10th Jul 2024 09:58
(Alliance News) - Diversified Energy Co PLC on Wednesday said that it has signed a conditional agreement to buy natural gas assets from Crescent Pass Energy in Texas for USD106 million.
According to the US-focused natural gas producer, the acquisition will be funded through the issue of 2.4 million new shares directly to the Houston-based seller, plus a senior secured bank facility supported by the acquired assets. Price adjustments are expected to result in a net purchase price of USD100 million.
Shares in Diversified Energy were trading 0.9% higher at 1,116.00 pence each in London on Wednesday morning. This makes 2.4 million shares worth GBP26.8 million, or USD34.3 million.
The deal is expected to close in the third quarter of this year.
The assets in question are operated natural gas properties and related facilities in eastern Texas, Diversified said. They are close to assets that Diversified already owns, and provide opportunities to "realise synergies attributable to operating scale and asset density".
"The accretive transaction adds scale to our central region footprint and remains consistent with our strategy to focus on high-quality, low-decline producing assets at attractive [present value] values where we can apply our 'smarter asset management' approach to enhance margins and grow free cash flow," explained Chief Executive Officer Rusty Hutson.
"The evolution of our funding sources, illustrated by the use of direct equity issuance to the seller as a portion of the consideration, highlights the importance of our recent NYSE listing while providing additional financial flexibility."
By Holly Beveridge, Alliance News senior reporter
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