Diversified Energy Closes Acquisition of East Texas Assets
Diversified Energy Company (LSE/NYSE:DEC) has completed its acquisition of natural gas properties in eastern Texas for a gross purchase price of $69 million. The acquisition includes 70 Bcfe of PDP reserves with current net production of 21 MMcfepd. The deal was financed through a combination of 2,342,445 new shares issued to the seller and $22 million in cash from a secured bank facility. The assets are expected to generate approximately $19 million in Next Twelve Months Adjusted EBITDA, representing a purchase price multiple of ~3.5x. The newly issued shares represent 4.57% of existing share capital and will be subject to six-month regulatory restrictions.
La Diversified Energy Company (LSE/NYSE:DEC) ha completato l'acquisizione di proprietà di gas naturale nell'est del Texas per un prezzo di acquisto lordo di 69 milioni di dollari. L'acquisizione include 70 Bcfe di riserve PDP con una produzione netta attuale di 21 MMcfepd. L'operazione è stata finanziata attraverso una combinazione di 2.342.445 nuove azioni emesse al venditore e 22 milioni di dollari in contante da una linea di credito garantita. Gli asset dovrebbero generare circa 19 milioni di dollari in EBITDA aggiustato per i prossimi dodici mesi, rappresentando un multiplo del prezzo di acquisto di ~3,5x. Le nuove azioni emesse rappresentano il 4,57% del capitale sociale esistente e saranno soggette a restrizioni regolatorie di sei mesi.
La Diversified Energy Company (LSE/NYSE:DEC) ha completado la adquisición de propiedades de gas natural en el este de Texas por un precio de compra bruto de 69 millones de dólares. La adquisición incluye 70 Bcfe de reservas PDP con una producción neta actual de 21 MMcfepd. El acuerdo fue financiado a través de una combinación de 2.342.445 nuevas acciones emitidas al vendedor y 22 millones de dólares en efectivo de una instalación bancaria asegurada. Se espera que los activos generen aproximadamente 19 millones de dólares en EBITDA ajustado para los próximos doce meses, lo que representa un múltiplo del precio de compra de ~3,5x. Las nuevas acciones emitidas representan el 4,57% del capital social existente y estarán sujetas a restricciones regulatorias de seis meses.
다양한 에너지 회사(Diversified Energy Company)(LSE/NYSE:DEC)는 동부 텍사스의 천연 가스 자산을 6,900만 달러에 인수했습니다. 이번 인수에는 현재 순 생산량 21 MMcfepd를 가진 70 Bcfe의 PDP 매장량이 포함됩니다. 이 거래는 판매자에게 발행된 2,342,445주의 신주와 보증은행에서 제공받은 2,200만 달러의 현금을 결합하여 자금을 조달했습니다. 이 자산은 향후 12개월 동안 약 1,900만 달러의 조정된 EBITDA를 생성할 것으로 예상되며, 구매 가격 배수는 약 3.5배에 해당합니다. 새로 발행된 주식은 기존 자본금의 4.57%를 차지하며, 6개월 동안의 규제 제한을 받게 됩니다.
La Diversified Energy Company (LSE/NYSE:DEC) a finalisé son acquisition de propriétés de gaz naturel dans l'est du Texas pour un prix d'achat brut de 69 millions de dollars. L'acquisition comprend 70 Bcfe de réserves PDP avec une production nette actuelle de 21 MMcfepd. L'accord a été financé par une combinaison de 2 342 445 nouvelles actions émises au vendeur et de 22 millions de dollars en espèces provenant d'une facilité bancaire sécurisée. Les actifs devraient générer environ 19 millions de dollars en EBITDA ajusté pour les douze prochains mois, représentant un multiple de prix d'achat d'environ 3,5x. Les nouvelles actions émises représentent 4,57% du capital existant et seront soumises à des restrictions réglementaires de six mois.
Die Diversified Energy Company (LSE/NYSE:DEC) hat den Erwerb von Erdgasimmobilien im östlichen Texas zum Brutto-Kaufpreis von 69 Millionen US-Dollar abgeschlossen. Der Erwerb umfasst 70 Bcfe von PDP-Reserven mit einer aktuellen Netto-Produktion von 21 MMcfepd. Der Deal wurde durch eine Kombination aus 2.342.445 neuem Aktien, die an den Verkäufer ausgegeben wurden, und 22 Millionen US-Dollar in bar aus einem gesicherten Bankkredit finanziert. Die Anlagen sollen in den nächsten zwölf Monaten etwa 19 Millionen US-Dollar an bereinigtem EBITDA generieren, was einem Kaufpreis-Multiplikator von etwa 3,5x entspricht. Die neu ausgegebenen Aktien machen 4,57% des bestehenden Eigenkapitals aus und unterliegen sechsmonatigen regulatorischen Einschränkungen.
