(Alliance News) - Diversified Energy Co PLC on Tuesday said it has closed an "innovative" transaction, where it has sold part of its stake in Appalachia.

Diversified, the largest owner of US oil and gas wells in the country, said the transaction has allowed the company to "unlock additional value from its current asset base at an attractive multiple while further enhancing liquidity and reducing leverage".

Under the agreement, Diversified has sold producing assets in Appalachia to a special purpose vehicle. Diversified will retain a 20% minority interest and operatorship of the assets.

The transaction has generated proceeds to Diversified of approximately USD200 million, comprised of an asset backed securitization placed at the SPV and a sale of an 80% equity interest in the SPV for approximately USD30 million.

Diversified noted that proceeds were used to repay outstanding borrowings under the company's sustainability-linked loan, as well as general corporate purposes.

Chief Executive Rusty Hutson said: "This latest transaction further demonstrates the attractiveness of Diversified's asset base that provides reliable production and consistency of cash flows. At an attractive multiple, this transaction has provided a path for the company to unlock additional value from our assets, reduce our outstanding debt, and enhance our liquidity."

Shares in Diversified Energy were up 4.6% to 1,166.54 pence each in London on Tuesday.

By Sophie Rose, Alliance News senior reporter

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