Diversified Closes on $42 Million Acquisition of Summit Natural Resources
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Diversified Energy has closed on the acquisition of operated natural gas properties and related midstream pipeline infrastructure located within Virginia, West Virginia, and Alabama from Summit Natural Resources.
Additionally, the company closed on an asset backed securitization (ABS). Diversified will use the proceeds from the ABS transaction to consolidate and repay the outstanding principal, utilizing those assets plus additional Summit Natural Resources assets as collateral in the new structure.
“We are excited to announce the completion of another acquisition of high-quality, bolt-on assets that are uniquely positioned to benefit from the operational expertise of our field teams, capture higher prices with exposure to premium Transco zone 5 pricing, and are poised to provide additional revenues from the sale of incremental environmental credits with our growth in the production of coal mine methane,” said CEO Rusty Hutson, Jr.
“We continue to believe there is a sizeable backlog of organic coal mine methane cash flow growth within our current Appalachian portfolio, and this acquisition highlights our ability to leverage existing capabilities, assets, and intellectual capital to grow this segment of our revenue stream,” added Hutson.
“Supported by a growing base of loyal credit investors, we are now a seasoned programmatic issuer, and this ABS transaction achieved record demand with a significant amount of interest from a large group of new participants. This strategic refinance improves asset level cash flow with higher hedge prices and a more refined amortization schedule,” said CFO Brad Gray.
“Our increasing operational scale, track record of stable asset performance, and strength of our business enable us to attract reliable sources of capital and achieve a lower overall cost of capital. This outcome is a testament to how the financial markets value Diversified’s reliable production and consistent cash flows,” added Gray.
Diversified Energy is a leading publicly traded energy company focused on natural gas and liquids production, transport, marketing, and well retirement. Through its differentiated strategy, they acquire existing, long-life assets and invest in them to improve environmental and operational performance until retiring those assets in a safe and environmentally secure manner. Recognized by ratings agencies and organizations for its sustainability leadership, this solutions-oriented, stewardship approach makes Diversified the right company at the right time to responsibly produce energy, deliver reliable free cash flow, and generate shareholder value.
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