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Diversified Energy Co. PLC announced Tuesday it will acquire Canvas Energy Inc. for $550 million, cementing its presence in the oil-rich Anadarko Basin of Oklahoma and fortifying its position in one of the nation’s most prolific petroleum-producing regions.

The deal, expected to close in the final quarter of 2025, marks a major expansion move for Diversified, which is dual-listed on the FTSE 250 in London and the New York Stock Exchange.

Financing the $550 Million Acquisition

Diversified revealed it will raise up to $400 million in debt financing to fund the bulk of the purchase, pledging oil and gas well production into an asset-backed securitization vehicle created by Carlyle’s global credit platform.

Additionally, Diversified will issue 3.4 million new U.S.-dollar-denominated shares to Canvas as part of the transaction. Notably, the acquisition does not require shareholder or regulatory approval, clearing the path for a swift close.

Strategic Rationale Behind the Deal

Rusty Hutson Jr., CEO of Diversified, called the acquisition “an attractive opportunity” that delivers immediate cash flow growth.

“This purchase strengthens Diversified by expanding our footprint in Oklahoma with targeted assets that fit perfectly with our scale,” Hutson said. “It allows us to capture synergies, enhance margins, and drive long-term cash flow growth.”

Canvas’ assets are expected to add about 24 million barrels of oil equivalent per day, boosting Diversified’s production by 13%.

Canvas Energy: A Local Powerhouse

Based in Oklahoma City, Canvas Energy is a private exploration and production company with wells concentrated in Major, Kingfisher, and Canadian counties.

The Anadarko Basin, where Canvas operates, has been described as a “super basin,” with potential to produce nearly 50 billion barrels of oil equivalent—and possibly the same volume again from untapped reservoirs, according to a Geo Science World study.

Diversified projects the deal will generate $155 million in pre-tax profits over the next year, even before additional benefits from integrating Canvas’ operations.

Legal and Financial Muscle Behind the Deal

The transaction was steered by Kirkland & Ellis LLP for Diversified, led by corporate partners John Kaercher and Camille Meissner. KeyBanc Capital Markets acted as Diversified’s financial adviser, with Legado Capital Advisors LLC and TCG Capital Markets serving as structuring agents.

Sidley Austin LLP advised Canvas, led by partner Mark Metts in Houston. Evercore and BofA Securities Inc. handled Canvas’ financial advisory role.

The Kirkland team also included specialists in real asset transactions, debt finance, tax, and capital markets, underscoring the complexity of the deal.

Context: Diversified’s Growth Path

This acquisition follows Diversified’s disclosure in February that it aimed to raise $123 million through a share sale to fund another buyout—its planned acquisition of Maverick.

For now, Canvas has not issued public comment on the transaction.