Final Results

Diversified Achieves Strong Final Year-End 2024 Results, Delivers on Capital Allocation Promises, and Introduces 2025 Combined Company Outlook

2024 Achievements Position Diversified on a Meaningful Path Forward as a Stronger and Larger Company

Executed Approximately $2 Billion of Acquisitions in an Advantageous Pricing Environment

Third year of Consistent Operating Costs Despite Broader Industry and Inflationary Pressures

Maverick Integration Anticipated to Provide Meaningful Financial and Operational Benefits to Drive Free Cash Flow Acceleration

Created a PDP Solution for Upstream Peers to Facilitate Operated Acquisitions with an Undeveloped Inventory Focus

BIRMINGHAM, Ala., March 17, 2025 (GLOBE NEWSWIRE) -- Diversified Energy Company PLC (LSE: DEC; NYSE: DEC) is pleased to announce its operational and final audited results for the year ended December 31, 2024.

Diversified remains a differentiated key player in acquiring and building a portfolio of assets through value-accretive transactions while simultaneously unlocking hidden value through its unique operational framework, strategic development partnerships, and growing adjacent business segments, including coal mine methane (CMM), energy marketing and well-retirement. By completing over $4.0 billion of acquisitions since its public listing in 2017, Diversified has built a large-scale integration and operating company that remains focused on delivering de-risked, reliable cash flow for its shareholders. With the combination of maturing assets and M&A activity leading to growth-oriented E&P’s recycling capital through divestment, there remains an ample opportunity set for Diversified’s continued growth. Additionally, with most upstream acquisitions today focusing on increasing undeveloped inventory, Diversified provides a creative and actionable solution as the PDP purchasing partner for those E&P’s that only value inventory.

Only Publicly Traded Champion of the PDP Subsector with Unique Strategic Advantages

Large Operational Scale: Multiple geographies in core basins including Western Anadarko (largest producer), Permian, Appalachia, Barnett and Ark-La-Tex with commodity product diversification

Vertical Integration: In-house marketing, extensive midstream network, wholly-owned processing infrastructure, and a well retirement business segment

Leading Technology Platform: 100% cloud architecture, supporting well level data capture, information for actionable production optimization, and real-time monitoring which mitigates production downtime

Beneficial Financing Solution: Demonstrated ability to access numerous capital solutions, including investment grade, low-cost Asset Backed Securities, commercial banking facilities and equity investment partners

Flexible Capital Allocation: shareholder returns-focused model prioritizing Free Cash Flow for systematic debt reduction, fixed dividend payments, opportunistic share repurchases, and accretive acquisitions

Proven Process to Capture Synergies: established integration playbook and sophisticated corporate infrastructure provides considerable expense savings and unlocks sustainable value

Delivering Consistent and Reliable Results in 2024

Delivered average net daily production: 791 MMcfepd (132 MBoepd)

December exit rate of 864 MMcfepd (144 MBoepd)

Year end 2024 reserves of 4.5 Tcfe (747 MMBoe; PV10 of $3.3 billion(b))

Total Revenue, inclusive of hedges of $946 million(e), net of $151 million in commodity cash hedge receipts that supplemented Total Revenue of $795 million

Operating Cash Flow of $346 million; Net loss of $87 million, inclusive of $141 million tax-effected, non-cash unsettled derivative fair value adjustments

Adjusted EBITDA of $472 million(c); Adjusted Free Cash Flow of $211 million(d)

2024 Adjusted EBITDA Margin of 51%(c)

2024 Adjusted Operating Cost per unit of $1.70/Mcfe ($10.22/Boe)

Achieving Expectations

Recommend a final quarterly dividend of $0.29 per share

Generated $49 million of cash proceeds through land sales and Coal Mine Methane Revenues

Retired over $200 million in debt principal through amortizing debt payments

Returned $105 million to shareholders, including $21 million in share buybacks(h)

Completed $585 million (gross) in strategic and bolt-on acquisitions during 2024

Retired 202 Diversified wells in Appalachia, marking third consecutive year to exceed 200 wells

OGMP Gold Standard and MSCI AA Rating for third and second consecutive year, respectively

