Cabot Oil and Cody Company Complete Merger
Cabot Oil & Gas Corporation has completed the merger with Cody Company, the parent company of Cody Energy LLC. Under the terms of the definitive merger agreement, the total consideration given to Cody shareholders was $181 million in cash and two million shares of Cabot Oil & Gas common stock, with a value per the agreement of $24.497 per share. Cody Company merged with a wholly-owned subsidiary of Cabot Oil & Gas Corporation.
The cash portion of the purchase price was almost entirely funded through a private placement of debt that Cabot completed on July 26, 2001. Through the issuance of new notes, Cabot raised $170 million under similar terms and conditions as the Company's existing debt agreements. These new notes consist of three different series of obligations with maturities of 10, 12 and 15 years, and an overall average coupon rate of 7.33%.
"The addition of the Cody reserves further solidifies Cabot's position in the Gulf Coast," said Ray Seegmiller, Chairman and Chief Executive Officer. "During due diligence, we have identified multiple exploration opportunities that complement the significant level of development drilling which originally attracted us to these assets. The Gulf Coast drilling program now has a three-year inventory of exploration and development drilling prospects, balanced between south Texas and south Louisiana."