Diversified Energy Expands Midstream Assets in Appalachia with $45 Million Acquisition
(P&GJ) — Diversified Energy Company PLC has announced a $45 million acquisition of natural gas properties and midstream facilities in Virginia, West Virginia, and Alabama. The assets were purchased from Summit Natural Resources and are expected to close during the first quarter of 2025.
The acquisition includes 300 natural gas wells in the Appalachian Basin and 265 coal mine methane (CMM) wells in Alabama. Diversified aims to integrate these assets into its existing operations, leveraging its Smarter Asset Management practices to improve efficiency and margins.
“These assets are strategically located within our southern Appalachia operations and are uniquely positioned to benefit from our field teams' expertise,” said CEO Rusty Hutson, Jr. He highlighted the potential for increased revenue from environmental credits tied to coal mine methane production and the opportunity to route production to premium-priced markets through enhanced midstream infrastructure.
The newly acquired midstream pipelines are expected to strengthen Diversified's capacity to move volumes to higher-value sales points. The company estimates the acquisition will generate $12 million in adjusted EBITDA in 2025, with reserves valued at $55 million PV-10.
Midstream Synergies
The overlapping Appalachian assets align with Diversified’s existing footprint, creating operational efficiencies. The company plans to implement its established field practices to enhance cash margins and operational performance.
Hutson emphasized the acquisition's role in Diversified's strategy to grow its coal mine methane segment. "This bolt-on package demonstrates our ability to leverage existing capabilities to drive growth and expand margins while delivering long-term value to shareholders," he said.
Diversified Energy continues to focus on optimizing acquired assets while pursuing opportunities to expand its midstream and environmental credit revenue streams.
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