Decreased Scope 1 methane intensity to 0.7 MT CO2e per MMcfe, a 13% reduction from 2023

Powerful Step Forward

Closed transformative $1.3 billion acquisition of Maverick Natural Resources (“Maverick”)

Largest Producer in the Western Anadarko Basin (WAB)

Entry into the Permian basin

Expecting to achieve over $50 million in annual synergies by year-end 2025

Closed the accretive bolt-on acquisition of assets from Summit Natural Resources

Anticipate over 300% increase in cash flow from CMM environmental credit sales in the next 24 months

Developed a unique partnership to create an innovative, reliable, net-zero data center power solution

Enhancing free cash flow growth in 2025 by advantageously added natural gas hedges (related to ABS & recent acquisitions) and planning approximately $40 million from the divestiture of undeveloped leasehold during the first half of 2025

CEO Rusty Hutson, Jr. commented:

“Our over 1,600 women and men of Diversified remain the driving force behind our strong operational and financial performance in 2024. Whether it’s natural gas to power the technology of the future or the everyday needs of families and businesses across our operating region, Diversified provides the reliable and sustainable energy needed, and we continue to invest in growing our business while expanding our opportunity set of cash flow generation through verticals in a variety of end markets.

We have built a Company that remains highly focused on long-term value creation through the growth of our platform and our ability to leverage vertical integration and scale to operate a structurally and dependably higher-margin business that delivers de-risked, consistent cash flow. Our focused strategy, disciplined leadership team, sound operating practices, and the strong demand for natural gas provide us with momentum as we begin the year and the confidence to achieve our full-year 2025 expectations while executing against our capital allocation strategy. We are starting the year in a position of strength as a bigger, better business, and there has never been a more exciting time for our Company and the energy industry. We feel privileged to be at the heart of the energy renaissance as the Right Company at the Right Time to help provide essential energy needs.”

Combined Company 2025 Outlook

Following the recently completed acquisition of Maverick, Diversified expects to realize significant operational synergies associated with a larger, consolidated position in Oklahoma and the ability to improve the overall cost structure of the Maverick Natural Resources assets while continuing to prioritize returns and Free Cash Flow generation.

The following outlook incorporates a nine-month contribution from the recently acquired Maverick.

2025 Guidance

1 In cludes the value of anticipated cash proceeds for 2025 land sales

Posting of 2024 Annual Report and Notice of Annual General Meeting

Diversified has published to the Company’s website its 2024 Annual Report and Notice of AGM, along with the form of proxy for the AGM. These documents can be viewed or downloaded from Diversified’s website at https://ir.div.energy/financial-info.

The Company has also provided copies of these documents to the National Storage Mechanism that, in accordance with UK Listing Rule 6.4.1R, will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Annual General Meeting Arrangements

The Company's AGM will be held on April 9, 2025 at 1:00pm BST (8:00am EDT) at the offices of FTI Consulting, 200 Aldersgate, Aldersgate Street, London EC1A 4HD.

Presentation and Webcast

DEC will host a conference call today at 12:30 pm GMT (8:30am EDT) to discuss these results. The conference call details are as follows:

A corporate presentation will be posted to the Company’s website before the conference call. The presentation can be found at https://ir.div.energy/presentations.

Footnotes:

For Company-specific items, refer also to the Glossary of Terms and/or Alternative Performance Measures found in Diversified’s 2024 Annual Report

Use of Non-IFRS Measures

Non-IFRS Disclosures

Adjusted EBITDA

As used herein, EBITDA represents earnings before interest, taxes, depletion, depreciation, and amortization. Adjusted EBITDA further adjusts for items that are not comparable period-over-period, including accretion of asset retirement obligations, other (income) expense, loss on joint and working interest owners receivable, (gain) loss on bargain purchases, (gain) loss on fair value adjustments of unsettled financial instruments, (gain) loss on natural gas and oil property and equipment, costs associated with acquisitions, other adjusting costs, non-cash equity compensation, (gain) loss on foreign currency hedge, net (gain) loss on interest rate swaps and other similar items.

