Diversified Energy Announces Strategic Bolt-on Acquisition of Complementary Producing & Midstream Assets in the Appalachian Basin
Diversified Energy Company (LSE:DEC)(NYSE:DEC) has announced the acquisition of natural gas properties and facilities in Virginia, West Virginia, and Alabama from Summit Natural Resources for approximately $45 million. The acquisition includes current net production of ~12 MMcfepd, PDP Reserves of 65 Bcfe with PV-10 of ~$55 million, and is expected to generate ~$12 million in estimated 2025 Adj. EBITDA.
The strategic acquisition encompasses 300 net producing wells in Appalachia (~60% of production) and 265 net producing Coal Mine Methane wells in Alabama (~40% of production). The assets overlap with existing operations, providing operational synergies and opportunities to enhance cash margins. The deal includes strategic midstream pipeline assets that enable routing of production to premium sales points.
The transaction, expected to close in Q1 2025, will be fully funded through cash on hand and current liquidity. The acquisition expands DEC's Coal Mine Methane revenue generation potential and is expected to benefit from the company's Smarter Asset Management programs.
Diversified Energy Company (LSE:DEC)(NYSE:DEC) ha annunciato l'acquisizione di proprietà e impianti di gas naturale in Virginia, West Virginia e Alabama da Summit Natural Resources per circa 45 milioni di dollari. L'acquisizione include una produzione netta attuale di ~12 MMcfepd, riserve PDP di 65 Bcfe con un PV-10 di ~55 milioni di dollari e si prevede genererà ~12 milioni di dollari in EBITDA aggiustato stimato per il 2025.
L'acquisizione strategica comprende 300 pozzi produttivi netti in Appalachia (~60% della produzione) e 265 pozzi produttivi di metano da mina di carbone in Alabama (~40% della produzione). Le risorse si sovrappongono alle operazioni esistenti, offrendo sinergie operative e opportunità per migliorare i margini di cash flow. L'accordo include attivi strategici di pipeline midstream che consentono il trasporto della produzione verso punti di vendita premium.
La transazione, prevista per chiudere nel primo trimestre del 2025, sarà completamente finanziata attraverso contante disponibile e liquidità attuale. L'acquisizione espande il potenziale di generazione di ricavi da metano da mina di carbone di DEC e si prevede che beneficerà dei programmi di Gestione degli Asset Intelligente dell'azienda.
Diversified Energy Company (LSE:DEC)(NYSE:DEC) ha anunciado la adquisición de propiedades e instalaciones de gas natural en Virginia, West Virginia y Alabama de Summit Natural Resources por aproximadamente 45 millones de dólares. La adquisición incluye una producción neta actual de ~12 MMcfepd, reservas PDP de 65 Bcfe con un PV-10 de ~55 millones de dólares, y se espera que genere ~$12 millones en EBITDA ajustado estimado para 2025.
La adquisición estratégica abarca 300 pozos de producción netos en Appalachia (~60% de la producción) y 265 pozos de Metano de Mina de Carbón netos en Alabama (~40% de la producción). Los activos se superponen con las operaciones existentes, proporcionando sinergias operativas y oportunidades para mejorar los márgenes de efectivo. El acuerdo incluye activos estratégicos de tuberías midstream que permiten el transporte de producción a puntos de venta premium.
Se espera que la transacción se cierre en el primer trimestre de 2025, y será financiada completamente a través de efectivo disponible y liquidez actual. La adquisición expande el potencial de generación de ingresos de DEC de Metano de Mina de Carbón y se espera que se beneficie de los programas de Gestión de Activos más Inteligentes de la empresa.
다양화된 에너지 회사(Diversified Energy Company)(LSE:DEC)(NYSE:DEC)는 Summit Natural Resources로부터 버지니아, 웨스트버지니아 및 앨라배마의 천연가스 자산과 시설을 약 4500만 달러에 인수한다고 발표했습니다. 이번 인수에는 현재 순 생산량 ~12 MMcfepd, 65 Bcfe의 PDP 매장량과 PV-10 약 5500만 달러가 포함되어 있으며, 2025년도 추정 조정 EBITDA는 약 ~1200만 달러에 이를 것으로 예상됩니다.
