US-based Noble Energy has announced that it will retain and increase its ownership in Noble Midstream Partners.

Under the deal, the Houston-based company agreed to sell its remaining US onshore midstream interests and assets to Noble Midstream Partners and eliminate its incentive distribution rights for a combined value of $1.6bn.

The consideration includes $670m in cash and 38.5m of newly issued common shares of Noble Midstream Partners valued at $930m.

Noble Energy Chairman and CEO David Stover said: “Retaining ownership of these assets through the NBLX structure enhances our business with steady and growing cash flow with lesser volatility from commodity prices.

“Noble Midstream will continue to play a critical role in Noble Energy’s execution and capital-efficient development onshore, where we have a deep inventory of high-return upstream investment opportunities.”

Upon the completion of the deal, Noble Energy will possess 56.5 million units or nearly 63% of the outstanding units of Noble Midstream Partners.

Terms of the agreement between Noble Energy and Noble Midstream

Under the deal, Noble Energy has divested its 60% working interest in the Delaware Basin gathering system, which services crude oil, natural gas, and water gathering. The company has also sold a 75% working stake in the Mustang area (DJ Basin) gathering system, which services crude oil, natural gas, and water gathering, along with freshwater delivery.

Furthermore, Noble Energy has divested a 75% working interest in the East Pony area (DJ Basin) gathering system, which services freshwater delivery and a 100% working stake in the East Pony area (DJ Basin) natural gas gathering and processing system.

Noble Midstream CEO Brent Smolik said: “Noble Energy has completed its midstream strategic review. We are excited to announce the resulting simplification and drop transaction.

“This financially-attractive acquisition of essentially all of Noble Energy’s remaining midstream assets will enhance operational synergies and increase economic alignment in Noble’s growth basins. The acquisition is expected to be accretive to distributable cash flow per unit.”

Noble Midstream Partners now owns 100% of the interest in the three gathering systems.