Diversified Energy Company has completed its co-investment with funds managed by Oaktree Capital Management, to acquire certain Cotton Valley and Haynesville upstream assets and related facilities in the states of Louisiana and Texas from Tanos Energy Holdings III, as previously announced on July 5, 2021.
Commenting on the acquisition, CEO Rusty Hutson, Jr. said: “We are pleased to have closed our third acquisition within the Central Region. We are already at work with the former Tanos employees who join the Diversified family to integrate the assets and strategically implement our Smarter Asset Management program. We are also actively pursuing the operational and administrative synergies afforded by aggregating assets within a defined area much like we currently enjoy in Appalachia. Collectively, these efforts enhance the already significant free cash flow from the Central Region assets that complement our ESG, dividend distribution and debt reduction commitments to stakeholders.”
The $154m deal was funded with availability on the company’s revolving credit facility and cash on hand, plus the assumption of certain hedges through 2023.
The assets currently produce around 14 mboepd, with 92% from approximately 390 net operated wells with an average production-weighted well age of 9 years. There are PDP reserves of 40 mmboe with pretax PV10 of $201m at the effective date of January 1, 2021 and using a full NYMEX strip as of June 28, 2021.
Diversified has retained 55 Tanos field personnel and previous contractors that supports efficient integration and incremental value creation by promptly identifying and pursuing synergies.
For more information visit: www.div.energy.com