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Diversified Energy Company PLC expands footprint with latest asset acquisitions

The London-listed firm has inked a deal to pick up some 14,000 boepd of mostly gas production at the same time as it confirms completion of a prior deal to acquire wells yielding 16,000 boepd

() has further expanded its footprint in its new growth area with a deal to acquire assets in the states of Louisiana and Texas.

It is acquiring a package of 390 wells currently producing 14,000 barrels oil equivalent per day (boepd), of which 96% is natural gas, alongside co-investor Oaktree Capital Management.

Diversified’s deal is with Tanos Energy Holdings III LLC and it is agreed at a gross consideration of US$154mln, US$118mln net, which will be covered with cash and existing credit capacities. It will give the London-listed firm a 51.25% working interest in the acquired assets.

“When we announced our strategic entry into the Central RFA [Regional Focus Area], we expected to quickly build scale as a capable buyer with a proven track record in a region with ample opportunity,” said chief executive Rusty Hutson. “Just over two months later, we are excited to deliver results and build momentum with the addition of geographically proximate assets that represent the next step in achieving that goal and replicating our historical successes in Appalachia.”

“Once complete, our Central RFA acquisitions will contribute over 30% of our production and adjusted EBITDA.”

“Oaktree’s participation not only demonstrates the attractive nature of these acquisitions, but also affords Diversified additional liquidity and line of sight to identify and pursue opportunities while continuing to maintain a strong balance sheet.

“Together, we will responsibly grow our Central RFA footprint, build scale and drive operational synergies.”

Also today, the company confirmed the completion of its acquisition of assets, in the Central RFA, from Blackbeard Operating LLC via a deal with net consideration of US$166mln.

The Blackbeard assets yield some 16,000 boepd of production currently from a package of 820 wells.

Hutson, in a statement, noted: “These mature Barnett wells further expand our base of low-decline production and Smarter Asset Management opportunities

“As with each transaction, I would like to welcome the Blackbeard employees who work on these wells to the Diversified family. We look forward to working with these talented individuals to deploy our Smarter Asset Management efforts across the acquired assets to create value for our shareholders.”

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2021-07-05 02:16:00

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