Diversified picks up $50mn in east Texas assets
London-listed Diversified Energy announced on April 26 it was acquiring upstream assets in east Texas from a private seller for $50mn in cash.
The deal builds on previous acquisitions that Diversified has made in the US Central region since entering the area last year. As was the case in previous transactions, Diversified's latest purchase is supported by asset management firm Oaktree Capital.
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The assets Diversified is acquiring contain 110bn ft3 in net proved developed and producing gas reserves, and currently flow gas at a rate of 22mn ft3/day. Diversified expects to earn $35mn in adjusted EBITDA from the assets over the next 12 months, before synergies are taken into account.
"With a compelling purchase multiple of 1.4 times net cash flow, this acquisition represents another accretive, fully cash and debt-financed acquisition that further demonstrates our status as a capable consolidator of low-decline producing assets within the Central region," CEO Rusty Hutson Jr said in a statement. "Our enlarged regional footprint complements our portfolio of high-quality assets and provides additional scale from which we can derive operational synergies as we optimise asset performance and the associated costs."
Diversified is "well positioned to capitalise on additional opportunities," he said.