9th Sep 2025 12:06
(Alliance News) - Diversified Energy Co PLC on Tuesday said it has entered into an agreement to purchase oil and natural gas exploration and production company, Canvas Energy Inc, expanding its footprint in Oklahoma.
The Birmingham, Alabama-based gas and oil production company said the total consideration for the acquisition of Oklahoma-based Canvas Energy is around USD550 million.
Under the terms of the deal, Canvas unit holders are set to receive USD495 million in cash at completion. Diversified said the initial transaction will be funded through its strategic partnership with global investment firm Carlyle Group Inc. The company will also utilise existing liquidity and the issue of around 3.4 million shares to Canvas Energy to fund the purchase, it said.
Diversified noted that Canvas's gross assets as of June 30 stood at USD689 million, with revenue and other income items of Canvas for the 12-months to June 30 being USD304 million and net income being USD107 million.
Diversified expects the transaction to close in the fourth quarter of this year.
Shares in Diversified Energy rose 3.5% to 1,144.00 pence on Tuesday morning in London, giving the company a market capitalisation of GBP882.1 million.
Diversified said the deal complements its existing Oklahoma asset portfolio, and is underpinned by high earnings before interest, tax, depreciation and amortisation margins of around 70%. It added that it expects "meaningful annual run rate synergies" from the deal.
Diversified Energy Chief Executive Rusty Hutson commented: "This purchase strengthens Diversified by further expanding our footprint in our Oklahoma operating area with targeted assets that are a perfect fit for increasing our scale, allowing for synergy capture and providing meaningful opportunities for margin enhancement, that ultimately will grow and bolster our cash flow.
"We are excited to leverage our strategic partnership with Carlyle for funding accretive acquisitions and are pleased with the collective team's collaboration. This initial transaction serves as an important milestone in our relationship and we look forward to growing our combined portfolio of high quality assets."
By Christopher Ward, Alliance News reporter
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