Bigger Is Better Merger Trend Continues With Cimarex/Cabot Deal forbes.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from forbes.com Daily Mail and Mail on Sunday newspapers.
Mon, 05/24/2021 - 04:00 PM
Instead of in-basin synergies, however, Dittmar said the Cabot/Cimarex deal is driven by financial-side metrics.
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Marrying together a core oily Delaware Basin asset with a dry gas Marcellus one, the merger of equals between Cabot Oil & Gas Inc. and Cimarex Energy Co. upturns a growing trend in the upstream E&P space.
“While public company consolidation including mergers of equals have been a key theme of the post-COVID M&A market, this deal comes as a bit of a surprise and may have a less clear story to tell investors,” Andrew Dittmar, senior M&A analyst with Enverus, said in an emailed statement on May 24.
Cimarex, Cabot Combination ‘Building an Ark, Not a Party Boat’ in Lower 48 Oil, Natural Gas
Cimarex Energy Co. and Cabot Oil & Gas Corp. on Monday agreed to combine in an all-stock merger, tying together their extensive operations in the Marcellus Shale, Permian and Anadarko basins.
Denver-based Cimarex controls 560,000 net acres combined in the Permian and Anadarko, while Houston-based Cabot has 173,000 net acres in the Marcellus. Cabot CEO Dan Dinges has been tapped as executive chairman, while Cimarex chief Tom Jorden would be CEO of the to-be-named company.
The merger is “the start of the next chapter in our histories,” Dinges said. Management has “long understood the long-term benefits of expanding geographically and beyond the Marcellus and adding more scale to our operations.