이 전략적 인수에는 아팔라치아 지역의 300개의 순 생산 굴착공 (~60%의 생산량)과 앨라배마의 265개의 순 생산 석탄광 메탄 굴착공 (~40%의 생산량)이 포함됩니다. 자산은 기존 운영과 겹치며, 운영 시너지 효과와 현금 마진 향상 기회를 제공합니다. 이 거래에는 생산을 프리미엄 판매 지점으로 전송할 수 있는 전략적 미드스트림 파이프라인 자산이 포함됩니다.
이번 거래는 2025년 1분기에 종료될 예정이며, 현금 및 현재 유동성으로 완전히 자금 지원됩니다. 인수는 DEC의 석탄광 메탄 수익 창출 잠재력을 확대하며, 회사의 스마트 자산 관리 프로그램의 혜택을 볼 것으로 예상됩니다.
Diversified Energy Company (LSE:DEC)(NYSE:DEC) a annoncé l'acquisition de propriétés et d'installations de gaz naturel en Virginie, en Virginie-Occidentale et en Alabama auprès de Summit Natural Resources pour environ 45 millions de dollars. L'acquisition comprend une production nette actuelle d'environ ~12 MMcfepd, des réserves PDP de 65 Bcfe avec un PV-10 d'environ ~55 millions de dollars, et devrait générer environ ~12 millions de dollars en EBITDA ajusté estimé pour 2025.
L'acquisition stratégique comprend 300 puits producteurs nets dans les Appalaches (~60 % de la production) et 265 puits de méthane à partir de mines de charbon en Alabama (~40 % de la production). Les actifs se chevauchent avec les opérations existantes, offrant des synergies opérationnelles et des opportunités d'amélioration des marges de liquidités. L'accord inclut des actifs de pipelines stratégiques en amont qui permettent de diriger la production vers des points de vente premium.
La transaction, qui devrait se conclure au premier trimestre 2025, sera entièrement financée par de la trésorerie disponible et de la liquidité actuelle. L'acquisition élargit le potentiel de génération de revenus de DEC à partir du méthane des mines de charbon et devrait bénéficier des programmes de gestion d'actifs intelligents de l'entreprise.
Diversified Energy Company (LSE:DEC)(NYSE:DEC) hat die Übernahme von Naturgasanlagen und -einrichtungen in Virginia, West Virginia und Alabama von Summit Natural Resources für etwa 45 Millionen Dollar angekündigt. Die Übernahme umfasst eine aktuelle Nettoproduktion von ~12 MMcfepd, PDP-Reserven von 65 Bcfe mit einem PV-10 von ~55 Millionen Dollar und wird voraussichtlich ein geschätztes angepasstes EBITDA von ~$12 Millionen für 2025 generieren.
Die strategische Übernahme umfasst 300 netto produzierende Brunnen in den Appalachen (~60 % der Produktion) und 265 netto produzierende Methanbrunnen aus Kohleminen in Alabama (~40 % der Produktion). Die Vermögenswerte überschneiden sich mit den bestehenden Betrieben und bieten betriebliche Synergien sowie Möglichkeiten zur Verbesserung der Cash-Margen. Der Deal umfasst strategische Midstream-Pipeline-Vermögenswerte, die den Transport der Produktion zu Premium-Verkaufsstellen ermöglichen.
Die Transaktion, die im 1. Quartal 2025 abgeschlossen werden soll, wird vollständig durch vorhandenes Bargeld und aktuelle Liquidität finanziert. Die Übernahme erweitert das Umsatzpotenzial von DEC aus Methan aus Kohleminen und wird voraussichtlich von den Programmen zur intelligenten Vermögensverwaltung des Unternehmens profitieren.
- Purchase price of $45M represents a favorable PV-16 valuation
- Expected to generate $12M in 2025 Adj. EBITDA
- Strategic midstream assets provide access to premium-priced markets
- Operational synergies expected from overlap with existing operations
- Expansion of Coal Mine Methane revenue generation potential
- Additional capital required for integration and optimization
- Production relatively modest at 12 MMcfepd
Insights
This
The deal's structure is particularly attractive from a balance sheet perspective, being fully funded through existing cash and liquidity rather than new debt. With current production of 12 MMcfepd and 65 Bcfe of PDP reserves, the acquisition cost translates to approximately
The strategic value extends beyond pure financials. The overlap with existing operations enables operational synergies that should enhance cash margins. The midstream assets provide optionality for routing gas to premium-priced markets, while the Coal Mine Methane component offers additional revenue potential through environmental credits, diversifying the income streams.
