Diversified Energy (DEC) M&A announcement summary

Deal rationale and strategic fit

• Acquisition of Birch Resources for $1.8 billion is the largest in company history, creating a scaled, vertically integrated position in the Permian Basin and aligning with a 25-year strategy of acquiring established, low-decline producing assets for durable cash flow.

• Expands operational footprint in the Midland and Permian Basins, establishing a core, scalable anchor for future consolidation and growth opportunities.

• Birch's assets are almost entirely PDP, low decline, and generate predictable cash flow, fitting the company's operational model and supporting long-term commercial uplift.

• Partnership with Carlyle enables access to up to $10 billion in future PDP acquisition opportunities.

• Establishes a premier operator position in the Permian, enhancing diversification, scale, and optionality for future acquisitions.

Financial terms and conditions

• Purchase price is approximately $1.8 billion, with a PV-14 valuation and 3.3x EBITDA multiple, subject to customary adjustments and a $50 million break fee.

• Funded predominantly through asset-backed securities (ABS) facilitated by Carlyle and available liquidity under a senior secured bank facility.

• Transaction is on-balance sheet, with full ownership and benefit of production.

• Carlyle partnership ABS funding capacity increased to $10 billion for future PDP opportunities.

• Net purchase price subject to customary adjustments and effective date cash flows.

Synergies and expected cost savings

• Operational overlap with existing Texas assets and integrated infrastructure enables economies of scale, margin enhancement, and immediate synergies.

• Integration into the OneDEC platform and consolidation of corporate and technology functions expected to drive expense reductions.

• Smarter Asset Management and Portfolio Optimization Programs will be applied to extract further efficiencies and cash flow.

• Existing low operating costs (~$5.70/BOE) and 81% adjusted EBITDA margins provide a strong base for further margin expansion.

• Enhanced oil recovery (EOR) capabilities offer potential for extended asset lives and incremental returns.