Diversified Energy and Carlyle Enter Strategic Partnership to Invest in Up to $2 Billion of PDP Energy Assets

Rhea-AI Summary

Diversified Energy (NYSE:DEC) and Carlyle (NASDAQ:CG) have announced a strategic partnership to invest up to $2 billion in proved developed producing (PDP) natural gas and oil assets across the United States. Under the agreement, DEC will operate and service the newly acquired assets, while Carlyle will pursue opportunities to securitize these assets.

The partnership combines Carlyle's credit and structuring expertise through their asset-backed finance team with DEC's operating capabilities in acquiring and optimizing long-life oil and gas assets. Carlyle's Asset-Backed Finance group has deployed approximately $8 billion since 2021 and manages about $9 billion in assets as of March 31, 2025.

Positive

• Strategic partnership provides access to up to $2 billion for PDP asset acquisitions
• Enhanced ability to pursue and scale strategic acquisitions in current market conditions
• Partnership with Carlyle ($453B AUM) adds significant financial expertise and resources
• Opportunity to leverage securitization for long-term financing

Negative

• Increased dependency on partnership success for future growth
• Potential risks associated with asset securitization strategy
• Subject to market conditions and availability of suitable acquisition targets

Insights

Energy Industry Analyst

DEC's $2B partnership with Carlyle enhances acquisition capacity in PDP assets, strengthening their consolidation strategy and operational scale.

This strategic partnership between Diversified Energy and Carlyle represents a significant enhancement to DEC's consolidation strategy in the PDP (proved developed producing) asset space. With access to up to $2 billion in investment capital, DEC substantially increases its firepower in what management describes as a "highly compelling environment for PDP asset consolidation."

The arrangement cleverly leverages each partner's strengths – Diversified contributes its operational expertise in managing mature oil and gas assets, while Carlyle brings deep financial resources and securitization capabilities. This structure allows DEC to expand its operational footprint without necessarily assuming the full capital burden on its balance sheet.

What's particularly notable is the focus on PDP assets – these are existing producing wells with proven reserves rather than exploratory or development projects. This aligns perfectly with DEC's established business model of acquiring mature, long-life assets and optimizing their performance and cash flow. The company avoids the higher-risk aspects of energy investment (exploration, development) while focusing on steady cash generation.

The partnership comes amid an industry-wide trend of consolidation in mature producing assets, as larger operators seek growth and smaller producers face capital constraints. By positioning themselves as consolidators with significant financial backing, DEC can potentially cherry-pick attractive assets across multiple U.S. basins, further diversifying their production base while applying their operational model at greater scale.

The mention of securitization is also significant, indicating Carlyle's intention to package these energy assets into financial products for institutional investors – potentially creating a more efficient funding mechanism for future acquisitions while providing Carlyle's investors with exposure to energy infrastructure returns.

Financial Analyst

DEC's $2B Carlyle partnership significantly enhances acquisition capacity without direct balance sheet impact, strengthening cash flow potential.

This partnership represents a strategic capital solution that materially enhances DEC's acquisition capacity without directly impacting their balance sheet. By structuring the deal where Carlyle provides financial backing while DEC serves as operator/servicer, the company gains the ability to consolidate additional PDP assets while potentially keeping leverage metrics in check – critical for a company whose business model depends on continuous acquisition of mature assets.

The arrangement effectively creates an asset management revenue stream for DEC through the operating and servicing fees they'll collect, diversifying income sources beyond direct ownership. This parallels models seen in other sectors where companies separate asset ownership from operational management to optimize returns on capital.

The securitization component is particularly notable. As assets are acquired, Carlyle intends to securitize them, creating what they describe as "long-term, resilient financing." This mechanism allows for efficient recycling of capital, potentially enabling the partnership to exceed the headline $2 billion figure over time as returns from earlier investments fund new acquisitions.

For DEC shareholders, this structure potentially delivers growth without proportional capital demands. The company gains scale benefits across its operational platform while earning fee income, enhancing the efficiency of its business model. The partnership timing appears opportunistic, coming when many energy producers are reevaluating their portfolios, potentially creating a buyer's market for the right assets.

Notably, Carlyle ABF has deployed approximately $8 billion since 2021 with $9 billion in assets under management, suggesting this partnership represents a significant allocation of their investment capacity, indicating strong institutional confidence in both the asset class and DEC's operational capabilities.

BIRMINGHAM, Ala. and NEW YORK, June 23, 2025 (GLOBE NEWSWIRE) -- Diversified Energy Company PLC (LSE: DEC; NYSE: DEC) ("Diversified," or "DEC"), a leading publicly traded natural gas and liquids production company, and global investment firm Carlyle (NASDAQ: CG) have today announced a strategic partnership to invest in up to $2 billion in existing proved developed producing (PDP) natural gas and oil assets across the United States.

