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 operational 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 backing and expertise
• Opportunity to leverage Carlyle's securitization capabilities for long-term financing

Negative

• Potential risks associated with asset securitization and market conditions
• Success dependent on finding suitable acquisition targets in competitive market

Insights

Energy Sector Investment Strategist

DEC's $2B partnership with Carlyle strengthens acquisition capacity in PDP assets, enhancing cash flow potential amid industry consolidation.

Diversified Energy's newly announced $2 billion strategic partnership with Carlyle represents a significant enhancement to DEC's acquisition capacity in the PDP (proved developed producing) asset space. This exclusive arrangement cleverly addresses two critical market dynamics: the growing consolidation opportunity in mature energy assets and the challenge of capital access for expansive acquisitions.

The partnership structure shows sophistication in how DEC plans to scale its core business model. By serving as operator and servicer while Carlyle provides financial backing and securitization expertise, DEC gains acquisition firepower without the full balance sheet burden. This amplifies DEC's distinctive business approach of optimizing existing long-life assets for reliable production and consistent cash flow.

What makes this particularly valuable is the timing. The industry is experiencing heightened consolidation pressure among PDP assets, which typically deliver predictable production profiles with lower geological risk than new drilling programs. The deal potentially positions DEC to capitalize on acquisition opportunities that might otherwise exceed their independent capacity.

Carlyle's intent to securitize these assets adds another layer of financial engineering that could provide more efficient capital structures for these acquisitions. This securitization approach has proven effective in similar contexts, creating potential for enhanced returns on invested capital compared to traditional acquisition financing.

For DEC shareholders, this partnership signals a pathway to accelerated growth within the company's established operational framework, without dramatically altering its risk profile or core competencies. The partnership fundamentally strengthens DEC's ability to execute its established strategy at greater scale in what appears to be an increasingly favorable market environment for PDP asset consolidation.

BIRMINGHAM, Ala. and NEW YORK, June 24, 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 enables 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 partnership with Carlyle?

Diversified Energy 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 manages $453 billion in assets under management as of March 31, 2025, with operations across three business segments.

What is Carlyle's Asset-Backed Finance (ABF) team's recent investment history?

Carlyle's ABF team 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 through enhanced acquisition capabilities and operational efficiency in a compelling market environment.