Cabot Oil & Gas to Acquires Cody Company

Cabot Oil & Gas Corporation announced that its Board of Directors has unanimously approved a definitive merger agreement to acquire Cody Company, the parent of Cody Energy LLC, for $230 million in cash and Cabot Oil & Gas stock. The Cody Board of Directors and shareholders have also unanimously approved the transaction. Cody Company is based in Denver, Colorado, with all of its exploration and production reserves in Texas and Louisiana. In the deal Cabot will acquire: 166 Bcfe of proved reserves which are 58% natural gas and 42% oil and 50 Mmcfe per day of equivalent production with 84% natural gas.

The transaction is valued at $1.39 per Mcf based on proved gas equivalent reserves, without valuing the probable and possible reserve potential. It will be accounted for as a purchase and is expected to be immediately accretive to cash flow, reserves and production per share. Accretion to earnings is anticipated in 2002. The merger should increase total company proved reserves by 16% to 1,185 Bcfe, increase the Gulf cost reserves to 26% of total proved, and increase daily production.

Under the terms of the definitive agreement executed by both parties, Cody shareholders will receive $168 million in cash and $62 million in stock, or cash and stock, at Cabot's election. The stock value will be determined based on the 15 trading days ending three business days before closing. The cash portion of this transaction will be financed under the Company's existing revolving credit facility and potentially under a new private placement of debt.


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