DALLAS—Having spent the past five years running Noble Energy’s Mediterranean operations in Israel, Lawson Freeman returned to the states as business development manager in January and immediately entered discussions that led to the near $4-billion acquisition of Rosetta Resources.

“I didn’t have much time to get comfortable in the chair,” Freeman confessed, “but that’s OK; it was a nice sheep dip.”

And it was an accretive acquisition in a period when deals were falling apart in droves. Noble Energy closed the merger with Rosetta in July, an all-stock deal that added two new basins—the South Texas Eagle Ford and Delaware—to its diverse domestic and international portfolio.

Freeman expounded on the nuances and motivations of the deal to a crowd of more than 500 A&D professionals at Hart Energy’s recent A&D Strategies and Opportunities conference.

The $15 billion Houston-based company had been looking at Rosetta and similar packages in the months before Freeman returned, seeking to add another basin or two to its portfolio. However, when Morgan Stanley came calling in January to shop the Rosetta opportunity, oil price and equity valuations were plummeting to new lows.

Forging an all-stock merger in a volatile price environment is not for the faint of heart, Freeman said. “In an all-stock transaction, it’s all about the exchange ratio.”

Unlike an asset deal where due diligence involves crunching numbers to come up with a value for the assets, a stock transaction, in contrast, “is very subjective on where’s the right spot to be. Not only does it move after you make that offer, but what you make as that offer is not for the faint of heart.”

For instance, the day the offer is made, the target company is defined with a specific value, “but on the next day it’s something else, and the next day something else. It’s very dynamic; it keeps moving.”

He quipped, “You scratch your head and say, I sure am glad we calculated the net hydrocarbon thickness to the foot. It’s a very different environment.”

Conversely, offering stock when cash sources were sparse made an otherwise unlikely deal do-able.

“There’s always a question of whether it’s the right time to do what you’re trying to do,” he said. “The all-stock transaction lessens that a bit.”

Noble plans 22 wells in the Eagle Ford next year, and an $825-million, self-funded spend through 2018 with an anticipated growth in production to 80,000 boe/d. In the Delaware Basin, targeting Wolfcamp A, the company plans 15 wells in 2016, and a cumulative $850 million capital program through 2018. Production growth is expected to reach 20,000 boe/d.

While Noble considers itself an exploration company first, Freeman said, acquisitions are another way to “feed the hopper.” Prior to the Rosetta integration, he said, “We were in two of what we considered the premier operating basins in the U.S.,”—referring to its Niobrara and Marcellus holdings—“and now we’re in four. We’re happy to be where we are.”