Diversified Energy Expands Footprint with Acquisition

Diversified Energy PLC (DEC) has strengthened its position in Oklahoma by acquiring Canvas Energy. This strategic move follows the earlier acquisition of Maverick Natural Resources, doubling their developed area in Oklahoma to 1.3 million acres in 2025 and further expanding through the Canvas deal to 1.55 million acres in the Western Anadarko Basin.

The acquisition, valued at USD 550 million, is financed through a mix of share issuance, asset-backed securitisation by Carlyle, and DEC's borrowing capacity. Expected to close in Q4, this transaction aims to increase DEC's adjusted EBITDA and free cash flow by 18% and 29%, respectively, with a minimal rise in share count by 4%.

DEC shares trade at a 32% discount compared to peers. Analyst Simon Scholes from First Berlin Equity Research maintains a "Buy" rating, increasing the price target from GBp 1,500 to GBp 1,700.