Diversified Energy Company

Diversified Energy Company PLC (LSE: DEC; NYSE: DEC) (“Diversified,” or “DEC”), a leading publicly traded natural gas and liquids production company, and global investment firm Carlyle (NASDAQ: CG) have today announced a strategic partnership to invest in up to $2 billion in existing proved developed producing (PDP) natural gas and oil assets across the United States.

This exclusive partnership will combine Carlyle’s deep credit and structuring expertise, led by Carlyle’s asset-backed finance (ABF) team, with Diversified’s market-leading operating capabilities and differentiated business model of acquiring and optimizing portfolios of existing long-life oil and gas assets to generate reliable production and consistent cash flow.

The partnership enhances Diversified’s access to capital in an attractive acquisition market. Under the terms of the agreement, Diversified will serve as the operator and servicer of the newly acquired assets. As investments occur, Carlyle intends to pursue opportunities to securitize these assets, seeking to unlock long-term, resilient financing for this critical segment of the nation’s energy infrastructure.

“We are excited to partner with Carlyle, a leader in the asset-backed finance space. 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. “We continue to see a robust pipeline of opportunities and the growing need for operational scale and efficiency. With Carlyle’s support, we are well-positioned to capitalize on these trends while aiming to generate sustainable cash flow and value for our shareholders.”

“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 US domestic energy production and energy security. This partnership underscores Carlyle’s ability to originate differentiated investment opportunities through proprietary sourcing channels and seek access to stable, yield-oriented energy exposure.”

Initial thoughts are this could be a great deal for DEC, and Carlyle but it seems to give great opportunities to buy bigger and better and to use DEC’s skills in the energy acquisition area which should give good growth. As always more later…

Carlyle Asset-Backed Finance (“Carlyle ABF”) is a group within Carlyle’s Global Credit platform focused on private fixed income and asset-backed investments. The highly experienced team leverages the knowledge, sourcing, structuring, and breadth of the entire Carlyle investment platform to help deliver tailored asset-focused financing solutions to businesses, specialty finance companies, banks, asset managers, and other originators and owners of diversified pools of assets. Carlyle ABF has deployed approximately $8 billion since 2021 and has approximately $9 billion in assets under management as of March 31, 2025.

Hunting

Hunting has announced that it has completed the acquisition of the entire issued share capital of Flexible Engineered Solutions (Group) Holdings Limited (“FES”), a company based in the United Kingdom, for a total cash consideration of £50m, on a cash free / debt free basis, and which is subject to customary post-completion adjustments. 

Acquisition highlights and strategic rationale

The transaction represents an important step towards the delivery of the Hunting 2030 Strategy, strengthening Hunting’s growing offshore / subsea revenue profile and increasing the Group’s product coverage of deepwater and ultra deepwater markets:

• The transaction provides access to proprietary subsea fluid transfer technologies and system solutions for the offshore oil and gas and renewable energy industries, which are well-aligned to Hunting’s current customer base.
• FES’s portfolio of fluid transfer solutions are used in Floating Production Storage and Offloading vessels (“FPSOs”) and Subsea Distribution Systems (“SDSs”) and provides significant product bundling and cross-selling opportunities for Hunting’s other subsea businesses across key offshore regions.
• FES’s mission critical and highly engineered proprietary technology has driven robust growth and delivered a strong margin profile, which will be accretive to Hunting’s EBITDA margins.
• There is significant potential to grow FES’s existing international presence via Hunting’s global footprint in key customer locations such as Brazil, South East Asia, USA and West Africa.
• The addition of FES to the Group is expected to be earnings accretive in the first full financial year of ownership (before acquisition costs and normal acquisition adjustments such as fair value adjustments and the amortisation of intangible assets), as well as being highly cash generative.

The acquisition is in line with Hunting’s broader growth strategy, outlined at the Group’s Capital Markets Day in September 2023, which detailed its expansion into the subsea equipment sub-sector of the energy industry.

The acquisition has completed, with the consideration being funded from Hunting’s existing cash resources. FES is being acquired from members of its current management team, with the senior management team, comprising the principal sellers of FES, agreeing to remain with Hunting for at least twelve months post-acquisition.

FES will be integrated within Hunting’s Subsea Technologies operating segment and will report into Dane Tipton, the managing director of this operating segment.

Commenting on the acquisition, Jim Johnson, Chief Executive of Hunting, said:
“We are pleased to complete the acquisition of FES. It immediately boosts our subsea portfolio with proprietary products and capabilities and clearly demonstrates progress on our Hunting 2030 Strategy.

