Diversified Energy Company (LON:DEC) has made a decisive leap forward with its acquisition of Maverick Natural Resources, a deal worth US$1.275 billion that significantly enhances its scale, revenue diversification, and long-term growth. This transformative move positions DEC as a more formidable player in the US energy sector, reinforcing its financial strength and operational reach.
The Maverick acquisition is DEC’s largest consolidation to date, increasing production by 41% to approximately 200 kboepd across five basins. This expansion nearly doubles its revenue to US$1.8 billion (+96%), while EBITDA rises 68% to US$935 million. These gains highlight the significant operational synergies that will immediately generate over US$50 million in cost efficiencies, reducing expenses and driving greater value creation.
Strategically, Maverick’s portfolio aligns seamlessly with DEC’s existing assets, comprising long-life, low-decline production (~10% natural depletion), which ensures stability with minimal capital investment. The acquisition also enhances cash flow resilience by increasing exposure to liquid assets (55% of Maverick’s production mix). As a result, more than a quarter of DEC’s output will be linked to oil prices, reducing its reliance on the more volatile natural gas market and boosting unit cash margins by 26% to US$2.02/mcfe.
Financially, the deal is fully funded through a blend of vendor equity (21.1 million DEC shares worth ~US$343 million), cash (US$207 million), and assumed debt (US$700 million). With US$900 million in new credit secured, the acquisition strengthens DEC’s balance sheet while lowering its net debt/EBITDA ratio from 2.9x to 2.7x, moving closer to its 2.5x target. The transaction also supports the continuation of DEC’s US$0.29 per share quarterly dividend, now equating to an enlarged annual payout of US$84 million (+41%).
Beyond financial gains, the acquisition bolsters DEC’s market influence, expanding its market capitalisation by ~50% and increasing its enterprise value to US$3.7 billion. The involvement of Maverick’s major shareholder, EIG Partners, which now holds a 20% stake in DEC and has secured two board seats, also sets the stage for a potential NYSE primary listing in 2025. This move is expected to enhance stock liquidity, attract US investors, and position DEC for a valuation re-rating in line with US energy sector benchmarks.
Diversified Energy’s latest acquisition marks a pivotal moment in its growth strategy, reinforcing its financial stability, improving operational efficiency, and expanding its market reach. With strong cash flows, reduced leverage, and a significantly larger asset base, DEC is poised to capitalise on further opportunities in the US energy market. As analysts maintain a bullish outlook with a price target of £20 per share—a 50% potential upside—investors seeking a resilient, cash-generative energy play should closely watch DEC’s progress in 2025.
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.
