Diversified Energy Company has agreed to purchase a portfolio of natural gas properties in East Texas from Sheridan Production for $245 million, bolstering its position in the region with complementary producing assets. The acquisition encompasses approximately 62 million cubic feet equivalent per day (MMcfepd) of production with low annual decline rates of 6%, along with proved and probable reserves totaling 397 billion cubic feet equivalent (Bcfe). The reserve package carries a present value estimate of $310 million on a 10% discount basis.
The transaction is designed to create operational synergies with Diversified's existing East Texas footprint, which the company plans to leverage following the deal's anticipated completion in the second quarter of 2026. The acquired assets are projected to contribute approximately $52 million in earnings before interest, taxes, depreciation and amortization (EBITDA) on a next-twelve-months basis, providing near-term cash flow accretion to the buyer.
The combination of high working interests, low production declines, and substantial reserve volumes aligns with Diversified Energy's strategy of consolidating quality producing properties in prolific basins. The acquisition expands the company's natural gas production profile while maintaining the operational efficiency characteristics of its existing portfolio.