It paid US$110mln gross – US$98mln net – to acquire the package of wells which yield around 9,100 barrels of oil equivalent (boe) along with associated midstream and infrastructure assets, adding 4,700 miles of mid-stream with “flow optionality and margin-enhancing opportunities”.
This completion comes just a day after DGOC completed a separate but similar acquisition of assets from EQT Corporation for US$112mln, to add 9,000 boe per day from 900 wells.
The latest transaction is supported by a new 10-year US$160mln senior secured loan, underwritten and funded by Munich Re Reserve Risk Financing which carries a 6.5% coupon.
Some 74mln barrels of oil equivalent proved developed producing (PDP) reserves are added to DGOC’s portfolio as a result of the deal.
“Today’s transactions continue our commitment to create long-term shareholder value through selective expansion of our upstream and strategically important midstream assets,” Rusty Hutson, DGOC chief executive said in a statement.
“Like our largely conventional legacy assets, Carbon’s wells display the same long-life, low-decline profile and expand our base of stable production and Smarter Well Management opportunities.
“To that end, we welcome the members of Carbon’s team who today join the Diversified family and partner with us to realise the full, combined potential of these wells and the complementary midstream assets,” he added.
Huston, meanwhile, noted that DGOC and financier Munich Re Reserve Risk Financing “share a common belief in the low-risk profile and high-quality nature of the underlying assets and their associated cash flows”.
Published at Wed, 27 May 2020 07:33:00 +0000-Diversified Gas & Oil closes second asset acquisition