Diversified Energy Strikes $1.3 Billion Deal for Maverick in Permian Basin Expansion
(Reuters) — U.S.-based Diversified Energy said on Monday it will buy private equity-owned Maverick Natural Resources for $1.28 billion, including debt, to expand into the oil and gas-rich Permian Basin, sending its shares up 4.3%.
A deal-making boom has swept through the U.S. shale industry in the last two years as large producers look to gain scale, creating opportunities for buyout firms holding oil and gas assets.
EIG was exploring a potential sale of Maverick that could value the U.S. oil and gas producer at nearly $3 billion, including debt, Reuters reported in August.
The deal was a first step for Diversified Energy to gain access to the Permian Basin, executives said on the conference call, whereby they could add on to their portfolio through bolt-on acquisitions.
Maverick's asset base in the Permian Basin, the world's largest shale oil-producing region, consists of producing oil fields in West Texas and New Mexico.
Diversified Energy, which focuses on producing natural gas and liquids from the Appalachia basin and Central Basin, said it would take on about $700 million of Maverick's debt, giving the combined company a value of about $3.8 billion.
Combined production from the pro-forma company would total 59,000 barrels of oil equivalent per day, with 34% being weighted to oil, 22% to natural gas liquids, and 44% to natural gas.
Maverick's current owner, EIG Global Energy Partners, will own about 20% of the new company and will appoint two board members.
Diversified Energy CEO Rusty Hutson will lead the combined company and Chair David Johnson will continue in the role at the new company.
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