First Quarter Trading Statement

Black Bear Facility Strengthens the Company's Midstream Value Chain and Integrates Complementary Long-life Infrastructure Assets

Diversified Energy Company PLC (LSE: DEC, NYSE: DEC) is pleased to announce it is trading in line with expectations and provides the following operations and trading update for the quarter ended March 31, 2024. In addition, the Company is providing an update on its Black Bear processing facility.

Delivering Reliable Results

• Recorded average 1Q24 production of 723 MMcfepd (121 Mboepd)

◦ Exit rate of 742 MMcfepd (124 Mboepd)

◦ Production essentially flat from 4Q23 adj. production of 725 MMcfepd (121 Mboepd)(a)

• Operating Cash Flow of $107 million, and Net loss of $15 million inclusive of non-cash unsettled derivative fair value adjustments, and non-cash depreciation, depletion and amortization
• Achieved 1Q24 Adjusted EBITDA of $102 million and Free Cash Flow of $74 million

◦ Realized 48% Adjusted EBITDA Margin(b) and TTM Free Cash Flow Yield of 31%(c)

• Adjusted Operating Cost per Unit(d) of $1.68/Mcfe ($10.10/Boe); ~7% improvement vs 4Q23
• Realized $22 million in gains on settled derivatives as a result of a prudent hedging program, providing a 28% uplift to Adjusted EBITDA

◦ Recently added additional natural gas hedges in 2026 at $3.95 and 2027 at $4.01

Expansion of Processing Capabilities- Black Bear Facility

• Located in DeSoto Parish, Louisiana, includes two processing plants, and FERC regulated NGL pipeline
• Strategic purchase in April 2022 for ~$10 million as part of overall vertical integration strategy
• Recently completed upgrade and reroute that provides processing capacity for ~120 Mmcfpd

◦ Anticipated to process ~66 Mmcfpd of DEC production while also allowing for potential third-party processing revenue and additional volume from potential bolt-on acquisitions

• Improvement of ~20% on transportation and fractionation fees and anticipated margin improvement of ~$9 million per year

◦ Eliminates third-party processing and compression fees on the transferred Diversified production volumes

Executing Strategic Objectives

• Declared 1Q24 interim dividend of $0.29 cents per share
• Repurchased ~400,000 shares in 2024 for £3.9 million ($5 million) at an average of £9.74/share

◦ ~$18 million of share repurchases (inclusive of EBT(e) purchases) since the 2023 Annual General Meeting, representing ~3% of Issued Share Capital

◦ More than $830 million in aggregate return of capital(f) since the Company's 2017 initial public offering

• Reduced debt outstanding by ~20% (~$309 million) compared to Q1 2023
• $115 million of undrawn credit facility capacity and unrestricted cash; leverage ratio(g) of 2.5x
• Previously announced acquisition of Oaktree Capital Management working interest proceeding on schedule and anticipated to close in due course

Creating Value Through Stewardship

• Published 2023 Sustainability Report highlighting significant emissions reduction achievements, record levels of well retirement, and implementation of innovative sustainability strategies
• Next LVL Energy completed 76 well retirements through March 2024, in line with prior year retirements of 74 wells over the same period

Rusty Hutson, Jr., CEO of Diversified, commented:

"Building a portfolio of high-performing, mature producing assets and optimizing the cost structure has been the foundation of our strategic vision since inception. The Company's ability to continue to deliver solid results, both operationally and financially, reinforces the success of this strategy. I am pleased that our ongoing focus on cost reduction opportunities has translated directly into a 7% sequential quarterly operating cost improvement, allowing us to effectively navigate the current natural gas market headwinds.

Additionally, I am excited to announce that our Black Bear processing facility has begun service. Completing this strategic project demonstrates our success in leveraging in-house expertise to unlock value and facilitate meaningful cash flow generation. This facility will integrate our own natural gas production in the area and is expected to deliver approximately $9 million of additional margin creation annually while providing additional potential upside from any non-utilized capacity to process third-party gas from other operators and accretive bolt-on acquisitions in the Cotton Valley and Haynesville region.

