Cabot Oil & Gas merges with Cimarex
US energy companies Cabot Oil & Gas and Cimarex Energy on May 24 announced an all-cash merger valued at approximately $17bn.
“The combination of Cabot and Cimarex will create a free cash flow focused, diversified energy company with the scale, inventory and financial strength to thrive across commodity price cycles,” Cabot CEO Dan Dinges said.
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Combined, the companies believe they will generate as much as $4.7bn in free cash flow through 2024, assuming NYMEX natural gas at $2.75/mn Btu and US crude oil prices at $55/barrel. On May 24, NYMEX gas was trading at $2.91/mn Btu and West Texas Intermediate at $64.58/b.
The deal will bring together Cabot’s 173,000 net acres spread out over the Marcellus shale basin with Cimarax’s combined 560,000 acres in the Permian and Anadarko basins. Dinges is staying on to serve as the chairman of the board at the combined entity, while Cimarex CEO Thomas Jorden will serve as CEO.
Subject to regulatory approval, the merger is expected to close in Q4.