Diversified Energy Company PLC (LSE:DEC, NYSE:DEC) has now completed its latest asset acquisition, in its Central Region, through its previously announced agreement with Oaktree Capital Management.
The acquisition, announced in March, closed at a purchase price of $410 million, with net adjustments bringing the total to $377 million.
The acquired assets include 510 billion cubic feet of PDP gas reserves and net production of 122 million cubic feet per day. It also includes hedges on 60% of the assets' 2024 production at an average price of $3.89 per million BTUs.
"This transaction represents another deliberate step in our disciplined approach to focus on accretive acquisitions that enhance our scale, deliver margin expansion, and expand free cash flow,” DEC chief executive Rusty Hutson said in a statement.
“The net purchase price of these high-quality assets approximates a PV17 valuation and represents a low multiple of the assets' annual cash flows.
“As the natural acquirer of Oaktree's working interest in the Central Region, the transaction was a unique opportunity to consolidate these assets and represents the culmination of a successful, multi-year partnership with Oaktree.
Hutson added: “I would also like to thank our financial partners for their continued support, demonstrated by the increase in the borrowing base of our Sustainability Linked Loan, and the highly successful ABS VIII financing.”
DEC, meanwhile, noted that it had now completed an acquisition-related redetermination of its revolving credit facility’s borrowing base – resulting in the Sustainability Linked Loan’s borrowing base increasing by 26% to total $385 million, with $130 million of liquidity remaining.