Diversified Closes Summit Natural Resources Acquisition, Expands Midstream Infrastructure
Deal News | Feb 27, 2025 | Globenewswire
Diversified Energy Company PLC has completed its acquisition of natural gas properties and midstream pipeline infrastructure from Summit Natural Resources, covering assets in Virginia, West Virginia, and Alabama. The acquisition, valued at approximately $42 million, adds existing coal mine methane volumes with potential for future production and environmental credits. Additionally, Diversified has undertaken its tenth asset-backed securitization (ABS), issuing the ABS X note to refinance existing debts and optimize cash flows with improved hedge positions. Rated investment grade, this transaction was oversubscribed, reflecting Diversified's reputation in energy finance. This strategic move sharpens its operational prowess and financial leverage, aligning with its sustainability goals and expanding its footprint in the Appalachian region.
Sectors
- Energy
- Finance
- Environmental Services
Geography
- United States – The acquisition and operations cover multiple states in the U.S., including Virginia, West Virginia, and Alabama.
- United Kingdom – Diversified Energy Company PLC is publicly traded in the UK, emphasizing its relevance in this geography.
Industry
- Energy – Relevant due to Diversified Energy Company PLC's operations in natural gas and oil production and midstream asset management.
- Finance – Pertinent because of the asset-backed securitization and refinancing strategies used by Diversified Energy to manage debt and leverage cash flows.
- Environmental Services – Related to the acquisition's focus on coal mine methane production and the generation of environmental credits.
Financials
- $42 million – Net purchase price of the acquisition from Summit Natural Resources.
- $530 million – Structured ABS X note as part of the refinancing deal.
- 65 Bcfe (11 MMBoe) – Proved Developed Producing (PDP) reserves associated with the acquisition.
- $55 million – PV-10 value of the PDP reserves.
- ~$12 million – Estimated 2025 Adjusted EBITDA from the acquired assets.
- 6.4% – Blended fixed coupon rate of the investment grade rated notes.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Diversified Energy Company PLC | Acquirer | Company | A publicly traded energy company focused on natural gas and liquids production. |
| Summit Natural Resources | Vendor | Company | The seller of the natural gas properties and midstream infrastructure assets. |
| Barclays Capital, Inc. | Sole Structuring Advisor and Placement Agent | Company | Advised Diversified Energy on the ABS transaction. |
| Mizuho Securities USA LLC | Co-Placement Agent | Company | Assisted in the placement of the ABS X note. |
| KeyBanc Capital Markets Inc. | Co-Placement Agent | Company | Assisted in the placement of the ABS X note. |
| Legado Capital Advisors, LLC | Co-Placement Agent | Company | Assisted in the placement of the ABS X note. |
| Detring Energy Advisors | Sell Side Advisor | Company | Advised Summit Natural Resources on the sale. |
| Fitch Ratings, Inc. | Sustainability Rating Agency | Company | Provided a Second Party Opinion aligned with ICMA principles for the ABS notes. |
| Rusty Hutson, Jr. | CEO | Person | CEO of Diversified Energy Company PLC. |
| Brad Gray | CFO | Person | CFO of Diversified Energy Company PLC. |