The acquisition's midstream component is particularly strategic, strengthening DEC's infrastructure positioning in the Appalachian Basin. The ability to route additional volumes to premium sales points could generate meaningful pricing advantages beyond the stated economics. The geographical diversification across Virginia, West Virginia and Alabama provides operational flexibility and market optionality.
The 565 total wells (300 conventional plus 265 CMM wells) represent a meaningful expansion of DEC's operational footprint. The proximity of the Alabama assets to corporate headquarters should facilitate efficient integration and optimization. The company's proven Smarter Asset Management practices could unlock additional value through operational improvements and cost reductions.
The Coal Mine Methane (CMM) aspect of this acquisition is particularly noteworthy in the context of growing environmental credit markets. CMM credits can command premium prices in voluntary carbon markets, as they address both methane emissions reduction and mine safety. The expansion of DEC's CMM portfolio through this acquisition positions them to capitalize on potentially increasing environmental credit values.
The company's emphasis on their "Energy-Optimized" approach aligns with growing ESG considerations in the energy sector. The ability to generate additional revenue through environmental credits while improving operational efficiency represents a forward-thinking strategy that could become increasingly valuable as carbon markets mature.
Production Economics Expected to Benefit from Diversified's Regional Presence and Scale
Acquisition Grows Coal Mine Methane Revenue Generation Potential
BIRMINGHAM, AL / ACCESSWIRE / January 6, 2025 / Diversified Energy Company PLC (LSE:DEC)(NYSE:DEC) ("Diversified" or the "Company") is pleased to announce the acquisition of operated natural gas properties and related facilities located within Virginia, West Virginia, and Alabama (the "Assets") from Summit Natural Resources (the "Seller") (together with the assets, the "Acquisition").
Transaction Highlights
Purchase price of ~
$45 million , to be fully funded through cash on hand and current liquidityCurrent net production of ~12 MMcfepd (2 Mboepd)(a)
PDP Reserves of 65 Bcfe (11 MMBoe) with PV-10 of ~
$55 million (b)Purchase price equivalent of ~PV-16(b)
Estimated 2025 Adj. EBITDA of ~
$12 million (b)Existing Coal Mine Methane ("CMM") volumes with opportunities to extend future production
Appalachian assets overlap existing operations providing synergies for increased cash margins
Strategic midstream pipeline growth facilitating capability to route additional produced volumes to premium sales points
Expected closing of the Acquisition during the first quarter of 2025
Commenting on the Acquisition, CEO Rusty Hutson, Jr. said:
"This asset package is strategically located within our existing southern Appalachia operations and is uniquely positioned to benefit from the operational expertise of our field teams. Additionally, with this strategic acquisition, we anticipate capturing additional revenue from the sale of incremental environmental credits with our growth in the production of coal mine methane. The acquisition is anchored with stable production and strategic midstream assets, which provide optionality for existing production volumes to move to premium-priced markets. This bolt-on package will provide additional opportunities for us to drive improved margins through our Smarter Asset Management programs that continue to be a foundation and support for our consistent cash flows.
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 inorganically. As we kick-start 2025, we are committed to our strategic imperative of "Energy-Optimized" and our unique solutions-based approach to improving operational and emissions performance of acquired assets while expanding margins and continuing to create long-term value for our shareholders."
Upside Potential for Coal Mine Methane Revenues
The Acquisition includes wells that qualify for Alternative Energy Credit ("Environmental Credit") generation through the production of Coal Mine Methane ("CMM", together with the credit "CMM Revenues") and expands Diversified's ability to generate CMM Revenues. Additional CMM Revenue potential will be assessed following the close of the Acquisition.
Bolt-On Assets Expected to Benefit from Considerable Scale and Consolidation Experience
The Acquisition includes 300 net producing wells that are located within Diversified's operational footprint in the Appalachian states of Virginia and West Virginia (~
Additionally, the Acquisition includes 265 net producing Coal Mine Methane wells located within Alabama (~
Footnotes:
(a) | Current production based on estimated average daily production for January 2025; Estimate based on historical performance and engineered type curves for the Assets |
(b) | Based on engineering reserves assumptions using historical cost assumptions and NYMEX strip as of October 28, 2024 for the twelve months ended December 31, 2025. NTM Adjusted EBITDA and PV10 are Non-IFRS measure. See "Use of Non-IFRS Measures" |
For Company-specific items, refer also to the Glossary of Terms and/or Alternative Performance Measures found in the Company's 2024 Interim Report dated June 30, 2024 and Form 20-F for the year ended December 31, 2023 filed with the United States Securities and Exchange Commission.
