KEYFACT Energy
WTI (Sep) $78.16 +$1.18, Brent (Oct) $81.04 +$1.28, Diff -$2.88 +10c
USNG (Sep) $2.20 -2c, UKNG (Sep) 95.58p +1.58p, TTF (Sep) €39.9 +€0.91
Oil price
Oil has been vacillating all week, a rally yesterday on the US data has been followed today by a fall on the peace talks even if neither Hamas or the US Secretary of State Blinken is in attendance. Today’s fall means that oil may be down on the week after all.
Diversified Energy Company
Diversified has announced the closing of its acquisition of the of high-working interest, operated natural gas properties and related facilities located within eastern Texas from Crescent Pass Energy.
Acquisition Highlights
- Purchase price of $106 million before customary purchase price adjustments
- Acquisition net purchase price of $101 million after customary purchase price adjustments
- PDP reserves of ~170 Bcfe (~28 MMBoe) and a PDP PV10 of ~$155 million(a)
- Current net production of 38 MMcfepd (~6 Mboepd)(b)
- Estimated NTM Adjusted EBITDA of ~$26 million(c)
- Purchase price multiple of ~3.8x(c)
As previously announced, the net consideration for the Acquisition consists of a combination of the issuance of 2,249,650 new US-dollar denominated ordinary shares to the Seller (the “New Shares”) (subject to a customary commercial lock-up agreement), and cash consideration of $71 million, drawing from a senior secured bank facility supported by the acquired assets and existing liquidity. The New shares represents approximately 4.77% of the Company’s existing issued share capital.
CEO Rusty Hutson, Jr. commented:
“We are excited to announce the completion of another attractively-priced acquisition of Central Region assets which stands to benefit Diversified as a result of our continued growth in scale and density throughout the asset footprint. We are excited to on board our new employees from Crescent Pass and begin the process of efficient integration and deployment of Smarter Asset Management along with our sustainability initiatives across these assets, while adding robust cash flows that further support our business.”
Good to see this acquisition completing and that DEC is back in the business of making accretive deals which have been the hallmark of their strategy throughout its history. Another boost to margin and of course the amazing FCF in the company.
I like the fact that this time the acquisition has been paid for by a combination of cash and DEC paper, this is something that has been made possible by the recent US listing and I expect a significant movement in that direction which has already started. I think that it is likely that US investors will, as they see more of Rusty Hutson and his team, drive away the discount and drive the price a great deal higher where it belongs.
Angus Energy
Yesterday I was delighted to welcome to Core London Krzysztof Zielicki, the Non Executive Chairman of Angus Energy. We discussed Angus and its prospects as well as the bigger picture of the UK domestic gas industry. The link is below.
KeyFacts Energy Industry Directory: Malcy's Blog