Diversified Energy Company PLC (LSE:DEC, OTCQX:DECPF) and its investment partner Oaktree Capital Management agreed to divest their interests in predominantly undeveloped acreage in Texas.
The land package, referred to as the Haynesville acreage, is being sold for US$72.8mln which delivers around US$37.3mln net to DEC.
“I am proud of our team’s actions to enhance the value of our recent Tanos acquisition, significantly reducing our net purchase price by successfully monetising these assets,” said chief executive Rusty Hutson.
“This transaction exemplifies our strategy of efficiently managing our producing assets and extracting maximum value from predominantly undeveloped resources.
“The sale proceeds enhance our liquidity as we evaluate other value-accretive opportunities.”
Along with the mostly undeveloped acreage the transaction also includes US$3.6mln for a package of 38 shale wells which produce approximately 1,700 net mcf of gas production per day.
DEC said it retains a royalty interest in the undeveloped acreage which would provide value to the company should future projects be commercialised.
The Haynesville acreage was part of the portfolio acquired from Tanos Energy Holdings II LLC in August 202. The divestment will effectively see the company’s investment in that transaction reduce by 30% to US$81mln. Meanwhile, it also noted that the undeveloped acreage was ascribed no value in the Tanos asset deal.
Hutson added: “We remain focused on completing the integration our Central Region acquisitions, delivering operational and administrative synergies and implementing our ESG (Environmental, Social, and Governance) initiatives and smarter asset management programme across the portfolio.”
