SCHEDULE 13D: EIG Entities Disclose Significant Stake in Diversified Energy Co PLC Following Maverick Merger and Recent Share Sale

EIG Asset Management and its affiliated funds have filed a Schedule 13D, revealing their collective beneficial ownership of 18.0% of Diversified Energy Co PLC's ordinary shares following the closing of the Maverick Natural Resources merger and a subsequent block trade.

Summary

• EIG Asset Management, through various affiliated funds and entities (collectively, the "Reporting Persons"), has filed a Schedule 13D with the SEC regarding their beneficial ownership in Diversified Energy Co PLC.
• The filing indicates that the Reporting Persons collectively beneficially own 14,330,718 ordinary shares of Diversified Energy Co PLC, representing 18.0% of the company's outstanding shares as of May 9, 2025.
• This significant stake was primarily acquired on March 14, 2025, upon the closing of the merger between Diversified Energy Company plc's subsidiary, Remington Merger Sub, LLC, and Maverick Natural Resources, LLC.
• As part of the merger consideration, the Reporting Persons received 14,330,718 ordinary shares of Diversified Energy Co PLC in exchange for their interests in Maverick Natural Resources, in addition to certain cash consideration.
• Prior to the merger closing, the Reporting Persons already owned an aggregate of 1,584,689 ordinary shares of Diversified Energy Co PLC.
• In connection with the merger, the Reporting Persons entered into a Registration Rights Agreement, granting them customary registration rights for the resale of their shares, and agreeing to a lock-up period for the EIG Merger Shares: one-third until September 14, 2025, another third until December 14, 2025, and the final third until March 14, 2026.
• EIG Management also entered into a Relationship Agreement with Diversified Energy Co PLC, which grants EIG Management the right to nominate two directors if their beneficial ownership is at least 20% and one director if it is at least 10%.
• On May 27, 2025, the Reporting Persons sold 1,584,689 ordinary shares in an unregistered block trade at a price of $13.73 per share; the reported beneficial ownership reflects the effect of this sale.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While there was a partial divestment via a block trade, the overall context is EIG's significant strategic investment in Diversified Energy Co PLC through a merger, coupled with board representation rights. This indicates a long-term commitment and potential for strategic influence, which is generally positive, though the block trade introduces a slight negative nuance.

Positives

• The merger with Maverick Natural Resources, which resulted in EIG's significant equity stake, suggests a strategic alignment and potential for value creation for Diversified Energy Co PLC.
• EIG's continued substantial ownership (18.0%) indicates a vested interest in the long-term performance and strategic direction of Diversified Energy Co PLC.
• The Relationship Agreement provides EIG with board representation rights, allowing for direct influence and oversight, which could enhance corporate governance and strategic decision-making.

Negatives

• The sale of 1,584,689 ordinary shares in a block trade on May 27, 2025, at $13.73 per share, represents a partial divestment by the Reporting Persons, which could be perceived negatively by the market.
• The lock-up periods for the EIG Merger Shares indicate future potential for additional share sales, which could create overhang on the stock price as these periods expire.

Risks

• The Reporting Persons explicitly state their reservation of the right to acquire or dispose of additional shares, consolidate assets, or make changes to the Issuer's capital structure, which could lead to future market volatility.
• Future sales of shares by EIG, particularly after the lock-up periods expire (September 14, 2025, December 14, 2025, and March 14, 2026), could put downward pressure on the stock price.
• The potential for EIG to advocate or oppose certain courses of action through communications with shareholders or management introduces an element of uncertainty regarding future strategic decisions.

Future Outlook

The Reporting Persons currently have no specific plan to acquire, transfer, or dispose of additional ordinary shares. However, consistent with their investment purposes, they may, from time to time, acquire or dispose of shares in the open market or privately, consolidate assets, or seek to make changes to the Issuer's capital structure. They reserve the right to change their intentions and may engage in communications with other shareholders or the Issuer's officers to advocate or oppose certain courses of action.

Management Comments

• Jean Powers, Managing Director of EIG Asset Management, signed on behalf of several EIG entities.
• Kamyar Daneshvar, Associate General Counsel of EIG Asset Management, signed on behalf of several EIG entities.
• Randall S. Wade, a member of EIG's relevant investment committees, was appointed to the board of directors of Diversified Energy Co PLC on April 11, 2025, pursuant to the Relationship Agreement.

Industry Context

This filing reflects a significant ownership stake by a major energy-focused investment firm, EIG, in Diversified Energy Co PLC, an entity involved in the energy sector. The acquisition of shares through the Maverick Natural Resources merger highlights ongoing consolidation and strategic investments within the oil and gas industry, particularly in the context of asset management and portfolio optimization by private equity-backed entities. EIG's active role, including board representation and potential future strategic actions, underscores the trend of institutional investors taking more hands-on approaches in their portfolio companies.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Related Party Transactions

• The merger between Maverick Natural Resources, LLC (whose interests were held by the Reporting Persons) and Remington Merger Sub, LLC (a subsidiary of Diversified Energy Co PLC) resulted in the Reporting Persons receiving shares of Diversified Energy Co PLC as consideration. EIG Management acted as a representative of the holders in the Merger Agreement.

Stakeholder Impact

• Shareholders: The significant ownership stake by EIG and the potential for future share acquisitions or dispositions by EIG could influence share price volatility and the company's strategic direction. The lock-up periods provide some stability but also signal future potential supply.
• Management: The appointment of an EIG representative to the board and EIG's right to nominate additional directors will likely increase EIG's influence on management decisions and corporate strategy.
• Creditors: While not directly addressed, a stable and strategically aligned ownership base can indirectly benefit creditors by fostering long-term financial health and prudent management.

Next Steps

• Expiration of lock-up period for the first one-third of EIG Merger Shares on September 14, 2025.
• Expiration of lock-up period for the second one-third of EIG Merger Shares on December 14, 2025.
• Expiration of lock-up period for the last one-third of EIG Merger Shares on March 14, 2026.
• Reporting Persons may acquire or dispose of additional shares, consolidate assets, or seek changes to the Issuer's capital structure consistent with their investment purposes.
• Reporting Persons may engage in communications with other shareholders or the Issuer's officers regarding the Issuer's strategic direction.

Key Dates

Keywords

Diversified Energy Co PLC, EIG Asset Management, Schedule 13D, Beneficial Ownership, Maverick Natural Resources, Merger, Block Trade, Energy Sector, Oil and Gas, Shareholder Activism, Corporate Governance, Registration Rights, Relationship Agreement