The Massive American Energy Merger

Issue 72

Cabot Oil & Gas Corp. and Cimarex Energy Co. recently announced their intention on merging, with Thomas Jordan - the CEO of Cimarex Energy - acting as the new CEO of the currently unnamed business. The two companies in question are primarily focus on different commodities - with Cimarex focusing on oil in the south and Cabot as a natural gas producer in Northeastern regions of the United States.
The merger of the companies is designed to help minimize and protect against the effects of recent price swings in both commodities.  The merger between the companies, which is also expected to be based in Houston when it’s all said and done, will reportedly give the company the ability to “to generate $4.7 billion of free cash flow from 2022 to 2024 with around $55-per-barrel oil and with natural-gas prices of $2.75 per million British thermal units.”

Both companies have experienced drops in the valuation of their shares of over 7% lately, but with this merger in mind, the combined firm is expected to reduce costs by $100 million within the first 18 months of the merger.

Source: Bloomberg