Diversified completes $69m acquisition of Texas gas assets
By Josh White
Date: Wednesday 30 Oct 2024
(Sharecast News) - Diversified Energy announced on Wednesday that it has completed the acquisition of operated natural gas assets in eastern Texas for a gross purchase price of $69m.
The London-listed firm said the transaction, first announced earlier in the year, comprised $68m for high working-interest, proved developed producing (PDP) assets, and $1m for a 5% residual interest in undeveloped acreage.
After customary purchase adjustments, the net purchase price for Diversified was $49m.
The acquired assets included PDP reserves estimated at around 70 billion cubic feet equivalent or around 12 million barrels of oil equivalent, with a pre-tax present value of roughly $89m.
Current net production from the assets was 21 million cubic feet equivalent per day, which equates to about 4,000 barrels of oil equivalent per day.
Diversified anticipated adjusted EBITDA of $19m from the assets over the next 12 months, yielding a purchase price multiple of around 3.5 times on a gross basis.
The net consideration for the acquisition included a cash payment of $22m, supported by a secured bank facility and the issuance of 2,342,445 new dollar-denominated shares to the seller, representing 4.57% of Diversified's existing share capital.
It said the new shares would be subject to standard regulatory restrictions for six months.
"We are excited to announce the completion of another acquisition of high-quality, bolt-on assets within our Central Region, which are immediately accretive to operations, further increase operating scale and provide the opportunity for cost synergies," said chief executive officer Rusty Hutson.
"We look forward to welcoming our new employees as Diversified leverages their experience for efficient integration, and the deployment of our smarter asset management and sustainability initiatives across these assets."
At 1143 GMT, shares in Diversified Energy Company were up 0.17% at 899p.
Reporting by Josh White for Sharecast.com.
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