“Replicating our success in the Appalachians, we quickly established ourselves as a major operator in the central region,” said Rusty Hutson.
(,) reached its latest deal in the United States, taking over a set of mostly gas-producing assets in Oklahoma for US $ 218 million in cash.
It acquires interests in approximately 600 operating wells from Tapstone Energy Holdings. They currently produce about 12,000 barrels of oil equivalent per day, of which about 80% is either gas or natural gas liquids.
The deal is part of DEC’s rapid expansion into what it calls its “central region,” which includes areas of Oklahoma, Louisiana, Texas and Arkansas. This is a second step for the company which previously established itself through a series of acquisitions in the Appalachian region of the United States.
“Replicating our success in the Appalachians, we quickly established ourselves as a major operator in the central region, which positions us for further growth,” said DEC CEO Rusty Hutson.
He added, “With a net purchase price of less than twice net cash flow, this acquisition represents another highly accretive and fully balance sheet funded acquisition that once again demonstrates our status as a consolidator capable of producing active in the central region.
“Our expanded regional footprint strengthens our portfolio with additional high quality assets and increased scale to generate synergies. “
The transaction is backed by Oaktree Capital, a co-investor in DEC, which through its side investment brings the total value of the transaction to US $ 419 million – it purchases 48.75% of the direct interests in the assets for 192 million US dollars. This is Oaktree’s third co-investment with DEC in the central region, totaling $ 370 million out of a planned commitment of $ 1 billion, DEC said.
For DEC, it increases production volumes in the central zone by around 33% and adds around 35 million barrels of PDP (Proved Develop Producing) reserves.
The company said production currently enjoys high cash margins of around 65% due in part to production with a higher liquid content.
Rusty Hutson pointed out that assets will also have significant upside potential, thanks to asset optimization.