Diversified Strikes $245 Million Deal for East Texas Gas Assets

Diversified Energy has agreed to acquire $245 million in low-decline East Texas natural gas assets from Sheridan Production, adding 62 million cubic feet equivalent per day and 397 billion cubic feet equivalent of reserves.

(P&GJ) — Diversified Energy Company has signed a purchase and sale agreement to acquire high-working interest natural gas properties and related facilities in East Texas from Sheridan Production for $245 million.

The transaction, expected to close in the second quarter of 2026, will be funded through existing liquidity under Diversified’s senior secured bank facility, subject to customary closing conditions.

The assets are contiguous with Diversified’s existing East Texas footprint and are expected to add approximately 62 million cubic feet equivalent per day of estimated 2026 net production. The properties carry an estimated 397 billion cubic feet equivalent of proved developed producing (PDP) reserves with a PV-10 value of approximately $310 million.

Annual production declines are estimated at approximately 6%, in line with Diversified’s focus on acquiring low-decline, cash-generating assets. The company estimates next twelve-month EBITDA of roughly $52 million.

The acquisition includes approximately 75,000 acres of leasehold in East Texas. Diversified said the proximity to its existing operations provides potential operating efficiencies and scale benefits.

Commenting on the Acquisition, CEO Rusty Hutson, Jr. said:

"The target assets are a perfect fit with our existing East Texas operations and offer meaningful opportunities for material synergies upon completion of the Acquisition. The accretive transaction adds scale to our East Texas regional footprint and remains consistent with our strategy to focus on acquiring high-quality, low-decline producing assets at attractive valuations. These assets will benefit from our Smarter Asset Management approach to improve production, enhance margins, and grow free cash flow. Additionally, we anticipate that incremental cash flow can be generated from our Portfolio Optimization Programs. Our Company has a proven, demonstrated track record of delivering value to shareholders from our strategy of acquiring, operating, and optimizing established cash-generating energy assets."

The net purchase price represents an estimated PV-15 valuation based on NYMEX strip pricing assumptions as of early February 2026.