Noble Energy Inc. (NBL) has a new core play—Texas.

In a deal with Rosetta Resources Inc. (ROSE), Noble said May 11 the two companies will merge in a $3.9 billion, all-stock deal that opens up the fertile oil fields of the Eagle Ford and Permian Basin.

Noble’s deal pays $2.1 billion for Rosetta and assumes the company’s net debt of $1.8 billion.

Rosetta shareholders will receive 0.542 shares of Noble common stock for each share of Rosetta common stock held. That translates into Rosetta stockholders receiving $26.62 a share, a 38% premium to Rosetta’s closing price on May 9.

Gordon Douthat, senior analyst, Wells Fargo Securities, said the deal appears to signal a shift in the A&D trade winds.

“We have clearly recovered from the bottom of the commodity sell-off, and while macro headwinds still exist, shareholders can participate in upside as NBL shareholders, in a tax efficient manner,” he said.

If the merger goes through, Rosetta shareholders would own 9.6% of Noble. Several larger deals in the past several months have been stock only deals, including Whiting Petroleum Corp.’s (WLL) purchase of Kodiak Oil & Gas.

Dave Stover, Noble’s chairman, CEO and president, said the transaction adds two exceptional areas to its global portfolio.

“The Eagle Ford and the Permian are premier unconventional resource plays, two of the most economic in the U.S.,” he said. “The transaction will be immediately accretive to our per share production, reserves, earnings, and cash flow.”

Noble said the new core areas produced 66,000 barrels of oil equivalent per day (boe/d), 62% liquids, in the first quarter of 2015. At the end of 2014, proved reserves were 282 MMboe. The company said it has identified 1,800 gross horizontal drilling locations for development that provide net unrisked resource potential of 1 Bboe.

Douthat said Rosetta didn't need to sell—the company had solid liquidity and decent balance sheet after a March equity offering. The company also had a strong inventory in the Delaware Basin and Eagle Ford.

“At the end of the day, we believe Rosetta management took a longer term view of the business, versus Wall Street that has become increasingly short term focused, so it’s getting ahead of the potential consolidation wave and ringing the bell now,” he said.

Noble had said it was interested in acquiring Eagle Ford or Permian acreage. Pro forma, Noble is buying Rosetta at a long-term price deck of $80 per barrel (bbl) of WTI and $4 per thousand cubic feet (Mcf) of gas.

The deal seems to work for both companies, according to Tudor, Pickering, Holt & Co.

“NBL gets access to high-quality resource in Permian and Eagle Ford on the cheap, while ROSE can benefit from scale and balance sheet strength to bring forward value of deep inventory, particularly in the Delaware Basin,” Tudor’s report said. “We have been looking for NBL to add a third leg to its U.S. onshore portfolio and complement the Denver-Julesburg Basin and Marcellus. We are very positive on resource quality in the Delaware and expect NBL to generate NAV accretion over time as drilling and completions operations are optimized and downspacing adds inventory.”

With liquidity of $5.7 billion, Rosetta could be Noble’s first stop on a tour of Texas, said Tim Rezvan, analyst, Sterne Agee CRT.

Noble will receive a generous amount of value and the transaction high-grades the company’s core oil inventory in the U.S.

“We believe it's an effort by Noble's new CEO David Stover to make his own imprint on Noble's near-term growth,” Rezvan said.

The deal could give Noble a jumpstart among investors. Since the end of 2013, Noble shares have declined 28%. Investor’s haven’t had overwhelming enthusiasm for the company’s pace of growth from its domestic oil footprint in Colorado.

“D-J Basin development has been a successful, albeit bumpy path for Noble, with perpetual natural gas gathering, processing and compression issues as well as regulatory uncertainty in Colorado,” Rezvan said.

The boards of both companies have unanimously approved the terms of the agreement. Completion of the transaction requires approval by Rosetta shareholders, regulatory approvals and customary conditions. The deal is expected to close in the third quarter of 2015.

Petrie Partners Securities, LLC acted as exclusive financial adviser to Noble. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal adviser to Noble. Morgan Stanley & Co. LLC acted as exclusive financial adviser to Rosetta. Latham & Watkins LLP acted as legal adviser to Rosetta.

Contact the author, Darren Barbee, at dbarbee@hartenergy.com.