Completion of Acquisition & Credit Facility Upsize

Diversified Energy Company PLC (LSE: DEC, NYSE:DEC) announces the closing of its acquisition of the proportionate working interest in certain assets within the Company's Central Region (the "Assets") from Oaktree Capital Management ("Oaktree"), as announced on March 19, 2024 (the "Acquisition"). Concurrently, the Company also completed an acquisition-related redetermination of the borrowing base of its revolving credit facility (Sustainability Linked Loan, or the "SLL") resulting in a 26% or $80 million increase in the borrowing base to $385 million and estimated post-transaction liquidity of ~$130 million.

Acquisition Highlights

• Purchase price of $410 million before customary purchase price adjustments
• Acquisition net purchase price of $377 million after customary purchase price adjustments
• PDP reserves of 510 Bcfe (~85 MMBoe) and a PDP PV10 of ~$462 million(a)
• Current net production of 122 MMcfepd (~20 Mboepd)
• Estimated 2024 Adjusted EBITDA of ~$126 million(b)
• Purchase price multiple of ~3.0x(b) and ~PV17 valuation on PDP-only assets
• Includes hedges on ~60% of the Assets 2024 production at an average price of ~$3.89/MMBtu

Consideration for the Acquisition consists of $83 million in deferred cash payments to Oaktree, the assumption of Oaktree's proportionate debt of ~$120 million associated with the ABS VI amortizing note and other expanded liquidity sources.

CEO Rusty Hutson, Jr. commented:

"This transaction represents another deliberate step in our disciplined approach to focus on accretive acquisitions that enhance our scale, deliver margin expansion, and expand free cash flow. The net purchase price of these high quality assets approximates a PV17 valuation and represents a low multiple of the Assets annual cash flows. As the natural acquirer of Oaktree's working interest in the Central Region, the transaction was a unique opportunity to consolidate these assets and represents the culmination of a successful, multi-year partnership with Oaktree. I would also like to thank our financial partners for their continued support, demonstrated by the increase in the borrowing base of our Sustainability Linked Loan, and the highly successful ABS VIII financing."

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

PV10

PV10 is a non-IFRS financial measure and generally differs from Standardized Measure, the most directly comparable IFRS measure, because it does not include the effects of income taxes on future net cash flows. While the Standardized Measure is free cash dependent on the unique tax situation of each company, PV10 is based on a pricing methodology and discount factors that are consistent for all companies. In this announcement, PV10 is calculated using NYMEX pricing. It is not practicable to reconcile PV10 using NYMEX pricing to standardized measure in accordance with IFRS at this time. Investors should be cautioned that neither PV10 nor the Standardized Measure represents an estimate of the fair market value of proved reserves.