The proposed transaction would add approximately 68,000 boe/d, 46,000 net Permian acres and an integrated network of production, gathering and water infrastructure.
Published by Allstream Insiders
Allstream Insiders Summary
Diversified Energy Company has signed definitive agreements to acquire Birch Permian Holdings, Inc. and affiliated companies for a gross purchase price of approximately $1.8 billion. Diversified expects the transaction to close during the fourth quarter of 2026, subject to customary closing conditions, including regulatory approvals.
The acquisition would add a concentrated Permian Basin position with approximately 68,000 barrels of oil equivalent per day of current net production, about 46,000 net mineral acres and 500 gross operated wells, equivalent to approximately 480 net wells.
Birch also brings integrated production, gathering and water infrastructure. The company-reported asset package includes 12 primary central production facilities, nine well gathering facilities, more than 60 miles of gathering pipeline, five water-disposal facilities and more than 80 miles of water-disposal and recycling pipeline.
Diversified–Birch Acquisition Overview
| Transaction or asset item | Company-reported detail |
|---|---|
| Buyer | Diversified Energy Company |
| Businesses covered by the agreements | Birch Permian Holdings, Inc. and certain affiliated companies |
| Sellers | Affiliates of Elliott Investment Management L.P. |
| Gross purchase price | Approximately $1.8 billion, subject to customary purchase-price adjustments |
| Expected closing | Fourth quarter of 2026, subject to customary closing conditions and regulatory approvals |
| Current net production | Approximately 68,000 boe/d |
| Permian position | Approximately 46,000 net mineral acres |
| Well count | 500 gross operated wells, equivalent to approximately 480 net wells |
What Permian assets would Diversified acquire?
The transaction would add a predominantly operated portfolio of mature producing assets and associated infrastructure. Diversified describes the portfolio as approximately 96% operated, with an average lease NRI of approximately 77%.
The estimated production mix is approximately:
- 38% oil
- 32% natural gas liquids
- 30% natural gas
Diversified reports that about 75% of the wells are from the 2022 vintage or earlier. The company characterizes Birch as a proved-developed-producing, or PDP, asset base, meaning the acquisition is centered on wells that are already developed and producing rather than an announced greenfield drilling program.
The approximately 68,000-boe/d figure is an estimate based on average daily production for the second quarter of 2026 and estimated Birch production as of July 2026. It is not a production guarantee or a newly added processing-capacity figure.
What production and gathering infrastructure is included?
Birch’s integrated infrastructure covers field production, gathering, processing and water management. Diversified identifies the following assets:
| Infrastructure | Disclosed scale |
|---|---|
| Primary central production facilities | 12 |
| Well gathering facilities | 9 |
| Gathering pipeline | More than 60 miles |
| Central production facility capacity | Up to 345,000 barrels per day of oil and 310 MMcf/d of natural gas |
| Water-disposal facilities | 5 |
| Water-disposal and recycling pipelines | More than 80 miles |
The central-production-facility figures describe available processing capability, not current throughput. They also should not be compared directly with the 68,000-boe/d production estimate because the facility figures measure separate oil and gas handling capacities.
Birch portfolio includes more than 150 permitted EOR locations
Diversified says the Birch portfolio includes enhanced-oil-recovery capabilities and more than 150 permitted EOR locations. The company also reports what it characterizes as encouraging results from initial pilot programs.
The release does not provide a capital budget, development schedule or production target for those EOR locations. The permitted inventory therefore represents potential future activity rather than a commitment to execute all 150 locations.
The acquisition remains subject to closing conditions
The Birch acquisition had not closed as of Diversified’s September 2 announcement. Completion is expected during the fourth quarter, subject to customary conditions that include receipt of regulatory approvals.
Until closing occurs, Diversified should not be described as the owner or operator of the Birch assets. Its expected ownership, production contribution and operational integration remain proposed or anticipated.
Diversified notes that certain operating and reserve information in the announcement was supplied by Birch or the sellers and had not been independently verified by Diversified in all respects.
Carlyle partnership could support additional PDP acquisitions
Separate from the Birch purchase, Diversified and Carlyle agreed to expand their strategic partnership from an original $2 billion framework to a potential $10 billion collaboration. The companies may pursue additional PDP acquisitions over time, subject to mutual agreement and transaction-specific approvals.
The $10 billion figure is not committed spending, a construction budget or the value of an identified acquisition pipeline. It describes the maximum scale of potential future acquisition opportunities the parties may consider.
Allstream perspective: the acquisition adds an operating infrastructure platform
The Birch transaction is primarily the proposed transfer of an existing producing and infrastructure system, not an announcement of a new construction program. Its industrial relevance comes from the scale of the operated wells, central production facilities, gathering network and water-management assets that Diversified would assume.
If the acquisition closes and Diversified authorizes asset-level programs, potential work could include:
- Well servicing, workovers and production optimization
- Evaluation and implementation of enhanced-oil-recovery projects
- Central production facility maintenance and debottlenecking
- Gathering-pipeline inspection, integrity and repair work
- Water-disposal and recycling system operation and maintenance
- Measurement, controls, automation and emissions-monitoring services
These categories are Allstream analysis based on the disclosed producing assets and infrastructure. They are not announced bid packages, solicitations, capital projects or contractor awards.
The next material signals will be regulatory clearance, transaction closing, post-closing operating plans and any project-specific capital, procurement or contractor announcements from Diversified.
