Diversified Energy Company Plc will acquire Canvas Energy in a $550 million deal that significantly expands the company’s producing assets and acreage positions in Oklahoma. Approximately 23 high-quality producing wells are included in the acquisition.
The deal complements Diversified’s existing Oklahoma asset portfolio and is underpinned by high EBITDA margins(a) of ~70%, contributing an estimated $155 million of NTM Adjusted EBITDA(c) before any anticipated synergies. Diversified’s established integration playbook and corporate infrastructure are anticipated to unlock significant and sustainable value with fast, effective and efficient integration. Familiarity with the asset base and the combined operational density provides for significant expense saving opportunities supporting Diversified’s cash flow optimization focus.
“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,” commented Diversified CEO Rusty Hutson, Jr. “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,” Huston Jr. continued. “Importantly, this acquisition extends our proven track record of acquiring cash generating energy assets at attractive valuations. We remain committed to our capital allocation strategy and believe the accretive nature of this transaction on per share metrics creates significant long-term value for shareholders.”
