Diversified Energy Company has announced a conditional purchase and sale agreement to acquire high-working interest, operated natural gas properties and related facilities in eastern Texas from Crescent Pass Energy. The acquisition, expected to close in the third quarter of 2024, will encompass approximately 170,000 acres of commercially attractive leasehold in both East Texas and the Freestone Trend. These assets are contiguous with Diversified's existing East Texas assets.
According to CEO Rusty Hutson Jr., the current net production from these assets stands at 38 million cubic feet equivalent per day (MMcfepd), or 6,000 barrels of oil equivalent per day (Mboepd), with low annual declines of around 9%. Hutson emphasized the importance of low decline rates in maintaining annual production levels and ensuring long-term cash flows. This acquisition is particularly notable for its industry-leading corporate declines and capital intensity.
Hutson highlighted that the transaction aligns with Diversified Energy's strategy of growth through acquisitions. The company focuses on assets that add value to shareholders by enhancing production capabilities and securing long-term financial stability. A significant aspect of this acquisition is the use of shares from Diversified Energy's US listing as part of the purchase price. This move marks a strategic step in leveraging the company's equity for future acquisitions.
This acquisition underscores Diversified Energy's commitment to expanding its footprint in the natural gas sector while ensuring sustainable growth and value addition for its shareholders. The low decline rates and strategic use of equity in the transaction are likely to have a positive impact on the company's long-term financial health, making it a noteworthy development in the energy industry.
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