Independent oil and gas exploration company,
Cabot Oil and Gas
) entered into two separate agreements to sell its Mid-Continent
and West Texas properties for a total consideration of about $188
million. The sale of these proved and unproved oil and gas
properties is scheduled to close in the fourth quarter of this
Cabot will sell around 66,000 acres in the Marmaton Play in
Oklahoma and Texas Panhandles to Chaparral Energy Inc.,
increasing the latter's hold by almost twofold. The transaction
will take place for a consideration of about $160 million.
Per the company, as of Dec 31, 2012, the assets comprised proved
reserves of 2.1 million barrels of oil equivalent (MMBOE). The
prospect currently produces 2,000 barrels of oil equivalent per
In another transaction, Cabot will dispose properties in West
Texas to an unnamed buyer for $28 million. These assets hold
proved reserves of approximately 1.5 MMBOE and currently produce
Cabot plans to enhance the value of its portfolio through the
sale of non-core assets. These divestitures are a strategic move
by the company to shift its focus to the higher yielding
prospects in the Marcellus Shale.
The Houston, Texas-based company has a diversified asset
portfolio, spread between low risk/long reserve-life Appalachian
assets and large-volume/rapid payout Gulf coast properties. The
company also has large prospects in the Rocky Mountains and the
Shares of Cabot trade in a 52-week range of $21.07 to $40.34.
Post announcement, the company's stock slipped approximately 3%
over the day to $36.34 by close of trade on Oct 17.
Cabot currently holds a Zacks Rank #3 (Hold), implying that it is
expected to perform in-line with the broader U.S. equity market
over the next 1 to 3 months.
Meanwhile, one can consider other better-placed stocks in the
exploration and production industry such as
Stone Energy Corp.
Matador Resources Company
Linn Energy, LLC
). All these stocks hold a Zacks Rank #1 (Strong Buy).
CABOT OIL & GAS (COG): Free Stock Analysis
LINN ENERGY LLC (LINE): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
STONE ENERGY CP (SGY): Free Stock Analysis
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