Diversified Energy Completes Acquisition and Securitized Financing
Why we think this is good
The RNS announcement indicates that Diversified Energy has successfully completed the acquisition of Summit Natural Resources' assets and a strategic refinancing through an asset-backed securitization (ABS) transaction. The acquisition is expected to add meaningful production and EBITDA, while the ABS transaction will improve the company's cash flows and cost of capital. These positive developments outweigh any potential risks or uncertainties.
Key Points
- Acquisition of Summit Natural Resources' assets for ~$42 million
- Current net production of ~12 MMcfepd (2 Mboepd) and estimated 2025 Adjusted EBITDA of ~$12 million from acquired assets
- $530 million ABS refinancing with improved hedging profile, adding ~40% ($38 million) to EBITDA of refinanced assets
- ABS transaction significantly oversubscribed, reflecting quality of Diversified's assets and reputation
- Acquisition and ABS transaction solidify Diversified's position as leading issuer of oil and gas securitizations
Summary
Diversified Energy Company PLC has completed the acquisition of operated natural gas properties and related midstream pipeline infrastructure from Summit Natural Resources for a net purchase price of ~$42 million. The acquired assets are expected to contribute current net production of ~12 MMcfepd (2 Mboepd) and estimated 2025 Adjusted EBITDA of ~$12 million. The company also closed a $530 million asset-backed securitization (ABS) refinancing, which is expected to add ~40% ($38 million) to the EBITDA of the refinanced assets through improved hedging. The ABS transaction was significantly oversubscribed, reflecting the quality of Diversified's assets and its reputation as a responsible issuer. The acquisition and ABS transaction are expected to solidify Diversified's position as the leading issuer of oil and gas securitizations.