Diversified Energy Acquires Blackbeard’s Barnett Shale Assets
LSE-listed Diversified Energy Company Plc has entered into a conditional agreement with privately held Blackbeard Operating LLC to acquire approximately 123,000 net acres of Barnett shale assets in Texas, for a gross purchase price of US$180 million, subject to certain customary closing adjustments. The transaction represents Diversified Energy’s second strategic entry into a new central regional focus area (RFA) that includes producing areas within Louisiana, Texas, Oklahoma and Arkansas.
In April, Diversified Energy had entered into a purchase and sale agreement (PSA) for the acquisition of approximately 180,000 net acres in the Cotton Valley / Haynesville play located in north-west Louisiana and east Texas, for a gross purchase price of US$135 million, from Indigo Minerals LLC, a wholly-owned subsidiary of Indigo Natural Resources LLC. That transaction represented the first strategic entry of Diversified Energy into the central RFA.
The acquired acreage contains approximately 123,000 net acres of Barnett shale assets in Texas, with 840 wells having an average age of 12 years. The assets support existing cash-flow profile and low-cost operations that supplement robust margins, and existing infrastructure. Total proved (1P) reserves attributable to the acreage are approximately 79 million barrels of oil equivalent (MMboe) as of April 1st, 2021, with current average daily production amounting to approximately 16 thousand barrels of oil equivalent per day (Mboe/d), of which 82% is gas.
“Today’s announcement of our second acquisition in the newly defined Central Regional Focus Area evidences the strong momentum we have quickly built in an area poised for consolidation quite similarly to our experience in Appalachia, where we emerged as a highly capable buyer and operator of assets. With just two transactions, the Central RFA adds nearly a third to our daily production, and will benefit both from our Smarter Asset Management programmes and from the additional scale that future infill acquisitions will afford us to reduce costs and further improve already strong margins,” commented Rusty Hutson, CEO of Diversified Energy.
Alabama-based Diversified Energy is focused on the acquisition, development and operation of producing gas and oil wells in the Appalachian basin in Pennsylvania, Ohio and West Virginia in the eastern United States.
Texas-based Blackbeard Operating is focused on U.S. operations in the Permian, Ark-La-Tex and Arkoma regions.
The transaction is subject to customary closing conditions, including customary diligence, reviews and approvals, and is expected to close in late June 2021, with an effective date of April 1st, 2021.