- Assets expected to generate $19 million in NTM Adjusted EBITDA
- Attractive purchase price multiple of ~3.5x EBITDA
- Current net production of 21 MMcfepd (~4 MBoepd)
- PDP reserves of 70 Bcfe with PV10 of $89 million
- 4.57% shareholder dilution from new share issuance
- Additional $22 million debt from bank facility
Insights
This
The acquired assets include 70 Bcfe of PDP reserves valued at
The bolt-on nature of these assets within DEC's Central Region presents clear operational synergy opportunities through the company's Smarter Asset Management program, potentially enhancing returns beyond the stated acquisition metrics.
BIRMINGHAM, AL / ACCESSWIRE / October 30, 2024 / Diversified Energy Company PLC (LSE:DEC)(NYSE:DEC) ("Diversified" or the "Company") announces the closing of its previously announced acquisition of operated natural gas properties located within eastern Texas (the "Assets") from a regional operator (the "Seller") (the "Acquisition").
Acquisition Highlights
Total gross purchase price of
$69 million before customary purchase price adjustments$68 million for high working-interest PDP asset package
$1 million for residual (5% ) interest of retained undeveloped acreageAcquisition net purchase price of
$49 million after customary purchase price adjustmentsPDP reserves of ~70 Bcfe (~12 MMBoe) and a PDP PV10 of ~
$89 million (a)
Current net production of 21 MMcfepd (~4 MBoepd)(b)
Estimated NTM Adjusted EBITDA of ~
$19 million million(c)Purchase price multiple of ~3.5x(c) (gross)
As previously announced, the net consideration for the Acquisition consists of a combination of the issuance of 2,342,445 new US-dollar denominated ordinary shares to the Seller (the "New Shares"), and cash consideration of
CEO Rusty Hutson, Jr. commented:
"We are excited to announce the completion of another acquisition of high-quality, bolt-on assets within our Central Region, which are immediately accretive to operations, further increase operating scale and provide the opportunity for cost synergies. We look forward to welcoming our new employees as Diversified leverages their experience for efficient integration, and the deployment of our Smarter Asset Management and sustainability initiatives across these assets."
Admission of Shares and Total Issued Share Capital
The Company has applied for the New Shares to be admitted to the Equity Shares (Commercial Companies) Category of the Official List of the Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange PLC, and expects admission to occur on or around 31 October 2024. The New Shares will rank pari passu in all respects with the Company's existing ordinary shares of 20 pence each ("Ordinary Shares"), and will be eligible for trading on the New York Stock Exchange.
Following the allotment and issue of the New Shares, the Company will have 51,295,645 Ordinary Shares in issue and holds no Ordinary Shares are held in treasury. Shareholders may use the figure of 51,295,645 as the denominator in calculations to determine if they are required to notify the Company of their interest in, or a change to their interest in the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.
Footnotes:
(a) | PDP reserves values (including volumes, PV-10 and approximate PV value) calculated using historical production data, asset-specific type curves and an effective date of June 1, 2024 and based on the NYMEX strip at August 12, 2024 through December 2026, with WTI held flat at |
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(b) | Current production based on estimated average daily production for October 2024; Estimate based on historical performance and engineered type curves for the Assets |
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(c) | Based on engineering reserves assumptions using historical cost assumptions and NYMEX strip as of August 12, 2024 for the twelve months ended September 30, 2025. Purchase price multiple based on Gross Purchase Price and Acquisition's estimated Next Twelve Months (NTM) Adjusted EBITDA (unhedged). NTM Adjusted EBITDA is a Non-IFRS measure. See "Use of Non-IFRS Measures" |
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For Company-specific items, refer also to the Glossary of Terms and/or Alternative Performance Measures found in the Company's Interim Report for the six months ended June 30, 2024.
For further information, please contact:
Diversified Energy Company PLC | +1 973 856 2757 |
Doug Kris | |
Senior Vice President, Investor Relations & Corporate Communications | |
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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 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" 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. 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. The pro forma financial information in this announcement is for informational purposes only, is not a projection of our future financial performance, and should not be considered indicative of actual results that would have been achieved had the Acquisition actually been consummated on the date or at the beginning of the period indicated. 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.
PV10
PV10 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, PV10 is based on a pricing methodology and discount factors that are consistent for all companies. In this announcement, PV10 is calculated using NYMEX pricing. It is not practicable to reconcile PV10 using NYMEX pricing to standardized measure in accordance with IFRS at this time. Investors should be cautioned that neither PV10 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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