Diversified Energy Company PLC (LSE:DEC, NYSE:DEC) has announced its latest acquisition, picking up what it described as high-quality natural gas properties in eastern Texas.
DEC is paying $106 million to acquire the assets from Crescent Pass Energy, including the issuing of 2.4 million shares to the seller.
The asset package comprises 827 operated wells and over 500 miles of pipelines, with current production of 38 million cubic feet per day, low annual decline rates and earnings (NTM EBITDA) of $26 million per year.
It adds 170 billion cubic feet of PDP (proved developed and producing) reserves, valued at $155 million.
Rusty Hutson, DEC chief executive, described the assets as “a perfect fit” for the company’s existing East Texas portfolio.
“The accretive transaction adds scale to our Central region footprint and remains consistent with our strategy to focus on high-quality, low-decline producing assets at attractive PV values where we can apply our Smarter Asset Management approach to enhance margins and grow free cash flow,” Hutson said in a statement.
“The evolution of our funding sources, illustrated by the use of direct equity issuance to the seller as a portion of the consideration, highlights the importance of our recent NYSE listing while providing additional financial flexibility.”
He added: “Our Company has a long-standing, demonstrated track record of delivering value to shareholders from our strategy of acquiring, optimizing, and managing mature producing assets, making us the Right Company at the Right Time."
The deal is expected to close in the third quarter of 2024.