser.