Published: August 19, 2024 |

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Diversified Energy has closed the $106 million acquisition of natural gas properties and related facilities in eastern Texas from Crescent Pass Energy.

“We are excited to announce the completion of another attractively priced acquisition of Central Region assets, which stands to benefit Diversified as a result of our continued growth in scale and density throughout the asset footprint,” said Diversified Energy CEO Rusty Hutson, Jr.

“We are eager to welcome our new employees from Crescent Pass and begin the process of efficient integration and deployment of smarter asset management, along with our sustainability initiatives across these assets, while adding robust cash flows that further support our business,” added Hutson.

Announced last month, the stock and cash deal includes 827 net operated proven developed producing (PDP) wells. This acquisition is set to add 38 million cubic feet equivalent per day (MMcfepd) of production, a 5 percent increase from the first quarter of 2024’s reported 723MMcfepd.

The assets are also expected to bring in approximately 170 billion cubic feet equivalent (Bcfe) of reserves, with a present value of $155 million.

The new assets will complement Diversified Energy’s existing portfolio. The production profile has a low annual decline rate of around 9 percent, maintaining the company’s consolidated decline rate post-acquisition.

The deal includes more than 805km of pipelines and compression facilities. It also features undeveloped acreage with potential growth opportunities, in line with Diversified Energy’s approach to non-core assets.

The assets are close to Diversified Energy’s current East Texas properties. This proximity allows for operational synergies and efficiencies, said the company.

The acquisition encompasses about 170,000 acres of commercially viable leasehold in East Texas and the Freestone Trend. Current net production is 38MMcfepd, with an estimated next twelve months adjusted EBITDA of $26 million and a purchase price multiple of approximately 3.8 times.

The net consideration for the acquisition includes the issuance of 2,249,650 new U.S. dollar-denominated ordinary shares to Crescent Pass Energy, subject to a standard commercial lock-up agreement, and $71 million in cash.

The new shares represent about 4.77 percent of Diversified Energy’s current issued share capital.

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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