Diversified Energy Company, a natural gas and liquids production operator, has announced a collaboration with investment company Carlyle to invest up to $2bn in existing proved developed producing (PDP) natural gas and oil assets throughout the US.
The partnership will combine Carlyle’s extensive credit and structuring expertise, spearheaded by its asset-backed finance (ABF) team, with Diversified’s market-leading operating capabilities.
Carlyle ABF head Akhil Bansal said: “Diversified is a leading operator of long-life energy assets and a pioneer in bringing PDP securitisations to institutional markets.
“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.”
Diversified is known for its unique business model of acquiring and optimising portfolios of existing long-life oil and gas assets to ensure reliable production and consistent cash flow.
This partnership is expected to bolster Diversified Energy’s access to capital within a promising acquisition market.
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By GlobalDataUnder the terms of the agreement, Diversified will serve as the operator and servicer of the newly acquired assets.
Carlyle intends to pursue opportunities to securitise these assets as investments are made, seeking to unlock long-term financing.
Diversified Energy CEO Rusty Hutson Jr. said: “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.
“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 capitalise on these trends while aiming to generate sustainable cash flow and value for our shareholders.”
In March, Diversified Energy completed the $1.27bn acquisition of Maverick Natural Resources, a private company based in Houston, Texas, engaged in the development and production of oil and natural gas.
