Petroleum company Diversified Energy announced Friday it has finalized the $106 million acquisition of natural gas assets in eastern Texas from Crescent Pass Energy LLC, significantly expanding its presence in the central U.S.

Diversified Energy completes acquisition of natural gas Assets : Expanded Footprint in Central U.S.

Diversified Energy Co. PLC, which is listed on the London and New York stock exchanges, completed the transaction by paying $71 million in cash, funded through a bank loan, and by issuing approximately 5% of its own shares to Crescent Pass Energy as part of the deal. This acquisition of natural gas assets strengthens Diversified Energy's strategic position, following its ongoing expansion in the region.

The assets involved in the transaction include 827 active wells, more than 500 miles of pipelines, associated compression facilities, and additional undeveloped land, which are located near Diversified's previously acquired East Texas wells. The company first agreed to acquire these assets in July.

Diversified Energy completes acquisition of natural gas Assets : Legal Counsel and Strategic Outlook

Cliff Vrielink and John Brannan from Sidley Austin LLP, along with Rahul Vashi and Graham Valenta from Gibson Dunn & Crutcher LLP, provided legal counsel to Diversified Energy during the acquisition process.

Rusty Hutson Jr., CEO of Diversified Energy, described the acquisition as “attractively priced” and emphasized the company's commitment to integrating the new assets efficiently. “We are excited to onboard our new employees from Crescent Pass and begin the process of efficient integration and deployment of smarter asset management along with our sustainability initiatives across these assets, while adding robust cash flows that further support our business,” Hutson said.

Strategic Growth and Financial Structure

The acquisition of natural gas assets marks another milestone for Diversified Energy, following its $410 million purchase of similar assets from Oaktree Capital Management LP in March. The company operates primarily in the Appalachian Basin and the Central Region of the U.S.

As part of the consideration for the deal, Diversified Energy issued approximately 2.25 million new shares to Crescent Pass Energy. The transaction did not require shareholder approval.

Hutson noted in July that this stock-and-cash deal represents an "evolution" of the company’s funding sources and highlights the strategic importance of its recent listing on the New York Stock Exchange.

Market Reaction

Shares in Diversified Energy, trading on the FTSE 250 index of the London Stock Exchange, were up 0.9% to 1,021 pence on Friday afternoon, compared to 1,012 pence at Thursday's close.

About Crescent Pass Energy

Crescent Pass Energy, based in Houston, is a privately held exploration and production company backed by Texas-based private equity firm Talara Capital Management LLC. Talara invested $75 million into Crescent Pass in 2019.

Counsel information for Crescent Pass Energy in this transaction was not immediately available.