Diversified to buy Permian's Birch for $1.8B, expands Carlyle deal to $10B
What's the deal? Diversified Energy CompanyDealroom has a profile for this one. Try Dealroom → has signed definitive agreements to acquire Birch Permian HoldingsDealroom has a profile for this one. Try Dealroom → and affiliated companies for roughly $1.8 billion from affiliates of Elliott Investment ManagementDealroom has a profile for this one. Try Dealroom →. Birch is an independent oil and gas producer operating in the Permian Basin.
What's the endgame? The deal adds a scaled, operated position of proved developed producing (PDP) assets in the US's most productive oil basin. Diversified expects the acquisition to lift its production by about 35% and adjusted EBITDA by about 55%.
Pro forma gross volumes under Diversified's operated control are expected to reach roughly 2.5 Bcfepd (~1.6 Bcfepd net), reinforcing what the company calls its vertically integrated, four-basin PDP operating model.
How is it funded? Diversified plans to fund the purchase primarily through an asset-backed securitisation of about $1.5 billion via its partnership with CarlyleDealroom has a profile for this one. Try Dealroom →'s Asset-Backed Finance and Capital Markets teams, plus available liquidity under its revolving credit facility.
Why now? Alongside the deal, Carlyle and Diversified agreed to expand their strategic partnership from an original $2 billion framework to up to $10 billion of potential PDP acquisition opportunities over time, subject to mutual agreement and deal-specific approvals.
The company framed the wider partnership as evidence of the opportunity in PDP consolidation. The expansion is "a testament to the attractive and broad opportunity set in PDP consolidation," Diversified said.
What's next? Diversified expects to close during the fourth quarter of 2026, subject to customary conditions. The board determined the acquisition to be in shareholders' best interests.
The signal: Diversified is betting on buying up mature, low-decline producing assets rather than drilling new ones. As Permian output matures, it is positioning itself as a consolidator of existing wells — backed by Carlyle capital designed to keep the acquisitions coming.
Read more: stockwatch.com
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