Diversified Energy Company PLC Completion of Blackbeard Acquisition (0874E)
05 July 2021 - 4:05PM
UK Regulatory
TIDMDEC
RNS Number : 0874E
Diversified Energy Company PLC
05 July 2021
5 July 2021
Diversified Energy Company PLC
("Diversified" or the "Company")
Completion of Blackbeard Acquisition
Diversified Energy Company PLC (LSE: DEC) is pleased to announce
that it has completed the purchase of certain upstream assets and
related infrastructure within its Central Regional Focus Area
("Central RFA") from Blackbeard Operating LLC ("Blackbeard") (the
"Acquisition") as previously announced on 20 May 2021.
Acquisition Highlights
-- Enlarges the Company's presence in its Central RFA with an
entry into the Barnett producing area
-- Net consideration of $166 million represents a 3.5x cash
multiple on approximately $48 million of estimated next twelve
months' Adjusted EBITDA
-- Current production(a) of 16 MBoepd (95 MMcfepd) includes 820
net operated wells with an average production-weighted well age of
11 years
-- PDP reserves of 79 MMBoe (473 Bcfe) with pretax PV10 of $238
million at the effective date of 1 April 2021 and based on 7 May
2021 NYMEX strip
-- Retention of 50 skilled Blackbeard field personnel who
provide continuity of operations and who will facilitiate clear
identification of Smarter Asset Management opportunities to create
value
-- Hedge contracts covering 80% of remaining CY2021 production
at an average floor price of $2.93/MMBtu
For the Acquisition, Diversified paid total net consideration of
approximately $166 million ($180 million, gross) after customary
purchase price adjustments with a 1 April 2021 effective date. The
Company funded the Acquisition through a combination cash on hand,
including funds from its recent issuance of equity shares in May,
and existing availability on the Company's Revolving Credit
Facility.
Rusty Hutson, Jr., CEO of the Company commented:
"Today's announcement marks an important step in broadening our
operating footprint within the Central Regional Focus Area. Closing
this transaction marks our entry into the historic Barnett
producing area, which offers an attractive area for future growth.
Similar to our nearby and recently closed acquisition of Indigo
assets in the Cotton Valley area, the Barnett area provides access
to a portfolio of future consolidation opportunities which meet our
preferred asset criteria and afford us the opportunity to build
scale and operating efficiencies. These mature Barnett wells
further expand our base of low-decline production and Smarter Asset
Management opportunities. As with each transaction, I would like to
welcome the Blackbeard employees who work on these wells to the
Diversified family. We look forward to working with these talented
individuals to deploy our Smarter Asset Management efforts across
the acquired assets to create value for our shareholders."
Footnotes (for Company-specific items, refer also to the
Glossary of Terms and/or Alternative Performance Measures found in
the Company's 2020 Annual Report):
(a) Calculated as average daily production (estimated) for the
three-month period ended 30 June 2021
Market Abuse Regulation
This announcement contains inside information for the purposes
of article 7 of the UK version of regulation (EU) no. 596/2014 on
market abuse ("UK MAR"), as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018, and regulation
(EU) no. 596/2014 on market abuse ("EU MAR").
For further information, please contact:
Diversified Energy Company PLC +1 205 408 0909
Teresa Odom
www.div.energy
ir@dgoc.com
Buchanan +44 20 7466 5000
Financial Public Relations
Ben Romney
Chris Judd
Kelsey Traynor
James Husband
dec@buchanan.uk.com
About Diversified Energy Company PLC
Diversified Energy Company PLC is an independent energy company
engaged in the production, marketing and transportation of
primarily natural gas related to its synergistic US onshore
upstream and midstream assets.
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END
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