Diversified Energy (DEC.US) is close to acquiring Birch for $1.7 billion as the oil and gas merger and acquisition wave continues to heat up.

According to reports, Diversified Energy (DEC.US) is in advanced negotiations to acquire Birch Resources, an oil and gas company supported by Elliott Investment Management, with the transaction amount expected to exceed $1.7 billion in cash. Birch Resources holds core assets in the Permian Basin, the largest oil field in the United States. Sources indicate that the deal could be formally announced within weeks, with Diversified Energy positioned to win the bidding process. This transaction would bring substantial returns to Elliott. In 2018, Elliott, along with other investors, acquired Birch's assets from Los Angeles-based Breitburn Energy Partners. Breitburn went bankrupt during the oil price downturn, and Elliott, as a creditor, utilized that position to gain control of the core assets in the Permian Basin along with other investors. The negotiations come at a time when oil and gas prices are surging, prompting a wave of acquisitions in the industry. For Diversified Energy, if the deal goes through, it will further solidify its presence in the Permian Basin. Last year, the company acquired Maverick Natural Resources for $1.3 billion, and in May this year, it reached a $1.2 billion agreement with Carlyle Group Inc. to acquire Camino Natural Resources, which operates in Oklahoma. This transaction will also become the latest case in a series of oil and gas mergers and acquisitions. In July of this year, Magnolia Oil & Gas (MGY.US) agreed to acquire WildFire Energy LLC for about $4.1 billion (including debt); Matador Resources (MTDR.US) agreed to acquire Permian Basin assets from EnCap Investments LP for approximately $1.3 billion.