Coterra Energy Inc. (CTRA, Financial) has announced two significant acquisitions aimed at bolstering its asset portfolio. On November 12, 2024, the company entered into a Membership Interest Purchase Agreement with Cimarex Energy Co., a subsidiary of Coterra, and Franklin Mountain Energy Holdings, LP, among others. This agreement involves the acquisition of all issued and outstanding equity ownership interests of Franklin Mountain Energy, LLC and its affiliates. As part of the agreement, Cimarex has deposited $125 million in escrow to ensure compliance with the terms.
Upon closing, the Franklin Mountain Energy (FME) Sellers will receive $1.5 billion in cash and 40,894,925 shares of Coterra common stock, subject to customary anti-dilution adjustments and purchase price adjustments. The closing of this transaction is contingent upon the satisfaction or waiver of customary conditions.
In a parallel move, Cimarex has also entered into a Purchase and Sale Agreement with Avant Natural Resources, LLC and its affiliates. This acquisition involves a cash payment of $1.45 billion, also subject to customary purchase price adjustments. The Avant acquisition is independent of the FME transaction and is similarly subject to customary closing conditions.
These strategic acquisitions are expected to enhance Coterra's asset base and provide significant growth opportunities. The company has also agreed to enter into a registration rights agreement with the FME Sellers, facilitating the resale of the common stock issued as part of the transaction.
These transactions underscore Coterra Energy's commitment to expanding its operational footprint and enhancing shareholder value through strategic acquisitions. Investors and stakeholders are advised to consider these developments in the context of their investment strategies.
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