(Alliance News) - Diversified Energy Co PLC on Thursday said it has agreed to buy upstream assets, field infrastructure, and equipment from Tapstone Energy Holdings LLC for USD419 million.
The Reading, Berkshire-based onshore upstream and midstream natural gas assets company said the Tapstone assets are in the company's Central Region in the US, joining its prior acquisitions in the area of Tanos Energy Holdings III LLC, Blackbeard Operating LLC and Indigo Minerals LLC.
Diversified Energy is purchasing the assets alongside Oaktree Capital Management LP, its third such co-investment with Oaktree since May. Oaktree will acquire a 49% non-operating working interest for USD192 million, which is 50% of the total after adjustments. Diversified will pay USD218 million gross or USD174 million after adjustments, funded from cash and debt financing.
Current production in the new Central Region assets is 12,000 barrels of oil equivalents per day, which presents around a 33% increase to Diversified's previously anticipated production in the area.
The FTSE 250 constituent's main production used to take place in the US's Appalachian Basin region, but it recently extended inwards to the Central Region of Louisiana, Texas, Oklahoma and Arkansas, as it focused on a business model centred around an asset profile rather than a defined geologic region.
"With a net purchase price of less than two times net cash flow, this acquisition represents another highly accretive, fully balance sheet-financed acquisition that further demonstrates our status as a capable consolidator of producing assets within the Central Region," said Chief Executive Rusty Hutson.
"Our enlarged regional footprint strengthens our portfolio with additional high-quality assets and added scale to drive synergies."
Shares were up 0.6% at 120.50 pence in London on Thursday.
By Josie O'Brien; josieobrien@alliancenews.com
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Diversified Energy (DEC)