Oil and natural gas producer Cimarex Energy Co. said it would acquire Magnum Hunter Resources Inc. for about $1.5 billion in an all-stock deal to expand its drilling program with some higher-risk projects.
The proposed deal, approved by both companies' boards, is the latest in a string of deals in the U.S. energy sector as companies use balance sheets boosted by high oil and gas prices to increase production, reserves and cash flow. The deal would create a mid-sized energy player with its focus on natural gas.
Shares of Irving, Texas-based Magnum Hunter jumped $1.61 to $14.85, while Denver based Cimarex dropped $4.12 to $36.06. Both are traded on the New York Stock Exchange.