Shale investors have been demanding more consolidation in the U.S. oil patch. But not exactly a deal like this one.
(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.
The deal is the latest sign that USA drillers are getting increasingly acquisitive.
(Bloomberg) Cabot Oil & Gas Corp. and Cimarex Energy Co. agreed to merge, forming a new Houston-based shale driller with a value of about $17 billion.
The deal is the latest sign that U.S. drillers are getting increasingly acquisitive as a sustained rise in oil prices brightens the outlook for energy demand. The volume of shale deals has doubled to more than $10 billion this year compared with the same period in 2020, according to data compiled by Bloomberg.
Cimarex investors will receive 4.0146 shares of Cabot common stock for each share of Cimarex common stock owned, according to a statement from the companies on Monday. The deal will give Cabot shareholders about 49.5% of the combined entity, with Cimarex shareholders holding the rest, on a fully diluted basis.
Cabot Oil & Gas, Cimarex Energy to merge to create $17 bln producer
05/24/2021 | 06:49am EDT
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May 24 (Reuters) - Cabot Oil & Gas Corp and Cimarex
Energy Co on Monday agreed to merge to form a U.S. oil
and gas producer with an enterprise value of about $17 billion,
the latest deal in a sector rebounding from one of its worst
downturns.
The deal frenzy reflects hopes to ride a recovery in oil and
gas prices as fuel demand picks up from pandemic lows, while
also allowing for savings by eliminating cost duplication.
The companies expect to save $100 million in annual general