Diversified Energy Company PLC (LSE:DEC, OTCQX:DECPF) completed its US$181mln acquisition of Oklahoma-based Tapstone Energy, adding 12,000 barrels oil equivalent of production across 660 wells.
The deal was executed alongside co-investment partner Oaktree Capital Management which closed its transaction in parallel.
"Having closed our fourth acquisition within the Central Region this year, we begin the efficient integration process of these high-quality assets,” said DEC chief executive Rusty Hutson.
Hutson meanwhile highlighted that the acquisition is highly accretive and attractively priced at less than 2x adjusted EBITDA earnings.
“Alongside former Tapstone personnel who today join the Diversified family, we look forward to implementing our proven Smarter Asset Management programme and to leveraging our enlarged regional footprint to capture operational synergies,” the DEC boss added.
In a separate statement, DEC announced it expanded its existing credit facility through its semi-annual redetermination.
DEC’s banking group approved an US$825mln borrowing base, representing a US$200mln or 32% increase.
It was the result of higher fuel prices and DEC’s expanded collateral, added in the Tapstone acquisition.
“The more than 30% increase in the Credit Facility borrowing base affirms our banks' trust in Diversified's stewardship and confidence in our assets to generate strong free cash flow to support our business, repay our borrowings, fund our ESG initiatives for our stakeholders and sustain our dividends for investors," Hutson said.
DEC’s next credit redetermination is slated to take place in the second quarter of 2022.