Diversified Energy to buy Oklahoma-based Canvas Energy for $550m

(Sharecast News) - Diversified Energy said on Tuesday that it has agreed to buy Canvas Energy for about $550m (£405.3m). Canvas is a private oil and natural gas exploration and production company headquartered in Oklahoma City.

Diversified said the deal adds complementary operated producing properties and acreage positions in Oklahoma, concentrated in Major, Kingfisher, and Canadian Counties. Included in the acquisition are approximately 23 high quality wells that have been turned to sales in the last 12 months.

Chief executive Rusty Hutson said: "This purchase strengthens Diversified by further expanding our footprint in our Oklahoma operating area with targeted assets that are a perfect fit for increasing our scale, allowing for synergy capture and providing meaningful opportunities for margin enhancement, that ultimately will grow and bolster our cash flow.

"We are excited to leverage our strategic partnership with Carlyle for funding accretive acquisitions and are pleased with the collective team's collaboration. This initial transaction serves as an important milestone in our relationship and we look forward to growing our combined portfolio of high quality assets.

"Importantly, this acquisition extends our proven track record of acquiring cash generating energy assets at attractive valuations. We remain committed to our capital allocation strategy and believe the accretive nature of this transaction on per share metrics creates significant long-term value for shareholders."