BIRMINGHAM, Al. — Diversified Energy has announced plans to acquire Maverick Natural Resources from EIG Global Energy Partners for $1.275 billion. The move will enhance Diversified’s asset base, commodity mix, and operational scale.
“It’s a large scale acquisition, a 100 percent increase in our revenues and about a 57 percent increase in our free cash flow profile to almost $400 million,” Shinnston native and Diversified Energy President and CEO Rusty Hutson said. ” So, it’s a big deal for us with a lot of opportunity headed for us.”
About 90 percent of Maverick Natural Resources production capacity is centered in Western Anadarko and Permian basins and Southern Arkansas, Northern Louisiana, and East Texas gas. A portion of the acquisition is next to Diversified assets already operating in Oklahoma in the Cherokee Play and provides a new Permian asset base,
“We’re acquiring producing assets and looking for ways to improve that production and drive cost efficiencies across the portfolio,” Hutson said.
Hutson said Diversified has always been “acquisitive.” Early in the history of Diversified, many acquisitions have been in Appalachia, but changing markets have pushed the company to the west.
“Here recently it’s been primarily in the Oklahoma, Texas and Louisiana area,” Hutson said. “That’s not because we favor one over the other, it’s just that the valuations have been better and there have been more assets to purchase in those other states.”
Hutson said the oil and gas business has suffered in the regulatory environment over the last four years and some changes proposed by the Trump administration create the launching pad for a rebound, but more regulatory reform is needed.
“These executive orders he has signed are going to at least help to get the industry off of our back foor and back on our front foot,” Hutson said.
Changes to the energy infrastructure permitting process will have to be addressed if future economic expansion and Artificial Intelligence development can be possible. If the permitting process cannot be streamlined to get more energy into the marketplace, the electric grid will not be able to support economic expansion.
“We need pipelines in this country and until we get them the data centers and the power generation necessary across the country to result in big economic development is just not there,” Hutson said. “Our power grids are stressed.”