October 11, 2021
Willkie represented Oaktree in the transactions.
In connection with the previously announced Strategic Partnership Agreement, Diversified Energy Company PLC (LSE:DEC) (“Diversified”) and funds managed by Oaktree Capital Management (“Oaktree”) have entered into conditional agreements to jointly acquire upstream assets, field infrastructure, equipment and facilities within its Central Region from Tapstone Energy Holdings, LLC (“Tapstone”) and its related party - KL CHK SPV LLC (“KL”). Total gross consideration, inclusive of Oaktree's investment, is $419 million (approximately $366 million net of customary purchase adjustments to the August 1, 2021 effective date).
As part of the co-investment, Oaktree will acquire 48.75% of the working interest in Tapstone’s and KL’s collective assets for approximately $192 million, representing approximately 50% of the net total consideration after customary purchase price adjustments and reflective of Oaktree’s 2.5% initial promote to Diversified under the Strategic Partnership Agreement. The transactions are anticipated to close in early December upon completion of customary due diligence.
This acquisition, which represents Oaktree’s third joint acquisition with Diversified since May of this year and a deployment by Oaktree of an aggregate amount of approximately $370 million of its $1 billion commitment, is strategically aligned with Oaktree’s prior joint acquisitions with Diversified of assets from Tanos Energy Holdings and Indigo Minerals. Willkie previously represented Oaktree in each of these prior joint acquisition transactions with Diversified, as well as in connection with the previously announced $2 billion strategic partnership between Oaktree and Diversified to jointly identify and acquire producing oil and gas assets in the continental US.
Oaktree is a leader among global investment managers specializing in alternative investments, with $156 billion in assets under management as of June 30, 2021. Diversified Energy Company PLC is an independent energy company engaged in the production, marketing and transportation of primarily natural gas related to its synergistic US onshore upstream and midstream assets.
The Willkie team was led by partners Michael Piazza and David Aaronson and included partners Jay Hughes, Robert Jacobson and Jesse Myers.
