Cabot Oil & Gas (COG) today announced an agreement to sell its Marmaton Play operations in the Oklahoma and Texas Panhandles to Chaparral Energy Inc. (private) for approximately $160 million. The assets include approximately 66,000 net acres prospective for the Marmaton. Current production from these properties is approximately 2,000 barrels of oil equivalent per day.
The Marmaton has been the smallest of Cabot's three core operating areas, after the Marcellus and Eagle Ford, and never defined the company's overall investment thesis and valuation. Still, the unexpectedly low price received in the transaction is disappointing.
The divestiture does not come as a surprise. During the company's most recent earnings conference call, Cabot hinted investors with regard to its...
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