Acq. of High-Quality East Texas Asset

Diversified advises that the following replaces the RNS announcement headlined "Acquisition of High-Quality East Texas Assets" and released at 7.01am BST on August 20, 2024.

The announcement has been amended and clarified to exclude disclosure language referencing the Acquisition (as defined below) as a "significant transaction" for the purposes of the FCA Listing Rules. The Acquisition does not constitute a "significant transaction" under UKLR 7.

Nothing else has been amended. The full corrected version is below.

Diversified Energy Company PLC

("Diversified" or the "Company")

Diversified Announces Joint Acquisition to Acquire Package of High-Quality East Texas Assets

Represents Second East Texas Bolt-On Addition of PDP Production in 2024 and Further Increases Scale in Central Region

Joint Acquisition Partner to Directly Purchase Undeveloped Acreage

Diversified Energy Company PLC (LSE:DEC; NYSE:DEC) ("Diversified" or the "Company") is pleased to announce the execution of a conditional purchase and sale agreement for the acquisition of operated natural gas properties located within eastern Texas (the "Assets") from a regional operator (the "Seller") (the "Acquisition"). Notably, the Assets contain a significant Proved Developed Producing ("PDP") component, approximately $68 million, which will be purchased by Diversified.

Concurrently, an active third-party development company with operations in the area will purchase an additional amount of undeveloped acreage with a value of approximately $19 million, the majority of which will be purchased by the third-party development company, with Diversified maintaining only a minority 5% interest for $1 million in consideration. The total purchase price to the Seller, inclusive of both the PDP assets and undeveloped acreage is approximately $87 million before customary purchase price adjustments. The Development company will pay cash consideration of approximately $18 million to directly to the Seller at the closing of the Acquisition.

The consideration for the acquisition of the Assets to be paid by Diversified will be funded through a combination of the issuance of new US-dollar denominated ordinary shares direct to the Seller in the amount of approximately $35 million and new and existing liquidity supported by the increased availability as the result of increased collateral associated with the Assets. The Company expects to close the Acquisition in the fourth quarter of 2024 and is subject to a break fee, should the Acquisition not occur.

Acquisition Highlights (Diversified Allocated Consideration)

• Total gross purchase price of $69 million, inclusive of ~$1 million (or 5%) of the retained undeveloped acreage, and before anticipated customary purchase price adjustments

◦ PDP gross purchase price of ~$68 million

◦ Estimated total Net Purchase Price of $64 million

◦ Anticipated close during the fourth quarter of 2024

• Net PDP purchase price represents a PV-18 valuation
• Current PDP net production of 21 MMcfepd (4 MBoepd)(a)

◦ Complements industry-leading corporate declines and capital intensity

◦ Primarily gas-weighted production with ~69% gas volumes(b)

◦ Provides opportunities for additional cost efficiencies utilizing Diversified's Smarter Asset Management program and existing East Texas resources

• Estimated PDP production NTM EBITDA of ~$19 million(b) representing a 3.5x purchase multiple

◦ PDP Reserves of 70 Bcfe (12 MMBoe) with PV-10 of $89 million(c)

Commenting on the Acquisition, CEO Rusty Hutson, Jr. said:

"This purchase strengthens Diversified by expanding our footprint in our East Texas operating area, increasing our scale, and allowing for margin enhancement. Importantly, this acquisition extends our proven track record of completing disciplined transactions at attractive valuations. By joining resources with a development partner, we are highlighting our Company's ability to creatively and thoughtfully structure transactions that add value and maximize cash flow generation for shareholders."

Assets Acquired at Attractive Valuations

The Acquisition's estimated NTM EBITDA of ~$19 million represents a 3.5x purchase multiple and reflects an attractive valuation of PV-18 for the PDP assets, excluding the undeveloped acreage.

The Assets include 331 net PDP wells (total) and are expected to add 21 MMcfepd (4 MBoepd) of production and 70 Bcfe (12 MMBoe) PDP reserves with a PV-10 of $89 million. Additionally, the production profile of the Assets is highly complementary to the Company's existing portfolio and operational strategy, with low annual production declines of ~15% for the next twelve months(b).

The Assets are in close proximity to the Company's previously acquired East Texas assets and provide opportunities to realize synergies attributable to operating scale and asset density.

Gibson, Dunn & Crutcher LLP served as legal counsel to Diversified. Opportune LLP served as sole financial advisor and Kirkland & Ellis LLP served as legal counsel to the Seller.

Footnotes:

For Company-specific items, refer also to the Glossary of Terms and/or Alternative Performance Measures found in the Company's 2024 Interim Report dated 30 June 2024 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

PV-10