Diversified Energy completes Cotton Valley Asset Acquisition

Source: www.gulfoilandgas.com 5/19/2021, Location: North America

Diversified Energy has confirmed that, further to the announcement made by the Company on 30 April 2021, it has completed the purchase of certain Cotton Valley upstream assets and related infrastructure from Indigo Minerals.

Acquisition Highlights

- Establishes an entry into Diversified's newly identified Central Regional Focus Area ('RFA')

- Gross consideration paid of $135 million (before customary purchase price adjustments)

- Annualised 4Q20 Adjusted EBITDA of approx. $40MM

- PDP reserves of ~50 MMBoe (305 Bcfe) with pretax PV10 of ~$175MM based on 16 April 2021 NYMEX strip

- Current production of ~16 MBoepd (~95 MMcfepd) includes ~780 net operated wells

- Retention of key field personnel to streamline integration and Smarter Asset Management initiatives

- Initial hedge positions cover approx. 80% and 50% of remaining CY2021 and full-year CY2022 production, respectively, from the Acquisition assets

The Acquisition constitutes a Class 2 transaction for the purposes of the Listing Rules and this announcement is made in accordance with the Company's disclosure obligations pursuant to Chapter 10 of the Listing Rules.

Rusty Hutson, Jr., CEO of the Company commented:

'We are excited to solidify our entry into the strategically-aligned Central focus area, a prolific natural gas producing region that affords us a tremendous opportunity to build significant scale and cash flow. I'm pleased to welcome the former Indigo employees to the Diversified family who are eager to integrate these assets as they embrace our Smarter Asset Management philosophy designed to maximize the value of every well. This acquisition provides us a foundation to acquire additional accretive, long-life producing assets that will contribute to strong shareholder returns, add stability to our hedge-protected dividend and drive additional debt reductions over time.'


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