Diversified Energy Company Plc has announced a $550 million acquisition of Canvas Energy, a move that deepens its operating footprint in Oklahoma and strengthens its portfolio of producing assets. The transaction brings approximately 23 high-quality producing wells into Diversified’s portfolio, alongside a significant expansion of acreage positions that complement the company’s existing operations in the state.
This deal positions Diversified as a larger player in Oklahoma, an area that has been central to its growth strategy. The acquired assets are described as highly profitable, generating EBITDA margins of about 70 percent and expected to contribute an estimated $155 million of next twelve months Adjusted EBITDA even before synergies are considered. Management expects the combination of operational familiarity, corporate infrastructure, and integration experience to drive meaningful efficiencies and deliver lasting value.
Integration and Cash Flow Strategy
Diversified Energy has built its reputation on its ability to integrate newly acquired assets efficiently and unlock operational savings. The company’s “integration playbook” focuses on leveraging scale, consolidating operations, and optimizing cash flows through disciplined expense management.
By acquiring assets that are both familiar and proximate to its existing Oklahoma base, Diversified gains an advantage in capturing economies of scale. The company sees potential for significant expense reductions, which in turn support its stated focus on enhancing free cash flow. A denser operational footprint is expected to streamline field operations, reduce costs across the board, and strengthen overall efficiency.
Rusty Hutson Jr., Chief Executive Officer of Diversified, emphasized that the transaction is a natural extension of the company’s strategy. “This purchase strengthens Diversified by further expanding our footprint in our Oklahoma operating area with targeted assets that are a perfect fit for increasing our scale, allowing for synergy capture and providing meaningful opportunities for margin enhancement that ultimately will grow and bolster our cash flow,” he said.
Funding and Strategic Partnerships
A key component of the acquisition is the role of Diversified’s financial partnerships. The deal has been supported by Carlyle, which continues to play an important role in funding accretive acquisitions. The collaboration highlights how private equity and capital partnerships are shaping asset consolidation across the U.S. upstream sector.
Hutson highlighted Carlyle’s role in enabling the transaction. “We are excited to leverage our strategic partnership with Carlyle for funding accretive acquisitions and are pleased with the collective team’s collaboration,” he said. “This initial transaction serves as an important milestone in our relationship and we look forward to growing our combined portfolio of high-quality assets.”
The company stressed that the transaction reflects its commitment to disciplined capital allocation and to executing deals that enhance per-share value. In keeping with its established approach, Diversified framed the acquisition as part of a proven track record of acquiring cash-generating energy assets at attractive valuations.
Positioning for Long-Term Growth
For Diversified, the Canvas Energy acquisition is about more than immediate production and cash flow. The deal is positioned as a strategic step in scaling up its Oklahoma operations and further institutionalizing its acquisition model. With EBITDA margins near 70 percent and a strong path toward integration synergies, management believes the assets will deliver sustainable returns over the long term.
Hutson underscored the company’s long-term perspective. “Importantly, this acquisition extends our proven track record of acquiring cash generating energy assets at attractive valuations. We remain committed to our capital allocation strategy and believe the accretive nature of this transaction on per share metrics creates significant long-term value for shareholders.”
As U.S. independents navigate a landscape shaped by consolidation, disciplined spending, and heightened investor scrutiny, deals like this one highlight the continued appetite for scale and operational optimization. By building density in a familiar operating region, Diversified Energy aims to reinforce its position as a steady consolidator of mature, cash-flowing energy assets.
With the Canvas Energy acquisition, Diversified Energy strengthens its Oklahoma presence, deepens its operational efficiencies, and underscores its strategy of delivering shareholder value through targeted, cash-generating acquisitions. The transaction demonstrates how disciplined execution and financial backing can align to capture value in today’s competitive upstream market.
