Diversified Energy Co. and investment firm Carlyle plan to invest up to $2 billion in proved developed producing (PDP) oil and natural gas assets across the U.S., the companies said June 23.

The partnership gives Diversified access to capital in an “attractive acquisition market,”  the companies said in a joint press release.

Under the terms of their partnership, Diversified will be the operator and servicer of the newly acquired assets, which Carlyle intends to securitize for long-term investment opportunities, according to the press release.

“This arrangement significantly enhances our ability to pursue and scale strategic acquisitions in what we believe is a highly compelling environment for PDP asset consolidation," said Rusty Hutson Jr., CEO of Diversified Energy. 

Carlyle’s asset-backed finance group will bring its credit and structuring expertise to the partnership.

“Diversified is a leading operator of long-life energy assets and a pioneer in bringing PDP securitizations to institutional markets,” said Akhil Bansal, head of asset-backed finance at Carlyle. “We are excited to bring institutional capital to high-quality, cash-yielding energy assets that are core to U.S. domestic energy production and energy security.”

Haynes Boone represented Diversified in crafting the strategic partnership. 

"This transaction represents the convergence of deep operational knowledge and smart financing," said Jeremy Kennedy, a partner at Haynes Boone who led the legal team alongside attorneys John Craven, a counsel at the firm and Will Johnson, an associate.  

Diversified’s business model involves acquiring and managing long-life oil and gas assets. The company recently closed a $1.3 billion deal for Maverick Natural Resources in March.

The Maverick transaction added oil and liquids assets in the Permian and western Anadarko basins. The company’s production averaged nearly 1.15 Bcf/d after closing the Maverick deal.

RELATED

Diversified CEO: Gas Fervor Grows on LNG, Midstream Momentum

Comments