We will continue to observe our commitment to our "Focus Five" priorities while looking to capture synergies, operate efficiently, and ensure Diversified remains the Right Company at the Right Time. We look forward to completing the acquisition of additional working interest production from Oaktree. This acquisition provides Diversified with increased volumes in our Central region, which has exposure to the LNG pricing markets on the US Gulf Coast. I am confident that the reliability and consistency of our assets will continue to provide meaningful cash flow, financial flexibility and support our ability to return value to shareholders."

Black Bear Processing Facility

In April 2022, the Company closed on the strategic purchase of the Black Bear processing facility for approximately $10 million in cash. This NGL processing facility located within the Company's Central Region (DeSoto Parish, LA) maintains two 60,000 mcf per day cryogenic processing plants (total capacity of approximately 120,000 mcf per day) with direct connection to downstream natural gas and NGL markets. At full utilization, the facility can produce approximately 3,000 barrels per day of NGL's. The Company has completed a reroute and maintenance optimization program relative to the facility that will increase processed volumes to approximately 66,000 mcf per day of Diversified's natural gas production, which is approximately a 400% increase from when Diversified acquired the facility. The addition of this strategic midstream infrastructure is anticipated to drive further cost improvements, provide the potential for ethane recovery, and present the ability to receive third-party revenue from the current non-utilized capacity.

Operations and Finance Update

Production

The Company recorded exit rate production in March 2024 of 742 MMcfepd (124 Mboepd) and delivered 1Q24 average net daily production of 723 MMcfepd (121 Mboepd). Diversified's average production for the quarter reflects the exceptionally shallow decline profile of its assets, with average production for the period representing an effectively 0% change in volumes(a) compared to the 4Q23 average of 725 MMcfepd (121 Mboepd), adjusted for the recent divestiture of assets associated with the previously announced ABSVII Asset Sale transaction.

Margin and Total Cash Expenses per Unit

Diversified's consistent application of the Company's hedging strategy again provided material insulation from commodity price volatility, positively impacting 1Q24 per unit Total Revenues, inclusive of Settled Hedges of $3.25/Mcfe ($19.50/Boe) despite headwinds to natural gas prices during the quarter.

Adjusted EBITDA Margins(b) of 48% (42% unhedged) reflect the benefit of the Company's per unit revenues and ongoing decreases in commodity-price linked expenses that more than offset production-related changes to per-unit Lease Operating Expense and Midstream Expense. General and Administrative expenses remained consistent with prior period levels.

1 1Q24 excludes $0.05/Mcfe ($0.30/Boe) and 4Q23 excludes $0.08/Mcfe ($0.49/Boe) of other revenues generated by Next LVL Energy

Values may not sum due to rounding

2 1Q24 excludes $(0.07)/Mcfe ($(0.39)/Boe) and 4Q23 excludes $(0.08)/Mcfe ($(0.47)/Boe) of expenses attributable to Next LVL Energy

Values may not sum due to rounding

Results of Hedging and Current Financial Derivatives Portfolio

Diversified's consistent application of hedges to strategically secure cash flows and margins resulted in a 1Q24 hedge floor price of $3.36/Mcf, 40% higher than the average settled price for NYMEX Henry Hub during the quarter(j).

