Latest US energy merger creates $17bn oil and gas group

Latest US energy merger creates $17bn oil and gas group

The latest deal in a wave of US energy consolidation was announced on Monday, with shale oil producer Cimarex Energy and Cabot Oil & Gas revealing a "merger of equals“ that will create a group with an enterprise value of $17bn.

The combination brings together Cimarex's oil assets in the prolific Permian shale field of West Texas and New Mexico, and Cabot's acreage in north-east Pennsylvania's Marcellus Shale, the biggest US gasfield.

"This transformational merger will combine our top-tier assets and advance our shared focus on delivering superior returns for investors,“ said Thomas Jorden, Cimarex chief executive.

Dan Dinges, Cabot chief executive, said the deal would "create a free cash flow focused, diversified energy company with the scale, inventory and financial strength to thrive across commodity price cycles“.

The combined debt of the two companies is about $3.3bn, according to S&P Global Market Intelligence, while they each had a market capitalisation of roughly $7.1bn before the deal was announced.

The merger is the latest in a string of deals struck in recent months as the US oil patch recovers from last year's pandemic-induced crude-price rout, which bankrupted scores of oil companies and sent years of US crude production growth into reverse.

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