Diversified Energy Buys Birch in $1.8B Permian Deal

Diversified Energy Company has agreed to acquire Permian Basin producer Birch Permian Holdings for approximately $1.8 billion in the largest transaction in the company's history, expanding its footprint into a major U.S. oil and gas region. The cash-and-debt agreement is projected to immediately boost Diversified's group production by roughly 35% and increase adjusted EBITDA by about 55%, marking a shift for an operator historically known for acquiring mature, declining conventional wells in Appalachia and other established onshore basins.

"This transaction marks an important milestone in our development, establishing Diversified as a scaled operator in the Permian Basin while significantly enhancing our financial and operational profile," said Rusty Hutson Jr., Chairman and Chief Executive of Diversified Energy.

Production and Asset Profile

Under the terms of the agreement, Birch brings a portfolio of producing assets to Diversified. The acquired operations include approximately 68,000 barrels of oil equivalent per day of net production and an estimated $548 million of annualized adjusted EBITDA.

The asset base features 480 net wells and around 46,000 net mineral acres located in the Permian Basin, an oil-producing region in the United States. This addition introduces liquid hydrocarbons to a company whose asset mix has traditionally leaned heavily toward natural gas.

Financing and Carlyle Partnership

Diversified plans to fund the acquisition primarily through an approximately $1.5 billion asset-backed securitization arranged through private equity firm Carlyle. The remaining balance will be covered using existing liquidity and customary financing sources.

Alongside the acquisition financing, Diversified and Carlyle have expanded their existing strategic partnership. The two firms have scaled their collaboration from an initial $2 billion framework to potentially pursue as much as $10 billion of future proved-developed-producing asset acquisitions, detailing a blueprint for capital-backed growth.

What Happens Next?

The transaction is subject to customary closing conditions, including regulatory approvals. Both companies expect the acquisition to reach final completion during the fourth quarter of 2026.

For Diversified, the deal represents a continuation of consolidation trends sweeping the North American upstream energy sector. Mid-sized producers are increasingly seeking scale to lower per-unit operating costs, secure acreage, and access debt capital markets through structured financial vehicles like asset-backed securitizations.