Cabot Oil & Gas – Cimarex Energy – All-Stock Merger of Equals

Creating a Premier, Diversified Energy Company with a Strong Free Cash Flow Profile; Positioned to Deliver Superior and Sustainable Returns

HOUSTON, TX and DENVER, CO (STL.News), Cabot Oil & Gas Corporation (“Cabot”) (NYSE: COG), and Cimarex Energy Co. (“Cimarex”) (NYSE: XEC) today announced that they have entered into a definitive agreement whereby the companies will combine in an all-stock merger of equals.  The combination will bring together two industry-leading operators with top-tier oil and natural gas assets to create a diversified energy leader that is positioned to drive enhanced free cash flow generation and returns for investors through market cycles.

Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, Cimarex shareholders will receive 4.0146 shares of Cabot common stock for each share of Cimarex common stock owned.  The exchange ratio, together with closing prices for Cabot and Cimarex on May 21, 2021, reflects an enterprise value for the combined companies of approximately $17 billion.  Upon completing the transaction, Cabot shareholders will own approximately 49.5%, and Cimarex shareholders will own approximately 50.5% on a fully diluted basis.

“The combination of Cabot and Cimarex will create a free cash flow focused, a diversified energy company with the scale, inventory, and financial strength to thrive across commodity price cycles,” Dan O. Dinges, Chairman, President, and CEO of Cabot.  “The combined business will be overseen by an experienced Board and a management team that is committed to a prudent strategy built on disciplined capital investment, strong free cash flow generation, and increasing returns to shareholders.  With its premier assets, increased resource diversity, and a strong financial foundation, the company will be well-positioned to deliver long-term value creation for its shareholders and other stakeholders.”

“This transformational merger will combine our top-tier assets and advance our shared focus on delivering superior returns for investors,” said Thomas E. Jorden, Chairman, President, and CEO of Cimarex.  “We’re building an even more resilient platform with greater financial strength in order to deliver sustainable, through-cycle returns on and of capital.  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 and look forward to bringing our talented teams together to unlock the tremendous potential of this compelling combination.”

Strategic and Financial Benefits of Creating a Free Cash Flow Focused, Diversified Oil & Gas Producer

  1. Premier Multi-Basin Exposure Will Enhance Scale, Diversity, and Capital Optionality: With Cabot’s approximately 173,000 net acres in the Marcellus Shale and Cimarex’s approximately 560,000 net acres in the Permian and Anadarko basins, the combined business will have a multi-decade inventory of high-return development locations in the premier oil and natural gas basins in the United States.
  2. Attractive and Sustainable Free Cash Flow Profile: Executing a disciplined capital allocation and reinvestment strategy, the combined business will be positioned to capitalize on its high-quality assets and diversification to drive through-cycle free cash flow generation across a wide range of commodities price scenarios.  The company’s low-cost and capital-efficient inventory is expected to support its robust, cumulative free cash flow outlook of approximately $4.7 billion of free cash flow from 2022 to 2024 based on $55 per barrel WTI oil prices and $2.75 per MMBtu NYMEX natural gas prices.
  3. Positioned to Accelerate the Return of Capital to Shareholders: The combined business will be well-positioned to deliver enhanced capital returns to shareholders across a full range of market conditions through a multi-faceted program offering a sustainable base dividend that is positioned to grow over time, a variable dividend and a special dividend.  The new business is expected to have an annual base dividend of $0.50 per share (representing a forward dividend yield of 2.8%), which is paid quarterly and plans to supplement the base dividend with a quarterly variable dividend to achieve a target capital return of at least 50% of quarterly free cash flow, with the first payment expected in the first quarter of 2022.  The combined business also plans to declare and pay a $0.50 per share special dividend to all common shareholders of the combined business promptly after the closing of the transaction.
  4. Substantial Cost Saving Opportunity: The companies are targeting annual general and administrative cost synergies of $100 million beginning within 18 months to two years following the closing.
  5. Strong Balance Sheet: The combined business is expected to have a strong capital structure with minimal near-term debt maturities and a low cost of capital. Upon closing, the combined business is anticipated to have pro forma liquidity of $2.2 billion and will target a net debt-to-EBITDAX ratio of less than 1.0x.  This strong financial foundation and broader scale are expected to provide flexibility and optionality for capital deployment.
  6. Commitment to ESG and Sustainability: Cabot and Cimarex share commitments to environmental stewardship, sustainability, and strong corporate governance.  The combined business will build on the two companies’ ongoing ESG efforts by, among other things, continuing to link executive compensation to ESG performance and maintaining strong board oversight of ESG risks and programs.  The combined business is expected to report sustainability metrics pursuant to SASB and TCFD standards.

Headquarters, Leadership, and Governance

The combined business, which will operate under a new name, plans to be headquartered in Houston and maintain its regional offices.

Upon closing, Mr. Dinges will serve as Executive Chair of the Board of Directors of the newly combined business, and Mr. Jorden will lead the company as CEO and will serve on the Board of Directors. Scott Schroeder, Cabot’s current Chief Financial Officer, will serve as CFO of the combined business.  The remainder of the company’s leadership team will include executives from both Cabot and Cimarex.

The Board of Directors of the company will be composed of five directors from the current Cabot Board of Directors, including Mr. Dinges, and five directors from the current Cimarex Board of Directors, including Mr. Jorden.

Timing and Approvals

The transaction is expected to close in the fourth quarter of 2021, subject to regulatory clearance, the approval of Cabot and Cimarex common shareholders, and the satisfaction of other customary closing conditions.

Both Cabot and Cimarex intend to continue paying base quarterly cash dividends through closing.

Joint Investor Call

Cabot and Cimarex will hold an investor conference call and webcast at 8:30 AM ET / 6:30 AM MT to discuss the details of the transaction.  The event can be accessed from the Investor Relations pages of Cabot’s and Cimarex’s websites at and

Conference Call Information

  • Dial-In (for callers in the U.S.): 1-866-367-3053
  • Dial-In (for callers in Canada): 1-855-669-9657
  • Intl. Dial-In: 1-412-902-4216

A playback of the call will also be available on the Investor Relations page of each company’s website after the conclusion of the call.


J.P. Morgan Securities LLC is serving as financial advisor to Cabot, and Baker Botts L.L.P. is serving as its legal counsel.  Tudor, Pickering, Holt & Co. is serving as financial advisor to Cimarex, and Wachtell, Lipton, Rosen & Katz is serving as its legal counsel.