CIMAREX Energy and Cabot Oil & Gas have announced that they will combine, in an all-stock merger of equals.
The merger will combine Cabot’s assets in Marcellus Shale with Climarex’s assets in the Permian and Anadarko basins. The new company, which is yet to be named, will have a combined enterprise of US$17bn. Cabot shareholders will own 49.5% while Cimarex shareholder’s will own 50.5%.
The US oil and gas producers said that they would continue their commitments to environmental stewardship, sustainability and strong corporate governance (ESG), such as linking executive compensation to sustainability performance.
Dan Dinges, Chairman, President and CEO of Cabot, said: “The combination of Cabot and Cimarex will create a free cash flow focussed, diversified energy company with the scale, inventory and financial strength to thrive across commodity price cycles.”
Thomas Jorden, Chairman, President and CEO of Cimarex, said: “This transformational merger will combine our top-tier assets and advance our shared focus on delivering superior returns for investors. We’re building an even more resilient platform with greater financial strength. We view commodity, geography and asset diversification as strategic advantages that will drive more resilient free cash flow and long-term value creation. We are aligned on our commitment to ESG and sustainability.”
Dinges will serve as Executive Chair of the Board of Directors, while Jorden will become CEO and serve on the Board of Directors. The deal is expected to close in the fourth quarter of this year, subject to regulatory clearance and approval of shareholders.
According to The Financial Times, the US oil and gas industry has been striking several deals recently as it attempts to recover from the reduced demand during the pandemic. It said that around US$50bn of deals have been made since the start of Q4 2020.
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