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.
(Bloomberg) Shale investors have been demanding more consolidation in the U.S. oil patch. But not exactly a deal like this one.The merger of Cabot Oil & Gas Corp. with Cimarex Energy Co. announced Monday has confounded investors and analysts, leaving them to question the logic behind a tie-up that the companies say will increase diversification. Cimarex is mostly an oil explorer in Texas and Oklahoma, while Cabot is focused on natural gas drilling in the Marcellus shale basin in Appalachia.Although the two companies are following a path blazed by other shale explorers of late by clinching a deal involving almost no takeover premium, it wasn’t enough to win over investors. Shares of both drillers slumped.Analysts at Citigroup Inc. said the deal an all-stock transaction valued at about $7.4 billion was an unexpected pairing as it creates geographic diversity, unlike other major industry transactions recently. KeyBanc Capital Markets Inc. downgraded shares of Cimarex bec
Odd Coupling: Cimarex And Cabot Join In $17B Merger Of Unlikely Oil And Gas Equals 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.
Cabot-Cimarex merger puzzles both analysts and investors By David Wethe on 5/24/2021
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HOUSTON (Bloomberg) Shale investors have been demanding more consolidation in the oil patch. But not exactly a deal like this one.
The merger of Cabot Oil & Gas Corp. with Cimarex Energy Co. announced Monday has confounded investors and analysts, leaving them to question the logic behind a tie-up that the companies say will increase diversification. Cimarex is mostly an oil explorer in Texas and Oklahoma, while Cabot is focused on natural gas drilling in the Marcellus shale basin in Appalachia.
Although the two companies are following a path blazed by other shale explorers of late in clinching a deal involving almost no takeover premium, it wasnât enough to win over investors. Shares of both drillers plunged the most on an intraday basis in more than a year.
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.