For further information, please contact:
Diversified Energy Company PLC | +1 973 856 2757 |
Doug Kris | |
Senior Vice President, Investor Relations & Corporate Communications | www.div.energy |
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FTI Consulting | |
U.S. & UK Financial Public Relations |
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About Diversified Energy Company PLC
Diversified is a leading publicly traded energy company focused on natural gas and liquids production, transport, marketing, and well retirement. Through our unique and differentiated strategy, we 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 our 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.
Forward-Looking Statements
This announcement contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995). These forward-looking statements, which contain the words "anticipate", "believe", "intend", "estimate", "expect", "may", "will", "seek", "continue", "aim", "target", "projected", "plan", "goal", "achieve", "opportunity" and words of similar meaning, reflect the Company's beliefs and expectations and are based on numerous assumptions regarding the Company's present and future business strategies and the environment the Company will operate in and are subject to risks and uncertainties that may cause actual results to differ materially. No representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved. Expected benefits of the Acquisition may not be realized and the Acquisition may not close on the terms described in this release at all. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond the Company's ability to control or estimate precisely, including the risk factors described in the "Risk Factors" section in the Company's Annual Report and Form 20-F for the year ended December 31, 2023, filed with the United States Securities and Exchange Commission. Forward-looking statements speak only as of their date and neither the Company nor any of its directors, officers, employees, agents, affiliates or advisers expressly disclaim any obligation to supplement, amend, update or revise any of the forward-looking statements made herein, except where it would be required to do so under applicable law. As a result, you are cautioned not to place undue reliance on such forward-looking statements.
Use of Non-IFRS Measures
Certain key operating metrics that are not defined under IFRS (alternative performance measures) are included in this announcement. These non-IFRS measures are used by us to monitor the underlying business performance of the Company from period to period and to facilitate comparison with our peers. Since not all companies calculate these or other non-IFRS metrics in the same way, the manner in which we have chosen to calculate the non-IFRS metrics presented herein may not be compatible with similarly defined terms used by other companies. The non-IFRS metrics should not be considered in isolation of, or viewed as substitutes for, the financial information prepared in accordance with IFRS. Certain of the key operating metrics are based on information derived from our regularly maintained records and accounting and operating systems.
Adjusted EBITDA
As used herein, EBITDA represents earnings before interest, taxes, depletion, depreciation and amortization. Adjusted EBITDA includes adjusting for items that are not comparable period-over-period, namely, accretion of asset retirement obligation, other (income) expense, loss on joint and working interest owners receivable, (gain) loss on bargain purchases, (gain) loss on fair value adjustments of unsettled financial instruments, (gain) loss on natural gas and oil property and equipment, costs associated with acquisitions, other adjusting costs, non-cash equity compensation, (gain) loss on foreign currency hedge, net (gain) loss on interest rate swaps and items of a similar nature.
Adjusted EBITDA should not be considered in isolation or as a substitute for operating profit or loss, net income or loss, or cash flows provided by operating, investing, and financing activities. However, we believe such a measure is useful to an investor in evaluating our financial performance because it (1) is widely used by investors in the natural gas and oil industry as an indicator of underlying business performance; (2) helps investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the often-volatile revenue impact of changes in the fair value of derivative instruments prior to settlement; (3) is used in the calculation of a key metric in one of our Credit Facility financial covenants; and (4) is used by us as a performance measure in determining executive compensation. We are unable to provide a quantitative reconciliation of forward-looking Adjusted EBITDA to the most directly comparable forward-looking IFRS measure because the items necessary to estimate such forward-looking IFRS measure are not accessible or estimable at this time without unreasonable efforts. The reconciling items in future periods could be significant.
PV-10
PV-10 is a non-IFRS financial measure and generally differs from Standardized Measure, the most directly comparable IFRS measure, because it does not include the effects of income taxes on future net cash flows. While the Standardized Measure is free cash dependent on the unique tax situation of each company, PV-10 is based on a pricing methodology and discount factors that are consistent for all companies. In this announcement, PV-10 is calculated using NYMEX pricing. It is not practicable to reconcile PV-10 using NYMEX pricing to standardized measure in accordance with IFRS at this time. Investors should be cautioned that neither PV-10 nor the Standardized Measure represents an estimate of the fair market value of proved reserves.
SOURCE: Diversified Energy Company PLC
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FAQ
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