For the balance of the year, the Company's strategy continues to be well-placed for cash generation with a remaining 2024 average natural gas hedge floor of $3.41/Mcf, currently situated at a ~40% premium to the NYMEX strip(i) and a ~65% premium to the 2.04/MMBtu active contract price(i). The table below represents the Company's full-year hedge positions through calendar year 2026 at April 30, 2024:

Natural gas pricing has shown a meaningful recent improvement during 2024, driven by several overriding supply and demand factors, including continued production management through curtailments, deferrals of well completions, and the emerging data center thematic, which would require material volumes of additional natural gas power demand. The table below illustrates the natural gas price curve movements:

Source: Bloomberg, all values priced in $/MMBtu

Environmental Update

Emissions Reductions Activity

During the quarter, Diversified continued to execute its emissions detection activities throughout its operating footprint through a combination of aerial LiDAR and handheld LDAR deployments. Upstream emissions surveys in Appalachia and the Central Region have maintained no-leak rates of 99% through the quarter, reflecting the ongoing impact of Diversified's stewardship focus.

The Company continues to seek innovation in its application of emissions reductions and mitigation efforts, including pilot projects to convert upstream and midstream facilities from natural gas-powered pneumatic devices to air compression and electric actuation.

Asset Retirement Progress and Next LVL Energy Update

In 1Q24 the Company safely retired 76 wells (72 operated by Diversified), consistent with the 74 well retirements in 1Q23 and representing substantial progress towards the Company's annual goal of retiring 200 operated wells per year. Next LVL Energy's plans for the remainder of 2024 include revenue generation from its continued partnership with states and third-party operators. Diversified expects to achieve full-year retirements similar to 2023 while significantly offsetting the cash costs associated with retiring its own wells.

Oaktree Working Interest Acquisition

The Company's previously announced acquisition of Oaktree's proportionate interest in the acquired assets from Indigo, Tanos III, East Texas, and Tapstone (the "Assets") continues to proceed as planned with an estimated transaction close date within 60 days post general shareholder meeting, pending shareholder and other customary approvals.

Footnotes:

For Company-specific items, refer also to the Glossary of Terms and/or Alternative Performance Measures found in the Company's Annual Report and Form 20-F for the year ended December 31, 2023 filed with the United States Securities and Exchange Commission.

Use of Non-IFRS Measures

Adjusted EBITDA

Adjusted EBITDA should not be considered in isolation or as a substitute for operating profit or loss, net income or loss, or cash flows provided by operating, investing, and financing activities. However, we believe such a measure is useful to an investor in evaluating our financial performance because it (1) is widely used by investors in the natural gas and oil industry as an indicator of underlying business performance; (2) helps investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the often-volatile revenue impact of changes in the fair value of derivative instruments prior to settlement; (3) is used in the calculation of a key metric in one of our Credit Facility financial covenants; and (4) is used by us as a performance measure in determining executive compensation. When evaluating this measure, we believe investors also commonly find it useful to evaluate this metric as a percentage of our total revenue, inclusive of settled hedges, producing what we refer to as our adjusted EBITDA margin.

• Excludes proceeds received for leasehold sales. b) Other adjusting costs for the year ended December 31, 2023 were primarily associated with legal and professional fees related to the U.S. listing, legal fees for certain litigation, and expenses associated with unused firm transportation agreements.

Net Debt and Net Debt-to-Adjusted EBITDA

As used herein, net debt represents total debt as recognized on the balance sheet less cash and restricted cash. Total debt includes our borrowings under the Credit Facility and borrowings under or issuances of, as applicable, our subsidiaries' securitization facilities. We believe net debt is a useful indicator of our leverage and capital structure.

The following table presents a reconciliation of the IFRS Financial measure of Total Borrowings to the Non-IFRS measure of Net Debt and a calculation of Net Debt-to-Adjusted EBITDA and Net Debt-to-Pro Forma Adjusted EBITDA for each of the periods listed:

• excludes Miscellaneous debt, which is primarily related to real estate, vehicles and equipment.

Free Cash Flow

Total Revenue, Inclusive of Settled Hedges and Adjusted EBITDA Margin

• Excludes proceeds received for leasehold sales. (b) Net gain (loss) on commodity derivative settlements represents cash (paid) or received on commodity derivative contracts. This excludes settlements on foreign currency and interest rate derivatives as well as the gain (loss) on fair value adjustments for unsettled financial instruments for each of the periods presented.