Cabot deal may prove exception rather than rule

Merger showcases optimism in gas prospects but may not signal a wider shift towards multi-basin M&A

The merger between Delaware basin operator Cabot Energy and Marcellus dry gas producer Cimarex was a rare exception of geographical diversity over in-basin consolidation, the latter having been the dominant deal-making trend for US shale this year. The merger of equals will create a diversified company valued at approximately $17bn and leverage $100mn in annual cost synergies. But rather than consolidating a position in one basin—the industry’s prevailing strategy—the pro forma company is looking to broaden its portfolio across oil and gas. “Public E&Ps have been more likely to exit towards single basin status than strike out into new areas, as Oasis Petroleum did with its sale of Permia