Birmingham, Alabama-based Diversified Energy announced Sept. 2 that is has acquired Birch Permian Holdings from Elliott Investment Management for about $1.8 billion.
Ben Sullivan is the chief legal and risk officer at Diversified Energy. Gibson Dunn advised the company with a team led by Rahul Vashi and Tull Florey in Houston.
Akin Gump Strauss Hauer & Feld advised Houston-based Birch Permian Holdings, and a Birch special committee hired Hogan Lovells as its outside counsel.
Diversified Energy said the acquired assets include about 46,000 mineral acres in the Permian Basin with nearly 500 wells and an integrated midstream gathering, processing and water infrastructure that has a dozen central production facilities, nine well gathering facilities and more than 60 miles of gathering pipeline. The oil and gas company also said the deal includes five water disposal facilities and over 80 miles of water disposal and recycling pipeline.
“Birch has assembled one of the highest-quality operated asset positions, combining a concentrated footprint in the core of the Permian, substantial production scale, integrated infrastructure and a track record of delivering predictable, high-margin cash flows,” Diversified CEO Rusty Hutson Jr. said in a news release. “These assets align exceptionally well with our disciplined approach to acquiring and optimizing long-life energy assets.”
Hutson said the deal establishes Diversified “as a scaled operator in the nation’s most important oil-producing basin.”
Diversified Energy plans to fund the acquisition through an asset-backed securitization of about $1.5 billion originated by Carlyle and existing liquidity under a revolving credit facility. TCG Capital Markets acted as sole placement agent for the ABS, and Carlyle used Paul Hastings as outside counsel.
Gibson Dunn lawyers who advised Diversified Energy include Steve Wright, Michael Q. Cannon, Josiah Bethards and Austin Morris in Dallas with Mike Sellner, Cynthia Mabry and Sarah Dyer in Houston, and Kristen Limarzi in Washington, D.C., and Bradley Smith in New York.