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Diversified to buy Maverick in $1.3bn Permian purchase

Diversified to buy Maverick in $1.3bn Permian purchase
Diversified to buy Maverick in $1.3bn Permian purchase

Diversified Energy announced on January 27 that it had agreed to acquire private equity-owned Maverick Natural Resources for $1.275bn, including the assumption of around $700mn worth of debt.

The deal is the latest in a series of mergers and acquisitions that have been playing out across the US shale industry as part of the current consolidation wave, which has been underway since 2023 but which may be slowing.

For Diversified, the acquisition sees it living up to its name, as it will give it a presence in the Permian Basin. The company to date has focused on producing natural gas from the Appalachian and Central basins, with a strategy of acquiring and optimising already operational assets, which it describes as a “roll-up model”. Diversified’s aim is to extend the life of the wells it acquires and boost their production, managing them until the end of their life.

Gas accounts for 85% of the company’s commodity mix, versus 15% for liquids, with total current production of around 850mn cubic feet (24.1mn cubic metres) per day of gas equivalent.

Maverick, a portfolio company of EIG, has a commodity mix more weighted towards liquids – at 55% versus 45% for natural gas. It produces roughly 350 mmcf (9.9 mcm) per day of gas equivalent. Once the deal closes, which is expected in the first half of 2025, EIG will own around 20% of the outstanding ordinary shares.

The combined company will have an enterprise value of around $3.8bn. It will operate across five regions – Appalachia, Western Anadarko, Permian, Barnett and Ark-La-Tex – with a combined production base of around 1.2bn cubic feet (34.0 mcm) per day of gas equivalent, or roughly 200,000 barrels of oil equivalent per day (boepd).

“The acquired producing assets have demonstrated leading well performance and are a natural fit with our operating advantage and existing acreage,” stated Diversified’s CEO, Rusty Hutson.