Adjusted EBITDA should not be considered in isolation or as a substitute for operating profit (loss), net income (loss), or cash flows provided by (used in) operating, investing, and financing activities. However, we believe this measure is useful to investors 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 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 assess this metric as a percentage of our total revenue, inclusive of settled hedges, which we refer to as adjusted EBITDA margin.

Year Ended

Excludes $1 million in dividend distributions received for our investment in DP Lion Equity Holdco during the year ended December 31, 2024.

Excludes $27 million, $24 million and $2 million in cash proceeds received for leasehold sales during the years ended December 31, 2024, 2023 and 2022, respectively, less $14 million and $4 million of basis in leasehold sales for the years ended December 31, 2024 and 2023, respectively.

For the year ended December 31, 2023, the Group determined the carrying amounts of certain proved properties within two fields were not recoverable from future cash flows, and therefore, were impaired.

Other adjusting costs for the year ended December 31, 2024, 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. For the year ended December 31, 2023, these costs were primarily related to legal and professional fees for the U.S. listing, legal fees for certain litigation, and expenses for unused firm transportation agreements. For the year ended December 31, 2022, these costs mainly included $28 million in contract terminations, which enabled the Group to secure more favorable future pricing, and $31 million in deal breakage and/or sourcing costs for acquisitions.

Includes adjustments for the year ended December 31, 2024 for the Oaktree, Crescent Pass, and East Texas II acquisitions to pro forma their results for the full twelve months of operations. Similar adjustments were made for the year ended December 31, 2023 for the Tanos II Acquisition, as well as for the year ended December 31, 2022 for the East Texas I and ConocoPhillips acquisitions.

Total Revenue, Inclusive of Hedges and Adjusted EBITDA Margin

As used herein, total revenue, inclusive of settled hedges, accounts for the impact of derivatives settled in cash. We believe that total revenue, inclusive of settled hedges, is a useful measure because it enables investors to discern our realized revenue after adjusting for the settlement of derivative contracts.

As used herein, adjusted EBITDA margin is calculated as adjusted EBITDA expressed as a percentage of total revenue, inclusive of settled hedges. Adjusted EBITDA margin encompasses the direct operating costs and the portion of general and administrative costs required to produce each Mcfe. This metric includes operating expense, employee costs, administrative costs and professional services, and recurring allowance for credit losses, which cover both fixed and variable costs components. We believe that adjusted EBITDA margin is a useful measure of our profitability and efficiency, as well as our earnings quality, because it evaluates the Group on a more comparable basis period-over-period, especially given our frequent involvement in transactions that are not comparable between periods.

Year Ended

Net gain (loss) on commodity derivative settlements represents the 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.

Free Cash Flow

As used herein, free cash flow represents net cash provided by operating activities, less expenditures on natural gas and oil properties and equipment, and cash paid for interest. We believe that free cash flow is a useful indicator of our ability to generate cash that is available for activities beyond capital expenditures. The Directors believe that free cash flow provides investors with an important perspective on the cash available to service debt obligations, make strategic acquisitions and investments, and pay dividends.

Year Ended

Net Debt and Net Debt-to-Adjusted EBITDA (“Leverage”)

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

As used herein, net debt-to-adjusted EBITDA, also referred to as “leverage” or the “leverage ratio,” is calculated by dividing net debt by adjusted EBITDA. We believe this metric is a crucial measure of our financial liquidity and flexibility, and it is also used in the calculation of a key metric in one of our Credit Facility financial covenants.

As of

Includes adjustments for deferred financing costs and original issue discounts, consistent with presentation on the Statement of Financial Position.

The increase of restricted cash as of December 31, 2024, is due to the addition of $21 million and $3 million in restricted cash for the ABS VIII Notes and ABS IX Notes, respectively, offset by $7 million and $9 million for the retirement of the ABS III Notes and ABS V Notes, respectively.

Includes adjustments for the year ended December 31, 2024 for the Oaktree, Crescent Pass, and East Texas II acquisitions to pro forma their results for the full twelve months of operations. Similar adjustments were made for the year ended December 31, 2023 for the Tanos II Acquisition, as well as for the year ended December 31, 2022 for the East Texas I and ConocoPhillips acquisitions.

Excludes long-term plant financing of $30 million for the year ended December 31, 2024.