Diversified Energy Company PLC (LSE:DEC, OTCQX:DECPF) (DEC) has announced a further divestment of assets, with the sale of a package of 22,000 net acres of undeveloped ground in Oklahoma, in a transaction worth US$16 million.
The deal, with an unnamed counterparty, demonstrates the company’s ability to realise upside from within its portfolio by monetising undeveloped and non-core acreage, and is well-aligned with its strategic focus on its operated and more advanced projects, DEC highlighted.
"Once again, our teams delivered in their commitment to enhance the value from recent central region acquisitions, significantly reducing our net purchase price by successfully monetising another portion of undeveloped leasehold,” DEC chief executive Rusty Hutson said in a statement.
“This transaction exemplifies our strategy of efficiently managing our producing assets while extracting upside from other portions of our asset portfolio.
“The sale proceeds enhance our liquidity as we evaluate other value-accretive opportunities to generate additional free cash flow.
“We remain focused on delivering operational and administrative synergies, stewarding our assets, and executing our ‘smarter asset management programmes," he added.
In a note, stockbroker Peel Hunt repeated a ‘buy’ recommendation with a price target of 175p versus a current price of 86.5p, and said the transaction was in line with the company’s strategy of monetising its undeveloped Central Region acreage via sales or third-party drilling.
Moreover, as the broker has ascribed no value for this undeveloped acreage in its core valuation Peel Hunt said the deal proceeds were “all upside”.
Previously, in June, DEC sold a package of non-operated wells in Oklahoma and Texas raising US$40mln from the divestment of around 200 non-core wells, producing around 3,000 barrels of oil equivalent per day.