Diversified Reports Solid 2024 Interim Financial Results and Robust Cash Flow from Operations
Delivering Reliable Production with Low Capital Intensity, Sequential Cost Improvement and Consistent Cash Margins
Diversified Energy Company PLC (LSE: DEC) is pleased to announce it is trading in line with expectations and provides its Interim Results for the six months ended June 30, 2024 and other recent highlights.
Delivering Reliable Results
• Average net daily production: 746 MMcfepd (124 Mboepd);
◦ Reflects effectively flat production volumes since 4Q2023, on a normalized basis(a)
◦ June 2024 exit rate of 855 MMcfepd (143 Mboepd), including the impact of the Oaktree Acquisition
• Net Income of $16 million, inclusive of approximately $98 million in tax benefits
• 1H24 Adjusted EBITDA(b) of $218 million
◦ 1H24 Adjusted EBITDA Margin(c) of 50%
◦ 1H24 Adjusted Cost per Unit(d) of $1.68/Mcfe ($10.08/Boe)
• Free Cash Flow of $121 million, excluding the impact of working capital(e)
◦ Annualized Free Cash Flow Yield (excl. working capital) of 38%(e)
• Leverage ratio of ~2.8x(f), excluding Oaktree transaction, leverage ratio of 2.6x(g)
• Undrawn credit facility capacity and unrestricted cash of ~$120 million
Executing Strategic Objectives and Achieving Milestones
• Accretive Acquisitions:
◦ Announced $516 million (gross) of high-margin, low-decline asset and working interest acquisitions
◦ Includes the $410 million acquisition of Oaktree working interests and $106 million for assets to be acquired from Crescent Pass
• Sustainable Capital Return:
◦ Declared 2Q24 interim dividend of $0.29 per share
◦ Paid $55 million of dividends 1H24 and returned a total of $65 million, including share repurchases of ~2% of shares outstanding(i)
• Systematic Debt Reduction:
◦ Reduced amortizing debt principal by $108 million
• Recent Milestones:
◦ Included in the US Russell 2000 Index, adding to daily trading liquidity and US shareholder base
◦ Permanently retired 169 wells in Appalachia, including 135 Diversified wells (70% of 2024 goal)
◦ Realized ~$15 million of upside value through the divestiture of non-core assets and leasehold sales(h)
Commenting on the results, CEO Rusty Hutson, Jr. said:
"Building a portfolio of high-performing assets with dedicated teams of experienced professionals has been part of our strategic vision since the Company went public, and we have continued our track record of delivering on that vision with two recent announcements: the closing of our Oaktree acquisition and the pending Crescent Pass acquisition. The outstanding results presented, both operationally and financially, reinforce the success of this strategy. Our ability to drive the 3% cost structure improvement during the first half of 2024 is enhanced by further scale and vertical integration, allowing us to once again deliver approximately 50% Adjusted EBITDA margins and consistent free cash flow generation. This strategic vision has proven highly successful, but it's our employees' commitment to operational excellence in the field and the corporate office that has helped Diversified achieve these results. We remain committed to our balanced capital allocation framework, with the diversity and strength of our asset base providing a solid foundation for accretive growth and value creation for our shareholders, while maintaining our position as the Right Company at the Right Time to responsibly manage long-life, mature producing assets."