“FES’s fluid transfer solutions perfectly complement our existing subsea and FPSO-related lines, creating strong product bundling and cross-selling opportunities with our existing subsea businesses as well as the potential for further international growth.

“FES’s blue-chip customer base, international profile and high margin, mission critical applications make the business an ideal fit for Hunting.”

My initial thoughts are that this is very positive, a cash purchase immediately earnings accretive and with significant growth opportunities in the Hunting family.

More after I’ve listened to the webcast. 

Capital Allocation Policy Update

Hunting remains a highly cash-generative business with considerable financial flexibility and, following the completion of the FES acquisition, the Group retains total cash and bank / (borrowings) of c.$40m.

Following the successful acquisition of FES, the Group is reviewing its capital allocation policy and priorities and will confirm its intentions in the coming weeks.

Financial performance (unaudited)

For the year ended 31 December 2024, under UK GAAP, FES generated revenue of £31.3m and EBITDA of £6.2m. Adjusting EBITDA to include the impact of IFRS 16 ‘Leases’ and other management adjustments, FES recorded EBITDA of £6.7m in 2024.

At 31 December 2024, under UK GAAP, FES’s balance sheet recorded net assets of £33.1m and gross assets of £36.2m. All of FES’s 2024 results are subject to audit.

At completion, FES recorded a sales order book of c.£11.8m, with a robust tender pipeline and bid opportunities extending in excess of £100m.

Overview of FES

Headquartered in Ashington, Northumberland, UK FES operates from a 35,000 sq. ft. facility, in addition to a 6,000 sq. ft. test facility. FES currently has 46 employees. FES has diverse customer, product and market exposure and is a leader in its three core divisions of oil and gas fluid handling, with a portfolio of products used in FPSO and deepwater subsea distribution applications.

FES’s solutions have been deployed in many key offshore regions including the Gulf of Mexico, West Africa, and South America and the majority of its revenues coming from international business outside the UK.

FES also benefits from long-term relationships with a wide variety of blue-chip customers, including super majors, independent oil and gas companies, and international energy service companies, working on large, multi-year projects, that provide high levels of earnings visibility.

FES owns intellectual property in respect of a number of its product lines with a balanced portfolio of capabilities, which include:

• Diverless Bend Stiffener Connectors (“DBSC”);
• Turret Systems;
• Fluid Transfer Swivels;
• Hydraulic, Electric and Fibre Stab Plates;
• Subsea Control Panels;
• Pig Launchers;
• Spooling Systems;
• Seawater Intake Systems; and
• Suction Pile Vent Hatches.

FES’s DBSC solution provides support and protection for the production umbilicals, flexible and power cables used within offshore oil and gas production infrastructure.

There are clear opportunities to grow FES in the floating offshore wind sector and the business has further implemented its DBSC technology to provide a turnkey cable connection system for the offshore renewable market.

For further information on FES’s products please visit https://www.fesinternational.com/ or visit www.huntingplc.com/investors/fes-acquisition.

Webcast and Analyst Call

An overview of FES and its contribution to Hunting’s strategic growth path, as laid out in its Hunting 2030 Strategy, will be provided at a webcast which will commence at 2:00p.m. (London) / 8:00a.m. (Houston) today.

Jim Johnson, Chief Executive; Bruce Ferguson, Finance Director; and Dane Tipton, managing director of the Subsea Technologies operating segment, will provide a short presentation followed by a question and answer session.

To access the webcast, please contact Sodali & Co via Hunting@sodali.com.

Next Trading Update

Hunting PLC will be announcing its H1 2025 Trading Update on Wednesday 9 July 2025.

Corcel

Corcel plc, (London AIM: CRCL), the Angola-Brazil focused energy company, announces that the Company has received a notice of an exercise of warrants over 31,250,000 new Ordinary shares of £0.0001 in the Company (the “Warrant Shares”) at an exercise price of £0.00225 per Warrant Share, raising £70,312.50 for the Company.

Scott Gilbert, Corcel’s Chief Executive Officer, commented: 
“We are pleased to report initial warrant exercises, which we see as a strong indicator of growing investor confidence in our strategy and value proposition. These exercises, completed at a 40% premium to our most recent raise, strengthen our balance sheet and enhance our cash position, enabling us to continue to advance our operational plans, including the planned seismic program across our operated KON-16 block in the onshore Kwanza basin.”

Clearly this does what it says on the tin, Corcel is in a great place with its policy in Angola and has some very interesting assets.

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog