Diversified Energy Company Acquires Producing and Midstream Assets in Appalachian Basin for Expansion

Diversified Energy Company PLC has made a big move by acquiring operated natural gas properties and facilities in Virginia, West Virginia, and Alabama from Summit Natural Resources. The purchase price is around $45 million, and the deal is set to close in the first quarter of 2025.

Here are some key details about the transaction:
– The acquisition will be covered entirely by cash on hand and current liquidity.
– The properties have a current net production of approximately 12 MMcfepd (2 Mboepd).
– There are proven developed producing (PDP) reserves of 65 Bcfe (11 MMBoe) with an estimated value of around $55 million.
– The estimated Adjusted EBITDA for 2025 is about $12 million.
– The deal includes existing Coal Mine Methane (CMM) volumes and offers opportunities for future production expansion.

Diversified Energy Company’s CEO, Rusty Hutson, Jr., expressed excitement about the acquisition, highlighting the strategic location of the assets and the potential for revenue growth through the sale of environmental credits generated by the production of Coal Mine Methane. The company sees this acquisition as a way to enhance margins and create long-term value for shareholders.

The deal also includes wells that qualify for Alternative Energy Credit generation through the production of Coal Mine Methane, further expanding Diversified’s ability to generate revenue in this area. With the integration of these new assets, the company plans to implement its Smarter Asset Management practices to optimize operations and drive efficiency.

In sum, this acquisition is a significant strategic move for Diversified Energy Company, with the potential for increased revenue, improved operational performance, and long-term value creation.