Southwestern Energy Co., a publicly traded, Texas-based gas and oil company with significant land holdings in north-central West Virginia, said Wednesday it is merging with Montage Resources Corp., also public and also based in Texas, in an all-stock deal that will bring together two big players in the Marcellus and Utica shale.
Under the terms of the deal, Montage shareholders will receive 1.8656 shares of Southwestern stock for each share of Montage it owns. The merger is expected to be finalized sometime during the fourth quarter.
“This is an exciting step for Southwestern as we expand our Appalachia footprint with the high-quality assets of Montage,” Bill Way, Southwestern Energy president and CEO, said in a statement. “As we have consistently stated, we are firm believers in the benefits of value-creating consolidation.”
Southwestern has holdings through the top of the northern panhandle to the middle part of the state, including Monongalia County. In both West Virginia and Pennsylvania, Southwestern has 460,000 net acres, the Pittsburgh Business Times said.
Southwestern Energy closed at $3.04 a share at the end of trading Tuesday, while shares of Montage closed at $5.04.
“This transaction further solidifies the company’s position as a premier Appalachia operator and provides additional scale and synergies strengthened by our leading operational execution. Consistent with our strategy, this transaction is expected to deliver increased free cash flow, improved returns and long-term value to shareholders,” Way said.
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