Diversified Energy to Acquire Permian Producer Birch Permian Holdings for $1.8 Billion

Charles Kennedy Wed, September 2, 2026 at 8:15 PM PDT 3 min read

Diversified Energy has agreed to acquire Permian Basin producer Birch Permian Holdings and affiliated companies for approximately $1.8 billion, marking the largest acquisition in Diversified's 25-year history.

Key Transaction Details

• The deal will add approximately 68,000 barrels of oil equivalent per day of net production, based on Birch's estimated July 2026 output.
• Diversified expects the transaction to increase its production by roughly 35% and adjusted EBITDA by about 55%.
• Birch's production mix is approximately 38% oil, 32% natural gas liquids, and 30% natural gas.
• The company holds around 46,000 net mineral acres in the Permian and 480 net wells, with roughly 96% of production operated.
• About three-quarters of the wells date from 2022 or earlier.

Strategic Rationale

The acquisition represents a significant expansion of Diversified's Permian operations and aligns with its strategy of acquiring mature, producing oil and gas properties rather than relying primarily on new drilling for growth.

Financial Highlights

• Birch is expected to contribute approximately $548 million in annualized adjusted EBITDA, based on August 17 strip pricing, including general and administrative expenses and hedges.
• Diversified estimates the acquisition multiple at approximately 3.3 times adjusted EBITDA.

Infrastructure and Development Potential

The acquired assets include gathering, processing, and water infrastructure:

• 12 primary central production facilities
• 9 well gathering facilities
• More than 60 miles of gathering pipelines
• Over 150 permitted enhanced oil recovery locations, potentially offering another avenue to extend production from the acquired properties

Financing and Partnership Expansion

Diversified plans to finance most of the purchase through approximately $1.5 billion of asset-backed securitization financing structured through Carlyle, supplemented by other financing sources, including liquidity under its revolving credit facility.

The companies are also substantially expanding their broader financing partnership. Diversified and Carlyle have agreed to pursue as much as $10 billion of potential PDP acquisition opportunities over time, up from their previous $2 billion framework. Individual transactions remain subject to mutual agreement and their own approvals, meaning the $10 billion figure represents potential acquisition capacity rather than committed spending.

Post-Acquisition Outlook

If completed, the Birch transaction would give Diversified approximately 2.5 Bcfe per day of gross volumes under its operated control, with around 1.6 Bcfe per day net.

Timeline and Conditions

The acquisition is expected to close in the fourth quarter of 2026, subject to regulatory approvals and other customary closing conditions. The agreement includes a $50 million break fee.

By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com

• OPEC+ Set to Hold Oil Output Steady as Iran War Disrupts Supply
• Chevron Bets $7 Billion on Venezuela Oil Expansion
• Russia Doubles Dark Fleet to Ship LNG to Asia

Oilprice Intelligence brings you the signals before they become front-page news. This is the same expert analysis read by veteran traders and political advisors. Get it free, twice a week, and you'll always know why the market is moving before everyone else.

You get the geopolitical intelligence, the hidden inventory data, and the market whispers that move billions — and we'll send you $389 in premium energy intelligence, on us, just for subscribing. Join 400,000+ readers today. Get access immediately by clicking here.