Diversified Energy Co. plc will continue its Lower 48 expansion, this time into the Midcontinent, through an acquisition of natural gas-weighted Oklahoma assets from Tapstone Energy Holdings LLC.

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Diversified, in partnership with Oaktree Capital Management LP, has entered into conditional agreements to acquire upstream assets, field infrastructure, equipment and facilities in Oklahoma from Tapstone for total gross consideration of $419 million. Oaktree would acquire a 48.75% non-operated working interest in the assets for $192 million, with Diversified holding a 51.25% operated interest.

Formerly an Appalachian Basin pure-play, Diversified this year expanded into the Haynesville and Barnett shales through acquisitions from Indigo Minerals LLC and Blackbeard Operating LLC, respectively. Oaktree was a co-investor in each of those transactions as well.

Through the latest transaction, Diversified will acquire roughly 660 net operated wells that are currently producing about 12,000 boe/d or 72 MMcfe/d, with an 80% natural gas and natural gas liquids (NGL) cut.

“Our enlarged regional footprint strengthens our portfolio with additional high-quality assets and added scale to drive synergies,” said Diversified CEO Rusty Hutson Jr. 

He added, “Replicating our success in Appalachia, we have quickly established ourselves as a significant operator in the Central Region, which positions us for additional growth.”

The transaction expands Diversified’s footprint “into the well-established, operator-fragmented Midcontinent producing area that broadens the company’s consolidation opportunities,” the company said.

Management said that as with the broader central region of the Lower 48, “the Midcontinent also benefits from a constructive regulatory environment,” and aligns with Diversified’s environmental, social and governance strategic initiatives.

“Diversified’s expansion into the Midcontinent Producing area is a natural next step in further consolidating the Central Region and represents an entry into an established and well-developed area with strong economic fundamentals including high cash margins reflective of favorable takeaway pricing and competitive cost structure,” management said.

Diversified added that the assets’ production-weighted average well age of about 12 years “complements the company’s target asset profile of mature, long-life and low-terminal decline wells.

“Following the acquisition, the company estimates its consolidated corporate decline will approximate a peer-leading 9%.”

Diversified will fund its portion of the net cash consideration entirely with cash on hand and debt financing.

Diversified and Oaktree said they expect to close the transaction in early December upon completing customary diligence.