(Bloomberg) — Cabot Oil & Gas Corp. and Cimarex Energy Co. agreed to merge, forming a new Houston-based shale driller with a value of about $17 billion.

The deal is the latest sign that U.S. drillers are getting increasingly acquisitive as a sustained rise in oil prices brightens the outlook for energy demand. The volume of shale deals has doubled to more than $10 billion this year compared with the same period in 2020, according to data compiled by Bloomberg.

Cimarex investors will receive 4.0146 shares of Cabot common stock for each share of Cimarex common stock owned, according to a statement from the companies on Monday. The deal will give Cabot shareholders about 49.5% of the combined entity, with Cimarex shareholders holding the rest, on a fully diluted basis.

“The combination of Cabot and Cimarex will create a free-cash-flow focused, diversified energy company with the scale, inventory and financial strength to thrive across commodity price cycles,” Dan Dinges, chairman, president and chief executive officer of Cabot, said in the statement.

The transaction is expected to close in the fourth quarter, subject to regulatory clearance, shareholder approval and other customary closing conditions.

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