Diversified Energy Company plc DEC has announced the acquisition of a private-equity owned energy firm, Maverick Natural Resources, in the Permian Basin. The total value of the transaction came in at $1.28 billion, inclusive of Maverick’s debt. The deal is viewed as DEC’s first step into entering the Permian Basin, one of the largest oil-producing basins in the United States.
Maverick Natural Resources is a U.S.-based exploration and production player that owns producing oil fields in West Texas and New Mexico. The company is owned by the private equity firm EIG Global Energy Partners. EIG announced that it was exploring a potential sale of Maverick Natural Resources in August last year, per Reuters.
As part of the deal, Diversified Energy would take on nearly $700 million of Maverick’s debt, valuing the combined entity at approximately $3.8 billion. The transaction is expected to bring the total production of the combined company to 59,000 barrels of oil equivalent per day (Boe/d). The company mentioned that the production mix is expected to consist of 34% oil, 22% natural gas liquids and 44% natural gas.
After the conclusion of the deal, EIG Global Energy Partners, the owner of Maverick Natural Resources will own 20% of the combined entity. EIG will also gain the right to appoint two new board members for the company.
Through this deal, Diversified Energy Company will be able to enter the largest shale-oil producing region, the Permian Basin. Diversified Energy is primarily focused on producing and marketing natural gas and natural gas liquids from the Appalachian Basin and Central Basin in the United States.
DEC currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are Sunoco LP SUN,Equinor ASA EQNR and Cheniere Energy, Inc. LNG. Sunoco and Equinor currently sport a Zacks Rank #1 (Strong Buy) each, while Cheniere Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Sunoco LP is one of the largest distributors of motor fuel in the United States. The partnership distributes fuel to independent dealers, commercial customers, convenience stores and distributors. Its current distribution yield is greater than that of the industry's composite stocks, providing unitholders with consistent returns.
Equinor ASA is one of the leading integrated energy companies globally and the second-largest supplier of natural gas in Europe. The company’s expansion in the renewable energy space positions it for long-term growth as more and more countries transition toward cleaner energy solutions to meet their climate goals. Its strategic pivot toward low-carbon energy solutions unlocks new revenue streams in the growing market for clean energy and carbon management solutions.
Cheniere Energy is involved in LNG-related businesses, which include LNG terminals and natural gas marketing. The company has achieved a milestone with the first production from the first LNG train of its Corpus Christi Stage 3 Liquefaction Project. The project, which includes seven midscale LNG trains, aims to expand the production capacity of the Corpus Christi Liquefaction facility. This expansion is expected to enhance Cheniere's position in the rapidly growing global LNG market, enabling it to meet the rising demand for LNG, both in the United States and internationally.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Sunoco LP (SUN) : Free Stock Analysis Report
Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report
Diversified Energy Company PLC (DEC) : Free Stock Analysis Report
Equinor ASA (EQNR) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.