Oil producer Noble Energy Inc said on Monday it would buy smaller rival Clayton Williams Energy Inc for about $2.7 billion in a cash-and-stock deal to enhance its presence in the Permian Basin, the top U.S. oil field. Noble Energy said the deal includes 71,000 net acres in the core of the Southern Delaware Basin in Reeves and Ward counties in Texas, which are a part of the larger Permian Basin. You May Also Like To Watch This: The Permian basin has seen a slew of land acquisitions as producers scramble to gain or expand positions in the oil field, where drilling costs are low, in preparation for recovering oil prices. Under the deal's terms, Clayton Williams shareholders would receive 2.7874 shares of Noble Energy common stock and $34.75 in cash for each share of common stock held. The value of the transaction, based on Noble Energy's closing stock price as of Jan. 13, is about $139 per Clayton Williams Energy share or $3.2 billion in aggregate, including the assumption of about $500 million in net debt, the company said. Houston, Texas-based Noble Energy said its total capital budget for 2017 is now estimated at $2.1 billion-$2.5 billion and sees sales volumes between 410,000-420,000 barrels of oil equivalent per day (boepd) Noble Energy said it would fund the cash portion of the acquisition through a draw on its revolving credit facility, which stood untouched at $4 billion at the end of 2016, and expects to raise above $1 billion in 2017 through ongoing portfolio management and optimization. Noble Energy said the number of rigs on the new acreage is planned to accelerate to three by the end of this year, from one currently. Petrie Partners Securities LLC acted as financial adviser to Noble Energy, while Skadden, Arps, Slate, Meagher & Flom, LLP was the company's legal adviser. Evercore and Goldman, Sachs & Co were financial advisers to Clayton Williams Energy, and Latham & Watkins LLP acted as its legal adviser. The deal is expected to close in the second quarter of 2017.