Noble Energy Inc. (NYSE: NBL) is selling additional interests in Delaware and Denver-Julesburg (D-J) basin infrastructure in a $270 million dropdown to its affiliate Noble Midstream Partners LP (NYSE: NBLX), according to a June 21 press release.

The sale is expected to push Noble's divestiture proceeds year-to-date to more than $2 billion—well above the company's $1 billion goal, said Scott Hanold, analyst with RBC Capital Markets LLC.

"The transaction is consistent with Noble's previously announced plans to drop down a portion of its ownership in Noble Midstream," Hanold said in a June 21 report. "The sale equates to 8.2-9.2x forward 12 months estimated EBITDA."

Hanold said he expects proceeds to be used to further strengthen Noble's balance sheet and support onshore U.S. development.

The dropdown consists of Houston-based Noble's 20% interest in Colorado River DevCo LP in the D-J Basin and a 15% interest in Blanco River DevCo LP in the Delaware, which Noble Midstream agreed to acquire for $270 million in cash and stock.

Noble Midstream plans to fund the acquisition with $143 million of net proceeds from a concurrent private placement of common units and $102 million of borrowings under its credit facility.

The acquisition will increase Noble Midstream’s interest in Colorado River to 100% from 80% and in Blanco River to 40% from 25%. Noble Energy will retain the remaining 60% interest in Blanco River, which supports the company's Delaware Basin development.

Blanco River holds Noble Midstream’s Delaware Basin in field gathering dedications on about 111,000 acres for oil and produced water gathering, with substantially all of the acreage also dedicated for gas gathering.

Noble Midstream is constructing four central gathering facilities and pipeline infrastructure in the basin for Blanco River. The first facility is estimated to be completed mid-year 2017, the second in fourth-quarter 2017 and the following two in first-half 2018.

Colorado River consists of gathering systems across Noble Energy’s Wells Ranch and East Pony development in the D-J Basin. Noble Midstream provides oil, natural gas and produced water gathering, as well as fresh water delivery services in Wells Ranch, and oil gathering in East Pony through Colorado River.

Pro forma for the acquisition and the consummation of the concurrent private placement of common units, Noble Midstream's liquidity position is expected to be $178 million as of June 30, consisting of about $158 million available under its credit facility and roughly $20 million of cash on hand.

Total borrowing under Noble Midstream’s credit facility is expected to be $192 million at the end of second-quarter 2017, including the expected borrowing for the acquisition.

Upon closing of the acquisition and the private placement, Noble Energy is expected to own a 50.1% limited partner interest in Noble Midstream. The acquisition is expected to close in the second quarter, subject to the satisfaction of customary closing conditions.

The terms of the transaction were approved by the board of directors following a unanimous recommendation for approval from the conflicts committee of the board, which consists entirely of independent directors. The conflicts committee was advised by Evercore on financial matters and Baker Botts LLP on legal matters.