Diversified Energy has agreed to purchase natural gas properties in East Texas, US, from Sheridan Production, valued at $245m in cash before adjustments.
The acquisition is due for completion in the second quarter of 2026 pending standard closing conditions.
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Diversified Energy plans to finance the purchase using funds from its existing senior secured bank facility.
The deal is expected to enhance the company’s current operations by adding around 62 million cubic feet equivalent per day (mcfe/d) of production, with 72% being gas. This aligns with Diversified Energy’s focus on gas-weighted production and low capital intensity.
The acquired properties also include approximately 397 billion cubic feet equivalent of proved developed producing (PDP) reserves with an estimated PV-10 value of $310m.
Diversified Energy anticipates that the acquisition will generate estimated earnings before interest, taxes, depreciation and amortisation (EBITDA) of $52m over the next 12 months.
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By GlobalDataThe low annual production decline rate of around 6% complements the company’s industry-leading decline rates and supports its operational strategy.
The assets are situated adjacent to its existing East Texas holdings, offering potential for operational efficiencies and synergies due to the proximity and scale of operations.
The acquisition also includes around 75,000 acres of commercially viable leasehold that could provide additional upside opportunities. This move by Diversified Energy is consistent with its strategy to leverage its existing asset base and operational expertise to unlock value from non-core assets.
Diversified Energy CEO Rusty Hutson Jr said: “The target assets are a perfect fit with our existing East Texas operations and offer meaningful opportunities for material synergies upon completion of the acquisition.
“The accretive transaction adds scale to our East Texas regional footprint and remains consistent with our strategy to focus on acquiring high-quality, low-decline producing assets at attractive valuations.
“These assets will benefit from our Smarter Asset Management approach to improve production, enhance margins and grow free cash flow. Additionally, we anticipate that incremental cash flow can be generated from our Portfolio Optimisation Programmes. Our company has a proven, demonstrated track record of delivering value to shareholders from our strategy of acquiring, operating and optimising established cash-generating energy assets.”
In November 2025, the company confirmed the completion of its earlier disclosed acquisition of Canvas Energy. This transaction brought additional operated producing properties and strategic acreage in Oklahoma into its portfolio.
In March 2025, Diversified Energy completed the acquisition of Maverick Natural Resources, a private oil and natural gas development and production company in Houston, Texas.
