Completion of Tanos Acquisition

Source: RNS
RNS Number : 0083J
Diversified Energy Company PLC
18 August 2021

18 August 2021


 Diversified Energy Company PLC

("Diversified" or the "Company")


Completion of Tanos Acquisition


Diversified Energy Company PLC (LSE: DEC) is pleased to announce that it has completed its co-investment with funds managed by Oaktree Capital Management, L.P. ("Oaktree") to acquire certain Cotton Valley and Haynesville upstream assets and related facilities (the "Assets") in the states of Louisiana and Texas from Tanos Energy Holdings III LLC ("Tanos") (the "Acquisition") as previously announced on 5 July 2021.


Acquisition Highlights (Diversified's Interest)

•     Gross cash consideration of $154 million (~$117 million net at closing), funded with availability on the Company's revolving credit facility and cash on hand, plus the assumption of certain hedges through 2023

•     ~$51 million of estimated Adjusted EBITDA(a) before potential synergies and reflective of the high price realisations from the favourable Gulf Coast natural gas market

•     Current production of ~14 MBoepd (~82 MMcfepd) with 92% from ~390 net operated wells with an average production-weighted well age of ~9 years

•     PDP reserves of ~40 MMBoe (~241 Bcfe) with pretax PV10 of ~$201 million at the effective date of 1 January 2021 and using a full NYMEX strip as of 28 June 2021

•     Retention of ~55 Tanos field personnel and previous contractors that supports efficient integration and incremental value creation by promptly identifying and pursuing synergies



Commenting on the Acquisition, CEO Rusty Hutson, Jr. said:

"We are pleased to have closed our third acquisition within the Central Region. We are already at work with the former Tanos employees who join the Diversified family to integrate the assets and strategically implement our Smarter Asset Management program. We are also actively pursuing the operational and administrative synergies afforded by aggregating assets within a defined area much like we currently enjoy in Appalachia. Collectively, these efforts enhance the already significant free cash flow from the Central Region assets that complement our ESG, dividend distribution and debt reduction commitments to stakeholders.


"We are excited about Oaktree's co-investment in these assets as we continue to jointly pursue additional value-accretive opportunities in both Appalachia and the Central Region. With our enlarged credit facility and healthy balance sheet, we are well positioned to use our financing capabilities to fund additional growth."


Footnote (for Company-specific items, refer also to the Glossary of Terms and/or Alternative Performance Measures found in the Company's 2020 Annual Report):



Acquisition estimated Adjusted EBITDA calculated as next twelve months from estimated closing date (previously announced as mid-August 2021) using historical cost structure, engineered production and declines, and full NYMEX strip at 28 June 2021; not reflective of synergies that may be realised following post-acquisition integration



For further information, please contact:

Diversified Energy Company PLC

+1 205 408 0909

Teresa Odom





+44 20 7466 5000

Financial Public Relations


Ben Romney


Chris Judd


Jon Krinks


James Husband



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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