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Diversified Energy Company PLC sells undeveloped acreage in Texas

“Using the nearly $35mln of proceeds to reduce the borrowings on our revolving credit facility enhances our financial flexibility as we evaluate other value-accretive opportunities,” said CEO Rusty Hutson Jnr

Diversified Energy Company PLC (LSE:DEC, OTCQX:DECPF) said it has closed the sale of certain predominantly undeveloped acreage in Texas for roughly US$34.6mln cash and may sell more.

Working interests in the undeveloped Haynesville acreage owned by Diversified and Oaktree Capital Management were sold for a total of US$67.4mln.

A further transaction of up to around US$4mln, of which Diversified would be due half, may also be conducted soon, the company added.

The sold acreage represented approximately 1,700 net Mcf per day of production as of November, or 2% of the production originally acquired as part of the Tanos Energy deal in August this year.

Diversified said it had ascribed no value to the undeveloped Haynesville leasehold and that the sale “reflects its proven ability to purchase predominantly PDP (proved, developed, producing) assets at low multiples and drive further value through the strategic monetisation of undeveloped upside potential and non-strategic assets”.

Chief executive Rusty Hutson said: “Monetizing a portion of the undeveloped Haynesville acreage we acquired in the Tanos transaction marks a strong finish to an exceptional year for Diversified and boosts our returns from that acquisition by reducing our purchase price by nearly 30%.

“Using the nearly $35mln of proceeds to reduce the borrowings on our revolving credit facility enhances our financial flexibility as we evaluate other value-accretive opportunities.

“We enter 2022 with momentum as we integrate our Central Region assets, progress our comprehensive ESG initiatives and remain ever focused on opportunities to expand our portfolio of producing assets.”

 

Read More: Diversified Energy Company PLC sells undeveloped acreage in Texas

2021-12-29 01:38:00

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