Diversified Energy Co PLC on Tuesday announced a joint acquisition to purchase a package of US natural gas assets.

The Birmingham, Alabama-based energy company executed a conditional agreement with an unnamed operator to obtain operated natural gas properties in eastern Texas for $69 million.

Included in the transaction, for approximately $68 million, is a ‘significant proved developed producing component’.

A third party development company with operations in the area will also purchase an additional amount of undeveloped acreage for around $18 million in cash, with Diversified contributing an additional $1 million for a minority 5% interest.

Assets included in the transaction are in close proximity to other assets owned by Diversified providing the company with opportunities to realise synergies ‘attributable to operating scale and asset density’.

Diversified will fund the acquisition of the producing component and its share of the acreage through a combination of new shares direct to the seller for $35 million alongside new and existing liquidity supported by the increased availability as the result of increased collateral associated with the assets.

Chief Executive Officer Rusty Hutson said: ‘This purchase strengthens Diversified by expanding our footprint in our East Texas operating area, increasing our scale, and allowing for margin enhancement. Importantly, this acquisition extends our proven track record of completing disciplined transactions at attractive valuations.’

With a next twelve months earnings before interest, tax, depreciation, and amortisation of $19 million, the assets, excluding the undeveloped acreage, represent a 3.5-times purchase multiple.

The acquisition is expected to close in the fourth quarter of 2024 and is subject to a break fee.

Diversified Energy shares were down 1.4% to 1,020.00 pence each in London on Tuesday morning.

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