Diversified Energy Company PLC (LSE:DEC, OTCQX:DECPF) will bank US$40mln of proceeds from the sale of a package of non-operated wells in Oklahoma and Texas.
The asset package comprises around 200 non-operated wells which are producing around 3,000 barrels oil equivalent per day.
In a statement, DEC noted that the transaction is priced at a multiple of around 4 times annual cash flow from the wells, adds liquidity and is aligned with its strategy to focus on operated projects that benefit from ‘regional scale’.
"This divestiture of non-operated properties underscores our commitment to optimise the assets we operate while strategically realising value from assets better suited for other operators and owners,” said chief executive Rusty Hutson.
“Selling these assets with operating costs higher than those we operate positions us to further reduce our Central Region lease operating expenses and improve operating margins.
He added: “The sale aligns with our initiative to realize value from non-core and undeveloped acreage.”
DEC said it intends to reinvest the proceeds in order to generate sustainable cash flows.