Diversified Energy Company Plc (LON:DEC) has completed its acquisition of the Cotton Valley upstream assets and infrastructure, establishing its new ‘central’ regional focus area.
It is paying US$135mln for the asset package in Louisiana which comprises gas production of 16,000 barrels oil equivalent per day (boepd), across 780 net operated wells, and hosts around 50mln barrels of proved-developed-producing (PDP) reserves.
“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,” said chief executive Rusty Hutson.
He added: “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.”
The new Central RFA includes areas in Louisiana, Texas, Oklahoma and Arkansas. DEC sees it as having a similar footprint to Diversified’s existing Appalachia region and the assets available in the region also share similar asset characteristics.
DGOC in April said it sees a significant opportunity to grow scale through complementary bolt-on and/or larger deals.
Story by ProactiveInvestors
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