(Alliance News) - Diversified Energy Co PLC on Thursday said it closed the acquisition of some assets from Tanos Energy Holdings II LLC for USD244 million after customary purchase price adjustments.
The Alabama, US-based gas and oil production company also said it extended its sustainability linked loan by 50% to USD375 million from USD250 million, after completing an acquisition-related redetermination of the loan's borrowing base.
Diversified Energy said it funded the acquisition with proceeds from its recently completed USD163 million equity fundraise, cash reserves and existing availability from its sustainability-linked loan.
The acquisition from Tanos, a portfolio company of Quantum Energy Partners, was for certain upstream assets and related facilities in the US state of Texas, with proved developed producing reserves of around 25 million barrels of oil equivalent or 152 billion cubic feet equivalent.
Current net production is at around 17 million barrels of oil equivalent per day
Its proved developed producing PV10 (i.e. a calculation of the present value of estimated future oil and gas revenues, net of forecasted direct expenses, and discounted at an annual rate of 10%) is around USD312 million, Diversified Energy said.
This was alongside substantial potential upside from around 50 undeveloped locations with PV10 of around USD280 million.
"We are excited to complete another Central Region acquisition of accretive, high-quality assets, further increasing our operational scale in the region. Leveraging the recent reduction in natural gas prices, the net purchase price equates to a low multiple of the assets' net annual cash flows and approximates a PV17 value," said Chief Executive Officer Rusty Hutson.
"Having acquired the assets with a foundation of hedge protection, we will begin our usual asset-optimisation work while opportunistically adding to the hedge portfolio with an eye towards protecting and expanding already strong margins that underpin our tangible returns for shareholders through commodity price cycles and create long-term value."
Shares in Diversified Energy were down 1.8% to 101.37 pence each in London on Thursday late morning.
By Greg Rosenvinge, Alliance News reporter
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Diversified Energy (DEC)