Private Equity | Deals - Acquisition, Mergers, Divestitures | Capital Markets

Diversified Energy to Acquire Canvas Energy for $550MM

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   |    Wednesday,September 10,2025

Diversified Energy is expanding its Oklahoma footprint with a sizeable bolt-on acquisition that management says will meaningfully increase cash flow and deepen operating density in the state.

On September 8, 2025, Diversified Energy Company PLC (LSE/NYSE: DEC) announced it has entered into an agreement to acquire Canvas Energy for total consideration of approximately $550 million. The acquisition adds operated producing properties and adjacent acreage in Central Oklahoma, concentrated in Major, Kingfisher and Canadian counties, and includes ~23 high-quality wells that have been turned to sales in the last 12 months.

Diversified said the transaction strengthens its leadership position in Oklahoma and is expected to be accretive on key metrics, delivering an estimated ~18% increase in Adjusted EBITDA and ~29% increase in free cash flow, driven by a ~13% increase in production. The acquired assets are expected to contribute approximately $155 million of NTM Adjusted EBITDA before synergies, supported by estimated ~70% EBITDA margins.

Strategically, the deal is built around operational overlap. Diversified noted that the combined position will span approximately ~1.6 million net acres in Central Oklahoma, creating opportunities for cost savings, asset optimization and improved margins through its integration and operating playbook. The acquisition also includes undeveloped acreage and development locations that Diversified said provide additional optionality for portfolio optimization.

Financing includes a mix of equity and structured debt. Diversified expects to fund the acquisition through the issuance of ~3.4 million Diversified shares to the seller, a privately rated, bilaterally structured asset-backed securitization originated by Carlyle of up to $400 million supported by the acquired assets, and the remainder in cash from existing liquidity. The transaction is expected to close in 4Q 2025, subject to customary closing conditions and purchase price adjustments.

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