Diversified Energy Co. agreed to acquire oil and gas producer Birch Resources in a deal valued at $1.8 billion, according to an announcement dated Sept. 2. The acquisition expands Diversified Energy's upstream portfolio in the Permian Basin, where Birch produces approximately 68,000 barrels of oil equivalent per day.
Birch is backed by Elliott Investment Management, the activist and growth-focused investment firm. The deal is expected to close in the fourth quarter of 2026. Diversified Energy characterized the transaction as accretive to per-unit cash flow.
Diversified Energy is a publicly traded limited partnership focused on onshore conventional oil and natural gas production. The company operates in mature, cash-generative basins and manages assets with long reserve lives. Birch's Permian production adds to Diversified Energy's existing portfolio and represents a material scale-up in the basin for the acquirer.
The transaction follows a period of consolidation across the onshore oil sector, where larger producers have acquired smaller rivals to secure lower-cost reserves and extend reserve replacement ratios. Deal activity in the space has accelerated as commodity prices stabilized and debt markets reopened for energy borrowers in mid-2026.
The $1.8 billion valuation implies a multiple of roughly 27 times 68,000 barrels of daily production, a figure within the range of Permian Basin transactions completed over the prior 12 months. Birch's reserve base and production profile made it an attractive acquisition target for an operator seeking to consolidate operations in a single basin.
Diversified Energy's purchase of Birch marks one of the largest pure upstream acquisitions announced in the third quarter of 2026. The deal size and basin focus position it as a material consolidation play in a period when larger independent producers are pursuing bolt-on acquisitions rather than transformational deals. The close in Q4 will depend on standard regulatory and third-party approvals.
The filing or formal completion notice from Diversified Energy will confirm close conditions and any final adjustments to the purchase price.
