S&P gives Cabot Oil BBB

S&P said it gave preliminary BBB ratings to Cabot Oil & Gas Corp. and its planned Cimarex exchange notes, which will rank equally with Cabot's privately placed unrated debt.

Cabot is offering to exchange new notes for Cimarex’s $2 billion of unsecured notes.

“We are assigning our preliminary BBB issuer credit rating to Cabot Oil & Gas Corp. pending its merger with Cimarex Energy Co. Our preliminary rating reflects reserves and expected production that is in line with BBB category peers, good geographic diversity in the onshore U.S. segment, the high concentration of natural gas in its reserves and production base, and its low cost structure. Our ratings also reflect Cabot's low leverage, and our expectation that it will generate significant free cash flow for both debt reduction and dividends to shareholders,” S&P said in a press release.

The outlook is stable.

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