Cimarex (XEC)-Cabot Oil & Gas Merger Gets Shareholder Approval
At a special meeting, more than 90% of Cimarex (XEC) shareholders voted for its merger with Cabot Oil & Gas (COG).
Cimarex Energy Co. XEC and Cabot Oil & Gas Corporation COG recently announced approvals from shareholders of both companies for their merger. This has paved the way to create one of the largest oil and natural gas companies in the United States.
At a special meeting, more than 90% of Cimarex shareholders voted for the merger. Cabot Oil & Gas said that more than 99% of its shareholders cast votes in favor of the merger. The agreement, which was signed by both the leading upstream energy firms on May 23, 2021, will likely close on Oct 1, 2021. With the closure of the transaction, the companies will come up with a new name for the combined entity and a new ticker.
With most deals in the energy space pairing up rival players with operations and footprints in the same or similar resources, this transaction has a different motive to combat volatility in commodity prices. The agreement has called for a merger of oil-rich resources of Cimarex in the prolific Permian Basin and Mid-Continent areas of the United States with gas-heavy acres of Cabot Oil & Gas in the continental United States. Thus, with the mix of oil and gas rich resources, the combined company will be able to combat volatility in any single commodity and generate relatively stable and handsome cashflows.
It is an all-stock deal between Cimarex and Cabot Oil & Gas, representing a string of tie-ups between the fracking players in the United States with the energy industry evolving from the coronavirus pandemic. One such all-stock deal was between Bonanza Creek Energy, Inc. BCEI and Extraction Oil & Gas, Inc. XOG, announced on May 10, 2021.
Cimarex currently carries a Zacks Rank #3 (Hold), while Cabot Oil & Gas carries a Zacks Rank #5 (Strong Sell).
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Cabot Oil & Gas Corporation (COG): Free Stock Analysis Report
Cimarex Energy Co (XEC): Free Stock Analysis Report
Bonanza Creek Energy, Inc. (BCEI): Free Stock Analysis Report
Extraction Oil & Gas, Inc. (XOG): Free Stock Analysis Report
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