Diversified Energy announced a deal worth almost $1.3 billion 27 January to acquire Maverick Natural Resources from EIG Global Energy Partners.
The acquisition, which would be Diversified’s largest to date, combines two asset packages, adding to the company’s position in the Appalachian Basin, western Anadarko Basin, Permian Basin, Barnett Basin, and the Ark-La-Tex region.
The combined company will have an enterprise value of approximately $3.8 billion and operate across the five operating regions, with a combined production base of approximately 1,200 MMcfe/D—a mix of liquid hydrocarbons and natural gas.
“The acquired producing assets have demonstrated leading well performance and are a natural fit with our operating advantage and existing acreage,” Roy Hutson, CEO of Diversified, said in a statement, adding that the Alabama-based company will hold one of the largest positions in the western Anadarko region.
The CEO stated that Diversified plans to “unlock undeveloped acreage potential,” although no immediate drilling plans were announced. The company also highlighted the potential of the Cherokee formation within its western Anadarko holdings, describing the play as “emerging.”
“The deal is a major boost in scale for Diversified, which has emerged as one of the principal consolidators of legacy assets that can be acquired cheaply and managed for cash flow," Andrew Dittmar, principal analyst at Enverus Intelligence Research, said in a note following the announcement.
Dittmar also noted that Diversified focuses on making such deals primarily for the value of existing production, with no plans for further development. “For owners of these types of assets like EIG with Maverick, Diversified provides an exit option for a position not likely to draw many other public company suitors,” he said.
The transaction includes the assumption of almost $700 million of Houston-based Maverick's outstanding debt. Diversified will issue 21.2 million new ordinary shares to Maverick's shareholders, valued at approximately $345 million, and will also pay $207 million in cash.
While still subject to shareholder and regulatory approvals, the deal is expected to close in the first half of this year.
Upon completion of the sale, EIG will hold 20% of the outstanding ordinary shares of the combined company, including those acquired through previous transactions.
