Diversified Energy Company PLC (LSE:DEC, NYSE:DEC) has announced its latest bolt-on acquisition, with the firm agreeing to buy Canvas Energy for approximately $550 million.
The transaction is supported by DEC's asset-backed securitisation facility with Carlyle, and it adds producing assets and acreage in Oklahoma, including 23 high-quality wells brought online in the last year.
It will increase Diversified’s production profile by about 13%, and is forecast to bring in some $155 million earnings (adjusted EBITDA) over the next twelve months.
Chief executive Rusty Hutson highlighted that the deal expands the footprint in Oklahoma, with targeted assets that are a perfect fit for increasing DEC's scale and providing meaningful opportunities for margin enhancement, which ultimately will grow and bolster cash flow. Specifically, DEC expects the transaction to deliver a 29% increase in free cash flow.
"We are excited to leverage our strategic partnership with Carlyle for funding accretive acquisitions and are pleased with the collective team's collaboration," Hutson said.
"This initial transaction serves as an important milestone in our relationship and we look forward to growing our combined portfolio of high-quality assets.
"Importantly, this acquisition extends our proven track record of acquiring cash-generating energy assets at attractive valuations."
The acquisition is expected to close in the fourth quarter of 2025.