This exclusive partnership will combine Carlyle’s deep credit and structuring expertise, led by Carlyle’s asset-backed finance (ABF) team, with Diversified’s market-leading operating capabilities and differentiated business model of acquiring and optimizing portfolios of existing long-life oil and gas assets to generate reliable production and consistent cash flow.

The partnership enhances Diversified’s access to capital in an attractive acquisition market. Under the terms of the agreement, Diversified will serve as the operator and servicer of the newly acquired assets. As investments occur, Carlyle intends to pursue opportunities to securitize these assets, seeking to unlock long-term, resilient financing for this critical segment of the nation’s energy infrastructure.

“We are excited to partner with Carlyle, a leader in the asset-backed finance space. This arrangement significantly enhances our ability to pursue and scale strategic acquisitions in what we believe is a highly compelling environment for PDP asset consolidation,” said Rusty Hutson, Jr., CEO of Diversified Energy. “We continue to see a robust pipeline of opportunities and the growing need for operational scale and efficiency. With Carlyle’s support, we are well-positioned to capitalize on these trends while aiming to generate sustainable cash flow and value for our shareholders.”

“Diversified is a leading operator of long-life energy assets and a pioneer in bringing PDP securitizations to institutional markets,” said Akhil Bansal, Head of Asset-Backed Finance at Carlyle. “We are excited to bring institutional capital to high-quality, cash-yielding energy assets that are core to US domestic energy production and energy security. This partnership underscores Carlyle’s ability to originate differentiated investment opportunities through proprietary sourcing channels and seek access to stable, yield-oriented energy exposure.”

Carlyle Asset-Backed Finance (“Carlyle ABF”) is a group within Carlyle’s Global Credit platform focused on private fixed income and asset-backed investments. The highly experienced team leverages the knowledge, sourcing, structuring, and breadth of the entire Carlyle investment platform to help deliver tailored asset-focused financing solutions to businesses, specialty finance companies, banks, asset managers, and other originators and owners of diversified pools of assets. Carlyle ABF has deployed approximately $8 billion since 2021 and has approximately $9 billion in assets under management as of March 31, 2025.

About Diversified Energy Company PLC
Diversified is a leading publicly traded energy company focused on natural gas and liquids production, transport, marketing, and well retirement. Through our differentiated strategy, we acquire existing, long-life assets and invest in them to improve environmental and operational performance until retiring those assets in a safe and environmentally secure manner. Recognized by ratings agencies and organizations for our sustainability leadership, this solutions-oriented, stewardship approach makes Diversified the Right Company at the Right Time to responsibly produce energy, deliver reliable free cash flow, and generate shareholder value.

About Carlyle
Carlyle (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across its business and conducts its operations through three business segments: Global Private Equity, Global Credit, and Carlyle AlpInvest. With $453 billion of assets under management as of March 31, 2025, Carlyle’s purpose is to invest wisely and create value on behalf of its investors, portfolio companies, and the communities in which we live and invest. Carlyle employs more than 2,300 people in 29 offices across four continents. Further information is available at www.carlyle.com. Follow Carlyle on X @OneCarlyle and LinkedIn at The Carlyle Group

Media Contacts

Diversified Energy Company PLC
Doug Kris
Senior Vice President, Investor Relations & Corporate Communications
(973) 856 2757
dkris@dgoc.com

Carlyle
Kristen Ashton
Corporate Communications
(212) 813-4763
Kristen.ashton@carlyle.com

Forward-Looking Statements
This announcement contains forward-looking statements, including statements regarding the expected results of the strategic partnership and future results, which speak only as of the date of this release. They reflect Diversified's current expectations and are based on assumptions and subject to risks and uncertainties that may cause actual results to differ materially, including the factors described in Diversified’s filings with the U.S. Securities and Exchange Commission. 

FAQ

What is the value of the partnership between Diversified Energy and Carlyle?

The partnership allows for investments of up to $2 billion in proved developed producing (PDP) natural gas and oil assets across the United States.

What is DEC's role in the Carlyle partnership agreement?

DEC will serve as the operator and servicer of the newly acquired assets, leveraging their expertise in operating and optimizing long-life oil and gas assets.

How much assets under management does Carlyle have as of March 2025?

Carlyle has $453 billion of assets under management as of March 31, 2025, with operations across three business segments: Global Private Equity, Global Credit, and Carlyle AlpInvest.

What is Carlyle's Asset-Backed Finance (ABF) track record?

Carlyle's ABF group has deployed approximately $8 billion since 2021 and manages about $9 billion in assets as of March 31, 2025.

How will this partnership benefit DEC shareholders?

The partnership aims to generate sustainable cash flow and value for shareholders by enhancing DEC's ability to pursue strategic acquisitions in a compelling environment for PDP asset consolidation.