UPDATE 1-Proxy advisor ISS recommends Cimarex shareholders vote for Cabot merger

(Adds details, context)

By David French

NEW YORK, Sept 16 (Reuters) - Influential proxy advisory firm Institutional Shareholder Services (ISS) has cautiously recommended that shareholders of Cimarex Energy Co vote for its proposed merger with Cabot Oil & Gas Corp, according to a statement seen by Reuters on Thursday.

Fellow proxy advisor Glass Lewis also recommended earlier this week that both sets of shareholders back the tie-up, which will unite Cabot's gas-rich Marcellus shale positions in the northeastern United States and Cimarex's oil-heavy acres in West Texas.

Gaining the assent of these advisory firms is regarded as a positive sign, given that many shareholders follow such advice when deciding on how to cast their votes at shareholder meetings.

However, while Glass Lewis voiced broad support for the rationale behind the deal and its benefits, ISS' backing was more tepid, questioning how thoroughly Cimarex's management explored alternative merger parties and why Cimarex was only gaining 50.5% of the combined entity when its legacy assets were contributing around 60% of earnings.

Recent improvements in natural gas prices, which hit a seven-year high this month, and the feed-through into the benefits supplied by Cabot's assets help to mitigate some of this skepticism, ISS added.

"In the face of the downside risk that now appears likely to accompany a rejection, there are no longer grounds to recommend against the merger," the statement said.

Shareholder votes on the potential merger have been scheduled by both companies for Sept. 29. (Reporting by David French in New York Editing by Paul Simao)