Diversified Announces Accretive Acquisition of Birch

Diversified Energy (NYSE:DEC) is acquiring Birch for $1.8B, increasing its Permian production to 77,000 barrels of oil equivalent per day and adjusted EBITDA to $612M. The deal is expected to boost overall production by 35% and adjusted EBITDA by 55%, with financing from asset-backed securities and available liquidity. The acquisition is projected to double free cash flow generation and deleverage the company by $2B over four years, according to the company.

Diversified Energy (DEC) has underperformed over 5 years, but its low P/E ratio (2.4x) and high value score suggest undervaluation. The $1.8B Birch acquisition may boost production and cash flow but introduces risks. The stock's valuation gap depends on market perception of the deal and execution.

Diversified Energy (DEC) agreed to acquire Birch Permian for $1.8B, its largest deal in 25 years. The transaction, expected to close in Q4 2026, expands DEC's operations into the Permian Basin, adding 68,000 boe/d of production and $548M in annualized EBITDA. Funding includes $1.5B in asset-backed securities structured with Carlyle, aiming to limit equity dilution. DEC's CEO called Birch a high-quality asset, positioning the company as a scaled operator in the Permian.

Diversified Energy (LON:DEC, NYSE:DEC) is in early talks to acquire Birch Resources, potentially valuing it at over $1.7B. This follows its $1.28B acquisition of Maverick Natural Resources in 2025, expanding its Permian Basin position. Diversified has completed 35 acquisitions since its 2017 IPO, totaling over $7B in value.

Diversified Energy (LSE:DEC, NYSE:DEC) said it will shift from acquisition-led growth to drilling its own wells, launching a one-rig operated development programme in Oklahoma in 2H, spending $35m to $50m. It expects drilling to materially affect 2027 production. Q2 adjusted EBITDA fell 14% to $240m; guidance calls for $960m-$1.01b adjusted earnings and ~$440m free cash flow.

Diversified Energy (LSE:DEC, NYSE:DEC) said it will begin a one-rig operated development drilling programme in Oklahoma in 2H 2026, spending $35m to $50m, with a material production impact in 2027. Q2 adjusted EBITDA fell 14% to $240m as margins narrowed. Guidance: adjusted earnings $960m to $1.01b and adjusted free cash flow about $440m.