Diversified Energy Company PLC (LSE:DEC, NYSE:DEC) has further increased its footprint in East Texas, acquiring interests in a package of assets.
The acquisition, priced at $68 million, will add 21 million cubic feet per day (4,000 barrels oil equivalent) of production and 70 billion cubic feet (12mln barrels oil equivalent) of Proved Developed Producing (PDP) reserves to Diversified's portfolio.
Separately, and concurrently, a third-party development company is acquiring undeveloped acreage for approximately $19 million, with Diversified taking a 5% minority interest for an investment of $1 million.
DEC will pay the seller, described as “a regional operator”, $18 million in cash with the remainder of the deal consideration paid in new DEC shares.
"This purchase strengthens Diversified by expanding our footprint in our East Texas operating area, increasing our scale, and allowing for margin enhancement,” chief executive Rusty Hutson Jr said in a statement.
“Importantly, this acquisition extends our proven track record of completing disciplined transactions at attractive valuations.
“By joining resources with a development partner, we are highlighting our company's ability to creatively and thoughtfully structure transactions that add value and maximize cash flow generation for shareholders."