Cabot Oil & Gas Corp. and Cimarex Energy Co. have agreed to combine in an all-stock merger.
Under the terms of the agreement, Cimarex shareholders will receive 4.0146 shares of Cabot common stock for each share of Cimarex common stock owned. Upon completion, Cabot shareholders will own 49.5% and Cimarex shareholders will own 50.5% on a fully diluted basis.
Cabot contributes about 173,000 net acres in the Marcellus shale and Cimarex contributes about 560,000 net acres in the Permian and Anadarko basins. Combined production for first-quarter 2021 was 600,000 boe/d.
The companies are targeting annual general and administrative cost synergies of $100 million beginning within 18 months to 2 years following the closing. Upon closing, the combine is anticipated to have pro forma liquidity of $2.2 billion.
The combined business, which will operate under a new name, plans to be headquartered in Houston and maintain its regional offices. Dan Dinges will serve as executive chair of the board and Tom Jorden will lead the company as chief executive officer and will serve on the board. Scott Schroeder will serve as chief financial officer of the combine. The remainder of the company’s leadership team will include executives from both Cabot and Cimarex. The board will be composed of five directors from the Cabot board, including Dinges, and five directors from Cimarex’s board, including Jorden.
The transaction is expected to close in this year’s fourth quarter, subject to regulatory clearance, approval of Cabot and Cimarex common shareholders, and the satisfaction of other customary closing conditions.
