Diversified Energy Company plc has successfully finalised the acquisition of a proportionate working interest in certain assets from Oaktree Capital Management. These assets are situated within the company’s Central Region, encompassing areas in Oklahoma, East Texas, and Louisiana. The acquisition, initially announced in March 2024, was valued at $410 million prior to customary price adjustments.
After applying these adjustments, the net purchase price for the acquisition was $377 million. Diversified Energy will make deferred cash payments amounting to $83 million to Oaktree as part of the total consideration. Additionally, the company will assume Oaktree’s proportionate debt, estimated to be approximately $120 million.
The newly acquired assets currently produce around 122 million cubic feet equivalent per day (MMcfe/d). These assets include Proved Developed Producing (PDP) reserves of 510 billion cubic feet equivalent (Bcfe), with a PV10 value estimated at $462 million. Diversified Energy expects these assets to contribute approximately $126 million to Adjusted EBITDA in 2024.
Concurrently, Diversified Energy has completed a review related to this acquisition, resulting in an increase in the borrowing base of its revolving credit facility to $385 million, a 26% rise. Following this adjustment, the company anticipates having available liquidity of $130 million, post-acquisition.
The company’s management has emphasised that the acquisition from Oaktree presented a unique opportunity to consolidate its assets. They have reiterated their commitment to maintaining a disciplined approach and continuing to focus on accretive acquisitions that enhance scale and boost free cash flows.
Diversified Energy Company plc (LON:DEC) is an independent energy company engaged in the production, marketing, transportation and retirement of primarily natural gas and natural gas liquids related to its U.S. onshore upstream and midstream assets.
