Cimarex's reserves only rose by 5% in 2019, despite closing the $1.6 billion acquisition of Resolute in early 2019 and spending almost $1 billion on drilling and completing wells. Cimarex then bought Resolute Energy in 2018, after Resolute's aggressive development and tight inventory spacing were causing oil production misses and a falling share price. Cimarex bought the first iteration of Magnum Hunter in 2005 for $2.1 billion, which were subsequently written down to nearly zero over multiple years. While the knock on Cabot is too few meaningful acquisitions, the knock on Cimarex is too many. Cimarex Brief Background:Ĭimarex is the spin-out of Helmerich & Payne's ( HP) E&P assets.
EQT ( EQT ) has effectively implemented this strategy but Cabot was better positioned for this with a lower cost of capital and more room on its balance sheet. It has recently demonstrated depleted development inventory while missing opportunities to acquire Marcellus competitors in highly accretive and strategic transactions that would have involved operational synergies and potentially improved Appalachian-wide natural gas pricing. Prior to the deal specifics and analysis, which is addressed below, it is worth briefly considering some background on Cabot and Cimarex: Cabot Brief Background:Ĭabot, a spin-out of a century-old chemicals company, has focused on its core Marcellus asset for many years. Following the expected Q4 closing, Cabot shareholders will hold about 49.5% and Cimarex shareholders will own about 50.5% of the combined company. In the transaction, Cimarex shareholders receive 4.0146 shares of COG common stock for each XEC share owned, at an offer value of $71.50 per share (or <1% premium to Cimarex's close). On Monday, May 24th, 2021, Cabot Oil & Gas Corp ( COG) and Cimarex Energy Co ( XEC) announced their agreement to merge into a new company in an all-stock transaction that results in a combined company enterprise value of nearly $17 billion. Photo by BrendanHunter/iStock Unreleased via Getty Images
0 kommentar(er)
